Foreign Minister Santiago Cafiero said Argentina will not sign the Mercosur-European Union free trade deal if it means increasing asymmetry with Europe to the detriment of the South American bloc.
The final agreement was due to be announced on Thursday during the annual Mercosur presidential summit, but President Alberto Fernández and Brazilian officials have already suggested that that won’t be the case.
Cafiero said the trade deal agreed in principle in 2019 after two decades of talks is “very bad” because it would damage national industry and limit exports.
“Argentina has always wanted an agreement with the EU, but all [parties] should benefit from it,” Cafiero told Radio 10 on Tuesday morning. “Talks with the EU are always open, but Argentina won’t sign a deal that exacerbates the existing disparities between these two blocs.”
The free trade agreement in question differs from the blocs’ previous work toward trade integration involving technology transfer and investments, Cafiero said.
“For many years we negotiated in that direction,” Cafiero said, “but when [former Brazilian President Jair] Bolsonaro and [former Argentine President Mauricio] Macri came to power, they abandoned that line of work that incorporated a geopolitical point of view, and only focused on the trade chapter that involves lowering tariffs.”
The treaty is “a stairway to lowering tariffs,” the foreign minister said, “and the only thing it does is putting the Argentine and Mercosur’s industry in danger.”
Cafiero said that while Argentina has a competitive advantage over Europe in terms of agricultural exports, it would be harmed by the export quota included in the agreement. This would also affect Uruguay and Paraguay. “If this agreement is enforced, these countries will export much less,” he said.
“When we came into power [in 2019] we told the EU that this was a bad deal for us,” Cafiero added. “It has extremely harmful effects on our agricultural exports, that’s why we asked for it to be revised, but it wasn’t possible.”
The Mercosur members will discuss the treaty during the presidential summit in Rio de Janeiro on Thursday. However, they are unlikely to reach an agreement. Argentina’s outgoing government is not satisfied with it, and appears set to pass the baton to Javier Milei, who will take office on Sunday.
“Given the transition in Argentina, we are handing the subject to the new government, which has indicated they want a deal,” the Brazilian foreign ministry spokesman said on Sunday.
President Fernández said on Sunday that Argentina wants to sign it because “it is correct in geopolitical terms,” but that it should have certain conditions to protect industries and lithium development. He added that it hasn’t been signed yet because “there is great resistance from Europe” to making changes.
On Saturday, French President Emmanuel Macron said he is against the free trade deal because “it doesn’t take biodiversity into account” and it boils down to a “badly patched” agreement.
Brazilian President Lula Da Silva, who is leading negotiations to sign the deal, hinted on Sunday that if the agreement falls through, he would hold Macron responsible. Paraguay is also blaming Europe for the failure in the negotiations.
While a preliminary agreement was reached in 2019, additional environmental commitments demanded by the EU led Brazil and Argentina to seek new concessions that prolonged negotiations.