Luiz Inacio Lula da Silva, president of Brazil, right, meets Alberto Fernandez, president of Argentina, after taking the oath during the inauguration ceremony in Brasilia, Brazil on January 1, 2023.
Maira Erlich Bloomberg Getty Images
Brazil and Argentina aim for greater economic integration, including the development of a common currency, Brazilian President Luiz Inacio Lula da Silva and Argentine leader Alberto Fernandez said in a joint written article.
“We intend to overcome barriers to exchange, simplify and modernize rules and encourage the use of local currency,” said a text published on the Argentine website Perfil.
“We also decided to continue discussions on a common South American currency that could be used for financial and commercial flows, reducing operating costs and external vulnerabilities,” the article said.
The idea of a common currency began in an article written last year by Fernando Haddad and Gabriel Galipolo, now Brazil’s finance minister and executive secretary, and mentioned by Lula during the campaign.
Lula chose Argentina for his first international trip since taking office, keeping with the tradition of first visiting Brazil’s largest trading partner in the region. This follows four years of strained relations during the administration of Brazil’s right-wing former President Jair Bolsonaro.
Lula’s trip to neighboring Argentina also marks the return of Brazil to the Community of Latin America and the Caribbean (CELAC), which Brazil left in 2019 under the orders of Bolsonaro, who refused to participate in the regional group because of the presence of Cuba and Venezuela. .
Both presidents stressed the need for good relations between Argentina and Brazil to strengthen regional integration, according to the article.
The leader also emphasized strengthening the Mercosur trade bloc, which includes Argentina, Brazil, Paraguay and Uruguay, and Brazil’s Finance Minister Haddad recently complained of being left behind in recent years.
“Together with our partners, we want Mercosur to be a platform for effective integration in the world, through the joint negotiation of balanced trade agreements that respond to strategic development goals,” said the two presidents.
Earlier in the day, the Financial Times reported that neighboring countries will announce this week that they are starting preparatory work on a common currency.
The plan, to be discussed at a summit in Buenos Aires this week, will focus on how the new currency that Brazil is proposing to call “sur” (south) could boost regional trade and reduce dependence on the US dollar, the FT reported officials as saying. .
Politicians from both countries had discussed the idea in 2019, but met with pushback from Brazil’s central bank at the time.
Initially started as a bilateral project, the initiative will be extended to invite other Latin American countries, the report said, adding that an official announcement is expected during Lula’s visit to Argentina that begins on Sunday night.