Roundtable discussion on ‘EU-Latin America green partnership: what role can trade and investments play?
Held under Chatham House rule, this event offered a timely space for frank conversations between EU officials, senior diplomats, business representatives and think tank experts. In light of recent geopolitical developments, macroeconomic uncertainty and the continued climate crisis, talking candidly about the need and ways forwards for green partnerships was timely indeed.
To me, four main points stood out: first, the EU needs to follow up more thoroughly on previous commitments it has already made towards its Latin American partners. Second, there a coherent approach and strategy in managing such partnerships is still lacking and should be developped. Third, on a more positive note: several experts observe that there are enough relevant bankable project and investment options. Yet, the right system to turn them into concrete, mutually beneficial and sustainable opportunities is still lacking in European institutions and agencies. Fourth, partnerships need to enshrine local economic value addition and creation. EU actors and partner countries agree that mere extractive patterns are not enough, but their understanding and expectations on the nature and extent of this added value tend to differ significantly.
The Implementation Gap
On the first point, representatives from Latin American countries or with strong knowledge of them, noted that earlier agreements and partnerships already exist. An example is the Chile-EU partnership, signed in December 2023. In addition to a pure trade agreement, both sides have signed an association agreement on energy and raw minerals, which could provide the basis for deeper engagement and strategic joint projects and bears high relevance in the context of the EU’s bid to diversify its supply of critical minerals and related industrial products. Yet, little progress has been made since then. This is arguably only one example amid various pledges, announcements and agreements lacking concrete implementation and follow-up steps.
Gaps in implementation and follow-up on commitments came up several times in the discussion, also regarding the “lack of teeth” of EU standards for instance. This observation is also reflected, on a more general level, in discussions within our GSI project on Global Sustainability Agenda (see project page here): announcements and pledges can give the impression that enough willingness to act and available financing is there, but follow-up and actual delivery is a recurrent pain point. Thus, examining what is already there and leveraging existing partnerships can be seen as an amenable way forward.
Casting its shadow over EU-Latin America economic relations is obviously the EU-Mercosur trade agreement. After over 25 years of negotiations, a mutual deadlock some years ago, and renewed debates and controversies in the EU since its signing in January, it eventually entered provisional application on May 1st. This concrete step is being well-received, but the fact that the European Parliament could, and may well, block its full ratification, curbs optimism and adds uncertainty. While this situation has its reasons on the EU sides and in specific member states, it nonetheless continues to slow down cooperation with Latin American partners and to question the prospects of additional or more extensive partnerships.
The Lack of a Coherent Strategy
Second, several participants underlined the need for a better, more coherent approach and strategy in managing its partnerships. More than showing the existence of an underlying strategy, they form a patchwork of relations and agreements.
While EU standards were often regarded as generally adequate and welcome, they are viewed by some as creating additional difficulty and friction with Latin American partners. Some participants underlined the constraints brought by EU standards on deforestation, clean value chains, or its much-discussed Carbon Border Adjustment Mechanism (CBAM), which has now entered its definite period in January 2026 after a two-years transition phase. Yet, both sides have homework to do: it was also suggested that partner countries approach the EU more proactively, tabling clear plans and specific requests in the context of existing or prospective agreements.
The Issue of Investable Projects
Here, two contradicting perspectives emerge. On the one side, some European actors negatively noted the lack of a pipeline of concrete green projects that would be ripe for investment. They saw this gap as a main obstacle to delivering on such partnerships. On the other sides, colleagues from both sides of the Atlantic noted the availability of enough bankable projects and pointed to investments made by other large countries and actors as evidence for it. Arguably, EU agencies could invest more and find sufficient investable projects if it looks the right way and deploys the needed framework and coherent approach, as noted above.
An interesting remark was also made on the tendency to look at potential projects and investments from a purely economic point of view. If the EU wishes to make its supply chains more resilient and reduce dependencies and vulnerabilities to geoeconomic policies by diversifying for instance its suppliers of critical raw materials or related inputs, it may need to consider other factors. Strategic investments, i.e. financing projects that may not generate high or immediate profits, will be needed to reach such strategic goals. This also means considering the long time horizon needed for certain types of investments to bear fruits. A concrete example is given by new mining projects, which often need approximately 15 years before starting operations.
Adding Value Locally: Divergence in Interpretation
Based on their geopolitical and economic objectives, EU actors may see adding value locally primarily as a pragmatic pre-condition to get partners on board. This, of course, is not to say that values and positive intentions are absent.
Yet, some Latin American colleagues reminded us that the ambitions of their countries may go beyond, for instance, refining raw materials before exporting them. Put it simply, Latin American countries do not merely want to extract and refine a little for the EU to produce all advanced goods and sell them. They also aim to build a large part of the industrial value chains at home, producing for their domestic markets or even for international exports. This reality is arguable often overlooked and deserves being reminded. This would save time and efforts in exchanges, and help reach fair and mutually agreeable outcomes.
Conclusion
This highly informative roundtable featured a wealth and depth of perspectives and insights on improving green partnerships between the EU and Latin American countries. Both regions share a lot and, especially in current times, this common ground is a concrete asset. Differences remain and need to be addressed, some being more process-oriented, other rather based on values and normative perspectives.
This may seem like a tedious task indeed, and addressing the issues raised here will not be done overnight. Yet, such exchanges constitute a first step and shed light on where to start. By fostering the exchange of complementary, sometimes also conflicting perspectives, they provide enriching and pragmatic insights to advance common economic and environmental goals together.