ADDRESS BY EU-LAC FOUNDATION PRESIDENT BENITA FERRERO-WALDNER AT THE CONFERENCE Perspectives for the Future of EU, organized by Fundao

Getlio Vargas and Konrad Adenauer Stiftung Rio de Janeiro, 9 May 2012

PLEASE CHECK AGAINST DELIVERY UNICAMENTE SER AUTNTICA LA VERSIN PRONUNCIADA Prezado Senhor Carlos Ivan Simonsen Leal, Sehr geehrter Herr Knirsch, Prezada Senhora Elena Lazarou, Prezada Senhora Ana Paula Zacarias, Senhoras e senhores acadmicos, Senhoras e senhores, Ladies and gentlemen, uma grande alegria poder voltar ao Rio de Janeiro para, em nome da Fundao Unio Europia - Amrica Latina e Caribe, participar desta reunio. Foi aqui, na primeira cimeira bi-regional do Rio de Janeiro em 1999 que a Unio Europeia e a Amrica Latina estabeleceram uma parceria estratgica. Thank you very much for your kind invitation to attend this seminar Perspectives for the Future of the European Union. I am delighted to be back in this marvellous city, and I am looking forward to having a stimulating exchange of thoughts with all of you. As you may be aware, Latin America and the Caribbean is a region that has accompanied me throughout my political and diplomatic career as Secretary of State and Minister of Foreign Affairs of my home country, Austria and later on as European Commissioner for External Relations and European Neighbourhood Policy. Today, it is my pleasure to address you as President of the new European Union-Latin America and Caribbean Foundation, the EU-LAC Foundation; a role I hold with great pride and enthusiasm. Our mandate is to closely involve the societies of Europe, Latin America and the Caribbean and transform the strategic partnership between our regions into a visible reality with tangible results and mutual benefits. Given my trajectory, the programmatic statement I am about to make will not surprise you: I believe that there is a tremendous mutual interest in deepening cooperation between the

European Union and the Latin American and Caribbean region. And Brazil as a strategic partner deserves special attention. Senhoras e senhores, Ladies and gentlemen, Allow me to concentrate on two issues, which I consider especially relevant in the context of todays conference: Perspectives for the strategic partnership between the EU and Latin America and the Caribbean in a new global context with special references to the relations between the EU and Brazil. The role of the EU-LAC Foundation as a catalyst for increased mutual understanding via a strengthened multi-level and multi-stakeholder dialogue I. Perspectives for the EU-LAC strategic partnership in a new global context

Ladies and gentlemen, The European Union and the countries of Latin America and the Caribbean launched the strategic partnership more than a decade ago. And since then, the world has significantly changed. Indeed, these changes come along with important challenges, also for our bi-regional relations. However, our two regions have a lot to build on, including shared history, values and languages, as well as an impressive track record in the domains of political dialogue, development cooperation, trade and investment. The EU is the foreign leading investor in the region and Latin Americas second (2.) trade partner after the United Stated and followed by China.1 Brazil, in particular, features among the top ten trade partners of the EU.2 These are firm stepping stones for projecting our partnership into the future. What we need to do though, is to show enough flexibility and creativity to adapt to the new context and jointly manage the current challenges to our mutual advantage and benefit. The global financial and economic crisis affects us all, even if -and unsurprisingly so- in different ways. Today, the EUs economic downturn and the dilemma to assure financial stability and improve economic governance without damaging prospects for much needed growth contrasts with the overall dynamism of Latin America and the Caribbean. From a regional perspective, Latin American and Caribbean economies have performed well and shown a considerable degree of resilience. Two thirds of them grew at rates above 3 per cent last year. And there are other positive indicators, such as an increase in exports of 23 per cent during 2011 and a reduction of the unemployment rate from 7.3 per cent in 2010 to an anticipated rate between 6.6 per cent and 6.8 per cent in 2012.
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Based on figures for 2010. Based on figures for 2011, Brazil is the 9th most important trade partner for the EU.

Indeed, a climate of optimism prevails. Latin America and the Caribbean are increasingly seen as part of the solution rather than part of the problem. Not too long ago, the Director of the Interamerican Development Bank, Alberto Moreno, said that we were witnessing the Latin American decade. And in a recent speech in Madrid, Antonio Tayani, Vice-President of the European Commission and European Commissioner for Industry and Entrepreneurship predicted a brilliant future for the region as a whole. On the other hand, during a visit to Brazil last December, IMF Managing Director Christine Lagarde, urged Euro zone countries to find a collective and comprehensive solution to the crisis or risk enduring a lost decade3 ; a term that used to be a standard quotation to describe the Latin American debt crisis of the early 1980ies. However, a word of caution also seems to be justified. According to the Economic Commission for Latin America and the Caribbeans (ECLAC) balan ce and prospect for the Latin American and Caribbean economy, regional growth will suffer a slight slowdown to 3.7% this year having reached 4.3% in 2011 and 5.9% in 2010. This is due to international economic turmoil, lower growth of the world and especially Europes economy and greater uncertainty and volatility in international financial markets. Moreover, competition especially from Asia- is fierce. To cite a recent article in The Economist, the worry is that competitors from Asia are eating the regions lunch.4 With regards to the European debt crisis, I would like to say that this crisis is the best evidence that we need indeed more Europe not less in order to re-boost the European project. This project we must not forget this- remains a tremendously successful experience in terms of peace, solidarity, progress and wellbeing, an experience much admired in the whole world. It is therefore not the validity of the European project itself, which is currently at stake but its viability, and its economic and financial governance in particular. Ladies and gentlemen, In a recent speech in Brussels, EU Trade Commissioner, Karel de Gucht, spoke about the central role value chains have acquired in the global economy, acknowledging that todays products and services are the end result of a highly coordinated series of steps carried out in many countries around the world by many people with many different skills.5 This means that for all economies including Europe and Latin American and Caribbean prosperity will at least partly depend on the degree of economic integration that a country is able to achieve. Over time, the objective for economies is to become cost-efficient in those parts of the value chain that add the most value.

Emerging Markets Seen as Part of Solution to Global Problems, IMF Survey online, December 2, 2011 (shttp://www.imf.org/external/pubs/ft/survey/so/2011/CAR120311A.htm). 4 Unity is strength: Regional integration, not protectionism, is the right response to fears of deindustrialisation, April 10, 2012 (print edition). 5 A Partnership for the Future, IRELAC Conference, Brussels Management School ICHEC Brussels, April 24, 2012, http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/12/297&format=HTML& aged=0&language=EN&guiLanguage=en
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Notably Brazil has performed well in this regard. Its passenger jet industry is a good example although not the only one. At the same time, it is also true that much of the economic growth the region has seen since the 1990s is linked to the success of commodity exports with high prices due to increased demand from emerging economies, whether they be food, metals or fuel. Diversification to higher steps in the value chain is crucial if development is to continue and to be consolidated. This requires further modernisation, increased productivity and competitiveness, and quality investment. Ladies and gentlemen, Senhoras e senhores, I have deliberately put the emphasis on quality investment, as this is one of the areas where our bi-regional relations can generate real added value. The central theme of the seventh EULAC Summit, this is the EU-CELAC 6 Summit, in Santiago de Chile in January 2013 prominently reflects this idea. Both regions agreed on an Alliance for Sustainable Development: Promoting Social and Environmental Quality Investments. This clearly shows a strong convergence of interests between our regions. We agree that we need to do our utmost to pursue an economically, social and environmentally balanced development. Generally speaking, Latin American and Caribbean economies need to step up their game in terms of modernisation and productivity, and the EU is very well placed to contribute to this providing quality investment and technology. In this context, a reinforced cooperation between our regions in the field of small and medium size enterprises is crucial and extremely promising. In Europe, small and medium size enterprises play a decisive role for the competitiveness and the dynamism of our economies. Commissioner Antonio Tayani recently underlined the medium-term objective of the European Commission to establish a dialogue between small and medium size companies on innovation with the EUs partners across the world. Later on, you will see that at the EU-LAC Foundation has also identified this area as a top priority. In all this, dear ladies and gentlemen, Brazil and EU-Brazil relations play a special role. Since 2007, the EU and Brazil are strategic partners, therefore paying tribute to Brazils role as Latin Americas mayor economic actor and regional leader with growing importance in broad range of global fora. The importance of Brazil on the EU agenda cannot be underestimated. Effectively, EU strategic partnerships as the one with Brazil represent one of three key priorities of the EUs High Representatives, Baronesse Catherine Ashton mandate. Their overall purpose is to find ways to jointly tackle some of the pressing global issues we face. The Community of Latin American and Caribbean States (CELAC) brings together the 33 countries that make up the region. It results the merging of the Rio Group and the Latin America and Caribbean Summit on Integration (CALC).
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Topics, such as climate change and development stand out prominently in the EU-Brazil partnership. But there are other important fields of cooperation, including sustainable energy, the fight against poverty, the Mercosur integration process and the regions prosperity and stability, as well as effective multilateralism. With regards to the ongoing EU-Mercosur negotiations, it would be highly desirable to bring them to a successful conclusion. Having said this, I am well aware of the challenges this entails. Ladies and Gentlemen, Eventually, and in spite of our differences and the specific challenges each region and each country face, our governments share the strife for growth, sustainable development and job creation. The critical nature of sustainable development for all of us requires smart and creative partnerships. Having said this, I could not agree more with EU Commissioner for Trade, Karel de Gucht that we need to recommit to policies of productivity, growth and economic integration within our own regions and in our relationship with each other. In this regard, let me assure you that regional integration and regionalisation have not lost momentum. Far from it! Regional integration is key to combat the risk of deindustrialisation, boost intra-regional trade and foster development across Latin American and the Caribbean. In the medium- and longer term protectionism does not pay off. In any case, today we may need to rethink and redefine our bi-regional relations according to the challenges of our times. We need to foster mutual understanding and effectively involve our societies in the strategic partnership. This means listening to the voices of a wide range of stakeholders on various levels. This is the way forward for forging the contemporary and possibly both a more realistic and a more balanced agenda between our regions. And this is precisely, ladies and gentlemen, where the EU-LAC Foundation can make a difference. II. The role of the EU-LAC Foundation

The Foundation located in Hamburg is composed of the governments of Latin America and the Caribbean and the Member States of the European Union as well as the EU institutions, all of which are represented in the Foundations Board of Governors. It was created in Madrid at the 6th EU-LAC Summit, almost exactly two years ago and took up its activities in November last year. Our goal is to connect the non-governmental sectors of Europe-Latin America and the Caribbean with each other and to bring them closer to the agenda of the governments of both regions. We want to strengthen channels and mechanisms of dialogue and debate thereby enhancing the impact on key areas for constructing the bi-regional strategic partnership.

A wide range of stakeholders across the economic, social, cultural, environmental, academic and educational, research and technology domains shall progressively own and invest in the strategic partnership between the EU and Latin America and the Caribbean. As I said at the beginning of my speech, we are determined to involve the societies of Europe, Latin America and the Caribbean more closely. By doing this, we want to strengthen and transform the strategic partnership between our regions into a visible reality with tangible results and mutual benefits. The Foundation will carry out activities across the whole range of areas that define the biregional agenda, such as: Social cohesion and inclusion, the fight against poverty and employment creation Sustainable development Climate change Integration, trade, and connectivity Science, technology, and education, with an emphasis on the role of small and medium-sized enterprises Education and culture Investment Europe, Latin America and the Caribbeans participation in international investment and trade flows The EU-LAC Foundation works through a limited number of strategic partnerships from both regions. Each of them represents a specific field of action relevant to the bi-regional partnership. They will, in a non-exclusive way, take a leading role in executing activities related to their field of expertise. In Europe, our strategic partners are: The Institut des Amriques in Paris. The Lombardy Region in Italy. While the former is a frontrunner in the field of dynamics of regional integration in the context of globalization, the latter contributes with a wealth of experience in the field of partnerships among small and medium sized companies, with a special focus on innovation, research and technology transfer. In Latin America and the Caribbean, we are currently awaiting the formal approval of two more strategic partners, this is: The Fundacin Global Democracia y Desarollo (FUNGLODE), located in the Dominican Republic () a pluralistic and interdisciplinary think tank and research

centre for public policies, democracy promotion, human rights, the rule of law, sustainable development, etc. The United Nations Economic Commission for Latin America and the Caribbeans Apart from these strategic partners we will collaborate with many more allies from the public and private sector and civil society, such as, for example, the Interamerican Development Bank (IDB/BID), the Development Bank of Latin America (CAF), the Latin American Faculty of Social Sciences (FLACSO), the Organisation for Economic Cooperation and Development (OECD), and many more. Ladies and Gentlemen, Dear friends, Allow me to draw your attention to the fact that we are a very young institution with limited resources albeit great aspirations. We are determined to match these. To do so we, however, need the explicit political and financial commitment and support of our founding members who decided to create the EU-LAC Foundation in Madrid almost two years ago. In parallel, we are actively looking for external sponsors. But these additional funds can by no means ensure the financial viability and the development of the EU-LAC Foundation and enable us to bolster the strategic partnership in the ways I have described earlier. To conclude, I would like to repeat my initial statement: There is a tremendous mutual interest in deepening cooperation between the European Union and the Latin American and Caribbean region, particularly ahead of the next Summit in Santiago de Chile. We live in challenging times. There is no doubt about that. But together we can target and seize the opportunities and benefits where they are. I have no doubt about that either. Thank you very much for your attention. Muito obrigada.