When EU leaders met with their counterparts from the Community of Latin American and Caribbean States (Celac) back in July, they had one overriding objective: reengage with a region in which it has lost considerable influence. The meeting was the regions’ first joint summit since 2015, and followed decades of the EU having prioritised non-EU Mediterranean countries, Africa and the Indo-Pacific over Latin America.

The European Commission’s new strategy for the region, as announced at the summit, comes primarily in the form of the Global Gateway Investment Agenda (GGIA), a €45bn commitment geared toward advancing common interests across Latin America and the Caribbean. With a focus on green, digital, and sustainable projects, the GGIA represents the EU’s most concrete effort to engage with Latin America in more than a decade. And this doubling down comes at a critical time for EU leaders.

The most Euro-compatible region

For the EU, Latin America represents both a golden opportunity and an obvious solution to many of the bloc’s stated interests and needs.

Spain’s top diplomat — its minister of foreign affairs, EU and cooperation, José Manuel Albares — has described the resource-rich region as “the most Euro-compatible region on the planet”. It is an apt description that goes beyond politics or shared history.

More than half of global lithium reserves, critical for the energy transition, are located in Latin America — particularly in Bolivia, Argentina, Chile, and to a lesser degree Mexico and Peru. The so-called ‘Southern Cone’ — consisting of Argentina, Chile and Uruguay — holds immense potential for green hydrogen. Argentina is also expected to become a major natural gas exporter in the coming years. This is on top of traditional resource endowments such as Chilean copper and Brazilian wind power, iron and petroleum.

Given all of these resources, what Latin America most needs today is external capital to finance its sustainable development and boost productivity. In this sense, the GGIA is a sort of perfect marriage. 

The Beijing factor

The EU is the largest source of foreign direct investment (FDI) in Latin America and the Caribbean, according to fDi Markets. However, FDI stock has levelled off in some major economies, such as Brazil and Argentina, in recent years amid political turmoil and sluggish growth.

In neglecting these economic ties, the EU has lost valuable ground to rivals such as China, which now counts more than 20 countries from Latin America & the Caribbean (including key regional economies such as Argentina and Peru) within its landmark Belt and Road Initiative. China has also emerged as a major player in capital flows into Latin America. According to the American Enterprise Institute’s China Global Investment Tracker, Brazil was the largest recipient of Chinese outbound investment worldwide in 2021. While China has had its own trouble with development finance projects in countries such as Ecuador and Venezuela, the past decade has nonetheless seen the Asian superpower grow to become economically indispensable to the region.

Harnessing the GGIA’s significant budget, the EU aims to revitalise its presence within Latin America through a combination of private- and public-sector funds. While early commitments have been made, including €600m for green projects in Brazil and Chile, questions remain regarding the true feasibility of the EU’s proposed €45bn plan and its ability to mobilise the private sector.

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• EU's €45bn plan tackles Latam's productivity woes
• Arajet spreads its wings to turn Santo Domingo into aviation hub

The Chinese elephant

By all accounts, the EU–Celac summit was not a dramatic shift in global politics. As a leading journalist covering Latin America quipped to me following the summit: “It’s not a good sign when the fact they’re meeting at all is the biggest achievement.”

European leaders failed to convince most Latin American countries to join its unequivocal stance regarding the war in Ukraine, while both Mexico and the Mercosur regional bloc walked away with no substantial progress on their prospective trade agreements with the EU. All the while, China’s implicit position in Latin America hovered over discussions. This was also the case in recent European Parliament hearings on trade relations with Latin America. Evidently, for many in Brussels, the elephant in the room is the fact that China will secure any business the EU walks away from in the region.

But for all its shortcomings, the GGIA does reflect an encouraging, albeit tepid, sign for EU–Celac ties. If there are tangible results on display in 2025 when the two sides are due to meet again in Bogotá, this may well go a long way in resolidifying relations.

Gabriel Cohen is a doctoral fellow at the Institut Barcelona d’Estudis Internacionals completing his PhD on Chinese and European FDI trends in Brazil and Argentina. He is also senior editor at Latinometrics.