On the 10th of December President Javier Milei commenced on his four-year term as the newly elected President of Argentina. As Argentina is undergoing a chronic economic crisis, with inflation crossing 211 percent per annum and a poverty rate of 40 percent, economic issues were the main agenda of candidates during the elections. President Milei, a libertarian led the La Libertad Avanza (LLA) coalition and emerged victorious, ahead of the other two main coalitions, the incumbent Union por La Patria (UP) and the Juntos por el Cambio (JxC). The LLA coalition has 114 seats out of 257 in the Chamber of Deputies, 26 out of 72 in the Senate, and 126 seats out of 1199 in Provincial Legislatures. These numbers are not enough and may prove to be a hindrance in implementing measures.
During the campaign, President Milei called for drastic economic measures and a reformulation of Argentina’s foreign policy. Ideological reasons have been the key to his formulation of foreign policy goals.
This paper will seek to analyse President Milei’s foreign policy objectives during the period of the electoral campaign and trajectories after the assumption of office. It argues that despite ideological foundations, the foreign policy of President Milei will prefer political pragmatism in the coming period considering the economic crisis in Argentina.
President Javier Milei’s views during the period of the campaign
The results of the election signal a political shift away from the two main coalitions, and voter exhaustion with the programmes of established political parties. President Milei’s political views and plans[i] both at the domestic and external levels displayed a penchant for restructuring the economy and recalibrating Argentina’s foreign policy. His proposed economic reforms[ii] advocated a complete economic overhaul and focuses on reduction in public spending, tax reforms, flexibility in labour, and unilateral moving towards international free trade. To create economic competitiveness, state intervention would be reduced, and instead privatisation would be encouraged also which would be key to increasing economic performance.
President Milei’s foreign policy objectives included reducing relations with China[iii] and Brazil[iv] on ideological grounds. He expressed need to distance from the Left-oriented Latin American governments of Venezuela[v], Cuba, and Nicaragua. During the campaign he stated that Argentina had to withdraw from the Mercosur, terming it as a hindrance to free trade and interference in the sovereign economic affairs of the country. Similarly, he had announced his intentions to withdraw from the UNASUR and the possibility of declining to join the BRICS. He expressed his intentions to develop closer relations with the West[vi], the United States, and Israel, and showed support for Ukraine[vii].
Recent trends in Argentina’s Foreign Policy under President Milei
Although during the campaign, President Milei expressed his vision regarding future foreign policy measures based mostly on ideological foundations, economic uncertainty and geopolitical realities are key determinants to such measures in action. Despite his inclination to reduce relations with China, considering the bilateral relations, such an act would be difficult to implement. China is Argentina’s second-largest trading partner with a total volume of trade amounting to 17.1 billion US Dollars in 2023. It supports Argentina on the issue of the Falkland Islands (Islas Malvinas). China has made key investments in Argentina especially in infrastructure and in the mineral sectors. It has invested heavily in solar farms, hydroelectric projects, railways, and highways, in addition, it is a top buyer of Argentine soy and other agricultural products as well as bovine meat apart from enabling a currency swap with Argentina. The currency swap arrangement of 18 billion US Dollars enables Argentina to avoid a default with the International Monetary Fund (IMF)[viii] and was facilitated by the previous government under former President Alberto Fernandez to rebuild foreign exchange reserves, cover trade costs, and achieve economic targets as prescribed by the IMF in adherence to the 44 billion US Dollar Agreement. However, in response to President Milei’s position on China, Beijing stalled 6.5 billion US Dollars of funds from the currency swap mechanism, that had previously been agreed upon by the previous Argentine government.
An invitation was extended to Brazilian President Lula da Silva for the Argentine President’s inauguration, and President Lula expressed his inability to attend which highlights certain friction in the bilateral relations. Brazil is the largest trade partner for Argentina and is a member of the Mercosur and the BRICS and in 2023 bilateral trade was 23.1 billion US Dollars.
President Milei’s position regarding the economic efficacy of multilateral trade blocs and his preference for unilateral free trade has led his government to reconsider membership of the Mercosur[ix] and the BRICS. Even though Argentina is still a member of the Mercosur the inability to ratify the EU-Mercosur Agreement[x] looms large. Argentina declined to join the BRICS[xi] despite the previous government’s willingness to do so. Foreign Minister Diana Mondino explained that the decision[xii] to decline the BRICS membership stemmed out of a lack of relative advantage in joining the organisation and that it seemed more of a political alignment[xiii] rather than a trade organisation.
It is however clear that President Milei has signalled a preference for the West[xiv] expressing willingness to develop closer ties with the United States and as President-Elect visited the US to explore bilateral and commercial ties. The United States expressed its support towards Argentina regarding the IMF Agreement and also discussed possibilities in moving up the value chain in lithium production with the aid of the United States. He has also expressed his desire to visit Ukraine and Israel in the coming period which heralds a shift from the previous Presidency. The Presidential Inauguration[xv] was attended by Ukrainian President Volodymyr Zelenskyy and discussions took place between President Milei and President Zelenskyy regarding the Ukraine Crisis and bilateral cooperation. About the Israel-Gaza conflict[xvi], President Milei’s support for Israel[xvii] is another trend in the same regard. He expressed support for Israel[xviii] concerning the conflict and stated his commitment to Israel against Islamic terrorism.
Conclusion
Addressing economic concerns will remain a top priority for the new government under President Milei. Regarding, President Milei’s foreign policy, the ideological foundations are clear since the period of the campaign which highlights a swing towards the United States, Israel, Ukraine, and the larger West and some distancing from China, Brazil, and Russia.
