Two opposing trends are currently shaping relations between the European Union and Latin America. On the one hand, political signals in both regions are positive and point the way to closer ties in the future; on the other hand, the situation with regard to the Union's trade with Latin America has worsened appreciably, with the region's trade surplus giving way to a deficit for the first time in four decades. This trend may jeopardize the progress made thus far. If we do not act now, trade-related tensions, the reduction of development assistance and the appearance of social or environmental trade restrictions may cast a shadow over the bilateral situation, causing the two regions to become what we might describe as distant friends. If, however, existing political signs that the regions are drawing closer together lead them to take decisions that actually do improve their economic relations, then the two regions may form a mutually beneficial relationship and become genuine partners. If this is to happen, the two regions must place a higher priority on one other, agree upon a strategic, long-term agenda and resolve some specific trade problems. In this article the author examines these issues, presents an analysis of the reversal of the trading position and of the perils of inaction, and offers some thoughts regarding this strategic vision of a new kind of economic relationship between the two regions.