December 14, 2017

Macri: 12 months on

Friday, December 9, 2016

Looking for a new role in Latin America

Above, residents of the neighbourhood of La Boca share a moment in front of one of the quarter’s murals. The southern part of the City of Buenos Aires has significantly worse economic and health indicators than the northern sector.

After a turbulent year in the region, the Macri administration looks set for another year of intense activity

Shortly before he was sworn-in as president, Mauricio Macri and his newly chosen foreign minister-designate Susana Malcorra visited Brasilia and Santiago, in order to build political bridges. That flurry of activity would set the tone for a turbulent year in Latin America that included the impeachment of Dilma Rousseff and the worsening of relations between Caracas and its Mercosur partners over Venezuela’s place in the regional body and its domestic crisis.

With taxing efforts to increase cooperation between the Mercosur and the Pacific Alliance, the imminent transfer of the former’s rotating chair to Buenos Aires and the progressive implementation of the Colombian government’s peace plan, the Macri administration can look forward to at least another 12 months of heavy lifting in the region.

Trouble in the neighbourhood

Having emerged victorious from the late November runoff, the then-president-elect travelled to meet with Rousseff on his first official trip.

The Workers’ Party (PT) leader, who was coming increasingly under threat from lawmakers eager to see her depart office, and her Argentine counterpart set aside any political differences to advocate for greater dynamism within the Mercosur and agree to increase the pace of economic integration.

Overshadowing that visit was Macri’s campaign rhetoric. On the trail, he had repeatedly said he would push Argentina’s Mercosur partners to invoke the so-called “democratic clause” against Venezuela at the first possible opportunity, citing regular abuses against the opposition. Having met with Rousseff, he pulled back from those claims and said the situation would depend on the outcome of the Venezuelan legislative elections. The opposition won convincingly, momentarily easing tensions.

It was the first sign of pragmatism over campaign trail policy and Malcorra, in the following months, consistently softened the government stance by arguing that excluding Venezuela from the Mercosur or the Organisation of American States (OAS) was not a magical solution that would help the political crisis emanating from Caracas.

Later in the year, the pressure that Macri and his government applied in the case of Venezuela’s jailed hard-line opposition leader, Leopoldo López, and others — including having López’s wife, Lilian Tintori, onstage with him at a campaign event — would lead to an uncomfortable situation for the president.

His claims of jailing without due cause were mirrored by calls from a United Nations Working Group, the Inter-American Commission on Human Rights (IACHR) and OAS Secretary-General Luis Almagro demanding the immediate release of Túpac Amaru leader Milagro Sala. (The administration has responded to those calls with a mix that has included an invitation to visit Jujuy, declarations that Sala is lawfully in pre-trial detention and that her custody is a matter for the legal authorities in Jujuy.)

The counter to Macri’s pressure against the Venezuelan government was the international reaction to the arrest — which originated at a protest in a square — of the Jujeña social leader. The claims of the United Nations and the Organization of American States were joined by leaders of the region, such as Bolivia’s Evo Morales, Ecuador’s Rafael Correa and Venezuela’s Nicolás Maduro, as well as the Rousseff’s Workers’ Party.

Constant themes

Argentina’s relationship with Brazil and Venezuela’s role in the Mercosur were themes that popped up throughout 2016 — in the decision last week to suspend Venezuela’s rights within the regional trade and political integration body.

Argentina, Brazil — now headed up by an administration far more eager to engage in verbal combat with the Nicolás Maduro government — Paraguay and Uruguay moved to strip Venezuela of its rights as a member of the Mercosur. Caracas has ,of course, rejected the validity of the suspension.

Ostensibly, the decision was based on Venezuela’s failure to include Mercosur standards in its local legislation, but political tensions had been brewing throughout the year and most see the move in a different light.

“We are very concerned for Venezuela. The statement released by the (Venezuelan) Congress is overwhelming and we have confirmed together that under these circumstances, Venezuela cannot be a part of Mercosur,” Macri said in late October, after meeting with Uruguayan President Tabaré Vázquez, as tensions rose.

