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Argentine presidential candidate Javier Milei gestures during the closing event of his electoral campaign ahead of the November 19 runoff election, in Cordoba, Argentina, November 16, 2023.
Milei’s win raises pressure for completion of EU-Latin America trade deal
Javier Milei’s victory in Argentina’s presidential election could rapidly accelerate negotiations for a trade treaty between the Mercosur trade bloc and the EU. Milei, a self-declared anarcho-capitalist, vowed to pull Argentina from Mercosur altogether if he won. His victory raises questions about the future of the bloc and talks surrounding the treaty.
A trade pact between the bloc — Argentina, Brazil, Paraguay, and Uruguay — and the EU has been in the works for years, and the two sides reached an agreement in principle in 2019. But talks have been stalled ever since thanks to disagreements over environmental commitments pushed by the EU.
The Milei effect: There now appears to be a mad dash to complete an agreement before Argentina inaugurates Milei, a far-right libertarian who’s drawn comparisons to former US President Donald Trump. Diplomats involved in the negotiations told the Financial Times they’re hoping to wrap things up by early December.
“The talks are moving ahead fast,” a Brazilian official taking part in the negotiations told Reuters.
As a climate-change denier, the Argentine president-elect could complicate negotiations on environmentally related matters. While it would be tough to finalize the deal before his inauguration, this might be the incentive all parties need to get to the finish line. We’ll be watching to see whether they can reach a deal before Milei takes office on Dec. 10.
Industrial engineer and former lawmaker Maria Corina Machado holds up a Venezuelan flag as she reacts to the vote count after Venezuelans voted in a primary to choose a unity opposition candidate to face Venezuela's President Nicolas Maduro in his probable re-election bid in 2024, in Caracas, Venezuela October 23, 2023.
Oil exports or no, Maduro won’t let Machado win
Just two weeks after sealing a historic election pact with the opposition, the Venezuelan government announced Monday that it would suspend “all effects” of opposition primaries, thereby jeopardizing a six-month pause of US sanctions on Caracas’ oil.
The decision comes just days after strongman President Nicolás Maduro called the contests a “fraud” — but he’s really afraid of the winner, popular opposition leader María Corina Machado. The election deal was supposed to lift a ban on her and other opposition figures holding office until 2030, but state harassment evidently continues. Fortunately for the ordinary Venezuelans brave enough to go out and vote in an opposition primary, organizers say they destroyed the voter sheets, making state retribution more difficult.
So, will the US keep buying Venezuelan oil? Washington said it would swiftly shut off the taps if Caracas doesn’t follow through with its democratic commitments, but as we wrote earlier, leverage is limited. If Maduro’s options are keeping oil revenue and losing power, or accepting sanctions he’s survived for a decade to stay in control, which do you think he will choose?
Risa Grais-Targow, Eurasia Group’s director for Latin America, says the US will likely find discretion to be the better part of valor under these circumstances. Before snapping back sanctions, she continues, “the US will still wait and see if Maduro takes steps toward allowing candidates to participate in the general election, even if the ruling yesterday seems to go in the other direction.”Colombian President Gustavo Petro gestures after casting his vote during the elections for governors, regional lawmakers and mayors, in Bogota, Colombia October 29, 2023
Has Petro petered out?
President Gustavo Petro saw his allies lose elections across Colombia’s largest cities this weekend in what is widely viewed as a rebuke to the government and its reform agenda.
Petro, Colombia’s first left-wing leader, promised transformational change, but he has struggled to deliver. His frustration is tangible: When centrist Cabinet ministers opposed a controversial health care reform in April, the impasse broke apart his coalition, and Petro fired a third of his Cabinet, appointing ideological allies instead. He attempted to govern by emergency decree in La Guajira department, only to be stymied by the constitutional court, while his congressional priorities have slowed to a crawl. To make matters worse, his administration has been embroiled in separate corruption and wiretapping scandals.
Voters haven’t had it any easier. Colombia’s economy grew by 7.3% in 2022 but is expected to grow by just 1.7% in 2023, straining families in one of the world’s most unequal economies.
