Coronavirus

Argentina exits Mercosur negotiations, upending trade deals

Using the coronavirus as cover, Buenos Aires has in a drastic policy shift decided to embark on a more protectionist stance

Argentina exits Mercosur negotiations, upending trade deals
President Alberto Fernández. Photo: Casa Rosada

The world won’t stop spinning for Covid-19. From Donald Trump’s threats to “destroy” Iranian ships harassing U.S. ships, to China using the pandemic as a cover to enhance its territorial claims in the South China Sea, several major geopolitical actors believe this is the perfect moment to carry out otherwise controversial moves — with the world distracted by the worst pandemic in a century, negative reactions will be limited. In South America, that is precisely what Argentina has done, with President Alberto Fernández announcing that the country is suspending its participation in all negotiations within Mercosur — the trade bloc formed by Brazil, Argentina, Paraguay, and Uruguay.

The decision affects only ongoing talks — deals previously approved, such as last year’s Mercosur free trade agreement with the European Union will be preserved. However, it upends the trade deals currently under construction with South Korea, Lebanon, Canada, and India — as the bloc’s rules require unanimous agreement on trade issues.


Reactions so far have been mild — or non-existent. Paraguay, which holds the bloc’s rotating presidency, issued a moderate statement, calling it a “sovereign decision” of the Argentinian Republic. Uruguayan President Luis Lacalle Pou said he hopes the neighboring country will reconsider its decision, claiming that “together, [the Southern Cone nations] are...

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