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Latin American Trade Argentina, Brazil urge South America to open to EU, Mexico

Argentine President said that every area -- except football, of course -- is ripe for tighter cooperation.

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Brazilian President Michel Temer (R) and Argentina's President Mauricio Macri chat before signing bilateral agreements at the Planalto Palace in Brasilia on February 7, 2017 play

Brazilian President Michel Temer (R) and Argentina's President Mauricio Macri chat before signing bilateral agreements at the Planalto Palace in Brasilia on February 7, 2017

(AFP)

The presidents of Brazil and Argentina called Tuesday for more ambitious Latin American trade, saying regional ties should strengthen in response to uncertainty over relations with Washington.

Argentine President Mauricio Macri said in Brasilia after talks with his counterpart Michel Temer that every area -- except football, of course -- is ripe for tighter cooperation.

"Confronted with all the doubts we're facing in the world, what's increasingly clear is that we need to be allies," Macri said.

Macri said that Mercosur -- the troubled trade bloc also including Paraguay, Uruguay and the currently suspended Venezuela -- needs to make a deal with the European Union "which now has a bigger interest in finding an accord."

Temer called for also building ties with the Alianza del Pacifico, a trade bloc including Chile, Colombia, Mexico and Peru.

Brazilian President Michel Temer (L) and Argentina's counterpart Mauricio Macri sing national anthems before a meeting at Planalto Palace in Brasilia on February 7, 2017 play

Brazilian President Michel Temer (L) and Argentina's counterpart Mauricio Macri sing national anthems before a meeting at Planalto Palace in Brasilia on February 7, 2017

(AFP)

"We discussed the ever greater integration of Latin America, especially of South America and Mexico," Temer said after his talks.

A major impetus is the protectionist shift under newly elected US President Donald Trump. He has withdrawn the United States from the Trans-Pacific Partnership and called for renegotiating the NAFTA pact with Canada and Mexico.

Analysts say that troubled economies in countries like Brazil could see a benefit with Mexico likely to look southward for partnerships.

Neighbors, rivals

A man sells flags reading "Get Out Trump" during a protest over fuel price hikes in Mexico City on January 26, 2017 play

A man sells flags reading "Get Out Trump" during a protest over fuel price hikes in Mexico City on January 26, 2017

(AFP/File)

Brazil and Argentina have plenty in common, with two market-orientated presidents committed to liberal reforms to end recessions after longtime leftist rule.

They hope to boost their own trade -- which reached $23 billion in 2015, according to Brazil -- and take down barriers that have gradually worn away at the effectiveness of the Mercosur bloc, founded in 1991.

"It's a moment when both governments are on the same page on how to organize the economy and on the type of changes needed to return to growth," said Paulo Estivallet de Mesquita, Brazil's diplomat charged with Latin American relations.

But domestic economic weaknesses have contributed to the slump in trade.

The economy in Brazil -- Latin America's biggest -- shrank 3.8 percent in 2015 and is estimated to have shrunk another 3.5 percent last year.

Temer came into power last year after the impeachment of leftist president Dilma Rousseff. He is attempting to push through far-ranging pro-business reforms, with a 20-year federal spending freeze his first victory.

Temer still faces what economists say will be at best anemic economic growth this year, as well as the unpredictable fallout of a huge corruption scandal at the Petrobras state oil company.

Macri, who was elected at the end of 2015, is hoping for around three percent growth this year, a big turnaround from nearly two percent decline in 2016, according to analysts.

He has also enacted unpopular reforms that he says will free up the economy. But he needs Brazil to improve since the country is Argentina's main destination for exports.

One area where cooperation definitely won't extend, joked Macri, is the storied Brazilian-Argentine competitiveness on the football pitch.

"We should keep our rivalry only for sports, especially football. For the rest we have to be partners," Macri said. "In football we always want to win."

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