Lula promotes integration; Milei warns against economic rigidity
07/04/2025
On the day Brazil assumed the rotating presidency of Mercosur, President Lula said the South American bloc serves as “a refuge where we feel safe” and shields its members from “foreign trade wars.” Speaking in Buenos Aires during the handover ceremony from Argentina, President Lula’s remarks stood in stark contrast to those of Argentine President Javier Milei, who warned against the bloc becoming an “iron curtain” for its members.
It was Mr. Lula’s first visit to Argentina since Mr. Milei took office. The two leaders did not hold a bilateral meeting, although President Lula visited former Argentine President Cristina Kirchner, signaling his political alignment.
“When the world becomes unstable and threatening, it’s natural to seek refuge where we feel secure. For Brazil, Mercosur is that place,” President Lula said during the 66th Mercosur Summit. “Over more than three decades, we’ve built a house with solid foundations, capable of withstanding storms. We’ve established a network of agreements that now includes associate states. All of South America has become a free trade area, grounded in clear and balanced rules.”
According to President Lula, the bloc’s Common External Tariff serves as protection against external trade conflicts. “Being part of Mercosur protects us,” he said, adding that member states must work together to preserve their autonomy in an increasingly polarized global context.
For its six-month presidency, Brazil has outlined five main priorities: strengthening trade within the bloc and with external partners, addressing climate change and promoting energy transition, advancing technological development, combating organized crime, and promoting citizens’ rights. President Lula said Brazil’s leadership will be a chance to reflect on “the place we aim to occupy on the new global chessboard.”
Standing beside Mr. Milei, President Lula renewed his support for deeper economic integration and reducing the bloc’s dependence on the U.S. dollar. He advocated for a payment system using local currencies to facilitate digital transactions, lower costs, and reduce exchange rate risks.
Strengthening trade within the bloc and with external partners will be a top priority, he said, citing the need to integrate the automotive and sugar sectors into the customs union. “Delaying this task means sacrificing the bloc’s strategic potential in the production of electric vehicles and biofuels,” President Lula said.
He also announced plans to advance trade negotiations with Canada and the United Arab Emirates. Within the region, he emphasized the need to engage with Panama and the Dominican Republic, as well as update existing agreements with Colombia and Ecuador. He also called for Mercosur to turn its attention to Asia, which he described as “the dynamic center of the global economy.”
In contrast, Mr. Milei emphasized that Argentina’s top interest in the bloc is opening new markets for its exports. In his closing speech as outgoing chair of Mercosur, the Argentine president called for greater economic freedom within the bloc and more flexible internal rules. He insisted that Mercosur cannot remain “an iron curtain” for its members.
“We urgently need more freedom. We’ve left behind decades of stagnation. Mercosur’s partners must decide whether they want to support the path we’ve embarked on. Either we move forward together or alone,” Mr. Milei said. In his view, the bloc should no longer be seen as “a shield that protects us from the world, but a spear that allows us to enter global markets.”
While neither leader directly criticized the other, the distance between them was evident. After the summit, President Lula visited Ms. Kirchner and posted a photo of them holding hands, wishing her strength in her “fight for justice.”
President Lula said his bond with Ms. Kirchner extends beyond formal relations. “It’s a friendship rooted in mutual affection, shared political ideals, and a common commitment to social justice and fighting inequality,” he wrote. Ms. Kirchner is currently under house arrest, serving a six-year sentence for corruption.