This Briefing focuses on the economic dimension of the Association Agreements under discussion between the European Union and Mercosur, Chile and Mexico. These accords will create free trade areas and cover related matters such as intellectual property rights, government procurement, trade in services and capital movements. After examining trade relations between Europe and Latin America in their global and regional context, the paper considers the likely impact of the agreements on poverty in Latin America. We conclude that the EU is not taking sufficient account of human development concerns in their design – a failure stemming from excessive confidence in the contribution economic liberalisation will make to growth, and in the poverty reduction that will flow from that growth. Finally, we consider how the agreements could better achieve economic development and equity. Many of these suggestions are relevant to EU policies towards other countries in Latin America, and to any future regional agreement with the Caribbean.
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