Advisers to President Javier Milei in Argentina have informed the administration of US President Donald Trump that they lack the necessary votes in the nation’s Congress to ratify the bilateral trade agreement signed last February, according to sources familiar with the situation. Milei’s administration seeks to revisit the terms in light of the US Supreme Court’s decision regarding President Donald Trump’s global tariffs, as indicated by sources. Despite Trump’s characterisation of Milei as “my favourite president,” his policymakers recently travelled to Buenos Aires to convey a definitive stance: Renegotiation is not an option, as it would establish a precedent for other nations to pursue more favourable terms. Argentina is being urged to ratify the deal, yet observers note a lack of a coherent legislative strategy or timeline from Milei’s government, according to sources familiar with the situation. The clock is ticking as Argentina’s legislative year approaches its conclusion in November.
Milei is focusing on other significant legislative measures, and his upcoming 2027 re-election campaign may render ambitious reforms such as this one too perilous to implement. Argentina’s Foreign Ministry and the US Trade Representative did not provide comments upon request. Argentina’s dollar bonds are lagging behind emerging-market counterparts on Tuesday, as the country’s benchmark 2035 notes have declined nearly half a cent on the dollar to 73.7 cents. The yield increased by nine basis points, reaching 10.54 percent. Nonetheless, individuals acquainted with the situation in Washington and Buenos Aires indicated that the postponement is not adversely affecting the overall relationship. If Trump and Milei were to engage in discussions on the sidelines of the United Nations General Assembly in New York this week, it could potentially facilitate the resumption of their negotiations. Currently, the divergence regarding a way forward stands in stark contrast to their ideological alignment and follows the US’s provision of a US$20-billion currency swap line to Argentina a year prior, aimed at mitigating a market sell-off in anticipation of the country’s midterm elections.
Both sides also celebrated the trade agreement in February as a significant achievement that solidified the emerging bilateral ties characterised by over a dozen visits by Milei to the US to engage with Trump, Elon Musk, and others. It also indicates a decline in Milei’s momentum. Trump’s assistance succeeded in enabling the libertarian party to achieve a resurgence, more than doubling its representation in Congress during the midterm election. That political strength enabled Milei to sign the trade deal and implement significant labour reform, while also fostering optimism that Argentina was set for robust growth in the future. US officials regarded ratification as a mere formality at the time, rather than a significant obstacle, sources indicated. Since then, however, a corruption scandal and sluggish growth have resulted in a significant decline in Milei’s approval ratings, bringing them close to the lowest levels observed during his Presidency. His reform agenda has encountered obstacles in Congress, a situation that has rekindled US apprehensions regarding the timing and manner of his ratification of the trade agreement.
US officials contend that they have provided substantial support to Milei through favourable trade benefits, which include an increase of 80,000 tonnes to Argentina’s beef export quota and over 1,600 tariff exemptions within the agreement. They assert that it is now incumbent upon his government to fulfilll its obligations under this arrangement, according to sources. Jeff Goettman, visited Buenos Aires in August and engaged with Argentina’s leading trade official, Foreign Minister Pablo Quirno. “Ambassador Goettman also underscored the importance of ratification of the Agreement on Reciprocal Trade and Investment, which was concluded earlier this year, in order to fulfill our shared economic vision,” the USTR posted on X. Argentine officials cite the US Supreme Court’s decision to annul Trump’s global tariffs as a rationale for revising the terms, given that the agreement was finalised merely weeks prior to the ruling. It is asserted that ratification of an agreement cannot occur under an antiquated legal framework.
Indeed, Milei’s administration has initiated the execution of certain regulatory and intellectual-property obligations outlined in the agreement, despite the fact that the fundamental tariff provisions continue to be at a standstill. In March, Argentina’s patent office, INPI, abolished regulations established in 2012 that limited the patentability of pharmaceuticals. Argentina has also liberalised certain imports. In addition to the political resistance characteristic of its historically protectionist stance, Argentina’s pharmaceutical sector is actively engaging in lobbying efforts aimed at persuading the government to refrain from adopting various components of intellectual property regulations encompassed in the agreement, as reported by several sources. That legislation, known as PCT, is currently pending approval in the Senate following its passage in the lower house with revisions. In a clear indication of the heightened sensitivity surrounding the matter, the agreement was notably absent from discussions at a recent event centred on bilateral trade at the US Embassy with Quirno, as reported by several attendees who expressed surprise at its omission.
