Argentina’s pugnacious foreign policy spares vital trade partners

Argentina’s new president Javier Milei will put into practice the sharp rightward shift in foreign policy he promised on the campaign trail with visits this week to hardline leaders in Israel and Italy on his first international tour.

Milei said last year he would not “do business with communist countries” — in which he included neighbouring Brazil as well as China, Argentina’s main trading partners — and called their leaders “thieves” and “murderers”. He also said he would prioritise relations with “the US, Israel and other countries that defend freedom”.

But while the president attacks leftist leaders and savours the “alt-right” spotlight, his foreign policy team is already taking a more pragmatic approach.

Diana Mondino, Argentina’s foreign minister, told the Financial Times that the government would balance promoting libertarian ideology with protecting existing economic ties.

“The two are not mutually exclusive,” she said. “We want to have as many commercial relationships with as many countries in the world as possible, which is by definition very liberal.”

Mondino’s tone is a far cry from Milei’s rhetoric during and after the presidential election campaign, which had fuelled concerns among politicians and business leaders about relations with Brazil and China, which together account for 26 per cent of exports and 43 per cent of imports.

Brazilian president Luiz Inácio Lula da Silva declined to attend the presidential inauguration after Milei invited his hard-right predecessor Jair Bolsonaro, with whom he held a one-on-one meeting on the eve of the ceremony. 

At the World Economic Forum in Davos last month, Milei, a libertarian economist, used his speech to declare the “west is in danger” and accuse its leaders of succumbing to “collectivism”. Last week he sparked a diplomatic crisis by calling Colombia’s leftwing president Gustavo Petro a “murderous communist”.

A self-described “anarcho-capitalist”, Milei has cultivated friendships with a range of rightwing figures, including entrepreneurs such as Elon Musk and authoritarian politicians including Bolsonaro and Donald Trump.

Emanuel Porcelli, a professor of international relations at the University of Buenos Aires, said the libertarians had prioritised “their political ideals over Argentina’s foreign policy interests”. Milei, he said, was “pushing for a bigger profile as a reference for the global alt-right . . . These things speak to his domestic base.”

Argentina’s foreign ministry, however, is taking a more traditional approach.

“The difference between Milei six months ago and today is that he has a good team around him,” said one foreign diplomat in Buenos Aires, citing Mondino’s appointment of experienced career diplomats to important roles in the ministry. “They aren’t the outsiders we were expecting, they’re open, focused, serious.”

In Brazil, fears of a breakdown in relations have largely dissipated, Brazil’s ambassador to Argentina Julio Bitelli told the Financial Times. He noted that Milei took time to meet Brazil’s foreign minister on the day of his inauguration in “a gesture of respect”.

“Personal friendships might be important between countries with weaker ties, but this is a 200-year-old relationship,” Bitelli added. “Everything we need to co-operate is already in place — as long as we don’t rock the boat too much we’ll be fine.”

Milei’s planned meeting next week with Pope Francis in Vatican City will be another chance to heal international tensions from the campaign, when he labelled the Argentine pontiff a “filthy leftist” because of his focus on social justice. The pope said last week he was “ready to start a dialogue” with the president.

Milei will spend three days in Israel, a trip influenced by a personal interest in Judaism, to which he has expressed interest in converting. He will meet Benjamin Netanyahu and visit Jerusalem, and has pledged to move Argentina’s embassy there from Tel Aviv during his term in accordance with Israel’s claim to the city as its undisputed capital.

Milei will then travel to Italy where he will attend a canonisation mass for Argentina’s first female saint on Sunday before meeting rightwing prime minister Giorgia Meloni on Monday.

Relations with China illustrate the conflict between Milei’s outspoken anti-communism and Argentine pragmatism on foreign policy.

Ties with Beijing are frostier than they were under Milei’s left-leaning Peronist predecessor, analysts say. In December, Mondino declined an invitation from Brazil and China to join the expanding Brics group of economies.

“We gained economic freedom,” via the decision, Mondino said. “It isn’t necessary for us to be aligned with any country” despite having “great commercial relations with all of the Brics”, she said.

Mondino also met Taiwan’s commercial representative in Argentina on November 19, the day Milei was elected president, according to local media — the kind of meeting that angers Beijing because it insists Taiwan is part of China — while a provincial libertarian lawmaker praised the island as “an example for the free world” on social media.

For its part, China has opted not to release any more of the $18.5bn currency swap line it had activated with the outgoing Peronist government, and the countries are discussing how soon Argentina must pay China back for the billions already borrowed.

Yet neither country has an incentive to let relations seriously deteriorate, with Argentina highly reliant on China as a market for soyabeans and other crops, and China maintaining strategically important assets in Argentina, including stakes in lithium mines and a military-run deep space ground station in Patagonia.

Oliver Stuenkel, associate professor of international relations at the Getúlio Vargas Foundation think-tank in São Paulo, said relations might suffer only a “temporary dip”, comparing the situation to Brazil-China relations under Bolsonaro. The Brazilian leader made a series of provocative anti-China remarks while in office but trade between the two countries increased during Bolsonaro’s presidency and he made an official visit to Beijing in 2019. 

Stuenkel expects Milei’s government to walk a tightrope between the president’s ideological vision and Argentina’s interests.

“I think we’ll have occasional symbolic gestures, like anti-China statements, that speak to Milei’s domestic audience, but they will be carefully measured to not produce tangible damage,” he said. “I think right now they’re getting the balance more or less right.”