20/11/2023 – 18:09
Brazil observes with concern the election of Javier Milei in Argentina and fears that the ultraliberal will frustrate an agreement between the European Union and Mercosur, although sources in the Lula government are confident that pragmatism will prevail between the two trading partners.
The libertarian candidate, who defeated Peronist Sergio Massa on Sunday (19), threatened to withdraw his country from Mercosur (Argentina, Brazil, Paraguay and Uruguay) at a time when the bloc intensifies negotiations with the European Union to close a free trade agreement. trade “as soon as possible”.
On a bilateral level, Milei guaranteed that if he became president, he would not meet with Luiz Inácio Lula da Silva, whom he called “corrupt” and “communist”.
The Brazilian president wished “luck” to the new Argentine government on Sunday, without mentioning the name of the winner of the elections, and will not be present at the inauguration, according to a source at Palácio do Planalto. Meanwhile, Milei personally invited, on Monday (20), his far-right predecessor, Jair Bolsonaro, to the ceremony.
However, according to two Brazilian government sources, the close relationship between the two large South American countries will overcome the differences between Milei and Lula.
The Brazilian government intensified contacts with the ultra-liberal team a week before the decision for the second round, AFP found.
“What we have seen is a gap between the things he has said and what people close to him have said (…) the centrality of the relationship with Brazil will continue, it is important” and will be taken care of in the Milei government, said one of the sources , which closely follows the relationship between the countries.
“Part of this is rhetoric and part is unknown as to what will become policy and what will be lost in the discourse,” he added.
– Hostilities continue? –
Experts remember the hostilities between Bolsonaro (2019-2022) and the current Argentine president, Alberto Fernández. And they emphasize that even so, commercial relations were not affected.
“Bolsonaro did not place any obstacles in the relationship between Brazilian and Argentine companies”, and in the few times they were together, there was no visible friction between the two, said Roberto Goulart, professor of International Relations at the University of Brasília.
Brazil is Argentina’s main trading partner, a country immersed in a serious economic crisis with annual inflation above 140% and a shortage of reserves.
Between January and October this year, Brazil exported US$14.9 billion (around R$72.6 billion at current prices) to Argentina, more than 5% of the total sold by the largest South American nation abroad and 40 % of the region’s total. Among the main products are soybeans, automobiles and vehicle parts.
In the same period, Brazil imported US$ 10.15 billion (R$ 49.4 billion) from Argentina, the majority being automobiles.
– Pressure from agribusiness –
Goulart added that Milei will have to compete between internal sectors with a more ideological bias that supported him in the presidential race and agribusiness, which supports the free trade agreement between the EU and Mercosur.
For the elected president, the regional bloc is a “flawed customs union”.
The Argentine “will have internal pressure from export sectors that support the agreement” and the anti-globalist, ultra-liberal wing, which considers it “protectionist”, he explained.
After years of stagnation, negotiations gained new momentum with Lula’s return to power in January, whose government maintains the objective of closing them by the end of the year.
German Agriculture Minister Cem Oezdemir called for negotiations to be accelerated, warning of an “increasingly difficult” political outlook due to “the rise of populism both there and here”, while EU diplomacy chief Josep Borrell asked the next Argentine government to see an eventual conclusion of the agreement as a “positive result” for both blocs.
Current president of Mercosur, Brazil called the bloc’s next regional summit for December 7, in Rio de Janeiro, three days before Milei took office at Casa Rosada, in what sources close to the negotiations guarantee was a strategy to avoid the presence of the right-winger if he won the elections.
Milei’s government could “refuse to cooperate” and not “sign the EU-Mercosur agreement”, wrote Eurasia Group researcher Luciano Sigalov in a text published by the Wilson Center.
However, “circumstances will probably force him to moderate, given Brazil’s importance to Argentina’s trade balance and local industry,” he added.
But “the relations will continue anyway, the question is knowing their quality,” added another source from Palácio do Planalto.
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