Opinion of the economic and social committee on 'Relations between the European Union, Latin America and the Caribbean: socio-economic interregional dialogue'
Date: 1999-04-28
Institutions: European Economic and Social Committee
Subjects: Caribbean Islands, EU relations, Latin America, socioeconomic conditions

16.6.1999

EN

Official Journal of the European Communities

C 169/49

Opinion of the economic and social committee on ‘Relations between the European Union, Latin
America and the Caribbean: socio-economic interregional dialogue’

(1999/C 169/16)

On 3 December 1998, the Economic and Social Committee, acting under the third paragraph of Rule 23
of its Rules of Procedure, decided tot draw up an Opinion on Relations between the European Union,
Latin America and the Caribbean: socio-economic interregional dialogue.

At its plenary session on 24 and 25 February 1999, the Committee decided, in accordance with Rule
23(3) of the Rules of Procedure, to draw up an own-initiative opinion. The Section for External Relations,
responsible for carrying out work on the subject, drew up its opinion on 14 April 1999. The rapporteur
was Mr Zufiaur.

At its 363rd plenary session on 28 and 29 April 1999 (meeting of 28 April) the Committee adopted the
following opinion unanimously.

1.

Introduction

1.1.
Over the last decade, the Economic and Social Com-
mittee (ESC) has been actively involved in developing relations
between the European Union and the countries and sub-
regions of Latin America and the Caribbean. By preparing a
number of information reports and opinions, the Committee
has expressed its views on the most significant initiatives
introduced by the regions. By the same token, through regular
contact with its Latin American counterparts, primarily the
Economic and Social Consultative Forum (FCES) of the South-
ern Common Market (MERCOSUR), the ESC has contributed
to the marked rapprochement between the two regions during
this period. This opinion follows this whole range of initiatives.

1.2.
The forthcoming first Summit of Heads of State and
Government between the countries of the EU, Latin America
and the Caribbean, to be held in Rio de Janeiro on 28 and
29 June 1999, will constitute a watershed in a process which
has seen the two regions draw ever closer together throughout
the nineties. The main features of this process have been
the expansion of institutionalised dialogue and cooperation
mechanisms and, more recently, the opening of negotiations
with Mexico on the reciprocal liberalisation of trade and the
European Commission’s recommendation for similar nego-
tiations to be opened with MERCOSUR and Chile. The timing
of the Summit also coincides with an event of particular
importance for future relations between the EU and the
Caribbean, namely the negotiations for the next Lomé Conven-
tion which were launched on 30 September 1998.

The Summit — and the process of preparing its agenda
1.3.
— will not simply take stock of the progress made in the past
in terms of relations between the regions, since the political
declarations and guidelines on cooperation which should
emerge from it will also largely define the areas that will
dominate dialogue and cooperation between the EU, Latin
America and the Caribbean in the early years of the new
millennium.

values of democracy and international cooperation and on
centuries of shared history and deep cultural, political, econ-
this opinion assesses the current
omic and human ties,
state-of-play and the outlook for intra-regional relations, with
the emphasis on the outlook for dialogue and cooperation
between the representatives of civil society, on socio-economic
issues in particular. The issues addressed in this opinion are
in the information report on
examined in greater detail
Relations between the European Union, Latin America and the
Caribbean: socio-economic interregional dialogue, adopted on
14 April 1999.

2. State-of-play and outlook for relations between the

EU, Latin America and the Caribbean

2.1.
The EU, with the adoption of the basic document on
EU relations with Latin America and the Caribbean by the
Council of Ministers on 31 October 1994, and the declarations
issued at the Madrid European Council held on 15/16 Decem-
ber 1995, expressed the EU’s wish for closer political ties with
Latin America and deeper institutionalised dialogue with its
partners in the region. The aim was to bolster democracy,
to advance towards trade liberalisation, support regional
integration processes and target its cooperation more effec-
tively. Since then, ties between the regions have become much
stronger, and this has been reflected in the setting up of various
bodies for institutionalised political dialogue and cooperation
mechanisms at different levels. The new ‘fourth generation’
framework agreements signed with MERCOSUR, Chile and
Mexico have broadened and diversified the areas of cooper-
ation and have incorporated the objective of reciprocal and
gradual trade liberalisation. By the same token, the new EU
Member States have swelled the ranks of European countries
jointly and unanimously agreeing on the importance of
consolidating links between Europe and Latin America.

