The leaders of Brazil and Argentina vowed on Tuesday to pursue closer trade ties with Mexico and other Latin American nations threatened by U.S. President Donald Trump’s promises to rework trade deals to protect jobs at home.
In a state visit to Brasilia, Argentina President Mauricio Macri said the South American regional trade bloc Mercosur would in particular seek to strengthen its relationship with Mexico, Latin America’s second-largest economy after Brazil.
Trump has abandoned the Trans-Pacific Partnership (TPP) deal that aimed to bolster trade between 12 Pacific Rim nations, including Mexico, Chile and Peru, and threatened to tear up the North American Free Trade Agreement with Mexico and Canada. He also threatened to tax imports from Mexico to keep factories in the United States and build a wall along the U.S.-Mexico border to stop the entry of illegal immigrants.
Those moves were hailed by Macri, who came to power in 2015 on a business-friendly program, and his Brazilian counterpart Michel Temer as an opportunity to deepen Latin American trade ties long overshadowed by Washington’s economic might. “This change in scenario will make Mexico turn to the South with more conviction,”
Macri said in a statement, after inking a series of small deals with Temer, a centrist who assumed the presidency last year after the impeachment of Dilma Rousseff. Macri said he spoke with Mexican President Enrique Pena Nieto on Monday to discuss deepening cooperation between Mexico and Mercosur. Both Macri and Temer are seeking to open their economies, which together account for the lion’s share of manufacturing in South America, in an attempt to end lingering recessions.
They also hope that Mercosur can take advantage of the apparent change in the U.S. trade posture to close a free trade deal with the European Union that has dragged on for more than a decade. Paraguay and Uruguay are also members of Mercosur.
Venezuela was suspended from the bloc last year. Tensions over market access, however, continue to mar the Argentine-Brazil relationship. Although Buenos Aires is willing to discuss the entry of Brazilian sugar into its market, its move to increase tax benefits to local auto parts manufacturers has infuriated Brazilian rivals. In an interview with Brazilian newspapers published on Tuesday, Macri complained about his country’s $4.3 billion trade deficit with Brazil.