The stakes could not be higher. A run-off election on November 19 will not only determine the next president of Argentina but also the very future of the country: its democratic values, its economic model, and even its national currency.
Yet Argentines aren’t the only ones eager to see who will be their country’s next president. Argentina’s vast natural resources have made it a key geopolitical player in an age of energy transition and global food scarcity. As a result, major allies across multiple continents will be carefully monitoring the contest this weekend between the ruling coalition’s Economy Minister Sergio Massa (Unión por la Patria, UxP) and far-right libertarian economist Javier Milei (La Libertad Avanza, LLA). These include Argentina’s biggest trade partners: Brazil, the United States, and China.
Although China has made significant inroads in Argentina in recent years, whoever prevails in the run-off is likely to pursue close relations with Washington, even if the Biden administration may have doubts about a far-right candidate who has flouted democratic norms and repeatedly praised former president Donald Trump.
“Both candidates would pursue strong ties with the United States, but Javier Milei is a wildcard with no foreign policy experience,” the Wilson Center’s Latin American program director, Benjamin Gedan, told the Herald. “His reckless denial of climate science and his admiration for leaders like Trump and Bolsonaro could make for awkward conversations with his U.S. counterpart.”
Gedan added that the election in Argentina is seen as a “big deal” in the U.S.
Concern is understandably higher in Brasilia and Beijing. Brazilian President Lula da Silva has made it a priority to restore his country’s relationship with Argentina after several setbacks during the Bolsonaro administration, pushing hard for its southern neighbor to join the BRICS bloc of developing economies. But Milei has stated that he considers both Brazil and China “communist” countries and that he would not pursue state commercial ties with either.
Wait and see for Washington
While Milei’s denialism of climate science would put a damper on U.S. President Joe Biden’s efforts to advance decarbonization, there are other elements of his campaign platform that would be well received on Capitol Hill.
“Milei would surely find a receptive audience in Washington for his criticisms of China,” Gedan continued. “His attempts to address Argentina’s chronic economic disorder by sharply cutting spending and improving monetary policy would also be popular on Wall Street.”
As for Milei’s opponent, Gedan notes that Massa has a proven track record of engaging productively with the U.S. government and investors.
“He recognizes the importance of foreign investment and trade to Argentina’s economic recovery.”
The stance that Argentina’s next president takes towards China is something U.S. officials will carefully monitor. In addition to Beijing’s infrastructure projects, there is also the question of whether Chinese companies will be allowed to bid on 5G technology or sell equipment to the Argentine Air Force — a proposal the Defense Ministry was still reviewing in September.
Todd Tucker, the industrial policy director at the Roosevelt Institute, expects Biden to be “pragmatic” on these issues.
“While the US is highly attentive to Latin American countries’ relationships with China, they are less concerned about its investments in sectors like solar energy,” he told the Herald. “A similarly pragmatic Argentine administration will have a willing partner in the US.”
Beijing gazes towards Buenos Aires
Milei hasn’t just vowed to cut diplomatic ties with China. In an interview with Bloomberg shortly after his primary victory in August, he said people in the country “can’t do what they want, and when they do it, they get killed.”
Milei’s rhetoric would appear to make China’s preference a no-brainer, but Argentina’s ongoing economic and political crisis has complicated Beijing’s numerous infrastructure projects in the country.
“For China, this is a key election for several reasons,” said Patricio Giusto, director of the Sino-Argentine Observatory. “The Alberto Fernández administration has created a lot of uncertainty, and many of China’s strategic projects have been put on hold.”
China has around 26 projects in Argentina worth US$27 billion in investments, each in different stages of development. Perhaps the most notable is Atucha III, a nuclear power plant that has yet to break ground in Buenos Aires province due to disagreements regarding financing.
According to Jorge Malena, director of the China Studies program at the Catholic University of Argentina, Beijing will be monitoring more than its economic investments over the next four years.
“They want to see if the next administration will adhere to the Belt-and-Road Initiative President Fernández signed in February 2022 and its pre-existing ‘One China’ policy,” Malena told the Herald.
While Argentina recognizes Taiwan as the exclusive domain of the People’s Republic, the United States has pursued a position of strategic ambiguity, raising tensions between Beijing and Washington.
No secrets in Brasilia
Brazil is the only country of the three that has made its preferences unequivocally clear. In a meeting with Biden in September, Lula told his U.S. counterpart that Argentina’s democracy was in peril due to the rise of what he called “extremist sectors.” Brazilian Economy Minister Fernando Haddad has likewise said that a potential Milei victory “worries” him.
While Brazil’s growing agricultural sector has reduced its dependence on exports to Argentina, its reliance on its neighbor as a geopolitical partner has only increased. Lula has made it his quest to return Brasilia to the world stage, repeatedly telling the UN General Assembly and attendees at the COP27 climate summit that “Brazil is back.” But doing so requires allies, and none are more important than Argentina.
“President Lula and his Foreign Minister Mauro Vieira see Argentina as Brazil’s main political ally in the global arena,” Dharma Political Risk and Strategy CEO Creomar de Souza told the Herald.
“This strategy envisions both countries working together to establish a southern pole, if you will, capable of standing together and dealing with Washington, Beijing, and the European Union.”
Milei has not explicitly promised to cut diplomatic ties with Brazil, allowing that the state should not be involved in trade agreements and that private companies will be free to do deals on their own, but he has gone out of his way to antagonize the Brazilian president, calling him “corrupt.” He has also said that his geopolitical allies would be “the US, Israel, and the free world.”
“With Massa, there would be disagreements, for sure, but they would be within the parameters of what is considered normal,” added De Souza. “A Milei victory carries a significant risk of rupture.”
On Sunday, Argentina and its allies will learn if the center can hold.