Javier Milei reiterated that he will seek a free trade agreement with the United States: What possibilities does it have and what would happen to Mercosur?

President Javier Milei insisted this Monday that he will seek to sign a free trade agreement with the United States this year. He did so in a talk with businessmen as part of his North American tour to witness the inauguration of Donald Trump. Analysts warn that it could imply a breakup of Mercosur and raise difficulties due to protectionist policies from the White House. They warn about the lack of complementarity between both economies. What will be the next steps?

The return of Donald Trump to power raises expectations in the Government who showed in his first year in office a foreign policy of automatic alignment with the United States. Aside from the fact that the protectionist guidelines of the new president have little to do with the libertarian ideal, The Casa Rosada is excited that the ideological affinity, the following and the bet that Milei himself made for the Republican will bring him returns.

Aside from the challenges that arise for the global economy: high tariffs, international inflation, strong dollar, trade war, energy emergency, Argentina has its own objectives for the bilateral relationship. In economic matters, there are two that stand out: support for the International Monetary Fund and the signing of a free trade agreement.

In the first point the play is clear. The United States is the most important partner in the organization and has the power of veto. It is difficult for anything to be decided without your endorsement. Argentina wants funds above the almost US$45 billion it already owes to the IMF. Furthermore, he wants them quickly and with few conditions.

Despite the questions that the staff makes about the exchange rate policy, that is, the stocks and the appreciation of the peso, Among the veterans who worked with the organization there is agreement that a call from the White House could unblock the situation.

Trade agreement

To the surprise of many, President Javier Milei said at the end of last year that he will seek a free trade agreement with the United Statessomething that according to the Argentine president “should have happened 19 years ago.” This week during his tour of the northern country he confirmed it in a meeting with businessmen. This was confirmed to Scope a businessman who witnessed the meeting.

“I see it as something difficult. “I haven’t heard anyone in the United States refer to that,” former Argentine ambassador Jorge Argüello told Radio 10. In that sense, the specialist in North American politics maintained that “Trump is going to privilege national production” and recalled that, despite his closeness with Mauricio Macri, during his previous administration he suspended the import of Argentine biodiesel, which meant a loss of US$1.2 billion and also placed obstacles on national steel and aluminum.

International analyst Patricio Giusto added that the economies of both countries “are not complementary.” In dialogue with this medium, he gave some examples, such as the agricultural sector and some areas of industry. In that sense, he said that for competitiveness reasons a free trade agreement “It would not bring great benefits for Argentina, it seems more of an ideological question on Milei’s part.” Giusto sees more opportunities in the field of investmentswhere there could be a mutual gain.

Another point that analysts highlight is that There are no feasibility studies that justify the viability of an agreement of this type. Furthermore, moving forward in a negotiation of these characteristics It would mean breaking up Mercosursomething that requires prior approval by Congress

The role of Mercosur

For the former Argentine ambassador to the United States Diego Guelar it is the other way around, Mercosur could be the platform to face the free trade agreement. “Milei would have to take advantage of his pro tempore presidency to resume the 1992 invitation, for the United States it would be more attractive due to its size and number of inhabitants,” he said in dialogue with this medium.

The diplomat who was also in charge of representations in Brazil, China and the European Union told Scope that This would not be contradictory to Trump’s threats of tariffs. because since it is a block “it would imply expansion from a global point of view”

Guelar believes that Argentina is not taking advantage of Mercosur and that Javier Milei “did not show a desire for dialogue with any of our neighbors.” He also warns that more than a market problem, what the country has is a deficit in its supply of exportable products.