What is at stake in Spain-Argentina relations due to the Milei crisis

What is at stake in Spain-Argentina relations due to the Milei crisis

A crisis between Spain and Argentina is not a friction between distant partners. In the words of the Minister of Foreign Affairs, José Manuel Albares, on both sides of the Atlantic there are “brother peoples” and this is attested not only by the relations between their embassies, but also between their citizens, their companies or cultural and academic institutions, some intertwined with each other. the others. Therefore, the shock generated by Javier Milei’s accusations against Pedro Sánchez’s wife puts a lot at stake, on very sensitive levels.

While the Spanish president awaits an apology from his Argentine counterpart, Foreign Affairs is considering what steps to take, after the call for consultations from its ambassador in Buenos Aires and after summoning its Argentine counterpart in Madrid to Albares’ office. “When we have to act, we act,” the minister concludes, without further details.

These details are important because the day-to-day relations between the two states can be affected, despite how solid and old they are. With Milei, storm surges were expected, it has already had them with other Latin American states such as Colombia or Mexico, and now it is Spain. “Spain is one of Argentina’s most important partners, with political, economic, cultural and cooperation relations of long history and intensity,” summarizes Foreign Affairs.

The Elcano Royal Institute analyst Carlos Malamud, specialized in Latin America, already warned in a report last April that there could be problems between Madrid and Buenos Aires. “There is growing concern about its future evolution [de las relaciones bilaterales], keeping in mind that they are not going through their best moment. There are conflicting attitudes on both sides that accelerate a certain deterioration,” he noted.

On the one hand, “Pedro Sánchez’s support for Sergio Massa during the electoral campaign” stood out. The Peronist was Milei’s greatest opponent. On the other hand, he already announced the trips that Milei had in his portfolio to our country: the one on Sunday for the event with Vox, and another on June 21, when he will receive an award from the Juan de Mariana Institute for his “exemplary defense of the ideas of freedom”. He will be in Madrid and his presence, until now, was assured.

“Taking advantage of the visits, will there be any contact with the head of government or the head of state? There is too much at stake in the Spanish-Argentine relationship for both parties not to work a little harder to maintain their traditional levels, characterized by great intensity in all areas,” warned Malamud.

People and money

We are talking, therefore, about turning on the red alert with the nation in the world where there are the most Argentines registered, 328,333 people according to the most recent registry, from 2022, indicates the National Institute of Statistics (INE). Conversely, Argentina is the country in the world in which the most Spaniards reside, up to 482,176, according to data from this same year from the INE. Spain is represented in Argentina by its embassy based in Buenos Aires and the consulates in Bahía Blanca, Buenos Aires, Córdoba, Mendoza and Rosario.

An Argentine family, voting at the Colegio Mayor Argentino in Madrid, last November, in the second round of the presidential elections that Milei won.Ricardo Rubio / Europa Press via Getty Images

On a business level, the same dynamic: if Spain is the second European trading partner in Argentina and the second external investor in the Latin American country, Argentina is the second most important Latin American investor for Spain, with approximately 16%, only behind Mexico. These are data from the Ministry of Foreign Affairs, International Trade and Worship of Argentina and the Ministry of Foreign Affairs of Spain, recorded in their country file.

According to the Government now led by the libertarian Milei, during the last two decades the bilateral trade balance has been a surplus for Argentina. In the last five years, the country’s exports have remained at an average of 1.5 billion US dollars (about 1.4 billion euros). Within this current, the Quarterly Report on Foreign Trade (Comex) cites – and collects Newtral– that in the third quarter of 2023 Argentina was the fourth country in Latin America to which Spain destined the most exports. Likewise, it ranked as the third Latin American country in imports to Spain, only behind Brazil and Mexico.

Although, conversely, Mexico takes the cake in Spain, with 58% of the Latin American investments we receive, the Spanish Confederation of Business Organizations (CEOE) highlights the pinch of 16% of Argentines as very valuable. “Spain is one of Argentina’s most important partners, with intense political, economic, cultural and cooperation relations, reinforced by historical ties,” he said in 2021 in a working document.

