chapter  6
22 Pages

‘Gentle Commerce’ or Structural Power? EU Aid to Emerging Markets in Latin America and Asia

This wide-ranging chapter looks at the EU’s aid to geographically diverse countries and regions. Many will baulk at the notion of grouping together the countries of Latin America, and South and East Asia; however the EU does this with its aid policy. These areas have little in common save for the fact that they include dynamic developing economies which offer strong commercial opportunities, and are potential new axes of power. From the European perspective they also share the fact that they are at a remove from the EU’s core security concerns. Furthermore, although there are colonial linkages with these regions there has been a much less intimate post-colonial relationship than has been the case for the Africa, Caribbean, Pacific countries. The EU used a generic aid instrument for all of these distant partners, based on the Asia and Latin America aid regulation of 1992. There is no rigorously accepted definition of an ‘emerging market’. The countries focused on here are the ‘newly industrialising countries’ countries (that have achieved rapid growth and significant foreign investment) within these vast regions, which are ranked in the IMF’s 50 largest national economies (as measured by GDP). These are

Mexico, Venezuela, Chile, Argentina and Brazil in Latin America Indonesia, Malaysia, Thailand and Vietnam in South East Asia China India

The last two are dealt with relatively briefly as there is already substantial material devoted to their implications for the West (Smith 2007), and their sheer size means that aid is always going to be limited in impact. This chapter offers an opportunity to look more directly at the role of EU aid in promoting its influence in the context of economic globalization. One core aspect of this is the EU’s role in shaping regional integration in dynamic world regions, and the case study is of Mercosur in South America.