FES BRIEFING IDEAS FOR A “POTENTIAL NEW MODEL” FOR THE COOPERATION BETWEEN LATIN AMERICA AND EUROPE Perspectives of a bi-regional dialogue Ana Paula García Erramuspe November 2024 This policy briefing outlines the main issues covered by the discussion between trade union and progressive political party leaders in Europe and Latin America and the Caribbean (LAC) as part of the„Reorganising Global Trade and Value Chains“ joint project of the Friedrich-Ebert-Stiftung(FES) and the German Trade Union Federation(DGB). levels of development, the differential contributions of both regions to the climate crisis and the differences regarding their capacities to contribute to financing the transition. There is a need for the EU to ensure fair but not equal negotiating conditions for a possible transition, which might even bring advantages over other competing partners. ABSTRACT Principles of cooperation. The weakening of democracy, which has been diagnosed as a general background is closely related to neo-liberal policies. Therefore, the creation of decent jobs appears as a central element for the salvation of democratic systems, while trade unionism is seen as“the last barrier against neo-liberalism”. Within this context, the distinctive value that would provide the European Union(EU) with an advantage in the competition with its partners could be to uphold certain principles of cooperation: the promotion of fair trade, the fundamental importance of employment and the promotion of social dialogue. The added value lies in cooperating with a democratic,“social Europe” that defends peace, decent employment and human rights – and demands that corporations from the EU with business activities in LAC do the same. As part of a policy of active non-alignment, a strong and autonomous Europe is very critical for Latin America. An opportunity for a new stage of bi-regional cooperation. There is a window of opportunity to move the relationship between Europe and LAC to a new stage, with a potential multi-level structure: 1) some form of remediation for the historical inequalities suffered by LAC; 2) some form of a win­win relationship that benefits both regions(energy sector); 3) some form of cooperation in areas where neither of the two regions has achieved any capital accumulation so far(artificial intelligence, platform economy, etc.). Rebalancing a historically asymmetrical relationship. The discussion of a“potential new model” of cooperation between LAC and Europe provides an opportunity to start rebalancing historical asymmetries by recognising the unequal Transition and(re)industrialisation. It is impossible to think of a transition without considering the need for a process of(re) industrialisation in LAC, including the incorporation of technology and an increase in the complexity of regional production chains. If the aim is to sustain LAC exclusively in its historical role as a supplier of raw materials, no just transition will be possible. There are two paths: deepening LAC‘s dependence or taking a leap in its right to development, which would benefit the strategic interests of both regions. Regional integration without alternative. The regional integration of LAC is a sine qua non condition for a mutually beneficial cooperation with the EU. LAC needs to agree on a common agenda for bi-regional relations, and advance in its intra-regional productive and trade integration. Its regional integration strengthens the possibilities for cooperation with the EU and the region´s trade opportunities and should therefore be a priority process within the framework of the bi-regional relationship. Financing the transition. LAC‘s endemic debt means that neither industrialisation nor transition will be possible without financing and expanding its fiscal space. In LAC“we are the environmental creditors of our financial creditors”: the region’s debt stems from its historical role of geopolitical subordination and economic dependence as a supplier of raw materials to developed countries. Transforming or overcoming these asymmetries also implies reforming international financial instruments – or even creating new ones – to end their corporate capture and advance fiscal justice. Just transition and just trade require just global relations. A bi-regional cooperation model for mutual development. Based on these key elements, it is possible to envisage a bi-regional cooperation model that does not entrench 1