According to diplomats and trade experts, the EU-Mercosur trade agreement will not be derailed by the presidential victory of far-right libertarian Javier Milei in Argentina, and negotiations may even be concluded before Milei takes office on Dec. 10. His campaign criticism of Mercosur and Brazil’s President Lula da Silva is expected to be toned down in light of his election victory, with no disruptions in Mercosur trade anticipated.
Milei’s attacks during his campaign raised concerns about the future of Mercosur, leading negotiators to accelerate their efforts to overcome differences and hold weekly video conference meetings in order to reach an agreement.
One European diplomat with knowledge of the negotiations mentioned that President Lula da Silva will likely be more eager to finalize the trade treaty now that Milei has won.
A preliminary trade treaty was reached in 2019 after twenty years of negotiations, but additional environmental commitments demanded by the EU led Brazil and Argentina to seek new concessions, prolonging the negotiations.
Brazilian negotiators indicated that there are few details left to negotiate and they plan to announce the deal at a Mercosur summit on Dec. 7, which was brought forward to be held before Argentina’s change of government.
Welber Barral, a former Brazilian trade secretary, did not believe that Milei would follow through on his threats to pull out of Mercosur, given that opening of markets is part of Milei’s discourse. He emphasized that trade relations are too important for both countries for Milei to act on such threats.
Milei’s likely future foreign minister, Diana Mondino, stated that while Mercosur must be modified, it should not be “eliminated” as Milei has suggested in the past. She also emphasized that Argentina will seek to increase trade with Brazil.
Milei, who has labeled Lula an “angry communist,” has received support from former Brazilian President Jair Bolsonaro during his campaign. However, upon Milei’s victory, Lula extended his well-wishes to Argentina’s new government and expressed readiness for Brazil to “work together with our Argentine brothers.”
Despite the occasional attacks against Lula, it is expected that relations between Milei and Lula will be similar to those between Argentina’s current President Alberto Fernandez and Brazil’s Bolsonaro, with a lack of formal communication at the presidential level, but ongoing bureaucratic negotiations and trade ties.
While Milei is pro-trade, he is a climate change denialist, which may pose a challenge for ratification of the EU-Mercosur trade pact in Europe if he becomes a target for European environmentalists and protectionists, according to a professor of international relations.
(Reporting by Lucinda Elliott in Buenos Aires and Anthony Boadle and Lisandra Paraguassu in Brasilia; Editing by Paul Simao)