Despite the ideological underpinnings, the economic situation and the requirement to ensure cooperation in both bilateral and multilateral arenas may lead to a gradual tempering of Argentina’s foreign policy. For instance, both China, Brazil, Russia are important trade partners along with the United States, hence it is expected that economic pragmatism will override ideological concerns, considering the economic situation of Argentina and the challenges for President Milei.
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*Dr. Arnab Chakrabarty, Research Fellow, Indian Council of World Affairs, New Delhi.
The views expressed are personal.
[i] Christopher Chivvis, Oliver Stueknel et.al. (22nd November 2023). Argentina in the Emerging World Order. Carnegie Endowment for International Peace. Accessed 29th December 2023. https://carnegieendowment.org/2023/11/22/argentina-in-emerging-world-order-pub-91088.
[ii] Nicolas Misculin & Candelaria Grimberg. (11th December 2023). Argentine President Milei warns economic shock unavoidable in maiden speech. Reuters. Accessed 30th December 2023. https://www.reuters.com/world/americas/argentine-libertarian-milei-take-presidency-with-economic-crisis-focus-2023-12-10/.
[iii] BA Times. (16th August 2023). Milei says he’d reject ‘assassin’ China, take Argentina out of Mercosur. Buenos Aires Times. Accessed 2nd January 2024. https://www.batimes.com.ar/news/economy/argentinas-milei-says-hed-reject-assassin-china-leave-mercosur.phtml.
[iv] Salvador Lescano. (30th November 2023). What does the future hold for Argentina’s bilateral relations with Russia and Brazil? Modern Diplomacy. Accessed 29th December 2023. https://moderndiplomacy.eu/2023/11/30/what-does-the-future-hold-for-argentinas-bilateral-relations-with-russia-and-brazil/.
[v] President Nicolas Maduro of Venezuela criticised the economic measures implemented by President Milei in addition to criticising Argentina’s decision to decline joining the BRICS.[vi] Cecilia Degl L’Innocenti. (21st November 2023). BRICS, alignment with the United States and Malvinas- keys to Javier Milei’s foreign policy. Buenos Aires Times. Accessed 3rd January 2023. https://www.batimes.com.ar/news/argentina/brics-alignment-with-the-us-and-malvinas-keys-of-javier-mileis-foreign-policy.phtml.
[vii] Nate Ostiller. (20th November 2023). Far-right politician, Ukraine supporter Javier Milei elected president of Argentina. The Kyiv Independent. Accessed 2nd January 2024. https://kyivindependent.com/far-right-politician-ukraine-supporter-javier-milei-elected-president-of-argentina-3/.
[viii] Juan Pablo Toro. (22nd December 2023). Argentina’s Foreign Policy: The Quest for New Alliances and Economic Reform. RUSI. Accessed 6th January 2024. https://rusi.org/explore-our-research/publications/commentary/argentinas-foreign-policy-quest-new-alliances-and-economic-reform.
[ix] Diego Acosta & Leiza Brumat. (1st December 2023). Argentina’s Brexit: why new president Milei is threatening to pull out of South America’s common market. The Conversation. Accessed 4th January 2024. https://theconversation.com/argentinas-brexit-why-new-president-milei-is-threatening-to-pull-out-of-south-americas-common-market-218564
[x] Argentine President Javier Milei and German Chancellor Olaf Scholz held a telephonic discussion on 9th January 2024 to hasten the EU-Mercosur Agreement. Argentina has however expressed concerns regarding environmental clauses within the EU-Mercosur Agreement, leading to delays in its ratification.
[xi] Natalie Liu. (1st December 2023). Argentina not joining BRICS despite Xi’s personal letter to Milei. Voice of Americas. Accessed 4th January 2024. https://www.voanews.com/a/argentina-not-joining-brics-despite-xi-s-personal-letter-to-milei/7380722.html.
[xii] The position of President Milei’s government on foreign trade shows a strong preference for bilateral rather than multilateral agreements, hence the reluctance to join the BRICS.
[xiii] Argentina’s position regarding joining multilateral organisation is based on the ideological inclination of the current government that seeks to unilaterally open up the economy to free trade and practices, rather than engage with trade blocs which it considers to be politically motivated.
[xiv] Consuelo Thiers. (26th December 2023). Milei’s leadership examined” forecasting potential shifts in Argentina’s foreign policy. Global Americans. Accessed 4th January 2024. https://theglobalamericans.org/2023/12/mileis-leadership-examined-forecasting-potential-shifts-in-argentinas-foreign-policy/.
[xv] In contrast, President Milei did not extend invitation for the Presidential Inauguration to Cuba, Nicaragua, Venezuela and Iran citing ideological reasons. In response Nicaragua recalled its ambassador from Argentina signalling a cooldown in bilateral relations.
[xvi] President Milei stated, “Quiero enviarle un cariño a todo el pueblo judío y a los que tienen familiares cerca de la línea de combate, los acompaño en este momento difícil, y quiero ratificar mi compromiso con Israel en la lucha contra el terrorismo islámico.” Translated: I extend a warm greeting to all the Jewish people and in particular to those who have families at the frontlines, I accompany you in this difficult moment and I want to ratify at this moment my commitment to Israel in the fight against Islamic terrorism.”
[xvii] As President Elect, Javier Milei had expressed his intentions to move Argentina’s embassy from Tel Aviv to Jerusalem, a plan which was declared by him even during the period of the election campaign.
[xviii] Juan Melamed. (30th December 2023). Argentine President Milei expresses solidarity with Israel at Jewish sports event. The Times of Israel. Accessed 5th January 2024. https://www.timesofisrael.com/argentine-president-milei-expresses-solidarity-with-israel-at-jewish-sports-event/.