Victory of Argentina’s Milei could scupper EU-Mercosur trade deal

The victory of Javier Milei in Argentina’s presidential election has the potential to derail EU-Mercosur trade deal negotiations, given the hard-right libertarian has threatened to leave the South American trade bloc formed by his country, Brazil, Paraguay and Uruguay.

If the agreement fails, the biggest loser would be the EU, Gustavo Muller, a researcher from the Leuven Centre for Global Governance Studies told Euronews, since it wants to expand its influence in that region.

“Not reaching a deal with the Mercosur countries and not ratifying the association agreement would be (a) great loss for the European Union, not only on the economic front, but also in terms of symbolics and the politics in the relationship with Latin America,” he told Euronews.

“The EU has been trying hard to reassert influence in Latin America in the last few years, especially after the Russian invasion of Ukraine, when the EU tried to gather as many allies as possible.”

Despite these difficulties, Brussels still congratulated Milei and said it intends to maintain the partnership, in particular by finalising negotiations on the EU-Mercosur Agreement as soon as possible.

The trade deal was agreed in principle in 2019 after two decades of talks, but additional environmental commitments demanded by the EU, this year, led Brazil and Argentina to seek new concessions that prolonged negotiations.

Now, the election of a climate change denier, as Milei is, could become another argument for some EU member states, especially France and Austria, to end talks.

“A new government in Argentina that denies the effects of climate change constitutes a new obstacle, especially from an EU point of view and particularly the position by the European Parliament,” Muller said.

“But (at) the same time, the most important country in these negotiations – when it comes to climate change – is the one with more of the Amazon Forest, which is Brazil, and that is where most of the negotiations have to take place.”

The next Mercosur summit is scheduled for December 7 in Rio de Janeiro, with some already pushing for a decision during that meeting before Milei takes office just some days after on December 10.