Brazil Sees Argentina’s Fernandez as Threat to Mercosur, Economy

(Bloomberg) -- Brazil is worried that “setbacks” to the Mercosur trade bloc could harm its economic recovery should Argentina’s opposition win the presidency in October, according to Foreign Minister Ernesto Araujo.

In an interview in Brasilia, the minister said Argentina’s front-runner Alberto Fernandez and his running mate, former President Cristina Kirchner, are the same people who for years imposed barriers and held back the trade bloc comprised of Brazil, Argentina, Uruguay and Paraguay.

“It would be very frustrating, just as Mercosur enjoys its best moment in 30 years, to have an Argentine government that might bring setbacks,” he said. “That worries us a lot because Mercosur is the centerpiece of our trade and economic policies.”

A spokesman for Fernandez declined to comment on Araujo’s statements.

Mercosur’s prospects enjoyed a major boost following a breakthrough in free-trade talks with the European Union late in June, after 20 years of talks. Less than three months later, however, the continued existence of the South American customs union itself was called into question when Fernandez emerged as the clear favorite to win the elections and Brazilian President Jair Bolsonaro said his country could leave the bloc if Argentina resorted to protectionist policies after the vote.

Yet Araujo struck a cautious tone when asked about Brazil’s possible exit from Mercosur.

“Perhaps we might need to think about an exit,” he said, adding that his government would have to weigh wider political viewpoints to decide what to do. “Mercosur is a reality that’s part of the plan for our country, part of our economic recovery.”

To contact the reporters on this story: Walter Brandimarte in Brasilia at wbrandimarte@bloomberg.net;Samy Adghirni in Brasilia Newsroom at sadghirni@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Bruce Douglas

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