The weekend’s contests saw no widespread violence or irregularities, but voters are clearly displeased. The candidate Petro endorsed for mayor of the capital, Bogotá, often considered the country’s second most prominent political office, came in third, and Medellín and Cali elected some of Petro’s fiercest critics.
Petro himself can’t run for office again in 2026, and Eurasia Group’s Colombia expert Maria-Luisa Puig says the results portend ill for his chances of positioning a candidate to carry on his political legacy — but he’s not quite a lame duck.
“Despite the defeat at the local level,” she notes, “Petro can still secure enough votes in congress to advance aspects of his reform agenda,” which may allow for watered-down versions of his pension and health care programs to pass.
Supporters of Argentina's presidential candidate Patricia Bullrich of Juntos por el Cambio party attend the closing event of her electoral campaign ahead of the October 22 general election, in Buenos Aires, Argentina October 19, 2023.
Argentina’s wild presidential election
Argentines will vote on Sunday in the country’s most unpredictable, topsy-turvy election in recent memory.
The leading candidate is shaggy-haired firebrand Javier Milei, a social-media-savvy political outsider who describes himself as an “anarcho-capitalist.” Milei wants to radically shrink the government, adopt the US dollar, and ban sex education.
His more colorful proposals include legalizing the sale of human organs and converting to Judaism. Milei came in first in a presidential primary in August and is currently polling above 35%.
Argentines are fed up. Milei’s popularity, especially with younger voters, arises from widespread frustration with the established parties – and it’s not hard to understand why. Argentina is suffering through its worst economic crisis in decades: Inflation has topped 120%, three out of five Argentines now live in poverty, and the peso is one of the worst-performing currencies in the world.
“Milei has been able to capture this disenchantment as he lashes out at all political parties,” says Luciano Sigalov, an Argentina expert at Eurasia Group.
Ironically, Milei’s pledge to dollarize the economy has contributed to an even greater selloff of the peso, adding to precisely the economic woes that have helped to make him the frontrunner.
“His dollarization proposals sound increasingly attractive to many who see the value of their pesos rapidly evaporating,” Sigalov points out.
But Milei isn’t the only show in town. There are two other formidable candidates:
Former Security Minister Patricia Bullrich. She has built her campaign around a promise to “restore order” and is polling at 29%. Although Argentina’s homicide rate is one of the lowest in Latin America, several high-profile instances of violence by drug gangs in the port city of Rosario — one of which included a threat to soccer legend Lionel Messi — have put public safety on the ballot.
Economy Minister Sergio Massa. The candidate of the currently governing Peronist coalition is polling at 26%. As a moderate and technocratic voice within typically left-wing Peronism, Massa is seen as a safe pair of hands who has credibility with the private sector and has strong support from his own coalition.
The election rules are complicated. To win outright, the top candidate must get at least 45% of the vote OR must surpass the runner-up by at least 10 points. So, for example, you can win with 42%, but only if the runner-up has 32% or less.
If no one is able to meet either of these conditions, then the top two finishers will head to a runoff on Nov. 19.
A demonstrator holds up a model depicting a Chilean constitution book that reads 'The new Kastitucion' in a play on the word 'Constitution' and the name of far right-wing politician Jose Antonio Kast, while protesting against ongoing Constitutional process lead by right-wing parties, in Santiago, Chile, October 3, 2023.
Chile’s constitutional efforts look doomed, again
Chile is in the tortuous process of drafting a new constitution to replace one drafted by its former military dictator. A new draft reads like a partisan wishlist – just like the left-leaning document voters rejected last year – but this time the far-right holds the pen.
On Wednesday, the body attempting to hammer out a new constitution for Chile submitted its official proposals, which will now be reviewed by an expert panel. The draft limits the rights of workers to strike, guarantees to swiftly expel undocumented migrants, curbs abortion rights, and includes provisions supporting private pensions, schools, and healthcare systems.
It’s far from the moderate document Chilean President Gabriel Boric hoped would emerge from this second bite at the chirimoya.
