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EU and Latin American Leaders Talk Trade Relations

  • Lisa Bryant

European Union and Latin American leaders are holding a summit in Madrid where they have agreed to restart stalled trade talks, and address other issues. The idea of liberalizing trade between the two sides is controversial.

The three-day Madrid summit is expected to address a number of issues, including Haiti's recovery from its devastating earthquake and climate change. Also on the agenda is deepening trade ties between the 27-member European Union and Latin America - specifically reviving free-trade talks between the European Union and the Latin American bloc, Mercosur. The block consists of Argentina, Brazil, Uruguay and Paraguay.

Opening up the summit, Prime Minister Jose Luis Rodriguez Zapatero of Spain talked about pacts already forged between the European Union and two Latin American countries, Chile and Mexico. Spain hopes to make the Madrid summit a highlight of its rotating European Union presidency, which ends June 30.

Mr. Zapatero said the EU agreements with Chile and Mexico had brought many benefits and there is still plenty of unexplored territory to tap.

The European Union is Latin America's second-largest trading partner, and some European officials are eager to strengthen those trade ties - aware of growing competition from China, among other nations.

But France and several other EU nations are wary of a free-trade agreement with Mercosur, arguing it could hurt European farmers. Nevertheless, agreement was reached to resume talks on reaching a free trade agreement.

Overshadowing the Madrid summit is the financial crisis in Greece and its fallout - notably sharp drops in stock markets and the EU currency, despite a massive fallback package of loans for troubled EU economies.

Speaking to reporters in Madrid, EU permanent President Herman van Rompuy defended the bailout plan by the European Union and International Monetary Fund, which totals nearly $1 trillion. He noted European officials are also committed to strengthening the governance of the 16-nation Euro-zone of countries that use the euro currency.

"This is a strong and credible package of decisions. Let me reaffirm the determination of the euro-area authorities to ensure the stability of the euro area as a whole, as a main contribution to the stability in the global economy," he said.

Euro-zone finance ministers have been meeting in Brussels to talk about tighter financial regulation, among other issues.