1.4.
Against the backdrop of this gradual rapprochement
between the two regions, based on joint adherence to the

2.2.
In the political sphere, regular ministerial meetings,
also attended by Bolivia and Chile, have been launched with

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Mercosur. The EU has initiated institutionalised political
dialogue on bi-regional and interregional issues of common
interest with the Andean Community (AC), and regular
dialogue with Chile and Mexico on such issues in meetings at
various levels, going right up to the top level. These new
dialogue forums
reinforce the institutionalised meetings
between EU Foreign Ministers and the Rio Group held every
year on the basis of the 1990 Rome Declaration and the San
José dialogue between the EU and Central American countries
launched in 1984.

in international forums, these will be crucial to the goal of
achieving peace and stability in a multipolar world. The
many challenges posed by globalisation make it particularly
important for the two regions to adopt policies and strategies
based on mutual benefit and shared responsibility. Progress on
integrating markets and reducing the regulatory capacity
of national authorities heightens the need to strengthen
international and multilateral cooperation so as to foster the
democratic monitoring of globalisation at political
level.
Where imbalances triggered by globalisation reveal a lack of
international cooperation,
the two regions must help to
strengthen governability at regional, interregional and inter-
national level.

2.3.
Adherence to democratic principles and respect for
human rights form the cornerstone of EU/Latin American
political dialogue. The foundations of this vision, which has
been substantiated in a wide agenda of cooperation and
practical achievements, differ vastly from any other permanent
dialogue which the two regions maintain with other regions
or countries of the world. In step with Latin America’s progress
in consolidating democracy, the nature of this commitment
has changed in some respects, with growing emphasis placed
on establishing a climate guaranteeing good governance and
the definitive consolidation of democracy in the long term. In
addition to the importance of ‘good public management’ and
strengthening institutions supporting the rule of law, the focus
is on acknowledging the crucial role which civil societies play
in consolidating democracy in the long term. However, issues
such as safeguarding the rights of indigenous populations,
continued violation of basic human rights and workers’ rights
in some countries, including the persecution of trade unions
and their representatives, hinder the definitive consolidation
of democracy and the rule-of-law.

2.4. With regard to relations with Caribbean countries
covered by the Lomé Convention,
the revised Lomé IV
Convention, signed on 4 November 1995, reinforced political
dialogue between the EU and African, Caribbean and Pacific
countries (ACP) on issues such as democratisation and consoli-
dation of the rule of law. This has also meant greater emphasis
on developing the ACP’s foreign trade and its international
competitiveness, as well as greater flexibility in allocating
cooperation resources. The considerations relating to the new
Lomé Convention, which comes into force in the year 2000,
reflect the aim of strengthening the political dimension of
EU/ACP relations and of expanding and diversifying their
political dialogue, with greater emphasis on fostering ‘good
governance’, and on developing the institutions and political
participation of civil society.

2.5.
In pursuing and consolidating political dialogue, the
EU, Latin America and the Caribbean are responding to several
shared strategic concerns. Insofar as cooperation between the
two regions and converging views on the main items on the
international agenda will help to strengthen the overall pos-
ition of the two regions and increase their profile and influence

2.6.
The expansion and strengthening of trading relations
and reciprocal investment is an objective shared by the EU,
Latin America and the Caribbean. Generally speaking, the
development of trade between the two regions during the
nineties has been particularly dynamic. Trade between the two
regions has grown by more than 75 % in absolute terms and
EU exports to Latin America have risen by more than 150 %.
Growth in imports from Latin America has been more modest
at around 25 %. For Latin America as a whole, the EU is its
second global trade partner after the United States, accounting
for 15 % of the region’s trade with the rest of the world in
1997. As for MERCOSUR and Chile, the EU has long been
their main trading partner. With regard to investment, EU
Foreign Direct Investment (FDI) to Latin America and the
Caribbean has grown rapidly in recent years and accounts for
some 30 % of the region’s total FDI in the nineties.

