Currency, trade and regional integration on agenda as Fernández and Lula meet

Brazil’s president traveled to Buenos Aires a day before the CELAC summit to strengthen ties with Argentina

Alberto Fernández and Luiz Inácio Lula da Silva today announced that Argentina and Brazil will pursue a series of ambitious bilateral initiatives including a common currency, a boost to gas exports, and a series of joint health, science and tech policies. 

The two countries’ presidents made the announcements in a joint press conference after meeting privately and signing an agreement entitled the “Action Plan for Relaunching the Brazil-Argentina Strategic Alliance”. The meeting, part of Da Silva’s first state visit since taking office, comes as the Brazilian leader seeks to re-establish regional relations that had soured during the Bolsonaro administration.

Da Silva said that Brazil would support the construction of Argentina’s Néstor Kirchner gas pipeline through the Brazilian Development Bank (BNDES), while Fernández mentioned his administration’s plans to extend the pipe to the Uruguayana region in southern Brazil, strengthening energy exports across the continent.

The agreement also includes steps towards financial and industrial integration, proposing greater use of the Local Currency Payments System (CLS) and a long-term project to create a common currency

Tentatively named “Sur” (“South”), the new currency would not eliminate the peso or the real, but aim to boost trade and reduce the reliance on the US dollar, especially at a time when Argentina is facing severe shortages of international reserves. A currency that included all of Latin America would represent 5% of the global GDP, according to the Financial Times. 

Other joint policy proposals touch on areas including health, science, tech, energy, sustainability, and culture.

During the press conference, both presidents called each other ‘friend’ several times and committed to working together to build “the strongest bilateral bond in Latin America”, in Lula’s words. Da Silva thanked Fernández for supporting him while he was in jail, referring to corruption charges that were eventually overturned. “I will never forget the solidarity of the Argentine people,” he said. 

He also apologized for some of Jair Bolsonaro’s declarations about Argentina and Fernández, and called his predecessor “genocidal”. 

The return of UNASUR?

In the mid-2000s, both Da Silva and Fernández participated in initiatives towards Latin American integration that developed mostly during the Kirchner era in Argentina, alongside left-leaning and leftist presidents like Ecuador’s Rafael Correa, Venezuela’s Hugo Chávez, Uruguay’s José Mugica, and Bolivia’s Evo Morales.

Since his return to office, Lula has pushed his peers to rebuild the Union of South American Nations (UNASUR). Born in 2008, the regional bloc was formed with the intention of counteracting U.S. influence over Latin American economies. It virtually dissolved as numerous member states voted in right-wing governments who chose to leave. 

Fernández, who so far had been noncommittal about reviving UNASUR, said the pair had discussed the project – support which observers said could prove key to the project’s fate, since Argentina has previously played an important role in UNASUR’s activities.

Both presidents were asked about the recent protests against the presence of Venezuelan president Nicolás Maduro and his Cuban counterpart Miguel Díaz-Canel, at the Summit. On Monday afternoon, the Venezuelan Foreign Ministry said in a statement that the country’s delegation would be led by the country’s foreign minister, appearing to confirm reports that Maduro himself would not attend. 

Fernández stressed that he believes dialogue is key to building bridges between the countries, adding that he’s opposed to excluding leaders from international meetings. He gave the example of the 2022 Summit of the Americas in Los Angeles, when the Biden administration excluded Venezuelan, Cuban and Nicaraguan representatives. 

Lula explicitly stated that he hoped to rebuild Brazil’s relationship with Venezuela, and that he opposed the U.S. economic embargo on Cuba. “I’m against the occupation of Russia in Ukrainian territory and, in the same way, I’m against anyone’s intervention in Venezuela,” he said, calling for dialogue and a “civilized” relationship.

Both leaders are expected to continue their joint announcements on Tuesday.

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