EU warned not to ignore Latin America

"We are determined to keep our top spot," declared EU trade commissioner Karel De Gucht, in reference to Europe's foreign direct investment in Latin America.

Others said the EU needs to rethink its current strategy in a region that is forecast to grow by an average of four percent of GDP this year, four times faster than Europe.

"We see that Latin America in not a top priority on the EU's political agenda," said Carlos Lopez Blanco, director of international affairs at Spanish multinational Telefonica. "For us this is a big, big mistake."

The former Spanish minister said foreign companies are increasingly looking to emerging markets as sources of growth in the post-financial crisis environment, pointing to the fact that China is set to overtake the EU as Latin America's second largest trading partner after the US.

In addition, EU trade and investment is dominated by states with colonial links such as Spain, Portugal, France and the Netherlands. "The rest of the countries, especially the new EU member states, do not know our region very well," said Mexico's ambassador to the EU, Sandra Fuentes-Berain.

Recent statistics by the Paris-based OECD economic club have helped rebrand the image of a region which accounts for three G20 members, and which, according to the club, in many ways constitutes a less risky investment environment than Europe.

Argentina's debt crisis (2001) has given way to Greek panic in the public consciousness (2010), although significant differences remain between the two sides in terms of poverty levels and income inequality.

Latin America's businesses such as Brazilian company JBS, the world's largest beef producer, are among a growing number of home-grown firms looking to snap up bargains in Europe, but the EU's imperfect single market complicates opportunities.

"For us it would be easier to deal with one partner rather than 27," said Ms Fuentes-Berain, referring to a recent report by former EU commissioner Mario Monti on the need to relaunch the single market.

Trade deals

The out-going Spanish presidency has worked hard to correct Europe's perceived lack of attention, with the EU initialing free trade agreements with Peru, Colombia and a collection of Central American states in Madrid this May.

Spurred on by the country's top CEOs who stand to make huge savings through a reduction in tariffs, Spain has also been a key supporter of restarting trade negotiations with the South American trade bloc Mercosur.

After years of stalled talks, the European Commission is set to sit down at the negotiation table this week for the first time since 2006.

Newly empowered MEPs, who under the Lisbon Treaty have to approve international agreements, have indicated their reservations over the Colombian agreement however, with the country home to the highest rate of trade union deaths in the world.

"We are certainly going to face a deep discussion on the Peru and Colombia deals, to put it mildly," conceded Mr De Gucht.