Foreword

This document was prepared as a cooperative effort by the Eurasian Economic Commission (EEC) and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) to reveal and examine opportunities and cooperation challenges between the Eurasian Economic Union (EAEU) and Latin America and the Caribbean (LAC). The report has compounded a framework of cooperative ties established by the Memorandum of Understanding concluded between EEC and ECLAC in Moscow in 2018. The readiness to join forces demonstrated by the two international organizations reaffirms their adherence to the shared principles of multilateral partnership. These common core values bridge the two geographically, historically and culturally distant regions. Aiming to identify the most fruitful collaboration areas, the present document scrutinizes the regions’ commonalities and peculiarities, as well as both barriers to and spurs for interaction. Proceeding from the analysis of the economic, political and social development of EAEU and LAC States while highlighting the strengths and weaknesses of the two regions, the report elaborates on the patterns of inter-regional trade and foreign direct investment (FDI) ties, exploring the possible opportunities that could strengthen commercial relationships between their businesses. Whereas both EEC and ECLAC place specific emphasis on inspiring entrepreneurial contacts, the current level of interaction seems far from the intensity and efficiency it could deliver. Despite the regions’ unarguably large markets and the prospects for creating interregional value chains, recent growth in trade turnover has been based on low value added products, including fertilizers and food items. Notwithstanding the increase in investment volume, the major share of capital targets offshore territories. At the same time, the investment case study suggests that joint ventures and business initiatives have recently tended to defocus from extractive industries to encompass such spheres as information technology (IT), pharmacy, engineering, etc. In the face of the current pandemic those are areas of renew and strategic importance. Nevertheless, to fully realize the

potential, these projects, constituting the basis for the regions’ economic and technological advances, require specific support and stimulus. Having identified the level of intensity of real sector contacts and their underlying reasons, the report focuses on the regions’ development paths, examining their inclusivity and sustainability. Despite both regions having made strides in ensuring sustainable and inclusive growth, neither has come close to their realization. While multidimensional inequalities have represented the major challenge for LAC, EAEU member States have achieved considerable advances in trying to overcome them. On the other hand, EAEU has not progressed enough in combatting climate change given continued investment in fossil fuels. In LAC, the need for a big environmental push is more widely acknowledged and the region has been at the forefront of advancing renewable energy development partly due to advantageous geographic conditions. The new challenges today’s world faces, including the COVID-19 pandemic, climate change, the erosion of core principles of the multilateral trade system, trade wars and growing uncertainty in global markets, might seem to constitute additional obstacles to expanding economic relations. Indeed, the fragility of coordinated global efforts towards sustainable development raises the importance of transparent bilateral partnership in these areas. Supporting this idea, the last chapter of the report sheds light on different opportunities between the two regions, both in the form of sharing public policy experience and spurring business links. To conclude, both regions have made a promising joint effort to promote friendly and cooperative relations between them. Nevertheless, further efforts are required to bring public and private actors from EAEU and LAC together and help them develop the same kind of positive working relationships.

Alicia Bárcena Ibarra Executive Secretary of ECLAC Sergei Glazyev Member of the EEC Board – Minister in charge of Integration and Macroeconomics