Santiago, Chile – 20/02/2013 – as published by Americas Quarterly.

The most controversial outcome of last month’s second CELAC (Community of Latin American and Caribbean States) summit in Santiago, following close on the heels of the first EU-CELAC meeting, was the decision in Santiago to appoint Cuban President Raúl Castro to the chairmanship of the 33-member regional body.

Castro, who will be splitting the two-year term with his Costa Rican counterpart, Laura Chinchilla, could not resist several pointed remarks aimed at the United States. He decried the presence of multinational companies in the region and the U.S.’ continued possession of Puerto Rico. The 81-year-old leader’s message was clear, however:

“We are building the ideal of a diverse Latin American and Caribbean region united in a common space of political independence and sovereignty over our enormous natural resources to advance toward sustainable development [and] regional integration,” Castro said.

Colombian President Juan Manuel Santos described Cuba’s leadership of CELAC as a “very significant political development with special symbolism.” Though absent from the summit, Venezuelan President Hugo Chávez wrote in a letter that the act told “the U.S., with a single voice, that all the attempts to isolate Cuba have failed and will fail.”

The United States and Canada were not invited to the summit, since CELAC was created in 2010 as an alternative to the Organization of American States (OAS). Spanish President Mariano Rajoy and German Chancellor Angela Merkel were the only European heads of state present, and along with Chávez, Ecuadorian President Rafael Correa and Paraguayan President Federico Franco (who was not invited) were also absent. Brazilian President Dilma Rousseff left the summit early following the tragic nightclub fire in Rio Grande do Sul that killed over 230 people.

Though CELAC member countries expressed solidarity on regional issues such as Cuba, the summit also provided an opportunity to air their grievances. While the letter from Chávez expressed support for Argentina in its dispute with the United Kingdom over the Falkland (Malvinas) Islands, Bolivian President Evo Morales revived an older spat over Bolivia’s 1904 treaty with Chile, which left Bolivia landlocked. Morales called the treaty “unjust…imposed and incomplete,” but Chilean President Sebastián Piñera responded by highlighting agreements between Bolivia and Chile that allow Bolivian products to be stored in Chilean ports for up to a year without charge.

Meanwhile, the Mercosur and Pacific Alliance blocs met with EU leaders on the sidelines of the summit with varying success. Despite an attempt to reignite trade discussions with European leaders, Mercosur is still the only sub-regional Latin American organization without a trade agreement with the European Union. However, the Pacific Alliance managed to eliminate 90 percent of inter-member tariffs by the end of March and signed strategic bilateral pacts between Santiago and Berlin, Brasilia and Madrid. Spain has applied to be a full member of the Pacific Alliance, while Japan and Guatemala have been granted observer status. Paraguay, left out in the cold by Mercosur, has applied to do the same.

Although agreements between CELAC member countries and the EU did not advance significantly, European trade with Latin America has more than doubled over the last decade, making Europe the region’s top foreign investor. Spanish migrants especially are arriving by the thousands and filling the job void in Chile, where visas for Western European nationals grew 39 percent through October 2012 and surged 84 percent for Spanish nationals, according to Chilean government data.

This trend will likely continue now that Piñera and Rajoy have signed the Chile-Spain Strategic Alliance pact, which will allow Chilean and Spanish graduates to work in each other’s countries with full educational recognition. In the last census, Chile had an estimated 40,000 resident Spaniards living within its borders.

Chile’s desirability as a destination for highly skilled foreign workers is not incidental. While Piñera forged important bilateral agreements with Spain, the country’s Start-Up Chile scheme has already received widespread media attention for its attempts to attract migrants with entrepreneurial flair. Putting technology high up on the list of attractive start-up ventures has led many commentators to dub Santiago “Chilecon Valley”.

The real dilemma for both Chile and the region as a whole is where to draw the line between attracting foreign investment and developing independence and self-sufficiency. Reflected in the difference of outlook between Mercosur and the Pacific Alliance, it is clear that the region is divided in its approach.