Some background: In 2019, famously stable Chile was rocked by a series of protests known as the estallido social (roughly, “social outburst”), of which a key demand was a new constitution to replace the one authored by the military junta of Gen. Augusto Pinochet in 1980.
In 2020, Boric — then just a lower-house member — played a key role in organizing the plebiscite in which an astounding 80% of Chileans voted in favor of writing a new constitution. It catapulted him to national fame, and in March 2022, the presidency.
But the first constitutional convention became bogged down in ideology, producing an ambitious and left-leaning draft that spooked middle-class Chileans. Voters roundly rejected it last September, but Boric didn’t feel he could just let the matter die. He attempted to continue the overhaul, but with a process supervised by Congressionally appointed experts to tamp down ideology.
It didn’t work. Boric’s left-leaning coalition took just 17 of the 51 seats in the constitutional assembly after May 2023 elections. Concerned by rising crime and a sluggish economy, voters elected the far-right Republicans to 22 seats, and they easily dominated the assembly in a supermajoritarian coalition alongside conventional right-wing parties.
But Chileans don’t appear happy with the prospect of a right-wing constitution either. Just 24% of voters plan to vote for the draft constitution so far.
The constitutional assembly will have a final chance to make changes after receiving expert comments, opening a slim chance for moderation before the plebiscite in December. Should Chileans reject this draft, they’ll be stuck with the Pinochet version, as Boric has made clear he’s now done with constitutional conventions.
The constitutional reform process has dominated political discourse for four years, while ordinary Chileans dealt with COVID-19, economic instability, and spiking crime and violence. Who will be satisfied if it all comes to naught?Undocumented Immigrants from West Africa, Mexico, and Venezuela camp outside the Roosevelt Hotel in New York City.
Biden approves hundreds of thousands of work-visas for Venezuelan migrants
As President Joe Biden left the Big Apple last night, his administration announced that Venezuelans already in the country could legally live and work in the US for the next 18 months.
The decision will affect 472,000 Venezuelans nationwide and roughly half of New York City’s migrants, letting them support themselves and easing the strain on New York’s social safety net. (For more on the situation in New York, see our explainer).
The bigger picture: Adams is pushing Biden to extend the authorization to migrants from other nations, but the White House is wary that a broad policy could incentivize even more migrants to cross the border. On the national level, Democratic leaders fear the GOP could sweep suburban house districts in 2024 by weaponizing the migrant issue, as they did with crime in 2022.
Lieutenant General Mohamed Hamdan Dagalo, deputy head of the military council and head of paramilitary Rapid Support Forces (RSF).
What We’re Watching: Worsening clashes in Sudan, Biden’s waiting game, Lavrov’s Latin America tour, a Chinese police station … in NYC
Violence spreads in Sudan
Fighting in Sudan raged on for a fourth day Tuesday, and it’s unclear who is now in control of the country. Many of Khartoum’s 5 million residents are hiding in their homes as street fighting and air raids continue in the capital. So far, more than 1,800 people have been injured, while the death toll is nearing 200.
Who is fighting? Two military factions are vying for control of the oil-rich country that’s been trying to transition to democracy since longtime despot Omar al-Bashir was ousted in 2019. Gen. Abdel-Fattah Burhan, the country's army chief and de facto leader since 2021, is facing off against Mohammed Hamdan Dagalo, head of the RSF militia. (For more on the rivalry, see here.)
Amid a battle for control of key infrastructure, Khartoum's international airport has been subject to ongoing shelling, while a US diplomatic convoy also came under attack Tuesday. And while the UN, US and regional bodies have called for a truce, both sides have rejected ceasefire calls.
Still, we’re watching to see whether regional heavyweights – including Egypt and the United Arab Emirates – that have a vested interest in the outcome have any luck in getting the two sides to stand down.
What’s Biden waiting for?
Anyone who has paid attention to his comments over the past few weeks knows that Joe Biden is running for reelection. On Friday, as he finished his much-ballyhooed visit to Ireland, he told reporters that, “I told you, my plan is to run again” and that a formal announcement was coming “relatively soon.”
