The return of democracy in Argentina (1983) and Brazil (1985) presented a unique opportunity to reconfigure foreign policy priorities, with the imperative of ensuring political transition.
The need to address the external debt incurred by the dictatorships and to stabilize and reform the economy to promote development, prompted the leaders of both countries to transform an old geopolitical rivalry (which was intense and prolonged) into a relationship of strategic cooperation.
To that end, in November 1985, Presidents Raúl Alfonsín (Argentina) and José Sarney (Brazil) created the “High Level Joint Commission for Bilateral Economic Cooperation and Integration” and signed the “Joint Declaration on Nuclear Policy” initiating an ambitious process of integration between their countries.
In a context of a continental “rebirth” for democracy, they sought to delete the main hypothesis of conflict between the two countries (an invasion or armed conflict) in order to redirect economic, human and political resources towards the development of Brazil and Argentina.
Both politicians, convinced democrats, cultivated a friendship that allowed them to build trust, which until then had been absent in the institutional link between Brazil and Argentina, essential to overturn the secrecy surrounding national nuclear plans, and thus stop a potential arms race in the South Atlantic.
During those years, Argentina implemented the “Austral Plan” (mid-1985), a program aimed at stopping inflation. Brazil implemented the “Cruzado Plan” (February 1986), with the same objective. A certain synchronization, if not macroeconomic coordination, was emerging between the two countries.
The good relationship between the presidents strengthened a climate of trust to share experiences and good practices between the administrations. The plans, however, did not have the expected results and the nascent democracies of Argentina and Brazil faced presidential elections in 1989 in a context of economic turbulence due to high inflation.
In Argentina, Carlos Menem won and in Brazil, Fernando Collor de Melo won. Both triumphed by presenting themselves as political “outsiders”, although both were governors and had a traditional political career.
The geopolitical context they found was marked by the fall of the Berlin Wall and the “Washington Consensus”, a series of market reforms to stabilize and reform the economy. In the West, large economic blocs were being organized (such as the European Union, established in Maastricht in 1992 after decades of negotiation, and the North American Free Trade Agreement in December of that year).
Encouraged by the growth of bilateral trade generated by the treaties signed by their predecessors, Collor and Menem strengthened the integration process and, imbued with the spirit of the times, signed the Treaty of Asunción (March 1991), establishing the Common Market of the South (Mercosur).
The Treaty of Asunción institutionalized the bilateral integration process initiated by Alfonsín and Sarney, expanding it with the incorporation of new actors (Uruguay and Paraguay).
At the same time, the Brazilian-Argentine Agency for Accounting and Control of Nuclear Materials (ABACC) was also created, a binational institution that put an end to any potential arms race in the South Atlantic, turning it into a zone of peace.
The personal relationship between Presidents Collor de Melo and Menem played an important role. Both had strong incentives at home (where they won elections by cultivating the image of new reforming leaders) and at the international level (where consensus in favor of economic integration and market reforms prevailed) to advance political integration and reform the economy.
This good personal interaction, encouraged by the geopolitical context and the domestic situation, continued between Menem and Itamar Franco and, later, with Fernando Henrique Cardoso.
During those years, Argentina adopted the “Convertibility Plan” (March 1991) to combat inflation and resume economic growth, and Brazil would implement the so-called “Real Plan” (June 1993). The synchronization of the 1980s began to transform into a certain macroeconomic coordination, facilitated by the prevailing consensus at a global level.
The domestic conditions of both countries changed, as did the international context, with the arrival of the new century.
The devaluation of the real in Brazil in 1998 was followed by the very serious crisis in Argentina in 2001. Both had a different impact on each of them, with Argentina being the hardest hit country. Brazil exercised “strategic patience” with Argentina in 2001, when five presidents succeeded one another in one week and the country suffered a political and economic crisis that only began to develop in mid-2002.
At the international level, the 2001 recession in the United States, although short-lived, had long-lasting effects (even considered structural by some) on the labor market and the so-called “mortgage crisis” of 2007/8 put the international financial system in jeopardy (intoxicated by derivative products) triggering the most serious recession in the West since the “crash” of 1929.
The political leadership of Luiz Inacio “Lula” Da Silva in Brazil and that of Néstor Kirchner in Argentina were influenced by this change of era and, in some way, are a result of and reflect this new reality.
Although both leaders came from similar ideological backgrounds (or at least, that is what they claimed) and projected a good interpersonal relationship, they were not able to resolve the challenges that the new phase of national economies (and the global economy) presented for the region.
The exceptional growth of the international economy in those years (between 2003 and 2007 more than 110 countries grew by more than 5%) helped to conceal tensions, but the Mercosur countries faced the challenges of the time with divergent policies.
The economies of their countries grew at different rates and Argentine inflation began to soar during the mandate of their successors (Dilma Rousseff and Cristina Kirchner).
The political coincidences projected an image of harmony in the international positioning (most of the parties in the region were of the same political sign) and reinforced the defense of democracy and the “social” dimension of integration, but they were not enough to produce progress in economic matters. Trade barriers and obstacles based on technical or health regulations proliferated.
In those years, as a result of processes that matured over decades, Brazil managed to overcome its challenges in terms of food and energy security, while Argentina once again struggled with the old ghost of high inflation. It is difficult to integrate two countries when the monthly inflation in one of them is equal to that of the other annually.
The situation improved, but did not change radically, when Mauricio Macri assumed the Argentine presidency and Michel Temer completed Rousseff’s term to be succeeded, in turn, by Jair Bolsonaro in the Brazilian presidency.
In the last 20 years, the impulses to the process of binational and regional integration have lost dynamism. The economic and political evolution of the countries diverge markedly.
And although the international economy has provided incentives, the existing institutions in MERCOSUR have barely been enough to maintain the rituals of meetings and the bureaucratic functioning of the bloc, in a context where interrupting the integration process or altering it (with the damage that this would represent for important industrial complexes, such as the automotive industry, for example) has significantly higher costs than maintaining the “status quo”.
In this context, it is difficult for interpersonal relationships between presidents to play a constructive role, which modifies the trajectory of the bilateral relationship, even when there is personal identification and ideological empathy between the leaders.
This is perceived in a more pronounced way when these characteristics are absent, as has been the case since 2019 onwards (with the relationship between presidents Bolsonaro and Fernández and currently between Lula and Milei).
Even in the presence of a good interpersonal relationship or ideological coincidence, the integration process can stagnate, with disappointing results (as occurred during the PT governments in Brazil and those of the Frente para la Victoria in Argentina or those of Mauricio Macri and Temer-Bolsonaro).
This occurs especially when the incentives of the context stimulate divergent political responses in the absence of efficient institutions that allow the resolution of conflicts (as occurs in the matter of homogenization of technical regulations to eliminate non-tariff restrictions or with issues such as the Hydroway).
In any case, it seems clear that the geopolitical context and the institutional strength of the integration process play a key role in moderating the dynamics of presidential diplomacy.
