)
Brazil is reviewing a new US Argentina trade deal, fearing it exceeds Mercosur’s limits on bilateral pacts and undermines the bloc’s unity.
Brazil has launched a detailed review of a freshly announced trade agreement between the United States and Argentina. Officials worry it breaches the strict guidelines of Mercosur, the South American trade alliance, potentially weakening the blocs collective bargaining strength.
Initial findings raise concerns
Diplomats in Brazil are poring over the pact, made public by Washington last Friday. Early assessments suggest it stretches beyond the boundaries Mercosur sets for individual member deals with outside nations. Two well placed sources indicate the agreement touches on roughly 200 products, exceeding Argentinas quota of 150 exceptions granted last year amid rising global trade frictions under US President Donald Trump.
STORY CONTINUES BELOW THIS AD
An Argentine representative insists the tariff cuts for American goods fit squarely within their allowed list. Brazilian authorities, however, see a clear overrun and plan to scrutinise every detail to ensure fairness.
Mercosur rules under pressure
The bloc, formed three and a half decades ago, curbs members from pursuing independent trade links to preserve unified negotiations. Last year saw temporary relaxations to the common external tariff, giving Brazil and Argentina 150 slots each, with Uruguay and Paraguay receiving more generous allotments.
Sources point out further hurdles like rules of origin, service provisions, and technical standards that could complicate matters. Argentinas push, led by President Javier Milei a close Trump confidant, may prove hard to square with prior exemptions.
Past tensions within the bloc
Mercosur has weathered repeated challenges as nations chase separate trade paths, though no one has sealed a rogue pact until now. Uruguay came close to a US free trade deal in 2006 but retreated over expulsion threats. It has since eyed a similar link with China, irking partners Argentina, Brazil, and Paraguay.
In 2019, under then President Jair Bolsonaro, Brazils finance chief threatened withdrawal, decrying the blocs drag on ambitions. Neither Bolsonaro nor his successor Luiz Inacio Lula da Silva followed through with a formal exit.
At a recent briefing, Argentinas Foreign Minister Pablo Quirno dismissed Mercosur barriers, noting Milei could enact portions by decree while a full investment treaty awaits parliament.
STORY CONTINUES BELOW THIS AD
Potential next steps
Brazilian officials stress adherence to established protocols. One remarked that any confirmed violation would trigger a Mercosur Council meeting to chart a response. The blocs next summit looms in late June in Asuncion, where Paraguay passes the rotating chair to Uruguay.
Senior levels in Brasilias government must weigh in, though the matter has not yet reached Lula. Governments in Brazil and Uruguay stayed silent on queries, while Paraguay and Argentinas foreign offices along with the US State Department offered no immediate reply.
The saga underscores deepening strains in Mercosur as members balance loyalty to the group against enticing bilateral prospects.
