Navigating the Regional Challenges: The New Milei Government in Argentina

2023-11-26 22:32:04

LOOK: Governance, the great challenge for the new Milei government in Argentina

But one thing is the electoral verbiage and another, very different, is the reality that the next head of the Casa Rosada will have to face, something that is already being seen in the formation of his cabinet.

On the Brazilian side there is not much enthusiasm either. Last Tuesday, following Milei’s victory, Lula said: “We are experiencing some confusion in South America and we are going to have some political problems, but instead of complaining we have to be intelligent and try to solve them,” in a clear allusion to the new situation. Argentina.

Luiz Inácio Lula da Silva, president of Brazil. | Photo: AFP

The two South American giants are not just neighbors, they are vital trading partners. Brazil is the main destination of Argentine exports and, following China, Brazil is the second origin of Argentine imports. So freezing relations for ideological reasons should not be on the table. For now, nothing has been said and it remains to be seen how both leaders will handle each other starting December 10, when Milei puts on the presidential sash.

Pragmatism vs. ideology

It is not a secret that advisors close to Lula helped Sergio Massa – the official candidate and still Argentine Minister of Economy – in the electoral campaign, in a direct bet by the Brazilian president to have an ideological ally in the Casa Rosada, as still happens with Alberto Fernández.

“What we saw in dialogue with emissaries from Milei’s campaign is the opposite of what he has said publicly. “They recognize the centrality of the relationship with Brazil and say that she will be closely cared for in her government,” said one of the Brazilian sources.

TAKEOVER OF COMMAND

The former president of Brazil Jair Bolsonaro was specially invited by Milei to the inauguration on December 10. Lula da Silva has not confirmed his attendance, but sources in Brasilia have indicated that it is very likely that he will not participate in the ceremony in Buenos Aires .

The tense relationship that is expected between Milei and Lula might be a simile of what happened between the far-right Jair Bolsonaro and Alberto Fernández. The former president of Brazil received with a grim gesture the arrival of the Peronist to the Argentine presidency in 2019 and, in fact, the two hardly spoke to each other during the time they coincided as heads of state.

Alberto Fernández and Jair Bolsonaro. (Photo: AFP)

/ – EVARISTO SA

However, what was seen on the surface was not the same as what was happening behind the scenes. Pragmatism prevailed and everyone hopes that the same path will continue, at least from the economic and commercial side.

“During Bolsonaro’s presidency there was no significant political or integration agreement with Argentina, but the investment and trade relationship remained strong, and the same will probably happen now. Lula is a very pragmatic president and Milei, due to Argentina’s difficult economic situation, also has to force a strategic position from a commercial point of view. Argentina depends on Brazil, and Brazil depends on Argentina. “Both are very important partners,” Marina Pera, Brazilian political risk analyst at the consulting firm Control Risks, tells this newspaper.

Daniela Neves, Brazilian political scientist and professor at the Federal University of Latin American Integration (Unila), details that since Lula returned to power at the beginning of this year the relationship between Brazil and Argentina has become closer, not only on a commercial level but also diplomatically. . “The dialogue between both countries will decrease with Milei’s victory, because he has a speech contrary to Lula’s, so in political terms there will be a distancing.”

Javier Milei will take office as president of Argentina in December. (Photo: Bloomberg)

/ Anita Pouchard Serra

Pera agrees on this aspect: “We foresee a relationship between both countries that is going to cool from a diplomatic and political point of view. Lula and Milei may not get along well because there is no ideological affinity, but in commercial terms Brazil and Argentina will continue to be very important partners and have strategic interests, and that runs independently of the two presidents.”

The future of Mercosur

During the campaign, Milei also indicated that he would withdraw Argentina from Mercosur – made up of Brazil, Uruguay and Paraguay. However, the bloc is in the midst of negotiations to close a free trade agreement with the European Union, and Lula is being the main promoter for the signing to be achieved before the end of the year, even before the libertarian comes to power.

“Milei’s speech regarding Mercosur has changed during the campaign. At first she said that she was going to take her country out of the bloc, saying that it was of no use, but then she moderated herself and started talking regarding the need to update Mercosur to make it more efficient,” explains Pera.

For the libertarian, Mercosur is a “defective customs union that harms good Argentines.”

In the midst of negotiations with the European Union, kicking the board would only bring headaches to the new president. The Argentine agro-export sector is one of the most interested in the agreement being signed and will do everything possible to pressure the new government to approve it.

“It is one thing for Milei to say that she wants to leave Mercosur and another that she can leave,” says Neves. “And for this, the agreement with the European Union will be fundamental, especially if the signature is finalized before Milei takes office. If so, it will be more difficult for Argentina to leave the block.”

The two giants of South America know that they need each other, it does not matter if their presidents are at ideological opposites. In the end, business is business.

IN THE REGION

The South American expectation

Not only Brazil is expectant regarding what will happen in Argentina when Milei takes office. The entire world has reacted with surprise, applause, suspicion and disbelief, depending on the political orientation of their governments.

The South American countries are also very aware of what is to come with one of their most important neighbors, especially due to the libertarian’s speech once morest regional integration.

This week, South American foreign and defense ministers – including representatives of Alberto Fernández’s government – met in Brasilia to reaffirm their commitment to cooperation and integration, a will that they hope will prevail “regardless of the electoral results of one nation or another,” in the words of Mauro Vieira, Brazilian Foreign Minister.

Regarding the panorama that may arise in the region following Milei’s victory, Vieira expressed that “we will have to be patient and wait.”

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