President Javier Milei on Thursday called on his Mercosur partners to advocate for increased trade openness within the bloc while hosting his fellow leaders of the South American group in Buenos Aires.
In a typically forceful opening speech, the La Libertad Avanza leader cautioned that his government would pursue that goal unilaterally if necessary, suggesting – not for the first time – that an exit from the bloc could be on the cards. “We will embark on the path of freedom, and we will do so together or alone because Argentina cannot wait,” Milei warned, calling for “more freedom” to negotiate. The head of state has viewed the regional trade bloc as a barrier to enhanced trade due to its regulations on collective negotiations.
“Mercosur, which has increasingly diminished as a market and as a common market.” “We seek to put an end to what we consider to be destructive inertia,” Milei said at the summit, before handing over the rotating pro-tempore presidency of the bloc to Brazil. “That is why we have proposed that, as a bloc, we move toward a much freer trade and regulatory framework, instead of the iron curtain to which we are currently subjected, in which each country can enjoy greater autonomy to take advantage of its comparative advantages and export potential,” he continued. ”
It would be a great joy if, in a few years’ time, when Argentina once again has the opportunity to chair this bloc, we find ourselves in the final stretch of achieving this set of objectives. But if this is not possible, and the bloc’s partners prefer to resist, to persist on a path that has not worked for us, then we will have to insist on making the conditions of our partnership more flexible,” said Milei.
Argentina’s government has consistently stated its intention to advance a free-trade agreement with the United States, considering Mercosur a barrier to that objective. “We urgently need more trade, more economic activity, more investment and more jobs – and that is why we also urgently need more freedom,” said Milei. He urged Brazil – one of the bloc’s four members, alongside Argentina, Bolivia, Paraguay, and Uruguay – to spearhead this process during its forthcoming leadership. “If this is not possible, and our partners prefer to resist and persist on a path that has failed us, then we will have to push for a loosening of the conditions that bind us together,” Milei warned.
Leaders of the bloc urged Mercosur to broaden its markets amid US President Donald Trump’s global trade war, with Brazil advocating for stronger connections with dynamic Asian economies. “It’s time for Mercosur to look toward Asia,” President Luiz Inácio Lula da Silva stated, highlighting the potential advantages of strengthening ties with Japan, China, South Korea, India, Vietnam, and Indonesia.
Lula stated that under his leadership, Mercosur would seek to “strengthen inter-bloc trade with external partners” and to implement a landmark free-trade agreement with the European Union. In December, Brussels reached an agreement with the founding members of Mercosur to establish a free-trade zone encompassing approximately 700 million consumers. The agreement has taken 25 years to develop, yet it still requires ratification by EU member states. France has expressed strong opposition, with farmers concerned about being undercut by less-regulated counterparts in Latin America and other agricultural powers.
Uruguayan President Yamandú Orsi stated, “It is now time to resume negotiations with key partners such as South Korea and Canada.” For decades, Montevideo has pursued a relaxation of the bloc’s rules that require unanimous consent from all partners for agreements with other countries.
Lula stated that Mercosur’s primary objectives over the next six months will include climate change, the energy transition, combating organized crime, and promoting technological development. Discussions focused on advancing trade agreements with the United Arab Emirates and Canada, updating accords with Colombia, Ecuador, Panama, and the Dominican Republic, and promoting regional gas integration. On Wednesday, Mercosur foreign ministers announced a free-trade agreement with the European Free Trade Association, which includes non-EU members Iceland, Liechtenstein, Norway, and Switzerland.
At the conclusion of the summit, Mercosur’s leaders released a joint statement expressing their approval of a new agreement to “expand the national list of exceptions to the common external tariff of each state party by up to 50 tariff codes.” They noted that this decision “will allow state parties to adapt to a constantly evolving international environment.”