A Brief Look Over Argentina’s Relations with China and the US under Javier Milei
The far-right outsider candidate Javier Milei’s triumph in the Argentine primaries has shaken the country’s political landscape to its core. Milei became the most-voted candidate with over 30% of votes, winning in 16 out of the 24 provinces, and leaving behind the main political coalitions –the Peronist Unión Por la Patria and the opposition Juntos por el Cambio–.
With Milei now being closer than ever to entering the Casa Rosada in the upcoming October elections, a possible government of the far-right candidate has caused massive controversy due to his proposals. The abolishment of the country’s Central Bank, a voucher system for education, the deregulation of the handgun legal market and the dollarization of the economy can be found in Milei’s electoral platform.
However, little has been said about the candidate’s recent declarations regarding pivotal themes of Argentina’s foreign policy, including the country’s relationship with the United States and China. Having defined free trade, peace, and freedom as his foreign policy axis, it is crucial to review the far-right libertarian’s position on this theme to draw a clearer picture of how Argentina’s foreign relations with China and the US would be under his eventual presidency and its possible consequences.
The End of the Equidistance Diplomacy
Since the end of Cristina Kirchner’s government, Argentina has maintained a relatively equidistant diplomacy between the United States and China. On the one hand, it has revitalized its previously strained relationship with the United States, whose support has gained particular relevancy now in the midst of the profound economic crisis and a pressing international debt with the IMF. Some clear examples of this rapprochement were President Fernández official visit to US President Joe Biden –making him the first Peronist president to have an official meeting with his US counterpart in the Oval Office since 2003–, and Argentina’s Finance Minister and presidential candidate Sergio Massa’s numerous meetings with White House top-officials and international banks representatives.
On the other hand, Argentina and China have steadily deepened their bilateral agenda. The commercial relation between both countries has continuously increased, ultimately consolidating the Asian power as Argentina’s second biggest trade partner behind Brazil. Argentina has also secured major Chinese investments in infrastructure projects and has officially signed its entry to Xi Jinping’s Belt and Road Initiative and the BRICS. What’s more, Argentina has recently renewed its currency swap line with China amid a sharp decrease in its foreign currency reserves and the peso devaluation.
However, Javier Milei has made it clear that he will put an end to this equidistant position. In a recent interview with Bloomberg, the libertarian candidate stated that he will not promote the bilateral relationship with China as he “does not pact with communists”, and will pursue a complete alignment with the West and its main referents, the United States and Israel. Moreover, Milei stated that China would just be a trading partner of the private sector, implying that Argentina would freeze their bilateral relations.
A Nightmare for China and the Doubtful Willingness of the US
Many questions arise regarding the consequences of Argentina breaking its diplomacy of equidistance between the US and China. Firstly, Milei freezing diplomatic relations with China would challenge the continuation of the swap agreement, which has been a lifeline during Argentina’s economic turmoil. The cancellation of the swap agreement would leave Argentina without the option of paying its increasing imports from China with yuans nor access to funds of approximately USD 18 billion. Secondly, China would possibly cross out Argentina as a recipient of the necessary infrastructure investments that the country can not carry on its own in the midst of a macroeconomic crisis. Thirdly, Milei will most certainly bid for the exit from the BRICS group, losing an important forum of exchange and negotiation of preferential trade agreements with some of the biggest economies in the world in a time of extreme need for foreign currency.
With the end of the equidistance diplomacy, Milei will most certainly seek to replace the lost benefits from the relationship with China by relying completely on the US. This can be a great opportunity for the Biden administration to continue with the revitalization of US-Argentine relations and neutralize the growing influence of China in the region.
However, it is important to analyze the willingness of the US to assume the role and compromises pursued by Milei. The Biden administration has expressed support for Argentina during its renegotiations with the IMF and access to credits from international banks. Nonetheless, it remains uncertain whether the US will be inclined to advance on more substantive foreign policy actions such as providing its own credit line to the South American country or investing millions in infrastructure projects as China currently does. Moreover, it is debatable how keen will President Biden be to actively engage with the libertarian candidate who has openly criticized him and declared himself as “pro-Trump”. The last time a Latin American president –Jair Bolsonaro– criticized the then-Democrat candidate and supported Donald Trump, it took him more than two years to get a bilateral meeting with President Biden (and not even in the Oval Office).
While a lot can change until Argentines cast their vote again in October –especially in a country where the short-term and the unexpected are the norm–, in the meantime, we ought to start examining how Argentina’s foreign policy will look like if Milei is elected President and its consequences. The end of the equidistance diplomacy is a risky move that will potentially cut off the benefits stemming from the bilateral relationship with China, while not ensuring that the US will immediately assume those compromises much needed by Argentina in a context of economic turmoil and financial instability. In the end, the outcome will depend on the US assessing this new context as an opportunity and its willingness to replace China’s role in Argentina’s foreign policy.
Salvador Lescano holds a bachelor’s degree in International Studies with a minor in Government from Universidad Torcuato Di Tella. He currently works as a Project Assistant for biomass projects at LIGNIS and has contributed articles for Global Americans and London Politica.