So, what’s the holdup? Will Biden, as some have speculated, announce on April 25, the four-year anniversary of the formal announcement of his 2020 candidacy? Or might he wait longer? By announcing soon, the president would end any remaining speculation that he might change his mind, a shock move that would open the field to other Democrats. It might also help him avoid the suggestion, whispered by some Democrats and shouted by many Republicans, that he’s indecisive or hiding from the cameras.
But by waiting he could keep the media focused a while longer on Donald Trump’s legal problems and on the squabbling among Republicans. Why hurry, some ask, when Biden faces no viable challenge from within his party? It’s his decision to make, of course, and he’ll surely decide soon on how, when, and where to take on the combined roles of president and presidential candidate.
Russian foreign minister visits Latin America
Sergey Lavrov spent Monday in Brasilia, where recently elected President “Lula” Da Silva has already irked Washington by both-sidesing the Ukraine war and refusing to sell weapons to Kyiv.
For Russia, it’s no small thing that one of the world’s largest democracies is at least sympathetic to the Kremlin’s version of the Ukraine story. The fact that Russia exports lots of fertilizer to Brazil’s powerful farm industry probably helps.
Lula, meanwhile, has long sought to carve out a role as a leader of the Global South, where many view the faraway Ukraine war chiefly through the lens of food and energy price inflation and are skeptical of American arguments about defending democracy or the “rules-based order.” Still, he has to tread carefully – osgringos are Brazil’s largest foreign investors and key partners on Lula’s climate change agenda.
While Lavrov thanked Lula for his support, the White House, in a tough rebuke, accused the Brazilian president of "parroting Russian and Chinese propaganda without at all looking at the facts.”
After Brasilia, Lavrov will visit old Kremlin comrades in Cuba, Venezuela, and Nicaragua. All are countries where US sanctions have enabled Russia to gain significant footholds in energy, arms sales, and general “rogue-state” bonhomie.
But beyond that, Russia lags well behind the region’s two major external players: China and the US. See our GT below for more.
US cracks down on China’s foreign police stations
The US Justice Department on Monday arrested two US nationals of Chinese origin and charged them in connection with allegedly running a secret police station in New York City. Separately, the Feds also accused 34 Chinese cops of using fake social media accounts to harass California-based dissidents. The indictments are part of a wider yearslong DOJ probe into China's efforts to go after ethnic Chinese who are openly critical of Beijing in America.
This is a big deal because it's the first time any criminal charges have been filed against anyone suspected of operating one of China's alleged 100 overseas police stations. Also, the fact that the indictments were handed down in the US will surely shine a brighter spotlight on China's foreign policing shenanigans, putting other countries in a tough spot amid worsening ties between China and the West.
But the charges of conspiring to act as agents for the Chinese government fall short of actual espionage or unlawful detainment on US soil. And making them public might send China the wrong message, encouraging its consulates to do a better job of covering up their foreign police ops, which many fear seek to lure dissidents back to the mainland. Either way, expect a fiery response from Beijing.
Optimism about Mexico's political and economic future
Ian Bremmer's Quick Take: Hi everybody, Ian Bremmer here. A happy Monday to you and a Quick Take to kick off your week. I'm just back from Mexico, Mexico City myself, and lots of fascinating meetings, lots of takeaways. Thought I would give you some of my sense of what is happening there, Mexico and Mexico's context in the world.
First thing I would say is I come away pretty optimistic about where the country is heading overall, and some of that is the context of Mexico in an environment where China-US relations are getting a lot more challenging. There is some significant national security and strategic decoupling that is happening at the behest of US administration, governors, members of Congress, both Democrats and Republicans. And also, there's a lot more uncertainty about doing business in Xi Jinping's China itself, given the rapid and sudden changes on COVID, on how to do business as a technology company, on rules and regulations for the private sector, rule of law and its absence, local competition, you name it. And so, even though I still fairly strongly believe that China's going to become the largest economy in the world by 2030, the idea that US corporations will be able to take as much advantage of that is increasingly uncertain. Almost any business leader you talk to in the United States is saying, "Yeah, China is an important market for us, but we are being more cautious about how much we want to invest there, going forward. At the very least, we're putting a pause on some of the big decisions we're making." And in many cases, they're starting to reduce some of that forward looking exposure.
