Report: Argentina's Milei to Propose Trade Flexibility to Mercosur

Improve the News Foundation -

Facts

  • Argentine Pres. Javier Milei will push for Mercosur members to be allowed to sign their own trade agreements with other nations as he attends the Mercosur summit later this week in Montevideo, local newspaper La Nación reported, citing sources close to him.[1]
  • Discussions on the matter are also expected to take place because the host of the summit, Uruguay's outgoing Pres. Luis Lacalle Pou, has long expressed the same desire, including in a joint statement with former Brazilian Pres. Jair Bolsonaro in 2021.[1][2]
  • Last week, the Buenos Aires Times reported that sources in the Argentine government didn't rule out a potential Mercosur exit, which Milei hinted at during the presidential campaign last year if such requests aren't met.[3][4]
  • In mid-November, Milei said that he would pursue a free-trade agreement with the US amid enthusiasm for the incoming Donald Trump administration and more trade opportunities with China, with whom Trump pledged to freeze relations before taking office.[4][5]
  • Set to receive the pro-tempore presidency from Lacalle Pou, Milei will attend a Mercosur presidential summit for the first time. In July, he skipped the meeting in Asunción, Paraguay, to speak at a conservative rally in Brazil.[6][7]
  • Mercosur, or the Southern Common Market, was established in 1991, and its Common External Tariff has been in effect since 1995. Only a few countries, including Egypt and Singapore, have signed trade deals with the bloc so far.[8][9][10]

Sources: [1]MercoPress, [2]The Rio Times, [3]Buenos Aires Times (a), [4]Bloomberg, [5]Buenos Aires Herald, [6]Buenos Aires Times (b), [7]Associated Press, [8]Foreign Policy, [9]MERCOSUR and [10]Council on Foreign Relations.

Narratives

  • Narrative A, as provided by The Economist. The existing Mercosur structure has hindered economic growth and limited trade opportunities for its member states, driving the once-promising bloc to irrelevance. Whether you agree or not with Javier Milei's policies, it's a matter of fact that he is absolutely right about this one.
  • Narrative B, as provided by Valor International. Javier Milei's proposal to make Mercosur more flexible was widely expected, but that doesn't make the move any better. In fact, it's quite the opposite, as Mercosur members have more bargaining power when they negotiate as a bloc.

Predictions