2.7.
Although the development of trade between the EU
and Latin America has generally been satisfactory, there are
some structural problems. Despite the growth in EU exports
to Latin America, there has been a drop in the EU’s relative
share of Latin American foreign trade, due to the fact that the
region’s trade with its other main trading partners, the United
States and Japan, has grown more rapidly, just as trade between
the countries of the region doubled between 1990 and 1997.
From the Latin America perspective, the persistence of a
growing trade deficit with the EU since 1993 is a cause for
concern, and this has prompted demands for better access to
European markets, mainly for agricultural products.

2.8.
Dynamic and balanced economic relations between
the EU and Latin America provide the requisite framework for
developing dialogue and cooperation in other areas. In addition
importance of European trading and
to the fundamental
investment relations for the growth and diversification of Latin
American and Caribbean economies, EU objectives in this area
should be focused on the stabilisation of markets, international
financial flows, and the promotion of direct investment as a
stable source of financing for technological innovation and
development of production. The introduction of the euro as
the single currency for 11 of the 15 EU Member States has

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opened up new possibilities in this area. The opening of
negotiations on reciprocal trade liberalisation with Mexico, the
scheduled launch of similar negotiations with MERCOSUR and
Chile, and the launch of negotiations on agricultural trade
within the World Trade Organisation (WTO) at the end of
1999, all provide opportunities for progress on the reciprocal
opening-up of markets. Any further progress towards trade
liberalisation between the EU and Latin America needs to take
account of the sensitive nature of certain products, and, in
general, the legitimate interests of the different sectors of
production in the two regions.

mutually agreed priority areas, and boosting global and
multiannual programmes in key areas, the decentralisation
of cooperation is a prime mechanism for enhancing the
effectiveness and management of cooperation. The partici-
pation of civil society in the design and implementation of
cooperation should not simply be regarded as a means of
bringing cooperation closer to grassroots level, but also as a
means of boosting and maximising the benefits of cooperation
and of consolidating the democratic process. In recent years,
across-the-board EU cooperation programmes have played an
increasingly important role in establishing direct cooperation
ties between various players in the socio-economic sphere and
in civil society as a whole.

2.9. While trade between the EU and the Caribbean is
limited in terms of value, exports to European markets are
crucial to several of the small Caribbean economies, particu-
larly for products such as bananas and sugar. Looking towards
the renewal of the Lomé Convention and possible changes in
some of the preferential trade mechanisms in the coming years,
EU/ACP negotiations need to make greater trade liberalisation
consistent with consideration for the particular vulnerability
of Caribbean economies and their dependence, in many cases,
on exports of a single product.

2.10.
For the last decade, the EU and its Member States
have been Latin America’s main source of external cooperation.
Between 1990 and 1997, the 15 EU Member States and the
European Commission together provided almost 55 % of
Latin America’s bilateral cooperation resources. Moreover, the
growth in EU cooperation flows to Latin America up to 1996
is in stark contrast with the dramatic reduction in US aid to
Latin America during the same period. Community funds for
Latin America grew considerably between 1991 and 1996,
and despite a slight drop in the Commission’s commitments
in Latin America as of 1996, Community cooperation has
steadied at a significantly higher level than at the beginning of
the decade.

2.11.
Following a strategy of tailoring cooperation to match
the various levels of relative development reached, Central
America, the Caribbean and the Andean countries are the main
recipients of development aid, whose main components are
technical and financial assistance and humanitarian aid, while
other partners, that is, Mexico, MERCOSUR and Chile, primar-
ily benefit from economic and trade cooperation.

A most worrying trend is the cut-back in Official
2.12.
Development Assistance (ODA) provided by industrialised
countries — in 1997 the OECD (Organisation for Economic
Cooperation and Development) countries reduced their bilat-
eral cooperation to developing countries by 5,8 %, while total
ODA to Latin America dropped by 16 %. Even considering the
constraints on Community and EU national budgets, real needs
suggest that flows of financial resources to Latin America and
the Caribbean should be maintained at the pre-1997 level or
even increased. In any case, efforts to optimise the effectiveness
of European cooperation are significant. In addition to improv-
ing coordination between the donors, focusing cooperation on

