Argentina has announced that it will withdraw from ongoing trade negotiations being undertaken by the Mercosur, a trading bloc composed of Argentina, Brazil, Paraguay and Uruguay.
Officials from the country’s foreign ministry cited concerns over domestic economic struggles, the COVID-19 pandemic and what it perceived as the rushed negotiation of a half-dozen free trade agreements as its reasons for stepping back.
“Argentina made it clear that international uncertainty and the state of our economy suggest halting progress on those negotiations,” the foreign ministry said in a statement.
Among the ongoing trade deals from which Argentina is bowing out are with Canada and South Korea. This is likely to come as a blow for the country’s olive oil exporters as demand for olive oil is steadily growing in both.
Roughly 80 percent of Argentina’s annual olive oil production is destined for export.
However, officials from the ministry emphasized that Argentina would continue to work separately on the implementation of the previously agreed free trade agreement between the Mercosur and European Union.
The move would open the doors for tariff-free exports of olive oil from Mercosur countries to the E.U. and vice versa, as soon as the agreement is ratified by all 27 European member states. All four Mercosur members have already signed off on the agreement.
Upon ratification, Argentina is poised to be one of the big winners of the agreement. The removal of tariffs will open up access to emerging and lucrative olive oil markets in Northern Europe for Argentine producers.