President Mauricio Macri will travel to South Africa this Thursday to participate in the annual BRICS summit, where Brazil, Russia, India, China, and South Africa come together to discuss common issues. The search for responses to the threat of a US trade war against China and the EU, including multilateral agreements and other actions, will be the backdrop for the meetings in Johannesburg. As president of the G20, Macri was invited to participate in the encounters.
BRICS is a block of emerging nations formed in 2009 and comprises five countries deemed to be at at a similar stage of newly advanced economic development. Representing over 40 percent of the world’s population, or 3.1 brillion people, the group’s growth rates surpass those of the developed countries of the G7.
The summit begins tonight with a dinner reception and will last until Friday, when the BRICS Plus and Africa Outreach meeting will take place, with the participation of other invited world leaders. Macri will arrive on Thursday, when the bilateral meetings are scheduled.
His presence at the BRICS summit not only will require him to consult his peers on his vision for the G20 summit and the agenda that will be addressed during the meeting in Buenos Aires, but also explore the needs and possibilities of establishing bilateral relationships with BRIC member nations.
Although Macri has not yet confirmed any meeting, the government has expressed the objective to meet with his peers Xi Jinping of China, Vladimir Putin of Russia, and Narendra Modi of India. Another priority, albeit secondary, is to hold meetings with Michel Temer, president of Brazil, Cyril Ramaphosa of South Africa and another non-BRICS invited leader, Recep Tayyip Erdogan of Turkey.
Most importantly, Macri will seek to establish a closer relationship with Xi Jingpin in order to foment bilateral policies to attract Chinese investment in Argentina. In a global economy that shifts investment capital away from insecure markets, strong investment from China would be send a valuable signal to the rest of the world. The government took an important step in that direction last year, with an investment agreement for China to allocate US $30,000 to projects such as railroads, trains, gold and lithium mines, and electric cars.
However, since the implementation of adjustments demanded by the IMF, which stopped construction projects in Santa Cruz, that investment framework has been put under stress. How Argentina and China will continue to build an economic relationship with these added pressures will be an important topic in meetings between the two world leaders.
In his meeting with Putin, Macri will surely focus on expanding Argentine commercial activity in Russia and expanding Russian investment in Argentina. Local exports are currently around US $500 million annually, mostly composed of fruit and fish sales, but the government wants to increase exports of agricultural machinery, beef, and dairy products.
Although there was a US $170 million net export to Russia in 2017, Argentine sales accounted for only 0.4 percent of imports to Russia that year. Given that, and the current trade blockades between Russia, the US, and the EU, there is a lot of room for Macri to move forward with trade agreements with Putin. Trade issues will also be the main topic of discussion with Indian officials, as the magnitude of the Indian market presents great opportunities for imports from Argentina.