Trade with the European Union has not significantly improved the situation of workers in Latin America

Trade with the European Union (EU) hasn’t changed the situation of the labor market in Latin America. This while the mutual trade between 1990 and 2007 doubled. The EU is the largest investor in Latin America, mainly due to Spanish multinationals, and is also Latin America’s second largest trading partner, after the United States, although China is rapidly catching up with the European bloc. In turn, Latin America sells commodities to Europe.

Since 1997, several free trade and association agreements were signed, others are still in negotiation. The volume of trade increased from 86 billion euros in 2003 to 158 billion euros in 2007. The main trading partners in Latin America are Brazil, Mexico, Argentina, Chile and Colombia.

According to the Chilean economists Claudio Lara and Consuelo Silva, authors of the book Las relaciones entre economicas Unión Europea-América Latina y sus impactos los mercados laborales (1990-2007), (The economic relations between the European Union and Latin America and their impact on employment (1990-2007)), the repeated promises that economic openness and investment would provide more and better work in Latin American countries, are not materialized.

Lara and Silva have noted negative consequences. The number of jobs in sectors such as agriculture, fisheries and mining has declined despite the European investment. There is an increase in employment in services. Especially the financial sector has grown, but the real economy and creating jobs were not benefited by it. European companies often mergers and are primarily interested in flexibility, outsourcing and subcontract. “European multinationals operate as conglomerates. Their investments are intended only as temporary or as a bridge to Caribbean tax havens, ” said Lara and Silva. In five of the eleven countries surveyed, the real wages have fallen over the past decade.

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