Latin America round-up: New Ecuador president, Argentina's looming elections and EU-Mercosur

Tue 17 Oct 2023
Posted by: Phillip Adnett
Trade News

South American continent

In the latest round-up of Latin America trade news, the IOE&IT Daily Update brings you coverage of the new Ecuadorian president-elect, a preview of how the Argentinian presidential elections could affect international trade and an update on EU-Mercosur negotiations.

Ecuador’s new president

Businessman Daniel Noboa has won the Ecuadorian presidential election, narrowly beating rival Luisa González.

The early election was brought on when former president, Guillermo Lasso, invoked the muerte cruzada (‘mutual death’) clause of the Ecuadorian constitution, triggering a dissolution of parliament and his own resignation. This happened after he faced serious corruption allegations, following the International Consortium of Investigative Journalists’ release of the Pandora Papers.

The son of businessman Álvaro Noboa Pontón, who unsuccessfully ran for the presidency five times, Noboa has worked as both shipping and commercial director in his father’s banana exporting firm.

Noboa will now serve until May 2025, when he can run again for a full term.

Bloomberg Línea reported that the president-elect’s economic platform would likely focus on fiscal discipline, attracting foreign investment and strengthening Ecuador’s tourism and fishery sectors.

Argentina election booming

Ahead of Sunday’s first round of Argentina’s presidential elections, centre-right presidential candidate Patricia Bullrich has called for a re-think of her country’s relationship with China.

Bullrich told the FT she wanted to keep China as a key trading partner but added “we are not going to surrender our sovereignty”.

“We believe that in some of the latest [Chinese] loans there are clauses which we don’t know about, and we are ready to re-examine them,” she said in an interview.

To avoid a run-off, a candidate has to win more than 45% of votes or more than 40% with a more than 10-point lead over the second-place candidate. Otherwise, a final round will be held 19 November.

Currently, Bullrich, running for the opposition coalition, is polling behind libertarian Javier Milei and Sergio Massa, an economy minister in the current government.

Milei also advocates moving away from China. He also favours ‘dollarising’ the Argentinian economy and abolishing its central bank.

Mercosur

The outcome of Argentina’s election could be another barrier for the long-awaited free trade deal between the EU and Mercosur, which some analysts fear is already running out of time, as Spanish presidency of the EU ends at the end of this year.

Arantza Gomez Arana, a senior lecturer in international relations at the University of Northumbria, said that Spain had an “extraordinary” focus on Latin America and the Caribbean during its presidency, and that the end of this term combined with election season on both sides of the Atlantic could dissipate any positive momentum.

Luciano Sigalov, a researcher at the Eurasia Group, told the Wilson Centre that the election of Milei would add “risks to the deal”, due to the personal animosity between Milei and Brazilian president Luiz Inacio Lula da Silva.

Brazil is currently president of the Mercosur bloc and Lula is one of the leading negotiators with the EU. In September, Lula said he wanted a meeting between South American and European leaders to reach a decision about the agreement.

“Brazil wants and needs this agreement, but we have to be treated on equal terms”, he said at a press conference, “at the moment, we need to decide: ‘yes’ or ‘no’”.

Paraguayan President, Santiago Pena, has said he would not continue the talks if an agreement was not reached by the time Paraguay takes over the Mercosur presidency from Brazil on 6 December.

UK-Latin trade promotion push

The UK government has continued its efforts to boost trade with various Latin American countries, attempting to take advantage of momentum generated by the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Last week, trade minister Nigel Huddleston visited Peru and Colombia as part of a trade promotion tour.

The Department for Business and Trade (DBT) said that some of his objectives would be to reach a double taxation treaty, boost the green hydrogen market and gain more favourable treatment for UK alcohol sellers.

Huddleston said that Latin America offered “incredible opportunities” for UK businesses.