Who are you going to invest towards if you're not investing in China? Well, Mexico in many ways is the country that stands to benefit the most outside of the United States. And indeed, in every meeting I had in three days in Mexico, I was hearing about near-shoring. It's a kind of awkward term, but basically the idea of multinationals based in the United States, doing a lot more on the ground in Mexico. Mexico's the 15th largest economy in the world. It is a large population, it's quite young, it's hardworking. The demographic's increasingly very attractive and it's strongly integrated into the US economy and supply chains. The fact that Tesla had just announced a $10 billion investment near Monterey while I was there was a big boost, a shot in the arm for the Mexican economy that a lot of people were talking about.
And so as a consequence, I mean, there's no question I meant think back on Lula's days, his first time around as president and how much his popularity was benefited by the fact that the economy was in a commodity super cycle and indeed, led to some 80%, even 90% of times approval ratings. I think that right now, Mexico benefits significantly from right place, right time, given what's happening geopolitically.
Now, looking to Mexico itself, I have to say that I was also surprised that Mexico's CEOs and bankers, who have been enormously negative pre-pandemic about then new President AMLO, and he doesn't like him, he doesn't want to talk to him, he's going to be a disaster, he is going to lead the economy into ruin, this time around, I heard still plenty of criticism, but also a recognition from the CEOs in Mexico and the bankers that, "Well, actually, he's not been as bad as we expected." What do you mean by that? Well, he hasn't actually raised taxes, he hasn't spent money on the fiscal balance that the government doesn't have. In fact, in many ways, he's been conservative as a leader in terms of small government, fiscal hawkishness. Mexico's debt to GDP is 50% right now and has stayed stable despite the pandemic. That's caused some challenges in terms of the ability of Mexico to make large scale investments into its domestic economy, given the pandemic. But nonetheless has made the business community feel more comfortable with him.
Instead, there's been a focus on tax collection and on reducing government expenditure. So much so that there's a problem on execution, weakening and inefficient, but nonetheless, comparatively talented civil service in Mexico. It's a reason why when you go to the World Bank or the IDB, you see so many former Mexico technocrats in the bureaucracy, because they were always seen to be some of the most talented from all of the Western hemisphere. Overall, I would say the Mexican economy is positioned to do quite well over the coming, let's say five, 10 years.
The domestic political issues are the biggest concerns. In particular, President Lopez Obrador going after his country's electoral institute, trying to take away some 80% of their funding, which would, if it went through, undermine the ability of Mexico to have free and fair elections. And there's really no justification for that decision. AMLO claims it's because he actually won the 2006 election, which was razor thin decided against him. And it's also why he was quite late to congratulate Biden on his 2020 win, you might remember that. And even some of his own supporters are befuddled by it, since AMLO's Morena party is likely to win upcoming elections anyway. Unlike Trump, Erdogan, Orban, Bolsonaro, all of these leaders, it's not like AMLO needs to gut Mexico's democracy in order to keep his party in power. But the other point is that he's also likely to fail at this so-called electoral reform as Mexico's Supreme Court will rule against the so-called reform. And there've also been massive demonstrations against it across Mexico, largely from the middle and upper classes, showing the power of Mexico's civil society which is hardly going away. This is not going to become an autocracy, just as Brazil hasn't, just as the United States hasn't.
And when he fails, he's almost certainly going to call his supporters against the corrupt Supreme Court, as he would have it, all of which does undermine rule of law in the country. I will say that I am less worried about this than some in the same way that I was less worried about January 6th in the US as not a coup, or January 8th in Brazil as not a coup and not able to fundamentally undermine democracy in these countries. In part because I fully expect AMLO will be out after his single constitutionally mandated six-year term, and I also think that either of his potential Morena party successors won't have the same charisma or capacity to pursue these sorts of policies.
