Argentina has recently made strides in strengthening hemispheric relations beyond the nation’s like-minded regional allies. The country has just closed a significant trade deal with neighboring Brazil. The agreement seeks to guarantee importers will have enough U.S. dollars to pay for exports, and is expected to increase Argentina and Brazil’s bilateral trade market (which is worth more than $30 billion). After years of chill commercial relations it’s a step towards upping trade between both countries, as Brazil’s Trade Minister Mauro Borges put it. A scarcity of U.S. dollars in Argentina has curbed Brazilian exports of manufactured goods like cars and home appliances in the country’s direction.
The thaw doesn’t stop there. An Argentine delegation visiting Mexico City last week flew back with an agreement to boost bilateral trade and investment between both countries, especially in the automotive industry. Mexico and Buenos Aires reached a trade agreement covering the automotive industry in 2012 that allowed them to resolve differences over quotas. The current deal intends to give commercial relations a second wind and is a follow-up to the 2012 deal.
However, Argentina still has many lingering issues, among them a thorny quarrel with the European Union: Argentina requested the World Trade Organization’s Dispute Settlement Body establish of a panel to address the E.U.’s antidumping measures targeting Argentine bio-diesel, a move rejected by the Union. The E.U. decided to impose definitive antidumping rights at the end of November 2013, a move that closed the European market to Argentine exports of biodiesel.
As Argentina tries to reboot its position in the international market, these moves are likely to be well-received. The big test will come when it defines its position regarding the Mercosur-E.U. free trade deal in the making. Brazil, which spearheads the South American alliance in the talks, took advantage of the bilateral deal to do some salesmanship on the issue, which led Argentina to ease its reluctance towards its protectionism stance. Borges said on Monday that Mercosur expects to present a joint proposal regarding tariff reductions to the European Union during a meeting in June. This is a diplomatic victory for Brazil’s Dilma Rousseff, who had considered the exclusion of Argentina from the negotiation round.
Those attending the World Economic Forum on Latin America (which will be taking place in Panama City from April 1-3) will be pondering how Argentina’s recent moves affect the country’s economic outlook. If (as the recent moves seem to suggest) President Cristina Fernández de Kirchner is drifting away from her staunchly protectionist policies, the business leaders gathered in Panama will start to look at the third-largest economy in the region with kinder eyes.