INAUGURATION SPEECH FOR THE PRESIDENT OF THE EU-LAC FOUNDATION, BENITA FERRERO WALDNER, AT THE SEMINAR EUROPEAN UNION

AND THE PACIFIC ALLIANCE: JOINT OPPORTUNITIES

Hamburg, 6 November 2013 PLEASE CHECK AGAINST DELIVERY UNICAMENTE SER AUTNTICA LA VERSIN PRONUNCIADA Su excelencia Ministra Holgun, Embajadores, Autoridades nacionales, Distinguidos invitados, Queridos amigos, Seoras y seores, Quiero darles una cordial bienvenida a este espacio de reflexin sobre el potencial de una asociacin an ms estrecha entre la Unin Europea y Alianza del Pacifico. Es un verdadero honor y placer estar aqu junto a la Ministra Mara ngela Holgun representando a la Presidencia Pro-tempore de Alianza del Pacifico y al representante del Banco Inter-Americano de Desarrollo (BID) en Europa y querido amigo, Alejandro lvarez von Gustedt en representacin del Presidente del BID, que ha debido viajar al Asia. Thank you for joining us today, and a special thank to the Inter-American Development Bank for being part of this joint effort to promote the potential to enhance and deepen relations between the EU and LAC on the basis of their mutual benefit. Very special thank also to Eurochambres, and the Hamburg Chamber of Commerce for their support to this EU-LAC Foundations initiative, attending a request from the Pacific Alliance. The EU-LAC Foundation seeks to foster mutual knowledge about the Latin American, Caribbean and Europe with the view to identify and maximise the opportunities laid out by the bi-regional strategic partnership. It is in this framework that we have proposed to discuss the EU-Pacific Alliance relationship, and more specifically joint opportunities to be explored in a number of areas of common interest, including investment and trade in goods and services. These are timely issues for a number of reasons. The EU and the Pacific Alliance: Potential Partners in International Insertion 1. A changing global economy To begin with, EU-Pacific Alliance relations should be considered under the general context of a changing world most notably marked in recent years by the emergence of new concentrations of power.

The emergence of new actors on the world stage has changed and continues to change the world map of trade and investment today, as have the economic and financial crises of the last few years, by leading investors towards the comparatively more dynamic economies of growing regions as Asia and Latin America. With new actors on the world stage with dynamic economies open for trade, a wider range of options is increasingly available for countries to diversify their economic relations, contributing thus limiting their exposure to global risks, such as the fluctuation of commodity prices, while also allowing them to take advantage of new opportunities, like access to emerging consumer markets. Furthermore, these changes go beyond what the OECD had once called shifting wealth, as they also include new geopolitical alignments and vulnerabilities. Before this changing scenario, how can we best integrate the global economy? How to take advantage of the economic opportunities it offers, while ensuring at the same time sustainable development and preservation of the shared system of values such as democracy, rule of law, respect for individual freedoms, tolerance and so forth? 2. A similar approach to international insertion with common challenges ahead Secondly, several strategies have been in fact developed over the past decades to achieve insertion in the global economy. The complex geometry of the Latin American integration map currently bears witness to the diversity of options present today. In this regard, the EU and the Pacific Alliance could be said to share a similar approach: both share goals, values, and methods for international insertion in the global economy.1 And they do so, as Minister Holgun recently explained to the press, out of a conviction that free trade and the free circulation of goods, services, [capital] and people contribute to development,2 something that Europe has experienced in its integration process. As partners in international insertion, the EU and the Pacific Alliance stand to benefit both from a strong relationship between its Member States and, ultimately, a connection between the EU, Latin America and Asia via the Pacific Alliance, which could lead to the emergence of joint opportunities, such as the development of global value chains encompassing these geographical areas3 and gaining competitiveness. On the one hand, the Pacific Alliance comprises young and dynamic economies with an enormous potential for growth and in a strategic position towards Asia. On the other hand, Europe remains the largest single domestic market, an advanced economy with know-how in crucial areas such as innovation, technology, quality education, etc. What is more, the completion of the Transatlantic Trade and Investment Partnership cannot be overlooked by Pacific Alliance. In this regard, a close and mature relationship between us can only be beneficial.
1 The goals, values and methods of the Pacific Alliance are laid out in articles 2 and 3 of its Framework Agreement. Available online at: http://www.iadb.org/intal/intalcdi/PE/2013/11593.pdf. Regarding shared goals of free circulation of goods, services, capital and people, promotion of economic growth, development and competitiveness, and international projection on the EU side, see Consolidation Version of the Treaty of the European Union, Title I: Common Provisions, Article 3. Available online at: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2012:326:0013:0046:EN:PDF Concerning shared values, see also existing trade agreements with Pacific Alliance Member States, including Chile, Colombia, Mexico, and Peru. 2 Infolatam (October 16, 2013). Colombia defiende la Alianza del Pacfico de las crticas de Evo Morales. 3 Jos Antonio Sanahuja (2013). Towards a New Framework of Relations Between the European Union and Latin America and the Caribbean. (25). BBVA (August 22, 2012). Economic Watch: New Pacific Alliance Bloc: Mexico and Andeans look towards Asia. (1) and (4).