3. The social dimension in European and Latin American

integration

3.1.
Both the integration model of the EU and that of
MERCOSUR and other sub-regional groups, such as the
Andean Community, the Central American Integration System
(SICA) and the Caribbean Community (CARICOM), share the
vision of integration as an integral process whose objectives
extend beyond purely trade-related and economic aspects. This
model differs from that of initiatives such as the Free Trade
Area of the Americas (FTAA) — even though this is enshrined
in the Action Plan launched at the First Inter-American Summit
which covers objectives and initiatives for strengthening
democracy and sustainable development — and the North
American Free Trade Agreement (NAFTA) between Canada,
the United States and Mexico, which are basically restricted to
the establishment of a free trade area, and are devoid of
objectives or instruments in the political or cooperation
spheres. Closely linked to this perception of integration is the
notion that one of
the basic pre-requisites for political
democracy is the existence of a dynamic and diversified civil
society. The establishment of mechanisms to represent the
interests of the various socio-economic groups and for nego-
tiation and mediation between these is, therefore, of primary
importance for democratic consolidation. Similarly, against a
backdrop of increasingly globalised production and keener
the labour relations model, relations
world competition,
between the socio-economic groups and their level of partici-
pation in economic policy-making at national level, are all
crucial to promoting economic growth and development.
Consequently,
incorporating a social dimension into the
processes of integration and ensuring the active participation
of the social partners in these are necessary for achieving the
aims pursued by the integration processes in both regions.

3.2.
The EU Member States enjoy a solid tradition of social
dialogue, both directly between employers’ organisations and
tri-partite agreements.
trade unions and in the form of
While in some countries there is a long-standing tradition of
institutionalised relations between the economic and social

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players as well as mechanisms for social dialogue and resol-
ution of labour disputes, other countries have since the 70s
carried out valuable experiments in social dialogue. Similarly,
the social dimension has been part of the European integration
process since its inception. Within the sphere of Community
social policy, of particular note are initiatives such as the
establishment in 1960 of the European Social Fund (ESF); the
launch in 1985 of European Social Dialogue; the adoption in
1989 of the Community Charter of Fundamental Social Rights
for Workers, subsequently incorporated into the Amsterdam
Treaty of 1997; and the Agreement on Social Policy, signed by
the European social partners in October 1991, incorporated
as an appendix to the Social Protocol of the Maastricht Treaty
in 1992, and, lastly, incorporated into the Amsterdam Treaty.

3.3. With regard to the participation of organisations
representing economic and social spheres, the Economic and
Social Committee (ESC), established by the Treaty of Rome,
plays a crucial role in European integration. The ESC, com-
prised of representatives of the different economic and social
spheres, is a consultative body of the Council, Commission
and, since the Amsterdam Treaty, of the European Parliament.
The ESC may also issue own-initiative opinions. In addition,
throughout the years other more specific consultation bodies
have been established in various fields.

3.4.
In Latin America, relations between players in the
socio-occupational sphere have to a large extent been marred
by conflict and the failure to establish proper institutionalised
in recent decades,
dialogue or coordination. Nevertheless,
and linked to democratisation and the greater openness of
economies towards world competition, efforts to promote
dialogue between the economic and social players and between
these and the State have been stepped up. In some cases, the
purpose of dialogue has been to tackle a situation of economic
recession, while in others the main objective has been to
provide a framework of social and political stability for
processes of democratic transition.

3.5.
Similarly, in recent years significant progress has been
made in incorporating the social dimension into the different
regional
integration structures in Latin America and the
Caribbean. Notable examples of this progress are provided by
the adoption of the 1997 MERCOSUR Multilateral Social
Security Agreement, and, above all, the adoption of the 1998
MERCOSUR Socio-occupational Declaration, which establish-
es a range of individual and collective rights in the workplace.
Initiatives taken by the other sub-regional groups include the
Andean Community decision to adopt a common range of
social policies promoting employment, a reduction in poverty,
boosting education, health and human rights. The statement
of intent drawn up by the representatives of the various social
sectors meeting at the Second Andean Community Social
Summit held from 24-26 February 1999,
is another step
forward towards the joint promotion of social policies. With
regard to the SICA, the social dimension of integration has
above all been substantiated by the Central American Social

Integration Treaty of 1995. In the Caribbean, CARICOM has
adopted an agreement on social security in force since 1997,
and in February 1997, the Caribbean Heads of State and
Government concluded the CARICOM Civil Society Charter
pledging to uphold fundamental freedoms and rights in the
workplace.

