Brazil, Spain want EU-South America deal by year end
by AFP Staff Writers
Madrid (AFP) April 26, 2023

Brazil and Spain said Wednesday they hope a long-delayed trade deal between the European Union and four Latin American nations can be finalised by the end of the year.

The EU in 2019 reached a trade deal with the Mercosur bloc, comprising Argentina, Brazil, Paraguay and Uruguay, after 20 years of negotiations.

But the deal has yet to be ratified, with some EU member states expressing concerns over Brazil's environmental record under former far-right president Jair Bolsonaro.

The deal has also sparked concern in Europe's agricultural sector.

Spanish Prime Minister Pedro Sanchez said there was a good chance to dispel doubts and approve the deal during the second half of 2023 when Spain holds the rotating presidency of the EU.

Brazil will at the same time hold the presidency of Mercosur, he added during a joint news conference with visiting Brazilian President Luiz Inacio Lula da Silva.

"The coincidence is an extraordinary opportunity to try to bring our positions closer," the Socialist premier said.

"There are countries within the EU that have doubts about the culmination of this important agreement... but we will work to dispel these doubts."

Lula, as the Brazilian president if popularly known, agreed, saying the Spanish presidency of the EU "can be the opportunity to conclude this agreement".

"Someone needs to conclude it. Now to reach an agreement, everyone must win," he added.

The trade pact needs to be ratified individually by all 27 EU member states before it comes into effect.

Unlike his predecessor, Lula has made it a priority to fight climate change and deforestation in the Amazon rainforest which could help soften opposition from some EU nations.

Argentina to pay for Chinese imports in yuan instead of dollars
Buenos Aires (AFP) April 26, 2023 - Argentina will pay for Chinese imports in yuan instead of US dollars in order to preserve its dwindling foreign reserves, Economy Minister Sergio Massa said on Wednesday.

The South American country will be able to "program a volume of imports in yuan worth (the equivalent of) more than $1 billion from next month," Massa said at a meeting in Buenos Aires with China's ambassador Zou Xiaoli.

This would "replace" the use of Argentina's US dollar reserves.

Argentina's government on Tuesday accused the country's rightwing opposition of fueling a dramatic erosion of the peso against the dollar, and ordered an investigation.

The peso stood at 227 to the dollar at the official exchange rate Tuesday, but reaching more than double that on the parallel "blue" market.

The slide started last week after several days of pressure on the peso in a period of pre-election uncertainty in a country with exchange controls in place to limit the effects of a financial crisis and rampant inflation of more than 100 percent year-on-year.

Economist Maria Castiglioni told the TN broadcaster the devaluation was partly the result of Argentines seeking "refuge" in the US dollar to protect their purchasing power.

Massa said the decision to pay in yuan "improves the perspective of Argentina's net reserves."

It also "allows us to maintain the level of activity, the volume of imports, the pace of trade between Argentina and China and the levels of economic functioning that Argentina needs" following a poor year for domestic agriculture, and thus exports, amid persistent drought.

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