But also, and here I think this isn't appreciated by many of AMLO's opponents, I do think that there are real issues here. I mean, AMLO is broadly skeptical of all sorts of, as he calls them, neo-liberal conservative elites, that's a mouthful, and their institutions, because they've had enormous access and influence across the board historically, including in the judiciary. They really could shape policy or stop initiatives, given their influence over all branches of government. There has been corruption. There has been a lot of corruption in the distribution of social benefits, in influence over Congress and legislation in procurement processes. Tax authority, where the Mexican government had been clearly letting companies off the hook, which AMLO has tried to change at least somewhat successfully. And I think part of the elite anger at this administration is that the elites can no longer influence the regulatory and legislative policy as they could before. And while the judiciary is an important and necessary check on AMLO's power, it's also hard to argue that economic elites haven't had undue influence on Mexico's court system. Both of those things are actually true.
There are other places I could spend time, there's been very limited success in curtailing violence in Mexico, dealing with the drug cartels. That's a long history of failure in Mexico and I don't come away any more optimistic from my trip in Mexico this week. I am a little bemused by the criticism though, that AMLO doesn't travel internationally enough. And it's true, he almost never leaves the country. He's been five years in office now, I think he's been to the United States four times, each time for one day. And he made one trip to Central America and Cuba and that's it. I mean, for the head of a G-20 economy, that is unheard of. And he also doesn't really care.
But I want to say it's not like there's any particular debate about Mexico's development model. It's not like people are saying, "Oh, maybe we need to work more with Europe or hedge with China." AMLO has zero interest in that and indeed, one of the first things he mentioned to me was his concern that China's growth would unbalance the geopolitical order and lead to conflict. There's something that underpins this that's very important, which is last year, Mexico's trade with Texas was five times its total trade with all of Latin America.
Unlike Brazil, unlike other developing countries where there's lots of discussion about potential competing development models, there really isn't with Mexico. It is a US and USMCA focused model and I think appropriately so. Meanwhile, AMLO has been traveling relentlessly across Mexico by car or on commercial airlines, meeting with the Mexican people. And he's the first president in a very long time that's spent that kind of time with Mexico's poor across the country and that's a big piece of his popularity, which has been quite high over the course of his entire term. I personally would like it if he would travel more because I care about foreign policy. But in the context of Trump's America First or Biden's US foreign policy for an American middle class, you can certainly understand that you can have more sympathy.
And I think about my own friend, Iván Duque, who I've known very well for years now, the former Colombian president, he's loved by the Washington establishment, but ultimately was very unpopular in Colombia, in part because he was seen as being kind of a creature of Washington consensus and not as interested in Colombia. And I think AMLO completely gets that in today's geopolitical environment, that just doesn't play.
I think the right comparison for AMLO on the global stage is Modi, India's prime minister, in terms of he's from the underclass. In the case of Modi, from the under caste, focuses on the underclass and wants to take on colonial elites and their institutions that have always been unpopular with the average people in the country. That includes the independent media and NGOs which are viewed, even if somewhat unfairly, as educated elites that don't care about the people and haven't historically.
By the way, when I mentioned the Modi comparison to AMLO, he immediately liked it. In fact, recognizes that he doesn't do as well in Mexico as Modi does in India because Modi also has the Hindu nationalism call card that he can play and does play, which AMLO is certainly not doing in terms of Catholicism and the role in Mexico's government institutions. Now, of course, that's a mixed bag. Because while Modi has become an essential friend to the United States as a part of the Quad, the relationship can only get so close and there is that tension between the United States and Mexico, and the West and Mexico accordingly.
But I do think that putting all of that in context gives you a lot more balance about what's happening in Mexico right now and Mexico's role with the US and Mexico's role that it doesn't have with a lot of the rest of the world than we've been reading in a lot of the media, and as a consequence, I thought it was really interesting to talk about it.
Anyway, that's it for me and I'm delighted that I've had a chance to get back there and I'm sure I will be again real soon, and I hope everyone is well. Talk to you soon.
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