The defeat of Argentine president Mauricio Macri and his liberal agenda already affects the Brazilian economy; Jair Bolsonaro and Alberto Fernández exchange accusations

Argentine President Mauricio Macri was defeated by a large advantage in the country's primary elections by opposition candidate Alberto Fernández, whose deputy is former President Cristina Kirchner.

The advantage of Fernández's bid scared the financial markets. The candidate's unorthodox economic agenda is not accepted by the financial market.

The problem is that Macri's orthodox and reformist economic agenda has not brought the expected growth, but the country has worsened in many ways. When he was elected, Macri promised to end poverty, but it increased during his rule. He said he would run a liberal bias government, but ended up freezing prices for more than 60 products.

After 4 years, the population did not feel life improve with Macri. Many say it got worse. The answer, at the ballot box, is the return of Cristina Kirchner, Fernández's vice president.

The result has caused the Argentine stock market to plummet 48% (the biggest global loss on a stock exchange in one day in the last 70 years, according to Bloomberg), and the dollar has risen 30% to 58.85 pesos and was also felt in Brazil, which registered a drop of 2% in Ibovespa and dollar to $ 4. Argentina is an important market buyer of Brazilian goods - were $ 15 billion in exports last year alone.

Brazilian exports to Argentina have already shrunk by 40% in the first seven months of 2019.

The change could also affect the Brazilian market as Macri is a strategic ally of the country in negotiations for a deal between Mercosur and the European Union. President Jair Bolsonaro went public with open criticism of candidate Alberto Fernández, who responded in the same tone by calling Bolsonaro "racist, misogynist and violent."

After 20 years of negotiations, Mercosur and the European Union seal a historical agreement

After twenty years of negotiations, Mercosur (Argentina, Brazil, Uruguay, and Paraguay) and the European Union have concluded a free trade agreement between the two blocs. The new pact between the two blocs will bring together economies that together account for around 25% of world GDP and a market of 780 million people.

The free trade agreement could represent an increase of US $ 87.5 billion of the Brazilian GDP in 15 years. It covers both tariff and regulatory issues such as services, government procurement, trade facilitation, technical barriers, sanitary and phytosanitary measures, and intellectual property.

Paradoxically, the agreement is a blow to politicians opposed to globalization such as the current Brazilian chancellor Ernesto Araújo, who has already said he would fight to reverse globalization.

However, both Araújo and President Jair Bolsonaro celebrated the agreement reached today between Mercosur and the European Union.

It is very strange, to say the least, that a government in which the Minister of Economy said publicly that Mercosur would not be a priority in the new government, and the chancellor openly criticizes what he calls "globalism" and says that Europe is a "culturally empty space" is now celebrating this deal.

Agreement between Mercosur and the European Union should be signed in July

According to O Globo newspaper, the expected free trade agreement between Mercosur and the European Union should be signed in July this year. The main technical points have already been closed and pending discussions include rules on drug patents and the release for the entry of European wines. Brazil would have signaled an opening in the automobile market but faces resistance to expand the advantages in agribusiness.

The Europeans want a greater opening of the Brazilian automobile market. The members of the European Union want to increase their exports in this sector. In return, they promise to consider greater access to products such as ethanol, sugar, meats and other agricultural goods, where Brazil dominates.