New Euro-Latin Trade Links

Only half-jokingly, a summit that has brought together 33 Latin American heads of state and 13 from the European Union has been dubbed the farewell party for the Monroe Doctrine, the 1823 declaration that asserted U.S. dominance in the Western Hemisphere.

Although uninvited, the United States should pay close attention. Both Congress and the White House have failed to make progress toward what President Clinton promised at a 1994 Miami summit: a hemispheric free trade zone in place by 2005. The Rio de Janeiro summit that ends today, aimed at eventually opening Euro-Latin trade, should restore a sense of urgency to the U.S. plan.

Separate from the summit, Mexican negotiators say they are confident that the European Union and Mexico will sign their own free trade agreement this year.

A new brand of Spanish conquistadors is also establishing a boot hold in the hemisphere. Spanish investors are building hotels in Cuba and partnering with Argentine telecommunication companies. They have formed powerful banking chains in Mexico and are working on energy projects in all of the major Latin American markets. Spain has become the second-largest foreign investor in the region, very close to the level of the United States. The Italians and the Portuguese, just as anxious to rediscover the Americas, are still exploring ways to increase trade and investment.

It will be harder for Latin America to win access to protected European markets, but the pending deal between the European Union and Mexico indicates that it is possible.