Argentina departs from Mercosur following an accord with Brazil
On Friday, the foreign ministers of Mercosur nations gathered in Buenos Aires to iron out details for the July 3 president's meeting in the Argentine capital. With President Luiz Inácio Lula da Silva and Argentine President Javier Milei set to attend, eyes are on these two leaders who often share the same room but remain eerily silent towards each other - a recurring theme at previous Mercosur meetings and the G20 summit in Rio de Janeiro.
According to sources from Itamaraty, the ministers' meeting felt optimistic, with a pursuit for compromise and understanding of each nation's interests. Milei, a champion of free trade, has faced opposition in Argentina due to reduced import barriers for certain sectors of the economy. However, it seems the fire to withdraw Argentina from Mercosur has dimmed significantly.
Various factors contributed to this shift. On one hand, Argentina, like Brazil and other South American countries, faced the so-called reciprocal tariffs imposed by Trump. On the other, Mercosur agreed to allow Argentina to negotiate free trade with the U.S. for at least 50 products.
In recent days, Milei has stopped expressing his desire to leave Mercosur. Reports suggest that the Undersecretary for Commercial Policy and Negotiations of the U.S. Department of State, Robert Garverick, visited Buenos Aires ten days ago, meeting with business leaders and officials from the Milei government. The reciprocal tariffs and the 50-product agreement seem to be reasons behind Garverick's visit, which was only recently revealed.
Argentina faces pressure from both the Trump government and China. The Trump administration, represented by Secretary of State Marco Rubio and Treasury Secretary Scott Bessent, have hinted that Argentina should choose between the U.S. and China. Argentina holds agreements with China, crucial for enhancing its Central Bank's reserves, and recently reached a new agreement with the International Monetary Fund (IMF), where the U.S. wields a powerful deciding vote.
The upcoming $20 billion agreement, though, requires privatizations and social security reforms.
A Closer Look at Argentina-U.S. Relations
In pursuit of a stronger international standing and reduced dependency on regional trade agreements like Mercosur, Argentina is keen to imrove its relationship with the U.S. [Source: clarin.com]
The Existing Mercosur Dynamics
Within the Mercosur trading bloc - consisting of Brazil, Uruguay, Paraguay, and Argentina - Milei's pursuit of independence has raised concerns about the possibility of Argentina leaving Mercosur due to the bloc's unanimity rule [Source: clarin.com].
The Tariff Issue
Both Argentina and Brazil currently face higher tariffs on U.S. imports compared to the tariffs the U.S. imposes on them. Ongoing discussions center around reducing or exempting certain tariffs, particularly for around 50 Argentine products [Source: clarin.com].
The Proposed Free Trade Agreement (FTA)
In a bid to stimulate economic growth by diversifying trade relationships beyond Mercosur, Argentina is actively seeking a Free Trade Agreement (FTA) with the U.S. [Source: clarin.com].
Given these developments, the July 3 meeting in Buenos Aires is poised to present new opportunities and challenges for Argentina, the U.S., and the broader Mercosur bloc. Stay tuned as diplomatic relations unfold.
- The upcoming July 3 meeting in Buenos Aires, which will be attended by President Luiz Inácio Lula da Silva and Argentine President Javier Milei, presents an opportunity for negotiations on sports, politics, and policy-and-legislation, particularly in relation to the potential privatizations and social security reforms required for an $20 billion agreement.
- Amidst general news about Argentina's economic struggles and its need to improve its international standing, President Milei's pursuit of independence within Mercosur has raised concerns about the possibility of Argentina leaving the trading bloc due to its unanimity rule.
- The fire to withdraw Argentina from Mercosur has dimmed significantly, partially due to the ongoing discussions about reducing or exempting tariffs on around 50 Argentine products, a move aimed at stimulating economic growth by diversifying trade relationships beyond Mercosur and towards the U.S.
4.외통대에서 스턴트이
