Recovery Hit as Argentina Exits Trade Talks, Opposition Says

(Bloomberg) -- Argentina’s decision to pull out of regional trade negotiations will exacerbate the country’s economic crisis, a coalition of opposition lawmakers said.

Citing economic policy priorities and the effects of the Covid-19 crisis, President Alberto Fernandez’s administration withdrew from ongoing and future talks with several countries as part of the regional South American trade bloc known as Mercosur, the group’s president pro tempore, Paraguay, said late Friday.

The government said in a statement Saturday that while it supports regional integration, global uncertainty and its own economic situation led it pull out of the negotiations. Argentina’s ambassador to the U.S., Jorge Arguello, said in a tweet that the decision was aimed at protecting Argentine companies and jobs. The move affects talks with South Korea, Singapore, Lebanon, Canada and India, among others, he said.

The move doesn’t affect Argentina’s participation in completed trade deals, including its agreement with the European Union.

The opposition Together for Change, the coalition of former Argentine President Mauricio Macri, said the move would close new markets at a time when the country most needs them.

“Our challenges cannot be overcome by closing our economy with nationalist models such as those that were put in place during the the 1929 debacle that devastated much of the world economy and led to the tragedy of World War II,” the coalition said in a statement on Saturday. “To get out of this crisis, Argentina needs more markets, not fewer.”

With much of the country under lockdown to curb the spread of the novel coronavirus, Argentina’s economy is forecast to contract by 5.7% this year, according to the International Monetary Fund. The government is negotiating with creditors in an attempt to restructure $65 billion in sovereign debt.

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