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Brazil and Argentina try to amend fractured relationship

. Dec 01, 2020
argentina brazil relations Illustration: André Chiavassa/TBR

Over the past decade, Brazilian diplomacy has been nothing short of a disaster. After the globe-trotting presidents Fernando Henrique Cardoso and Luiz Inácio Lula da Silva, the country essentially removed itself from the international scene — first, due to the lack of interest from Dilma Rousseff and then because of the lack of prestige her successor Michel Temer enjoyed outside of Brazil. Under Jair Bolsonaro, however, things have changed — but not necessarily for the better. The country’s diplomacy has become overtly aggressive, picking feuds with China, Argentina, and the new president-elect of the U.S. — in other words, he has squabbled with the country’s three biggest trading partners.

This week, Mr. Bolsonaro began a process to mend fences with one of them: neighbors Argentina.

On November 30,

both countries commemorate Brazil-Argentina Friendship Day. This year&#8217;s events were special indeed, as they marked the very first direct conversation between Mr. Bolsonaro and his Argentinian counterpart Alberto Fernández, in a 40-minute video conference call set up by the Argentinian Ambassador in Brazil, <a href="https://brazilian.report/latin-america/2018/08/19/fall-south-america-pink-tide/">Daniel Scioli</a>.</p> <p>In regular times, the two countries rely heavily on one other for trade —&nbsp;let alone during one of the worst global crises in recent memory.</p> <p>Relations between the countries have cooled since the 2019 Argentinian presidential election. While a candidate, Mr. Fernández came to Brazil to <a href="https://oglobo.globo.com/mundo/lider-da-corrida-presidencial-na-argentina-visita-lula-na-prisao-promete-ficar-ao-seu-lado-23784926">pay a visit</a> to Mr. Bolsonaro&#8217;s political nemesis, Lula, while he was in prison. He would later call the Brazilian president “racist, misogynistic, and violent.”</p> <p>From his end, Mr. Bolsonaro responded with comparisons between Mr. Fernández and the increasingly authoritarian Venezuelan President Nicolás Maduro. He has yet to congratulate his counterpart for his electoral win, blanking his inauguration ceremony.</p> <p>Business leaders — especially in the automotive industry — hope that this first contact may be the beginning of a new era. &#8220;I hope this meeting will <a href="https://veja.abril.com.br/mundo/alberto-fernandez-pede-a-bolsonaro-para-deixarem-diferencas-no-passado/">give Mercosur</a> [the duo&#8217;s trade union with Uruguay, and Paraguay] the boost it needs,&#8221; said Mr. Fernández. &#8220;And it is imperative that Brazil and Argentina do it together,&#8221; he added.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/4529570"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-hierarchy" data-src="visualisation/4529667"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-hierarchy" data-src="visualisation/4529533"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <h2>Brazil-Argentina trade lowest in 15 years</h2> <p>The pandemic has had a profound impact on bilateral trade, as both economies <a href="https://brazilian.report/latin-america/2020/03/17/can-argentina-resist-the-covid-19-crisis/">ground to a halt</a> in the first half of the year. Argentina recorded its worst quarterly GDP result of all time (falling 19.1 percent), while Brazil observed a lower but also dramatic 5.9-percent crash.</p> <p>Trade has picked up in recent months, however. In October, it reached a combined value of USD 1.61 billion — the highest level in a year and 27 percent above the monthly average for the first nine months of 2020.&nbsp;</p> <p>According to Brazilian government data, exports to Argentina are <a href="https://brazilian.report/latin-america/2020/02/12/argentina-brazil-trade-felipe-sola-visit-brasilia/">picking up faster</a> than imports, partially due to the neighboring country&#8217;s woes and prolonged lockdown policies. In October, exports to Argentina amounted to USD 820 million, a 12-percent increase from the previous year.&nbsp;</p> <div class="flourish-embed flourish-hierarchy" data-src="visualisation/4529794"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-hierarchy" data-src="visualisation/4529756"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p>Still, trade between the two biggest South American countries is <a href="https://brazilian.report/latin-america/2020/06/10/blanked-brazil-argentina-turning-china-trade/">far from its 2011 peak</a>, when both countries combined for a whopping USD 33 billion. Part of the blame is the poor health of the Argentinian economy, as the country has endured the <a href="https://brazilian.report/latin-america/2020/05/25/argentinas-long-debt-default-history-imf/">second-highest amount of recessions</a> over the past 70 years — only the Democratic Republic of Congo has fared worse.</p> <p>To aggravate the situation, Argentina has adopted a more protectionist stance as of late, <a href="https://brazilian.report/latin-america/2020/04/25/argentina-exits-mercosur-negotiations-upending-trade-deals/">exiting Mercosur negotiations</a> and upending trade deals currently under construction with South Korea, Lebanon, Canada, and India — as the bloc’s rules require unanimous agreement on trade issues.</p> <p>Meanwhile, Brazil has its own problems of geopolitical isolation. Roundly criticized for its lack of action to curb Amazon deforestation, the country is set to become a global pariah after President Donald Trump&#8217;s loss in the recent U.S. elections. Not only has Mr. Bolsonaro lost his biggest ally in ignoring Amazon preservation, but the President-elect Joe Biden is set to give more attention to green issues, targeting Brazil in the process.</p> <hr class="wp-block-separator"/> <p><em>Additional reporting by Aline Gatto Boueri</em>

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Lucas Berti

Lucas Berti covers international affairs — specialized in Latin American politics and markets. He has been published by Opera Mundi, Revista VIP, and The Intercept Brasil, among others.

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