Argentina's Milei Expected to Skip Mercosur Meeting in Paraguay, Trade Bloc’s Future Uncertain
By Jose Resurreccion
Jul 07, 2024 10:20 PM EDT
Jul 07, 2024 10:20 PM EDT
(Photo : DANIEL DUARTE/AFP via Getty Images)
Argentine President Javier Milei is expected not to attend the summit of the Southern Common Market, more known by its Spanish acronym Mercosur, which would begin Monday (July 8).
The Associated Press reported that Milei, a firebrand right-wing populist and libertarian, would instead head to Brazil to attend a rally organized by hard-right former president Jair Bolsonaro.
Milei was only the second Argentine president to excuse himself from the Mercosur summit after then-president Fernando de la Rua did not attend the 2001 meeting due to an unprecedented financial disaster.
While Milei advocates free trade, he criticized Mercosur for being "defective" and a challenge to his free-market overhaul of the rapidly failing Argentinian economy.
University Torcuato Di Tella Buenos Aires international relations professor Juan Gabriel Tokatlian said that such an attitude from Milei, and previously from Brazil's Bolsonaro government, "weakens Mercosur as a whole." He added that Milei's absence is a "serious problem" for the bloc.
In addition, National University of San Martin political scientist Alejandro Frenkel told the Buenos Aires Times that whatever Milei does will affect Argentina politically.
Reuters previously reported that Milei preferred to meet with Bolsonaro instead of Brazil's current leftist president, Luiz Inacio Lula da Silva.
It is understood that Mercosur, South America's biggest trade bloc, has since been delayed by political division and beset by backsliding. It is facing an uncertain future as Milei intends to pull Argentina out of the bloc entirely.
In preparations for the summit, which would be held this year at Asuncion, Paraguayan president Santiago Peña set low expectations agenda-wise.
He told reporters Sunday (July 7) that this year's summit would supposedly be "an opportunity to reflect" after 33 years of maintaining economic cooperation across the continent.
In 1991, Mercosur was created due to a free trade agreement signed by its founding member states, Argentina, Brazil, Paraguay, and Uruguay, as a way to move forward from military dictatorships.
It is expected that the ratification of Bolivia's becoming the bloc's fifth full member will be a major topic of discussion at Monday's summit.
However, experts suggested that protectionism and political volatility destroyed the bloc's hopes and have ironically become counterproductive in recent years.
Exacerbating this is the fact that many of the member nations are mostly reliant on agriculture, with Hallgarten & Co. strategist Christopher Ecclestone emphasizing that producing "the same things at the same prices" broke down Mercosur, specifically with Argentina and Brazil, the bloc's two largest member states.
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What made things worse for Mercosur was Uruguay's intention to have a separate individual deal with China outside the bloc, a measure Mercosur's founding treaty forbids.
According to Uruguayan president Luis Lacalle Pou, Mercosur held his country "hostage," saying that the deal with Beijing would improve his country's economy.
However, Brazil, incensed with the move, announced that it would initiate a broader trade deal with China on behalf of the bloc.
Diplomats told reporters Sunday that there is no progress for such negotiations.
In addition, Paraguay diplomatically recognizes Taiwan, which complicates matters.
Diplomats added that proposed deals with the European Union, the United Arab Emirates, South Korea, and Japan also exist, but none have significant developments.
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