The president was referring to a statement released by a group of Venezuelan lawmakers from the opposition-led National Assembly which vowed to open impeachment proceedings against President Nicolás Maduro in response to the country’s electoral authorities — which are dominated by government supporters — nixing a recall referendum seeking to oust him from office. That threat remains latent despite incipient negotiations between the Maduro administration and the opposition.

Since then, Uruguay signed on although it had originally favoured taking a more moderate line. In an earlier clash of words over rotating chair of the Mercosur, Montevideo had been the only member to have been spared the accusation by Caracas of participating in a 21st Century “Operación Condor.”

Through a letter to the other bloc members foreign ministers back in July, Venezuela claimed the chair of the Mercosur trade bloc, which was due to switch to the country after the end of Uruguay’s pro-tempore presidency. That move was rebuffed by the other members, sparking a tit-for-tat escalation of insults and attacks that culminated with the decision that the chair would be held collectively by all of the other countries until it was Argentina’s turn. As such, later this month Buenos Aires will receive the chair of the Mercosur for six months.

Trade deals

Further to dealing with Venezuela, Malcorra will now be expected to make progress with the ongoing free-trade negotiations with the European Union. Those negotiations, theoretically immune from the turbulence with Caracas, will likely move forward after the initially disappointing exchange of trans-Atlantic offers.

Resistance from some European countries, led by France, to opening up their farming markets has made the EU-Mercosur agreement more difficult and Macri urged the government in Paris to be more flexible when he visited Europe in July.

Any deal with the EU will have to consider the consequences not only of the impending Brexit but also the concerted effort toward greater integration with the Pacific Alliance, which has a markedly more pro-market and pro-trade stance than the Mercosur of recent decades. Argentina is already an observer of the Pacific Alliance, and both Macri and Brazil’s new President Michel Temer appealed for greater flexibilisation of Mercosur when the latter visited Buenos Aires in early October. The Brazilian in particular called for rules that would allow states more leeway to negotiations outside the customs union’s regulations.

Malcorra, for her part, has always said that the path toward the Pacific Alliance is through the Mercosur and that the two bodies are not a contradiction in terms.

Some Brazilian business leaders — specifically those of the Sao Paulo-based most competitive sector — has been held back by membership of Mercosur.

Finding the right proportion of focus on the Pacific Alliance, Mercosur and the relationship with Brazil — at a time when Brasilia remains on edge with poor economic forecasts and the aftershock of corruption investigations threatening Temer himself, just months after he took office — will likely dominate the agenda in the immediate neighbourhood.

As a measure of the interest in going beyond Mercosur, Macri and Mexican President Enrique Peña Nieto have agreed to increase the scope of the ACE 6 (Acuerdo de Complementación Económica) that establishes reduced tariffs within the framework of the ALADI (Latin American Integration Association). A deal, if inked, would be implemented in five to 10 years.

Unity in Colombia — and beyond

Following the recent signing of a peace deal in Colombia between the government and the rebel guerrillas of the Revolutionary Armed Forces of Colombia (FARC) — the second time around —, Argentina looks poised to play a significant role in implementing the accord over the next 12 months. The government has committed itself to providing a military observation mission that will help to enforce the agreement.

Namely, Brigadier-General Javier Antonio Pérez Aquino will be in charge of the unarmed military observation mission, which will also include personnel from Chile, El Salvador, Guatemala, Mexico, Paraguay and the Dominican Republic in order to help with demining, disarmament and ceasefire observations.

While the implementation of the peace plan in Colombia will likely be immune from any of the diplomatic tiffs that could arise over the Mercosur, it remains to be seen to what extent, if any, the brand-new Donald Trump presidency plays a role in 2017 in Latin America — and how precisely Buenos Aires fits into that framework.

Herald staff

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Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia