Buenos Aires (AFP) – The fate of a landmark trade deal with the European Union, which France is trying to block, loomed over a gathering of South America’s Mercosur bloc that began Wednesday in Buenos Aires. Brussels in December struck a deal with Mercosur’s founding members—Argentina, Brazil, Paraguay, and Uruguay—to create a free trade zone of around 700 million consumers. The agreement has been 25 years in the making but still needs to be ratified by EU member states. It has faced stiff opposition from France, where farmers worry about being undercut by less-regulated Latin American peers.
“Today, the ball is in Europe’s court,” Ariel Gonzalez Levaggi, director of the Center for International Studies at the Pontifical Catholic University of Argentina, told AFP. But “there isn’t much willingness on the part of Brussels to move forward, mainly because of the French resistance,” he added. While waiting for a breakthrough, Mercosur foreign ministers meeting Wednesday in Buenos Aires announced a free trade agreement with the European Free Trade Association, made up of non-EU members Iceland, Liechtenstein, Norway, and Switzerland.
EU and South American backers of the EU-Mercosur deal had hoped US President Donald Trump’s tariffs blitz could breathe new life into it. For Florencia Rubiolo, a researcher at Conicet, Argentina’s scientific and technical research council, it would also show Argentina’s libertarian President Javier Milei that there is value in being part of Mercosur. Milei is gunning for a free trade deal with the United States and has suggested he could walk away from Mercosur if necessary to clinch an agreement with Washington.
The biannual Mercosur leaders’ summit, which takes place Thursday, comes at a low point in relations between Brazil and Argentina, South America’s biggest and second-biggest economies, respectively. Milei, a huge fan of Trump, has made no secret of his disdain for Brazilian President Luiz Inacio Lula da Silva, referring to the veteran leftist in the past as “corrupt” and a “Communist.” Lula has accused the Argentine of talking “nonsense.”
The tensions could be exacerbated if Lula uses his trip to Buenos Aires to visit Argentina’s left-wing ex-president Cristina Kirchner, who is serving a six-year sentence for fraud under house arrest. Kirchner has received permission from judicial authorities for Lula to pay her a solidarity visit, in a move likely to anger her arch-nemesis Milei.
“We may be experiencing the worst period in relations between Brazil and Argentina in terms of political convergence,” Juliana Peixoto, an expert in international relations at the Latin American Faculty of Social Sciences, told AFP. She said she nonetheless expected Mercosur, which also includes Bolivia, to endure the tensions. “It has a small but stable core of trade and has other related agendas that allow it to survive,” she said.
© 2024 AFP