In his diagnosis, he points out several “opportunity sectors” to strengthen trade relations between both nations, such as the automotive, agricultural machinery, agro-industrial, food and chemical sectors. All of them are considered “of great importance for the Argentine economy.” In addition, he highlights others such as transportation and road infrastructure, electrical energy, construction and management of urban waste and capital goods.

What we send above all to Argentina, according to Spanish data from 2022, is machines and mechanical devices (15.2%); motor vehicles (10.9%); electrical appliances and material (8.4%); special codes (5.3%); petroleum derivatives (5.2%); pharmaceutical products (4.5%); plastic materials (4.0%); perfumes (3.9%); chemicals (3.1%); and organic chemicals (2.9%). And what comes to us from there is, almost everything, countryside: agricultural and fishing products (almost 75% of both), among which the main products are feed (38.5%); chemicals (19.1%); fishing products (18.2%); fats and oils (6.6%); fruits and nuts (2.7%); cereals (2.5%); oilseeds (2.4%); legumes and vegetables (2.4%); organic chemicals (1.4%), and meat and edible offal (0.9%).

“Spain and Argentina maintain a close bilateral relationship, marked by migratory flows, investment, trade and tourism. Argentines positively value the Spanish commercial offer, but commercial exchange faces various tariff and non-tariff barriers,” he acknowledges. , also, the Spanish Ministry of Foreign Affairs.

In the last 15 years, Spanish exports to Argentina have followed a trend parallel to the evolution of the Argentine economy, “growing in times of improvement in activity and falling in times of crisis, in which Argentina usually imposes restrictive measures on trade to preserve the equilibrium of the balance of payments”. This explains that in the years 2018-2020, of acute crisis in which the GDP collapsed by almost 15%, “our exports also fell sharply: 47%. In 2018 they fell -7.3%, in 2019 they sank -28.7% and in 2020 they fell again (-19.5%), while imports increased by 14% in 2018 and decreased by -11.2% in 2019 and -13.7% in 2020” .

However, in 2021 the situation experienced an “important turnaround”, given that both exports and imports “showed high growth percentages (34.3% and 53.7%, respectively) with an increase in the deficit for Spain, which stood at 1,176 million euros. The year 2022 closed with an increase in exports of 32.5%, which reached 1,214 million, and also in imports of 9%, reaching 2,282 million. The trade deficit was reduced to -. 1,068 M EUR and the coverage rate stood at 53.2%. “In 2022, Argentina was the 35th destination of Spanish exports and the 26th origin of our imports,” states the country file.

Javier Milei gives his investiture speech before world leaders such as King Felipe, on December 10, 2023.Lucas Aguayo Araos/Anadolu via Getty Images

Beyond business, the V Master Plan for Spanish Cooperation 2018-2021 considers Argentina as a country of “advanced” cooperation, with which “an advanced dialogue will be maintained on sectoral policies and technical and institutional cooperation schemes.” Right now, ongoing projects focus on agriculture, water and sanitation, cultural and scientific cooperation and institutional strengthening, gender equality and social justice.

And in terms of culture, Exteriors highlights the strong Spanish presence in film festivals (led by the Buenos Aires Cultural Center), participation in the Buenos Aires International Book Fair or programs for the “recognition of cultural rights to vulnerable groups”.

When Milei took office last December, the Spanish representation was led by King Felipe, who met with the president at the San Martín Palace, the headquarters of the Argentine Foreign Ministry. The Government only sent a Secretary of State, not ministers, as a sign of distance from a populist very far from the postulates of La Moncloa.

Now we face a call for consultations to an ambassador, which consists of an order issued by Foreign Affairs for its ambassador in another country to “appear urgently in order to report on a certain matter and receive particular instructions.” In this case, the highest representative of Spanish diplomacy in Argentina returns to Spain immediately after being requested by Foreign Affairs. Apologies from Milei, for now, have neither arrived nor are they expected. The European Union endorses Madrid’s position.

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