ArgenEXIT: Will Argentina leave MERCOSUR?

A brief history of Argentina and MERCOSUR

After years of negotiations, proposals and initiatives towards a joint path, in the 1990s the countries of Brazil, Uruguay, Paraguay and Argentina formed the Common Southern Market “MERCOSUR” (in spanish, Mercado Común del Sur) an economic bloc focused on regional integration, trade and cooperation and fostering links with other nations and actors. The bloc has developed over the years, with 50 international cooperation projects developed, and with joint economic partnerships with actors like the European Union, the European Free Trade Association, among others. Argentina’s governments, across party lines and  different presidencies, each with different perspectives, have always supported regional integration. But, that has changed a bit recently as of yet, with Javier Milei’s victory in the 2023 presidential election. 

Milei and MERCOSUR: a complicated relationship. 

The relation between Milei’s government and MERCOSUR is very complex, on the one hand Milei has supported and his administration’s recently pushed for MERCOSUR’s agreement for the EFTA, but he has declared both in the past during the 2023 presidential campaign. saying Argentina should have free trade agreements outside the bloc, and also in the first two years of the mandate he’s currently serving, and even threatening to leave the bloc in June of this year.  All of this has turned the idea of Argentina leaving the bloc into a more real possibility. The question that comes out of this is whether Argentina should stay or leave MERCOSUR and seek new partners elsewhere. 

Should Argentina leave MERCOSUR?  At least not yet…

Argentina's economy is highly dependent on foreign currency due to low trust on the local currency, the peso. While the idea of leaving MERCOSUR would open doors to more free trade agreements that wouldn’t the bloc’s approval, it also closes many other ones that have been opened (like the free trade agreement with the EFTA, European Free Trade Association) or ones that are in progress (like the deal between MERCOSUR and the European Union), it would also damage the relations with the other members of the bloc. These other southamerican countries are some of Argentina’s trade partners, Brazil in particular, which is the country’s biggest trade partner. MERCOSUR also facilities exchange of people ,as well as goods and services between the member nations, a benefit that with all of the other member nations (Brasil, Bolivia, Uruguay and Paraguay) being bordering countries of Argentina should definitely be taken into consideration. 

Conclusion and final thoughts …

Ultimately, I believe that leaving MERCOSUR would only leave the country isolated, especially from those four that I already mentioned. In terms of more free trade and commercial opportunities, which is the argument Milei uses, there’s far more to be gained together than alone. Together MERCOSUR is achieving a partnership with the European Union. Meanwhile, the current administration of Argentina has been unsuccessful (at least for now) at achieving a free trade agreement with the Trump administration, which I personally believe goes to show that, in MERCOSUR’s case at least, there's strength in numbers.