3.6.
There has also been significant progress in involving
the social partners and socio-occupational spheres more
closely in the processes of regional integration. In MERCOSUR,
the interests and views of the employers’ associations and
trade unions of the four member countries are represented in
the Economic and Social Consultative Forum (FCES), which
the group’s institutional
since 1994 has formed part of
structure as a consultative body. In the same way, the Andean
consultative employers’ council and the Andean consultative
workers’ council respectively fulfil consultative and advisory
roles in the Andean integration process. Following the decision
to fully reactivate the work of both councils, the Andean
Community has specified the objective of ensuring effective
participation of employers and workers in the integration
process, just as these have expressed their wish to establish a
forum for permanent dialogue. In Central America, the SICA
consultative committee, established in 1991, advises the SICA
general secretariat.

3.7.
The deepening regional integration in Latin America
and the prospect of growing integration between existing
groupings — in particular, between MERCOSUR and the
Andean Community — calls for greater emphasis on the
development of a social dimension as part of integration and
for greater participation of social spheres in this process. In
this respect, preserving a certain balance between areas and
social groups in terms of integration may be considered a
pre-requisite for achieving the harmonious expansion of
the wider markets. Consequently, progress in the reciprocal
opening-up of markets needs to be accompanied by mechan-
isms to preserve economic and social cohesion by supporting
less developed areas and ironing out the differences within the
regional blocs, and by consultation of the social partners.

3.8.
The importance of strengthening the social dimension
of Latin American integration is underscored by the Latin
American economic and social situation, whose main feature
is persistent widespread poverty. The political progress and
economic recovery achieved by many countries during the 90s
is at odds with the scant reduction in poverty levels. As
fundamental pre-requisites for achieving stable economic
growth, social cohesion, the definitive consolidation of democ-
racy and political stability, reducing poverty and satisfying
basic needs are probably the most significant challenges facing
Latin American countries on the eve of the 21st century. The
world financial crisis which has beset Latin America since the
second half of 1998, and which has once again damaged the
immediate prospects for economic growth, highlights the need
to implement structural policies designed to reduce poverty.

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In this respect, the persistence of poverty and other related
problems, particularly the unequal distribution of income, is
closely linked to the weakness of the social partners, the
particular problems besetting the region’s labour markets,
inadequate job-creation, the expansion of the informal sector,
and the lack of a skilled workforce. Strengthening the organis-
ations representing the social partners, their effectiveness, and
is
dialogue and coordination between such organisations,
crucial to solving these problems.

similar to those established under the agreements with the
countries of the Maghreb and central and eastern Europe, and
within the European Economic Area (EEA). Other ways
could be to incorporate these sectors into various sectoral
committees and commissions, give them an advisory and
assessment role, and enable them to attend ministerial meet-
ings as observers.

4. The social dimension in future interregional relations

The first EU/Latin American-Caribbean summit will
4.1.
herald the beginning of a new phase in the consolidation and
expansion of links between the regions. In this new phase,
maintaining dynamic interregional relations which help both
regions to face the challenges of the new millennium means
that dialogue and cooperation need to be based on the
principles of a model for society advocating close intercon-
nection between political democracy, an active and organised
civil society, respect for human rights, free market economy
with social justice, ecologically sustainable development and
regional integration.

Given the fundamental role which the organisations of
4.2.
civil society play in strengthening democracy, upholding
human rights, and in the economic and social spheres, their
participation in dialogue between the two regions should be
considered essential. The ESC, therefore, supports the active
participation of civil societies in the various bodies for political
dialogue and cooperation. The establishment of permanent
contact and institutionalised relations between employers’
associations, trade unions, consumer and trade associations,
among others, will help to achieve the objectives defined by
political bodies in both regions and to construct interregional
relations on the basis of solid links between civil societies.

