out of proportion to the benefits received. Quite apart from the banana issue, economists would that, given the growing openness of markets around the world and the facility with which capital moves, ACP countries would gain from free trade that was global rather than preferential in nature and that EU consumers should be free to choose which goods, imported or not, they wish to consume. In a simulation of the effects of continued EU-ACP preferential free trade, Matthew McQueen has shown that while the EU gains in export sales the results for ACP countries would be a loss of welfare, pressure toward balance of payments deficit, slower growth, and a loss of import duty revenue.xxxix Finally, the fact that the individual ACP countries are so dramatically different in their levels of development, industrialization, and income suggests that no single blanket structure, such as Lomé Convention, could be appropriate for all of them.
5e. – This relationship has been developing considerable interest during the decade of the 1990’s. As the EU seeks to expand its presence out of its immediate region, Latin America is one of the most promising potential partners. The development of a more open, and less ideological, focus throughout Latin America has increased its attractiveness. From the standpoint of Latin America, the EU provides a much desired alternative to the US as a linkage with an industrialized region with a large market for its goods and services. The economy of Central America is not large enough to capture much attention from European nations but the combination of Argentina, Brazil, Chile and some of the other South American nations presents Europe with a market that is worth cultivating. In this section we will examine the roles of history and language, on the one hand, and, on the other, trade and investment in the development of this relationship.
5d1.. In the globalized environment each nation seeks to differentiate itself from the others and to find a unique role for itself, if that is possible. Spain has, in recent years, tried to present itself as a natural bridge to the Spanish-speaking countries of the Americas. Some of the cultural dimensions of this effort have been discussed above, and the most concrete evidence of this was the World’s Fair in Seville in 1992 at which explicit reference was made to this historic relationship and Spain’s gateway function was asserted. History and language are important bases for a special relationship but in the contemporary world of relatively rapid and lost cost transatlantic transportation and communication this assertion may amount to little more than just an assertion. It is more likely to be the case that Spain will have a role in EU-Latin America relations, but that since trade and investment trump history and language, that role will be rather subordinate to that played by Germany and France. Spain lost precious years between 1945 and the fall of Franco when that relationship could have been developed and given the dynamism of the rest of the EU and NAFTA, developing a position of dominance will be exceedingly difficult.
5d2. – While the US congress has stalled progress toward the sort of Western Hemispheric trade agreement sought by proponents of free trade, the EU has been engaged in discussions with this grouping of Argentina, Brazil, Paraguay and Uruguay. The first agreement was signed in 1992, after a meeting in the Portuguese city Guimaraes, and a commitment to seek closer ties was made by both parties at a “Heads of State and Government” meeting in 1994, in Corfu.xl For its part Mercosur has achieved agreements of association with other Latin