Milei’s election could disrupt Lula’s plans in South America

The victory of the libertarian Javier Milei in the primaries of the Argentine election sparked an alert in the Brazilian government. If he is the winner of the general election, in October, the Argentine could jeopardize the plans of Luiz Inácio Lula da Silva (PT) for South America, mainly in matters related to the Common Market of the South (Mercosur) and the ideological agenda of the PT , since he has a political position opposite to that of Lula. Furthermore, for the Brazilian opposition, Milei’s victory represents a breath of hope for the right on the continent and would be fundamental to reduce the space of the left in politics in the region.

For the experts consulted by the People’s Gazette, the relationship between Argentina and Brazil is the one that would least change in a scenario of Milei’s victory in the general elections, since the country has a great financial dependence on Brazil. However, the common international agenda between the two countries could change, as analyzed by Rogério Pereira de Campos, PhD in Social Sciences and researcher at the Araporã Foundation.

“Details involving the Union of South American Nations (Unasur) and the Common Market of the South (Mercosur) could be impacted. I believe that this is the big problem in the relationship between the two leaders. But I don’t think there is a big rupture between the two countries, bearing in mind that the economy of both are interdependent”, points out Campos.

Unasur is an ideologically biased coalition founded in 2008 by eight South American countries that were led by leftist presidents. As the political scenario in the region underwent changes, the bloc weakened and suffered a rupture. Without success, Lula tried to reactivate it this year when he gathered all the presidents of South America in Brasília. The agenda did not advance, including due to the participation of the Venezuelan dictator, Nicolás Maduro, in the event.

According to Cezar Roedel, Master in International Relations from the Federal University of Rio Grande do Sul (UFRGS) and Doctor in Philosophy from the Pontifical Catholic University of Rio Grande do Sul (PUCRS), Lula’s proximity to dictatorships is one of the main reasons for his loss of influence in South America, and the reason that may affect his relationship with Milei.

For Roedel, the Argentine would distance himself from “Lulist rhetoric of creating an intra-bloc currency and would question Lula’s ideal of regional integration, which is purely ideological. Milei’s speech is absolutely contrary to dictatorships. He also sees the relative weakness of leaders Westerners in the face of Putin’s threat, having a clear vision regarding the war in Ukraine, unlike Lula”.

Lula’s role in South America may be weakened with Milei’s victory

Lula’s rapprochement with dictators like Maduro and Daniel Ortega, from Nicaragua, has already left the petista in uncomfortable situations this year. During the South American Summit in May, when he tried to re-establish UNASUR, Lula was criticized by presidents from both the right and the left for saying that the Venezuelan dictatorship “is a narrative”.

The PT’s statements also generated criticism among its allies. “It is not a question of narrative as President Lula said. It’s reality and it’s a human rights issue,” said Chilean President Gabriel Boric, who was on the left at the time.

Lula also defends that Venezuela can resume its commitments in Mercosur and return to the center of geopolitical discussions. The country has been facing the dictatorship of Maduro for 10 years, an autocrat accused of crimes against human rights, of manipulating the Venezuelan elections and of arresting and torturing those who oppose his government.

In addition to contradictory statements about leftist dictatorships in Venezuela, Nicaragua and China, the Brazilian president also made mistakes when commenting on the war caused by Russia’s invasion of Ukraine. The PT even went so far as to say that Ukraine, a country that was invaded by Russian troops in February 2022, was as guilty of the conflict as the invading nation.

Although South America is mostly led by left-wing presidents, the trend is that this scenario may change in the coming years. In parallel to this, the opposition of right-wing leaders to Lula is constantly endorsed, as in the case of the president of Uruguay, Luís Lacalle Pou, who has already shown dissatisfaction with Unasur and Mercosur.

Lula bets on a “non-partisan” strategy to avoid further erosion in South America

Facing attrition in South America, the Brazilian government may avoid taking sides in the Argentine elections. As found by People’s Gazette with members of the Ministry of Foreign Affairs, Milei’s election is not given as concrete by the Brazilian government. Regardless, Lula should not side with any candidate. With that, the PT should not declare support for the Peronist candidate Sérgio Massa, the most voted in the left-wing coalition, but who came in third in the primaries. He is the candidate for the position supported by the current president of Argentina, Alberto Fernández, who is an ally of the head of the Brazilian Executive.

The PT’s strategy may be an attempt not to “affect its political image” in South America and also not to link the electoral failure of Argentine Peronism to the Brazilian left. As Milei was the winner of the primaries, the chances of the libertarian reaching the presidency of Argentina increase, taking into account the electoral history in the country.

If he decided to support the Peronist candidate and he was defeated in the general elections, the PT candidate could demonstrate “weakness” of political influence and even start an unfriendly relationship with the winner at the polls.

The decision of Alberto Fernández, current Argentine president, not to try to be re-elected for a second term – motivated by the high rejection and the failure of his administration – was one of the reasons that motivated Lula in his efforts to help his “friend”. In recent months, the petista even said that he “would do everything to help Argentina” to overcome the serious economic crisis that the country faces.

Among the attempts, the Brazilian representative announced the possibility of financing the completion of the Néstor Kirchner Gas Pipeline, in the Vaca Muerta region, through the National Bank for Economic and Social Development (BNDES); the end of the use of the dollar for negotiations between the two countries and the attempt for Argentina to eventually join the BRICS Bank – a group formed by Brazil, Russia, India, China and South Africa.

Such strategies, as stated by the experts above, are not of interest to Milei, who has a liberal stance. The candidate has even shown himself to be an enthusiast of the dollar as a solution to get Argentina out of economic hardship.

His main proposal, if elected, will be the dollarization of Argentina. According to Milei, the measure will control inflation, through the eradication of the peso, placing the American currency, which is already traded within the country, as the main currency for negotiations.

Mercosur may be even more fragile with Milei in the Argentine government

In addition to the political relationship between the South American countries, researcher from the Araporã Foundation Rogério Pereira de Campos analyzes that Mercosur could be even more fragile with Milei in the Argentine presidency. The scenario in the bloc is no longer one of the best and, with his election, Mercosur could end up even more weakened. Unlike the position adopted by Lula, the bloc is not one of the priorities of the Argentine libertarian candidate.

“For the national government program presented by the Coalition Avanza Libertad [partido de Milei], greater trade openness and, consequently, greater competitiveness would be sought. In this sense, there would certainly be questioning about Mercosur, which has not been revised for decades, especially the Common External Tariff. The trend would be to prioritize bilateral trade agreements”, evaluates Cezar Roedel.

Currently, the bloc is formed by Argentina, Brazil, Uruguay and Paraguay. Lula’s approach to dictatorships and his intention to reintegrate Venezuela into the bloc has caused dissatisfaction among other leaders, such as Pou, from Uruguay – currently the only right-wing president in Mercosur.

Recently, during a ceremony in which the Brazilian representative assumed the presidency of Mercosur, the Uruguayan refused to sign the joint declaration and threatened to leave the bloc to close a bilateral agreement with China – which, if implemented, could put an end to the agreement. Mercosur-European Union free trade agreement.

Since taking office for his third term, Lula has been trying to get the free trade agreement with the European Union off the ground, but without success. The Argentine libertarian, however, can support Pou’s ideas and strengthen opposition to the bloc.