Earlier this month, Argentina hosted the CELAC Summit, which was attended by President Luis Inacio Lula da Silva to mark Brazil’s return to the forum. However, the summit fell short of demonstrating the revival of a common regional agenda for Latin America and the Caribbean (LAC).
Over the past few years, multilateralism and regionalism have eroded the ability to bring nations together on common issues, and nations have increasingly focused on their own interests and priorities. The COVID-19 pandemic has facilitated this process, especially given the uncoordinated and individualized response to the health crisis.
This poses a new challenge to Brazilian diplomacy. Former President Jair Bolsonaro isolated the country internationally. LAC was no exception. Brazil’s return to her CELAC signals a willingness to bring countries back to a common regional agenda, but designing and implementing such a policy would be very difficult.
Regional cooperation on odds over China
In 2003, Lula promised to strengthen Mercosur. He intends to do so again in his new term. But the president will face many hurdles, including growing dissatisfaction among some members of the bloc, especially Uruguay.
Also, the recent impeachment of Peruvian President Pedro Castillo in December 2022 has increased regional tensions between Peru, Argentina, Bolivia, Colombia and Mexico. Vice President Dina Boluarte is now ruling in his place, relying on violent crackdowns to quell pro-Castilo protesters demanding immediate elections.
In Uruguay, far-right President Luis Lacal Pou has severely criticized Mercosur on several occasions. In Lacalle Pou’s view, the block needs to become more favorable to the free market. This disagreement comes as Lakar Pou seeks a free trade agreement (FTA) with China. This agreement is already under negotiation.
It should be noted that Article 1 of the Mercosur Constitution, the Treaty of Asuncion, stipulates that all Mercosur member states must adopt foreign tariffs and trade policies common to a third country or group of countries. . Even recognizing that such an FTA would violate treaties, the Uruguayan president has shown no fear of moving forward with China.
After the recent CELAC meeting, Lula visited Montevideo and stressed that an agreement between Mercosur and China would be considered, but not so quickly and negotiations much more cautious than Uruguay would like. suggested to be. Lacalle Pou said the meeting with Lula generated optimism, but that does not mean Uruguay will suspend its own negotiations with China.
Meanwhile, the Brazilian military has expressed deep concern about Argentina’s strategic rapprochement with China, highlighted by the presence of a Chinese military space station in Patagonia. It is worth noting that they overtook Brazil.
There is also the risk of impeding discussions on Latin America’s future role as tensions between Washington and Beijing set to spill over into other areas such as technology, finance and security. Countries differ on how to position LACs in the global competition for
Argentina was the first major economy in Latin America to join the Belt and Road Initiative, underscoring that Argentina’s interests are finding more common ground in China than in the region.
Lula mixed signals for Europe and China
Lula’s return to power provides an opportunity for Brazil to return to its past involvement in major global issues. The readiness of major international leaders to congratulate Lula after the election results shows how desperate the international community was for Brazil to return to the board of major global debates.
Lula quickly restarted the Amazon Fund, which was paralyzed after two major donors, Germany and Norway, stopped sending money to the fund during Bolsonaro’s tenure. A loss of about $283 million at the time was due to Germany announcing his donation of 193 million Brazilians to his Real fund and the visit of the country’s prime minister, Olaf Scholz, to Brazil this week. and is expected to be compensated.
On this occasion, there is a great chance to resume FTA negotiations between MERCOSUR and the EU, facilitated by Lula’s signal that the bloc should prioritize Europe before engaging in substantive negotiations with China on an FTA. rice field. Negotiations with Europe also appear to be a strategic card for Brazil to buy more time by keeping Argentina and Uruguay within the framework of Mercosur. A deal could bring member states closer together and increase the costs of exiting Mercosur.
Under these circumstances, a closer look at China’s role is inevitable. While Beijing has not expressed a clear negative response to the issue, the LAC has ignored the fact that since the mid-2000s China has been an exogenous factor complicating the development of South American integration. you can’t. China directly affects Brazil’s interests in the region and the efforts of neighboring countries towards existing regional projects, which also implies changes in relations with the United States and Europe.
The expansion of China’s commercial activity in the region is causing a displacement of domestic trade. While trade relations between South American countries have remained constant or even declined, trade between South American countries and China has increased. The implication is that China is displacing other trading partners, including the regional partners themselves.
China’s trade flows with MERCOSUR member countries have increased significantly over the past decade, especially with respect to the level of imports. In terms of competitiveness and improvement of industrial and technological processes, it can be said that China has worked hard to outperform its competitors. Mercosur member states are no exception.
There is concern among some European politicians that the region could become the target of an even greater attack by China without a trade deal with South America’s largest economy. A failure to forge an alliance with China would expose the region to Beijing’s commercial and political influence.
China is already Brazil’s largest trading partner and threatens to force European companies out of markets considered traditional for exports from Germany, France, Spain and other European countries. In 2022, Brazil’s trade map reveals this new political reality. China was her destination for 27% of all Brazilian exports.
Another of Europe’s interests is to strengthen its strategic alliance with South America as part of creating a more balanced international scenario that can ease the hegemonic rivalry between the United States and China.
Brazil’s Foreign Minister Mauro Vieira is due to visit Beijing next March, and China doesn’t expect much more than its priorities in Asia, especially talks about Vieira’s possible first visit to India. There is
Four years of diplomatic inaction and setbacks under Bolsonaro have left Brazil’s role in Latin America weakened and uncertain. During his term, Bolsonaro sought to strengthen ties with countries with the same political ideology, positioning Brazil in a very different way than before. Lula’s reinstatement raises hopes for the resumption of regional and international relations.
As its foreign policy is two-way, the new government will anticipate and absorb the gains to be derived from international relations, especially great power competition, and ensure that Brazil’s international engagements will produce positive results, especially in the immediate regional environment. should try to convince the domestic sector of .
Undoubtedly, Mercosur member states have recently come to be viewed as strategic partners by China. However, they are viewed individually rather than as part of an economic integration bloc, and the investments made and planned are based solely and entirely on the Chinese nation’s strategic supply interests. This creates room for countries in the region to be very realistic, balancing between Chinese and European interests. The legacy of previous missions in which Brazil was a natural and active regional leader seems qualified to give Lula this mission, but is far from serving as a model to be replicated at this time.
The authors thank Franco Alencastro and Pedro Mendes Martins for their insights.
