Milei welcomes EU trade deal but puts Mercosur on notice

President Javier Milei on Saturday welcomed the signing of the free-trade agreement between Mercosur and the European Union, though he warned the other members of the South American bloc that further flexibilisation must be on the cards.

In what was described as a historic moment for regional geopolitics, the two blocs formally signed their trade association agreement on Saturday in the Paraguayan capital of Asunción.

Milei described the deal as “a starting point,” before signalling that he wants Mercosur to advance further trade deals with “other countries that also support freedom.”

He referred to potential trade deals with Vietnam, India and Indonesia, among others.

“I want to underline that this agreement is not a starting point, it is a point of arrival: it is an agreement between Mercosur and the European Union,” said Argentina’s leader.

“This treaty affirms that every day we can go a little further on the international stage,” he added.

The President noted that the treaty was signed “after more than 25 years of negotiations” and argued that the final approach was “more open, more flexible and more dynamic in line with what had been set out.”

The reference was to the changes introduced to unlock a process that had been virtually stalled since its initial announcement in 2019 under Argentina’s former president Mauricio Macri.

Milei also raised concerns about the implementation of the treaty. He warned that “the application of quotas, safeguards and other equivalent mechanisms will significantly reduce the economic impact of the agreement.”

He called for “our parliaments to ensure that this does not happen.”

Milei announced during his brief speech that he would submit the text of the deal to Congress in the coming days for ratification. 

Argentina’s lawmakers are currently on break, so doing so would require the head of state to summon representatives for extraordinary sessions.

“We will send the agreement to Congress so that it can be considered during extraordinary sessions,” he said, anticipating an intense legislative debate.

The deal should lead to the creation of a free-trade area encompassing 720 million people – making it the largest in the world in terms of consumers and productive potential.

A ceremony to mark the signing was held at the Teatro San José de Flores of the Central Bank of Paraguay, the same venue where Mercosur was founded in 1991. 

Foreign ministers representing the nations in the South American bloc and top EU officials Ursula von der Leyen and António Costa signed the deal.

European leaders stressed that the pact seeks to bolster mutual economic security in the face of global instability.

Von der Leyen said that “South America chooses integration” and that the agreement sends a message of strength against protectionism.

The agreement will eliminate tariffs on a wide range of industrial and agricultural products, facilitating trade between the two regions.

The notable absentee from Saturday’s ceremony was Brazil President Luiz Inácio Lula da Silva, who has clashed with Milei on multiple occasions.

Milei did little to hide his dissatisfaction with Lula during the ceremony in Asunción. When Paraguay's President Santiago Peña called for applause for the Brazilian leader during a speech, Argentina’s president remained stiff and silent, refusing to even clap half-heartedly. 

Peña hailed the “great and beloved” Lula as one of the “fundamental drivers” behind the accord, saying it would not have happened without his contribution.

– TIMES/NA/PERFIL