Mercosur faces a tense future, the president-elect of Uruguay said on Monday, referring to a diplomatic spat between regional heavyweight economies Brazil and Argentina. Brazil’s right-wing leader Jair Bolsonaro and Argentina’s incoming leader, left-leaning Peronist Alberto Fernandez, have sparred openly.
The Brazilian called Fernandez a “red bandit” and said voters had made a mistake by electing him. Alberto Fernandez supported ex president Lula da Silva, who faces several corruption charges and was only recently released on a flexible interpretation of his conviction. Criminal Law professor Fernandez said all along Lula was wrongly imprisoned and defined him as a political prisoner.
However both leaders lately have lowered the tone of their exchanges recognizing that bilateral trade is essential for the two countries and in areas such as the auto industry they are closely integrated. Nevertheless Bolsonaro advanced the summit so that he does not have to host Fernandez who takes office next 10 December.
“The tensions are clear,” Luis Lacalle Pou said after meeting with outgoing Uruguayan leader Tabare Vazquez. He added that he hoped “pragmatism would prevail over ideology.”
If relations between South America’s two biggest economies falter, it could contribute to the global trade turmoil due to the tension between the United States and China. Investors are monitoring Washington and Beijing for signals about trade. The dollar and global stock markets retreated on Monday after U.S. President Donald Trump said he would restore tariffs on some imports from Brazil and Argentina.
Lacalle Pou, leader of the conservative National Party, will take office on March 1, ending 15 consecutive years of center-left government. He claimed victory last week over ruling coalition candidate Daniel Martinez after a Nov. 24 presidential runoff.
In the first round at the end of October, the ruling coalition, Broad Front took almost 40% of ballots cast, and Lacalle Pou 29%. Anyhow the conservative candidate managed to bring together a multicolor coalition of five parties totaling 53% of votes, and a clear majority in the next parliament, and with a shared cabinet should ensure him a strong government.
Lacalle Pou also announced that Uruguay will withdraw from the Montevideo Mechanism, an initiative alongside Mexico and a grouping of Caribbean countries aimed at mediating the conflict in Venezuela, which was established earlier this year. But the elect president also said Uruguay will not necessarily join the Lima Group, which brings together conservative countries of the region and openly catalogues the regime of president Nicolas Maduro as a dictatorship.
President Vazquez has invited Lacalle to join him at the Mercosur summit on Thursday in Bentos Goncalves, south Brazil. It will be the last such summit for Vázquez and his Argentine counterpart Mauricio Macri.