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ARGENTINA | 08-06-2019 10:56

Bolsonaro and Macri boost ties as election looms

Outspoken Brazilian leader pays first visit to Argentina, with EU-Mercosur deal and common currency on the agenda.

Arguably the two biggest names of the new wave of right-leaning leaders in Latin America, Presidents Jair Bolsonaro and Mauricio Macri, held a series of bilateral meetings this week in Buenos Aires, at which the duo talked up their hopes of securing a long-trailed trade deal between the Mercosur bloc and the European Union.

However, the Brazilian’s first visit to Argentina since taking the presidency of Latin America’s largest economy was mostly a political affair, with little to no concrete measures emerging from the meet-up. Even those hopes of an “imminent” EU-Mercosur accord were shot down yesterday by European officials, who said there was still a lot more talking to be done.

In the headline takeaway, Bolsonaro reiterated his strong support for President Macri’s re-election hopes. Speaking at a joint press conference on Thursday, the ex-Army captain implored Argentines to vote for the Cambiemos leader in October’s presidential elections. “I want to call out to the Argentine people, God bless them, as elections will be in October,” the outspoken Brazilian president declared. “They must pick, as happened in Brazil, with more responsibility than emotion, what’s best for their country because that is how we will have peace, prosperity and happiness for our nations.”

Macri, of course, highlighted once again that he has the support of the international community. “We have a long-lasting relationship with Brazil, and we are strongly committed to it and our joint development,” he explained.

ON THE AGENDA

Macri and Bolsonaro discussed several issue at the Casa Rosada, including the situation in Venezuela, where both presidents have actively expressed their support for National Assembly President Juan Guaidó, while calling for Nicolás Maduro to step down.

Energy was another talking point, given the development of the Vaca Muerta shale formation in the Argentine Patagonia and Brazil’s vast reserves of oil and natural gas held in the presalt fields off the Brazilian coast.

The duo ran into trouble on one topic, however – the announcement that an agreement is “imminent” on the long-awaited and much-trailed free-trade agreement between the European Union and the Mercosur trading bloc. Both Bolsonaro, the outspoken Brazil president, and President Macri expressed confidence that the deal would soon be signed soon.

“The signing of the Mercosur-EU accord is imminent,” declared the Brazil leader, who has actively pushed for the free trade agreement since coming to office

“Everyone will win with this: Brazil, Argentina and the other countries in the bloc,” added Bolsonaro, whose nation will take over leadership responsibilities after the bloc’s next summit, scheduled for June.

Echoing that view, Macri said the two groups of nations were “very close to an agreement.”

The Mercosur bloc, which currently groups together Brazil, Argentina, Uruguay and Paraguay, has been in negotiations with the EU since 1999 to establish a trade agreement. But 20 years of talks have failed to produce an agreement, despite both sides saying on several occasions that they were close to one.

The Macri administration said at the end of 2017 that they had hoped to clinch a deal on the occasion of a World Trade Organisation summit in Buenos Aires, but differences arose, especially over agricultural goods.

On Tuesday, however, Brazil’s Economy Minister Paulo Guedes said an agreement could be reached in “three or four weeks.”

OFF THE AGENDA?

Across the Atlantic, things didn’t seem so conclusive. Playing down claims made a day earlier by the presidents of Argentina and Brazil that a sweeping free-trade deal was “imminent,” European Union officials warned that the two leaders may have been a little presumptuous – and that work is still to be done if an accord is to be reached. “The European Commission welcomes and shares Mercosur’s political commitment to bring the current trade negotiations to a successful conclusion,” a spokeswoman for the European Commission told the AFP news agency. Also coming out of the meeting was the idea of a common “peso real” currency. Bolsonaro and Guedes both floated the idea during a meeting with Foreign Minister Jorge Faurie, Production Minister Dante Sica, and a group of industrialists and businessmen. Immediately, Brazil’s Central Bank denied any such project while Economy Minister Nicolás Dujovne said that there was no target date for the plan. But Bolsonaro stood by the plan on his return to Brazil, saying yesterday: “It’s a first step ... like the euro, the ‘peso real’ could happen. Economics is not my strong point but we trust the experience, knowhow and patriotism of my Economy Minister Paulo Guedes in this question.” While not seeing the common currency coming any time soon as “a long-term initiative requiring convergence in many aspects including taxation and labour,” Dujovne praised the idea as “promoting greater stability and trade between both countries,” also calling it “Mercosur’s most important project since the 1980s.” Yet the idea is not new, surfacing in every presidency since the creation of Mercosur (except perhaps the brief 1999-2001 Alliance administration) without coming to anything. Nor did the two presidents offer any details when floating the convergence of their troubled emerging markets on Thursday.

FIRST TIME

This week’s meeting was the first bilateral between the two leaders since Macri travelled to Brasilia on January 16, two weeks after Bolsonaro assumed the presidency. The Cambiemos leader chose to skip his Brazilian counterparty’s inauguration two weeks earlier, deciding instead to go on holiday.

The Brazilian leader arrived in Buenos Aires late Thursday morning. It is his first trip to the country. Unlike his predecessors as president, who all ensured their first overseas trip was to Argentina, the far-right former congressman decided to give Chile that honour. He also visited conservative allies in the United States and Israel before choosing to visit the Argentine capital.

Bolsonaro’s first public act was to lay flowers at the foot of the Monument to the Liberator General San Martín in the Retiro neighbourhood. There, as he exited a vehicle, a handful of people had gathered to express their support or dismay for the Brazilian leader. Supporters chanted “Myth!”, as is the custom in Brazil, while detractors branded him a “fascist” in song.

Protesters also held a rally on Thursday at the Plaza de Mayo, where demonstrators expressed their rejection of Bolsonaro’s policies.

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