HANGZHOU, CHINA - SEPTEMBER 04: President Mauricio Macri of Argentina arrives at the Hangzhou Exhibition Center to participate in G20 Summit, on September 4, 2016 in Hangzhou, China. World leaders are gathering in Hangzhou for the 11th G20 Leaders Summit from September 4 to 5. (Photo by Etienne Oliveau/Getty Images)Argentina’s ‘return to the world’

Under presidents Néstor Kirchner (2003-2007) and Cristina Kirchner (2007-2015), Argentina’s foreign policies were designed to please local constituencies rather than serve the country’s national interest. Both their rhetoric and actions became ideologically charged. The consequence of this was increasing isolationism for Argentina except for with a handful of countries ruled by populist and/or authoritarian regimes.

President Mauricio Macri has taken a very different course, one that has been described in previous issues of the Argentina Strategic Brief. This course has been demonstrated by a clear stand in favour of free international trade; steps towards activating the Mercosur common market and, in particular, its much-delayed trade agreement with the European Union; exploring the possibility of joining the Trans-Pacific Partnership (TPP), and others. But Argentina’s ‘return to the world’ finds a world that appears to be moving away from free trade, multilateral agreements and integration.

Trump and Argentina

The initial conclusion reached by most analysts is that Donald Trump’s election will have only negative impacts on Argentina. This may be true at the macroeconomic level, where rising interest rates may increase the difficulty of borrowing necessary funds abroad and, in any case, will increase their cost. But other factors may turn out to be positive.

Among the world’s regions, South America will have the lowest priority on the United States’ agenda – but this is hardly a novelty. But if Trump ever looks south, he may find in Mauricio Macri a fellow business-man, a person he has known for many years – with whom he has explored commercial ventures and has even played golf with in the past.

Unlike the countries that worry Trump, the US enjoys a trade surplus with Argentina. And the negotiations and proceedings initiated under President Barack Obama to open the US market to some Argentine products involve such small figures in relation to the global US trade deficit that they are likely to remain under the new president’s radar.

The TPP may be dead but other opportunities are opening up. Perhaps because of the dark clouds approaching from its northern border, for the first time in years Mexico is looking south: President Enrique Peña Nieto has offered Macri a bilateral trade agreement. The same is true of Argentina’s neighbour and another Pacific nation, Chile. An old saying assures that ‘when God closes one door, He opens a new one’. It is a question of being alert, and searching for that new opening.

This is an excerpt from an article in this month’s Argentina Strategic Brief – for more information please contact us at info@menas.co.uk.