ASSESSMENTS

Argentine Elections Could Narrow Brazil's Mercosur Reform Path

Apr 10, 2019 | 09:00 GMT

Argentine President Mauricio Macri, left, and Brazilian President Jair Bolsonaro are pictured after a meeting in Brasilia in January 2019.

Argentine President Mauricio Macri, left, visits Brazil to discuss the future of Mercosur with Brazilian President Jair Bolsonaro.

(EVARISTO SA/AFP/Getty Images)

Highlights

Brazilian President Jair Bolsonaro's push to reform the trade policy of the Common Market of the South (Mercosur) risks collapsing without the support of Argentina.
Bolsonaro will thus continue to press Argentina to accept his proposed changes, which include reducing tariffs and allowing member states to negotiate and sign trade deals individually.
However, if negotiations drag past Argentina's next presidential election in October, Bolsonaro risks facing a new leftist government that could stall his reform push.
Bolsonaro also faces an increasingly hostile political landscape at home that will limit his ability to withdraw from the bloc altogether, which could force Brazil’s government to ultimately reduce its proposed reforms.

Upon taking office, Brazilian President Jair Bolsonaro envisioned a deep reform of Mercosur's foreign trade regulations, with the intent of effectively freeing Brazil from its restrictions on signing new free trade agreements. But the window to approve and implement Bolsonaro's desired import tariff and trade policy reforms is quickly narrowing, with the potential for a leftist government to take power in Argentina before the end of the year -- thwarting the consensus he's built so far among the bloc's member states....

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