Latin America Advisor
A Daily Publication of The Dialogue
What’s at Stake as Macri Meets Today With Trump?
Argentine President Mauricio Macri meets today in Washington with his U.S. counterpart, Donald Trump. The meeting will be the U.S. president’s second with a Latin American head of state, after Peruvian President Pedro Pablo Kuczynski visited the White House in February. How have U.S.-Argentine relations fared since Macri took office in late 2015, and where are they headed during Trump’s presidency? What are the most fruitful avenues for cooperation between the two countries? What sticking points remain? In which ways might the United States and Argentina work together to end the turmoil in Venezuela, a topic that Trump and Macri plan to discuss?
Claudio M. Loser, visiting senior fellow at the Inter-American Dialogue, president of Centennial Group Latin America and former head of the Western Hemisphere Department of the International Monetary Fund: “President Macri rebuilt relations with the United States and President Obama in his first year in office, after a turbulent period during the Cristina Kirchner administration. The United States was instrumental in opening doors for an improved dialogue with the international financial community, and many constraints were effectively lifted during the period, be it at the executive or the judiciary level—which acted independently from the White House. In addition to the opening up of foreign financing, the two governments agreed on a number of initiatives, including cooperation on tax information. The latter may in fact explain the success of the tax moratorium on undeclared assets that the Argentine government recently completed. Whether or not the relationship between Macri and Trump will ‘click’ is an open question. Their personalities and business backgrounds will help, but it is far from certain that they have many common objectives. Argentina is not a large trading partner of the United States, and in fact there is competition in terms of agricultural exports. At the same time, Argentina is eagerly looking for foreign investment, which may go against Trump’s perceived national interest. There could be some cooperation in terms of coordinating agricultural export policies, but at present Argentina seems much more interested than the U.S. government in an open trade and investment system. Macri may, however, persuade Trump to take a more active role on Venezuela. In the end, not much should be expected from the forthcoming meeting, unfortunate as it may sound.”
Felipe Yapur, journalist at Radio Nacional and Tiempo Argentino: “From the outset, President Mauricio Macri has aligned his government with the ups and downs of the United States’ politics and economy. His public support of Hillary Clinton’s candidacy has now forced him to exaggerate his closeness to the administration of President Donald Trump, which he now has to express during his prompt visit to the White House. This alignment is expressed, for example, in Argentina’s purchase of $2 billion worth of military equipment despite the fact that Argentine Defense Minister Julio Martínez has tried convincing the public that it is really a donation of disused equipment. In addition, there are also Argentine exports, such as lemons, that are still not entering the United States despite the fact that the Macri administration is deepening its relationship with the IMF and opening its economy to U.S. businesses that are still not making good on their investment pledges in Argentina. Under this scenario, the presence of dollars in Argentina is due mainly to multimillion-dollar financial speculation fanned by Argentine central bank policies that have led to capital flight—far from the flood of investment that Macri has promised. The other axis of rapprochement is undoubtedly the case of Venezuela. The governments of Argentina and Brazil have been strong collaborators in the destabilization of that country’s democracy, not only by criticizing President Nicolás Maduro in international forums, but also by backing the coup efforts of the Venezuelan opposition.”
Charles H. Blake, professor of political science at James Madison University’s School of Public & International Affairs: “Mauricio Macri pledged to deepen Argentina’s ties with international trade, investment and finance. His government reduced import controls, removed capital controls and approved an expensive settlement with the remaining holdouts of Argentina’s 2002 debt default. Closer ties with the United States also form part of Macri’s agenda. In March 2016, during a state visit from Barack Obama, Argentina announced the elimination (for U.S. citizens) of its tourist entry fee in the hopes of regaining a slot in the U.S. Visa Waiver Program. In May 2016, Argentina approved the establishment of two new U.S. military bases. This first meeting with Donald Trump finds Argentina in a recession deepened by Macri’s abrupt policy changes. Macri had claimed that these policy adjustments would usher in a wave of new investment, but foreign direct investment in Argentina fell from $11.7 billion in 2015 to $5.7 billion in 2016 amid the recession. The Macri government will be hoping that media coverage of his U.S. visit stimulates productive investment. In turn, Argentina will likely be fielding requests from U.S. diplomats to make good on its March 2016 pledge to ratify the WTO’s Trade Facilitation Agreement. Argentina is the lone Mercosur country that failed to ratify the TFA prior to its entry into force on Feb. 22. While the U.S. government will encourage Argentina’s assistance in reducing tensions in Venezuela, the Nicolás Maduro government is unlikely to welcome Argentina as a potential mediator, given the pro-market, pro-U.S. stance of the Macri government.”
Megan Cook, political risk specialist, and Juan Cruz Díaz, managing director, at Cefeidas Group in Buenos Aires: “Since taking office, Mauricio Macri’s government has focused on reintegrating Argentina into global political and economic affairs, including revamping U.S. ties, which had cooled significantly over the previous decade. This change was marked by the high-profile visit of President Barack Obama just three months after Macri took office and the declassification of a series of U.S. documents related to Argentina’s military dictatorship. During the U.S. presidential campaign, several high-level officials in the Macri administration had indicated a preference for Hillary Clinton, and Trump’s win forced a recalibration of engagement strategy. Since then, both countries have indicated a desire to continue improving relations. The idea of a meeting between Macri and Trump arose during a reunion on the sidelines of the G-20 between Argentine Foreign Minister Susana Malcorra and U.S. Secretary of State Rex Tillerson, who became familiar with Argentina during his time at ExxonMobil. One focus of Macri’s visit will be the energy sector, as the president will make a stop in Houston to seek investment in the Vaca Muerta shale play. The discussions between Trump and Macri will focus on areas where there is common ground—namely, the crisis in Venezuela and promoting democracy, the energy sector and security cooperation—but avoid areas of contention, such as trade disputes related to Argentine exports of lemons and biofuel. There is a strong foundation to keep developing bilateral relations, especially related to energy and security, although the fact that the Argentine and U.S. ambassador posts are currently both vacant will pose a challenge to coordinating diplomacy.”
Santos Goñi, board member of the World Affairs Council of Greater Miami and retired Argentine career ambassador: “Despite their ups and downs, since the re-establishment of Argentine democratic institutions in 1983, U.S.-Argentine relations have been more than good. Over those years, and generally due to pressure from sectoral interests, successive U.S. administrations have either included or removed Argentina from their immigration, commercial and security regulations. A more stable inclusion would help avoid negative effects that do not correspond to the true nature of the underlying bilateral relationship. After a tense period, President Macri’s inauguration in 2015 brought expectations that his offering a more traditionally friendly atmosphere would soon materialize into concrete advances in the relationship. Due to the U.S. government’s recent nontargeted regulatory reviews that negatively affect Argentine exports to the United States, President Trump is presently perceived in Argentina to have slowed the progress of a promising agenda. Both presidents might signal the importance of re-establishing those achievements, while proposing similar initiatives in other fields. Notwithstanding their common positions on many international issues over many decades, the United States and Argentina should each approach the Venezuelan situation from their unique geographic and political perspectives. Both are also now home to expanding Venezuelan communities. President Macri has always been personally concerned with Venezuela. Both the United States and Argentina are actively seeking solutions to this present crisis within international, hemispheric and regional bodies. The presidents’ meeting will surely underline their respective and common views on how to reach a positive outcome for all concerned.”
The Latin America Advisor features Q&A from leaders in politics, economics, and finance every business day. It is available to members of the Dialogue’s Corporate Program and others by subscription.