SECOND TEXT

Kosovo has given the European Union a chance to forge elements of a new common foreign policy in the cauldron of war. Last week. More quietly and with far less sense of urgency, came a chance to do so in peace. At a landmark summit in Rio de Janeiro, 46 leaders from Europe and Latin America agreed on a broad range of political, cultural and trade initiatives to build a “strategic partnership” between the regions – and challenge the United States’ longstanding hegemony in South and Central America.

“The end of the North American century “trumpeted the daily Folha de São Paulo after the meeting. But even if words are followed by deeds, that proclamation seems premature. At present, E. U. trade with Latin America and the Caribbean is less than that with Switzerland. The U. S., on the other hand, claims that by 2010 it will export more to the region than to Japan and the E. U. combined.

Export markets are what Latin America needs most, but market access hasn’t been the E. U’s strong suit. The Old World has focused on development aid (Europe contributes mores than half of the region’s total aid receipts) and cultural links. Change will be grudging. Before the summit European governments squabbled over giving the European Commission a mandate for trade liberalization talks with the Mercosur bloc – Argentina, Brazil, Paraguay, Uruguay and associate member Chile. France in particular, as the prime beneficiary of the E. U’s lavish and protectionist agricultural policy, was loath to make any concessions ahead of the upcoming World Trade Organization negotiating round. The Commission did get its mandate, but the timetable for talks won’t be set until November and formal negotiations are unlikely to start before mid 2001.

“We had hoped the conference would have gone further,” said Prime Minister Antonio Guterres of Portugal, which along with Spain has been the principal advocate of greater trade with the region. Andrew Crawley, deputy-director of the Institute for European-Latin American Relations in Madrid, claims the Rio summit sill set the stage for a new trade era. “We essentially got Europe’s fast track,” he says, referring to the negotiating mandate denied to President Clinton by the U. S. Congress, thus complicating Washington’s efforts to secure a Free Trade Area of the Americas.

Even so, the E.U.’s protectionist farm tariffs are as much an obstacle to free trade as a fickle U. S. Congress. Latin America has greatly liberalized its trade regimes over the last decade, but Europe still discriminates against South American farm products, which make up 40% of Mercosur’s exports. Partly as a result, sales to Europe accounted for only 13.5% of Latin America’s exports in 1997, compared to 24% in 1990.

Brazilian President Fernando Cardoso has argued that if Europe can’t reform its agricultural regime, South America will gravitate more to the U. S. If that sparks a genuine competition between the U. S. and Europe to open their markets further to Latin American products, so much the better for South and Central America (Graff, J.L. “Europe Discovers America.” Time, July 12, 1999, p.25).

According to the text:

Item 2 - Latin America accounts for a small proportion of E.U.’s worldwide trade.