Caught between China and US, South American bloc rethinks its trade game as internal rifts deepen

Malay Mail

a day ago

BUENOS AIRES, July 4 — South America's Mercosur bloc sought yesterday to expand its markets in the face of US President Donald Trump's global trade war, with Brazil calling for closer ties with dynamic Asian economies.
'It's time for Mercosur to look toward Asia,' President Luiz Inacio Lula da Silva said, extolling the potential benefits of deeper relations with Japan, China, South Korea, India, Vietnam and Indonesia.
In a reflection of regional tensions, however, Argentina's President Javier Milei threatened to go it alone if necessary to secure a free trade deal with the United States.
'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 libertarian leader, a huge fan of Trump, has made no secret of his disdain for Lula, referring to him in the past as 'corrupt' and a 'Communist.'
Lula, on his first trip to Argentina since Milei took office in December 2023, had no bilateral talks with the self-declared 'anarcho-capitalist.'
The veteran Brazilian leftist, who took over Mercosur's rotating presidency from his Argentine counterpart, has accused Milei of talking 'nonsense.'
Lula said that under his leadership, Mercosur would aim to 'strengthen inter-bloc trade with external partners' and to implement a landmark trade agreement with the European Union.
Brussels in December struck a deal with Mercosur's founding members — Argentina, Brazil, Paraguay and Uruguay — to create a free trade zone of around 700 million consumers.
The agreement has been 25 years in the making, but still needs to be ratified by EU member states.
It has faced stiff opposition from France, where farmers worry about being undercut by less-regulated Latin American peers.
Climate change on agenda
Uruguayan President Yamandu Orsi said that it was now 'time to resume negotiations with key partners such as South Korea and Canada.'
Uruguay has for decades sought a relaxation of the bloc's rules, which prevent agreements with other countries without the consent of all partners.
Climate change, the energy transition, combating organized crime and promoting technological development would be Mercosur's main objectives during the next six months, Lula said.
Steps were discussed to make progress on trade agreements with the United Arab Emirates and Canada, as well as update accords with Colombia, Ecuador, Panama and the Dominican Republic, and to advance regional gas integration.
On Wednesday, Mercosur foreign ministers announced a free trade agreement with the European Free Trade Association, made up of non-EU members Iceland, Liechtenstein, Norway and Switzerland.
Adding to the tense atmosphere surrounding the summit, Lula took the time to visit his ally Cristina Kirchner, the former Argentine president who is under house arrest.
Lula, who was granted permission by a court to see Kirchner, spent almost an hour at her apartment in Buenos Aires.
He found her 'in good health, strong and determined to fight,' he said on social media platform X.
'In addition to expressing my solidarity with her for everything she has been through, I wished her all the strength she needed to continue fighting, with the same determination that has characterized her career,' he wrote.
Kirchner hailed the visit as 'much more than a personal gesture: it was a political act of solidarity,' in her own message on X.
Kirchner, the standard-bearer of the Argentine left for over two decades, was convicted of 'fraudulent administration' while president between 2007 and 2015.
The 72-year-old, who says her trial was an attempt to silence her criticism of the right, began a six-year sentence last month after losing a Supreme Court appeal. — AFP