4.3.
In this respect, the ESC considers it necessary to define
appropriate machinery for ensuring that organised economic
and social players participate in the various forums for
interregional dialogue, with regard to both relations between
the EU and the Rio Group and contacts between the EU and
the various sub-regional integration structures and individual
countries. It is important that negotiations on new interre-
gional agreements, with Mexico, Chile and MERCOSUR,
explore possible ways of ensuring the participation of represen-
tatives of trade unions, employers and other sectors in the
various interregional bodies. The ESC considers that one way
of boosting the participation of civil society representatives
in bi-regional dialogue should be to establish consultative
committees under the cooperation agreements with the sub-
regions and countries of Latin America and the Caribbean,

Strengthening socio-occupational associations in Latin
4.4.
America and the Caribbean should be a core objective of EU
dialogue and cooperation with the region. The EU could thus
help to boost the active participation of the socio-economic
groups in the framing and implementation of economic and
social policies, providing the key to an effective campaign
against poverty and social exclusion, with the emphasis on
promoting employment. All types of assistance,
including
technical and financial, for the most representative associations
would help these to fulfil such tasks. Similarly, as part of EU
support for sub-regional and regional integration, the exchange
of information and experiences regarding the participation of
organisations representing the different economic and social
spheres should be an area of priority cooperation.

4.5.
The ESC takes the view that strengthening ties between
the players in civil society in the EU, Latin America and the
Caribbean should ease the development of the social dimension
integration, an area in which
of Latin American regional
Europe has a long-established tradition.
In addition to a
more general exchange of experiences, EU socio-occupational
representatives could make a valuable contribution to Latin
American and Caribbean discussions on the pros and cons of
various aspects of integration. The European experience in
designing mechanisms for reinforcing economic and social
cohesion, both in general terms and in relation to restructuring
specific sectors of production, may also be of significance to
Latin America and the Caribbean, particularly as regional
integration progresses and expands beyond the sphere of
trade. Lastly, the establishment of contact and permanent
cooperation bodies involving players in the social and econ-
omic spheres could help to solve specific problems in other
areas of interregional relations, for example in the area of trade
where ‘social dumping’ could arise as a result of failure to
uphold fundamental human rights and basic international
labour standards, as defined by the International Labour
Organisation (ILO).

4.6.
The higher profile for the socio-economic groups
in interregional relations should mean that socio-economic
organisations and others representing social interests, will play
a significant role in implementing the various cooperation
programmes and measures. To this end, the ESC recommends
that ways be found to incorporate organisations representing
civil society into development and economic cooperation
programmes and to give them a more active role in channelling
these programmes. It is worth noting that several EU cooper-
ation agreements with countries in Latin America and the

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Caribbean in recent years embrace measures in areas such as
vocational training, job creation, and the administration of
social services, where the activities of socio-economic players
would be of particular relevance. Moreover, following the
success of programmes such as ECIP, AL-INVEST, ALFA
and URB-AL, it would be worth considering greater use of
decentralised cooperation programmes as a means of fur-
thering the objective of boosting the effectiveness of cooper-
ation.

Besides support for the implementation of policies
4.7.
promoting productive economic growth,
investment and
job-creation, the European experience shows that the ‘third
sector’, or the ‘social economy’, comprised of some types of
cooperatives, mutual societies and non-profit associations and
foundations, are potentially a considerable source of jobs. The
participation of representatives of these sectors in bi-regional
cooperation measures could, therefore, provide innovating
impetus for job-creation policies in Latin America and the
Caribbean. Similarly, as part of the fight against poverty and
social exclusion, cooperation in the field of job-creation should
give priority to measures specifically designed to support small
and medium-sized enterprises (SMEs) and micro-businesses.

Moreover, given the fundamental importance of education as
a basis for development, the consolidation of cooperation in
this area, including cooperation between universities in the
two regions, should be high up the bi-regional agenda.

4.8.
As part of its effort to support economic stability and
sustainable development in the countries of Latin America and
the Caribbean, the ESC considers measures that will help these
countries meet their foreign debt obligations to be useful and
necessary.

4.9.
As part of cooperation, the ESC sees it as a priority to
establish legal, programme-based and financial instruments
directly linking together the representatives of civil society,
and thereby facilitating mutual familiarity and direct contact.
Across-the-board cooperation establishing measures
to
encourage initiatives carried out directly by economic and
social players has proved a valuable complement to traditional
inter-governmental cooperation. Encouraging this type of
initiative is one way of fostering more direct cooperation,
which is less hide-bound by administrative structures, between
organisations representing the grassroots in EU, Latin America
and Caribbean countries.

Brussels, 28 April 1999.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI