Trump Tough Talk Pushes Argentina, Brazil to Embrace Trade

BloombergTwo of South America’s most pro-market presidents are struggling to shake off the protectionist policies of the past when it comes to international trade.

Tuesday’s state visit by Argentine President Mauricio Macri to his Brazilian counterpart Michel Temer brought together the leaders of the largest two economies in Mercosur, the regional trade bloc. Both men took office amid deep economic crises in their respective countries and both have won investor accolades for dismantling the anti-competitive policies of their leftist predecessors in their efforts to boost growth.

Amid the global reassessment of trade deals prompted by U.S. President Donald Trump, Argentina and Brazil discussed deepening bilateral trade ties as well as ways of boosting Mercosur, but there were no significant breakthroughs in the agreements signed. With record-high unemployment in Brazil and legislative elections due this year in Argentina, the question remains how willing the two leaders will be to pursue a free trade agenda.

“Although both Temer and Macri are branded as market-friendly, they are still quite sensitive to the political environment in both countries,” Edward Glossop, economist at Capital Economics, said by phone. “There are much more severe domestic challenges to overcome first before trying to stimulate trade in Mercosur.” …

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