Argentina-US Trade Agreement: A Blow to Mercosur

Aram Aharonian

The United States and Argentina have advanced a new Reciprocal Trade and Investment Agreement that redefines the bilateral economic relationship: Argentina will grant preferential market access to US exports including medicines, chemicals, machinery, information technology products, medical devices, motor vehicles, and a wide array of agricultural products.

The commercial framework deepens Argentina’s dependence on decisions made in Washington. After the announcement, Milei insisted the country would be “strongly capitalized” and that a “new golden century” based on mining, energy, and food was beginning. He also reinforced his agenda of labor, tax, and criminal reforms, stating his administration would remain “the most reformist in Argentine history.”

The asymmetry is evident: while Argentina opens sectors in which it faces competition from some of the world’s most developed industries, Washington’s concessions focus on primary goods or inputs that do not affect its domestic industry.

The bilateral relationship is strategic for the White House, which has used Argentina as the best test of its carrot-and-stick approach to directing foreign policy on the continent—the same logic Trump already applied with his tariff war, which redefined the rules of global trade.

In matters of commercial openness and regulatory standards, Argentina is virtually submitting to conditions imposed by US companies and laws. Argentina is obligated to follow Washington’s trade policy guidelines, especially in its dealings with third countries, which could be read as a direct reference to China.

It is unclear what freedom Argentina will have to trade: the new pact appears as yet another example of the old Monroe Doctrine, but this time designed to limit China’s advance in areas as sensitive to US economic interests as soybeans and their derivatives.

It is also uncertain how Argentina’s relationship with other Mercosur countries will be affected, since the clauses released in Washington’s official communication indicate privileged tariff and non-tariff treatment for US-origin products.

The agreement envisions the elimination of non-tariff barriers. Argentina dismantled import licenses and other restrictive mechanisms, facilitating the entry of US products, and agreed not to require consular formalities for US exports and to gradually eliminate the statistical fee for US goods. Also, Argentina will allow entry of US products that meet US or international technical standards, without additional evaluation.

The agreement subordinates Argentina’s trade policy to Washington’s guidelines, particularly regarding third countries such as China, raising questions about the country’s room for maneuver in sensitive sectors like soy. There are concerns about Mercosur’s future, as tariff preferences granted to the US could break the bloc’s logic. On the same day the agreement with the US was announced, it was leaked that Milei is leaning towards not attending the upcoming Mercosur Summit on December 20 in Foz de Iguazú, Brazil.

Various analysts have denounced that the Argentine government is pushing an unconditional alignment with the Trump administration, while consolidating an economic model that benefits primary sectors and exposes the national industry to tough competition. Notably, there has been almost no discussion of steel and aluminum, two historically sensitive sectors in any trade negotiation with the US.

Argentina will open industrial and technological markets where the US has overwhelming advantages, while Washington offers limited concessions for primary goods, with no impact on its production structure. The agreement is fully asymmetric: a pact between a nation that was “saved” by the other with direct Treasury loans—and now it’s payback time.

The elimination of non-tariff barriers, automatic recognition of US standards, and acceptance of certifications such as the FDA’s are seen as a surrender of key regulatory powers. Added to this is pressure to modify intellectual property rules and open up agriculture to highly subsidized products, which could hurt regional economies and local food SMEs.

The deal focuses on industries like automotive, pharmaceuticals, and agribusiness, but if Washington seeks to diversify supply chains and reduce Asian dependence, it makes sense to look at countries with industrial capacity and strategic location in the hemisphere.

Some analysts argue this agreement could be more advantageous than the Mercosur-EU treaty, whose Hilton quota for Argentine beef is around thirty thousand tons (only partially met today and possibly increased to fifty thousand tons with the agreement), while negotiations with the US could enable up to one hundred thousand tons.

Will the strategy of aligning unilaterally with the US be correct this time, even at the cost of damaging ties with our main trading partners, Brazil and China? Milei has removed Argentina’s margin for strategic neutrality. The economy is currently too fragile, the state too indebted, and the productive system too dependent on external decisions to sustain an autonomous foreign policy without costs, as noted by Perfil newspaper.

Alignment with the US implies accepting a power architecture where economic sovereignty is subordinated to outside interests. The agreement with Washington exposes the full extent of Argentina’s fragility. Analysts wonder whether the country will take advantage of this alignment to build its own capabilities—infrastructure, technology, industry—or if it will repeat the historical pattern of integrating into the world as a primary supplier and consumer of others’ manufactured goods, resulting in greater dependence and vulnerability.

Neocolonialism

Presented by Milei as “historic,” this “understanding” with the US is actually more serious than a Free Trade Agreement: it is a general framework designed to allow future neocolonial concessions—a broad umbrella with no equivalent obligations for Washington, but immediate and profound commitments for Argentina, notes analyst Matías Caciabue.

The agreement signed by Foreign Ministers Pablo Quirno and Marco Rubio is, simply put, a neocolonial pact that hands over regulatory powers, weakens regional integration, and puts Argentina back in a position of political and economic vassalage.

While the US only mentions Argentine beef as a specific concession (without specifying quotas or conditions, and with no improvements regarding steel or aluminum), almost all other demands are on Argentina: dismantling non-tariff barriers, accepting US standards, and surrendering regulatory sovereignty.

Argentina will allow vehicles manufactured in the US under US safety and emission standards, and certifications from the FDA for medical devices and pharmaceuticals. Alignment with the US may offer anchorage, investment, and geopolitical protection, but it surely means accepting a power architecture where economic sovereignty is subordinated to outside interests (those of Trump and the US).

Has the Monroe Doctrine from the early last century returned? It was a foreign policy announced by the US in 1823 under President James Monroe. Its core idea can be summarized as “America for Americans,” but in practice meant “America at the service of the United States.” The original message warned European powers not to intervene, colonize, or attempt to expand in the Americas. Today, Trump’s main concern is China.

It’s worth recalling that the doctrine was used as a pretext to legitimize military interventions, toppling governments, occupations, and economic control in several Latin American countries. This new pact is another example of the Monroe Doctrine—this time to limit China’s advance. It will have not only commercial, but all kinds of geopolitical implications.

In agribusiness, the agreement provides more access for US food. Argentina has opened its market to live US cattle, will allow entry of US poultry within a maximum of one year, and will not restrict products using certain dairy and meat terms. Registration for beef, by-products, offal, and pork will be streamlined and no facility registration required for US dairy products.

Argentina also undertakes to combat illegal logging, foster a more resource-efficient economy (particularly in critical minerals), and fully apply the WTO Fisheries Subsidies Agreement. Both countries will coordinate actions against non-market-based trade policies and develop shared tools for export controls, investment security, customs evasion, and other sensitive practices.

The deal adds that both countries will promote investments in lithium, copper, and other strategic minerals and work to stabilize global soy trade—a key sector for Argentine agriculture. Argentina also commits to review and limit market-distorting actions by state-owned companies and to evaluate industrial subsidies that could affect the trade relationship.

As for digital trade: concerning data flows and electronic signatures, Argentina will recognize the US as an adequate jurisdiction for personal data transfers and not discriminate against US digital platforms, services, or products. Likewise, electronic signatures accepted under US law will be recognized as valid.

Alignment with the US may offer anchorage, investment, and geopolitical protection, but it also means accepting a power architecture where economic—and political—sovereignty is subordinated to outside interests.

Uruguayan journalist and communications specialist. Master in Integration. Creator and founder of Telesur. Chair of the Foundation for Latin American Integration (FILA) and director of the Latin American Center for Strategic Analysis (CLAE).