BUENOS AIRES — Argentine President Mauricio Macri will hold talks with his new Brazilian counterpart Jair Bolsonaro on Wednesday likely to centre on consolidating trade ties between South America’s two biggest economies, officials said.
Battling recession and seeking re-election this year, Macri needs to boost Buenos Aires’s side of a steep trade imbalance with its main trading partner.
Argentina is seeking to tap into Brazil’s recent growth to boost its trade balance, after its exports to its neighbor fell from nearly $76 billion in 2013 to $58 billion in 2018.
GDP growth in Brazil is expected to reach 1.3 per cent for 2018, amid forecasts of 2.5 per cent in 2019.
Macri will travel to Brasilia for Wednesday’s talks, the first meeting between the two leaders. The Argentine skipped Bolsonaro’s January 1 inauguration to holiday in Patagonia instead.
"It’s likely the meeting will focus on trade issues, because politically the differences between the ultra-conservative Bolsonaro and the liberal Macri are huge," said analyst Bruno Binetti of the Inter-American Dialogue think tank.
Some analysts say the economic openness advocated by Bolsonaro could negatively impact Argentine companies.
"Argentina has everything to lose, not only because of a weakened Mercosur.
If Brazil adopts further trade liberalization, Argentine companies will be punished by fierce competition from other countries, particularly from Asia," warned economist Paula Espanol of Argentinian consultants Radar.
Bolsonaro has made it clear that the regional trade bloc of Argentina, Brazil, Paraguay and Uruguay is not a priority for his government.
Both presidents agree "Mercosur should be a more flexible bloc, where countries have the freedom to negotiate free trade agreements with third countries instead of negotiating together as they have done so far," despite the resisance of industries in both countries, Binetti said.
The Argentine president will arrive in Brazil late Tuesday with a delegation including Foreign Minister Jorge Faurie, Defence Minister Oscar Aguad and Finance Minister Nicolas Dujovne.. — AF