Along with the G20 summit, one of President Mauricio Macri’s top foreign policy priorities for 2018 is conclusion of the Mercosur-European Union freetrade agreement but this aim also involves improved regional integration. In order to progress with the agreement, the EU needs to take Mercosur seriously. But what does it see? In general terms, a highly imperfect customs union which has been dysfunctional for many years. And more recently, and specifically, arrives the alarming fact that Argentina’s trade deficit with Brazil is 90 percent of a negative number heading toward a record US$9 billion (as against a record trade surplus of US$67 billion for Brazil).
That figure is something that’s hard to explain without making it the chief subject of this editorial, but basically the imbalance stems from the inverse relationship between growth and exports in the two countries. Argentine growth trebling the Brazilian last year is much of the explanation but labour and other structural reforms in Brazil also play a part. Mercosur’s two main partners invite a much closer comparison it seems.
Brazil’s choice of a new president in the last quarter of the year will thus be hugely important here. Unlike last month’s elections in Chile (which were basically Sebastián Piñera’s to lose), Brazil’s own race remains wide-open at a distance of nine months, The opinion poll frontrunner, Luiz Inacio Lula da Silva, nostalgically linked to the golden years of his 2003-2011 presidency when B was the first letter in BRICS, walks a legal tightrope with pending graft cases. Next is the deputy Jair Bolsonaro, an extreme version of the increasingly widespread breed of right-wing populist who would almost make Donald Trump look like an urbane intellectual and a feminist by comparison. That welter of corruption scandals clustered under the label of Odebrecht dogging Lula also banishes virtually every past political figure except perhaps the green politician Marina Silva – it looks set to be the key factor in the election, which may well be decided according to the negative definition of who is the least corrupt, rather than who would make the best president.
Latin America’s most populous nation is not the only one going to the polls this year – by far the world’s biggest Spanish-speaking population (Mexico) will also be voting while the presence of Colombia and Venezuela means that the list includes three of South America’s four most populous countries (obviously excluding Argentina), as well as Paraguay and Costa Rica. In seeking to discern a regional trend, pundits will be looking at three main criteria – to what extent the elections follow the traditional party landscape and classic left-right lines and whether the backlash against corruption (ranging far beyond Brazil) will prove more decisive than ideology or policy platforms. Even if the outgoing presidents of Brazil, Mexico and Paraguay all represent parties dating back to the previous century, the captive party vote seems a negligible factor (the two-party systems of Colombia and Venezuela that lasted right to the end of the 20th century are long extinct). The fact that all three of the ABC (Argentina, Brazil and Chile) countries are now centre-right might seem to delineate a trend but it is precisely by far the most important countries voting (Brazil and Mexico) which are the most likely to swing left.
Yet, as things now stand, the backlash against corruption seems to be the main common denominator setting the electoral mood in all these countries. Last but not least, after this year’s electoral travesties and virtual annihilation of press freedom, the onus is very much on the Nicolás Maduro régime to prove that Venezuela also belongs to this list of voting democracies.