Working together to take advantage of economic opportunities Ladies and gentlemen, For economic actors to take advantage of these opportunities and enjoy their full potential, joint work should be carried out in a number of intertwined areas of common interest, such as a) infrastructure development, b) education, vocational training, research and technology, and c) support the development of small and medium sized-enterprises (SMEs). Infrastructure development Infrastructure development, as recently noted during a conference on Latin American and European infrastructure and integration, in which I participated in Paris, is a key driver of sustainable development, not only because it facilitates trade, but also because it brings isolated communities into the fold, granting them better access to a diverse set of basic social services and including them into modern economy. The local community in the context of globalization, more then in need to be saved from the threats of modernity, needs to be part of an open process of territorial development that allows its own socio-cultural character to project itself from the local towards the global scene, as an essential opportunity to attain global viability. But it is not only regarding territorial development where infrastructures are key. The development of good-quality infrastructures is needed to attain competitiveness, an inexorable condition of globalization that demands on both sides of the Atlantic immediate direct responses. These can be pursued through such avenues as international cooperation and public-private partnerships.4 Education, vocational training, research and technology Education, vocational training, research and technology are also key to ensuring sustainable development insofar as investment in these areas translates into productivity gains and sustainability in the medium to long term, hence, leading to a greater degree of competitiveness on the world stage. In this regard, I would like to stress that both the EU and the Pacific Alliance would benefit from the development of vocational training programmes. Germany and Austria are good examples of its success in tackling unemployment and productivity. Only last month Pacific Alliance countries announced two initiatives in this context, a scholarship program and a network of scientific research on climate change, to whose development the EU could contribute through the exchange of best practices, considering its experience and the common interests at stake.5 Support the development of SMEs Last but not least, supporting the development of SMEs is also essential for sustainable development and the creation of global value chains, through the establishment of companies geared towards the production and export of goods within and between Asia, the Pacific Alliance and the EU.

In the case of the Pacific Alliance, see Pacific Economic Cooperation Council (February 15, 2013). The Pacific Alliance: A Latin American for Asia Pacific Regional Integration. 5 El Pas (October 8, 2013). La Alianza del Pacfico: Construyendo un futuro integrado.

With this goal in mind, the Pacific Alliance is working on a program to increase the competitiveness and innovation of micro, small, and medium-sized enterprises (MSMEs), on which it would be interesting to learn more. The EU-LAC Foundation, for its part, is also working towards this goal by means of a project to draw the industrial map of Latin America & the Caribbean, MIALC (Mapa Industrial de Amrica Latina y el Caribe), and in which all 4 Pacific Alliance Members are included amongst the 9 pilot countries.6 Infrastructure development, education, research and technology, and supporting the development of SMEs are but few areas in which we could work together to take advantage of the opportunities that a strong relationship between the EU and the Pacific Alliance offers. I trust that today exchange of ideas will be fruitful, allowing us to engage in a longer and productive discussion about the wider range of opportunities to explore in the future. Without further ado, it is an honour to pass the floor to her Excellency Minister Holgun.

The 9 pilot countries include: Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru and Uruguay. Concerning MIALC, see EU-LAC Foundation website: http://eulacfoundation.org/news/seminar-latinamerica%E2%80%99s-and-caribbean%E2%80%99s-industrial-map-launches-mialc-project