Since winning the presidential election in October 2022, Luiz Inácio Lula da Silva has stated on numerous occasions that he would bring “Brazil back” to the international arena. His administration moved to recover many of the Brazilian diplomatic traditions that his predecessor, Jair Bolsonaro, had abandoned — including re-establishing relations with neighboring countries that had been fraught over the past few years.
Lula is in Buenos Aires for bilateral meetings and to take part in the seventh meeting of the Community of Latin American and Caribbean States (CELAC) — a group from which Mr. Bolsonaro had pulled Brazil. But while filled with potential, Lula’s first foreign trip debuted in a rather clumsy way.
The president and his finance minister, Fernando Haddad, rattled markets through a failed messaging around ways to boost trade with Argentina. Lula also again defended Nicolás Maduro, the authoritarian president of Venezuela, and pledged to finance a gas pipeline that would link Brazil to reserves that raise numerous environmental concerns — despite Lula’s commitments to make Brazil’s energy matrix carbon-neutral by the end of the decade.
The most headline-grabbing news from Buenos Aires was the pledge by Lula and Argentina’s President Alberto Fernández to create a vehicle currency to be used in trading transactions between Brazil and Argentina. Other South American countries would later be invited to join it.
The idea does make sense, as Argentina has had trouble accessing dollars. But a poor choice of words created a lot of unnecessary noise around it. We explain the imbroglio.
In an article published by an Argentinian newspaper, the presidents of Argentina and Brazil called for “further discussions” over a common currency.
“If it were up to me, we would always have foreign trade in countries’ own currencies. Why not try to create a common currency within Mercosur? I think it is necessary. Because many countries have difficulty acquiring dollars, and we can make agreements and establish a type of currency for trade,” Lula said from Buenos Aires.
However, what Lula and Mr. Haddad, and their Argentinian counterparts — President Fernández and Economy Minister Sergio Massa — are trying to come up with is not a...
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