Argentina’s President Alberto Fernandez has called on the European Union to renegotiate a landmark trade deal with South America, saying the agreement is unbalanced and a threat to the auto industries of Brazil and Argentina.

Fernandez told Financial Times’s Global Boardroom Conference.

Asked how long this process might take, he said, “As long as the parties want to. It’s like tango. The tango is danced by a couple, you need both of them to want to tango, otherwise it’s very difficult.”

The trade deal between the EU and the Mercosur bloc – Argentina, Brazil, Paraguay and Uruguay – was agreed in principle in 2019 after nearly two decades of haggling. But its conclusion has been shelved amid European objections to Brazil’s poor record of preserving the Amazon rainforest under far-right President Jair Bolsonaro.

The election in October of Luiz Inacio Lula da Silva, who has pledged to preserve the Amazon, to succeed Bolsonaro, raising hopes that a long-awaited deal between the EU and Mercosur might gain final approval. Spain’s trade minister, Xiana Mendez, told the Financial Times last month that she believed he would support the agreement. “It’s very balanced,” she said. We do not support reopening negotiations.

But Fernandez told the Financial Times conference that the environment “isn’t why we don’t get the agreement, it’s an excuse”.

The real reason is that for Brazil and Argentina [as] Car producers, the only car producers in South America, this agreement is problematic because it makes things difficult for us if European competition reaches South America,” he said.

At the same time, he added, South American countries faced a “burden of hurdles” in selling their agricultural exports to Europe, with countries such as France, Ireland and Poland opposing ending agricultural subsidies and allowing competition from Argentina.

“Neither I nor Lula are against the agreement with the European Union,” Fernandez said. You have to keep in mind what this agreement is, because this agreement has problems. . . related to market imbalances.

While the debate over the long-stalled trade agreement with Europe continues, Argentina is striking deals with China, its second largest trading partner after Brazil. Beijing last month agreed to expand a swap facility with Argentina’s central bank to $25 billion, which helps boost the South American country’s meager foreign reserves.

China has also built a space monitoring station in the Patagonian province of Neuquen, which the Center for Strategic and International Studies in Washington says is Works with little Argentinian supervision It can be used to gather military intelligence.

Fernandez rejected the argument Argentina Need to choose between the United States and China, saying that he does not wish to recreate the Cold War era. “Argentina has to do what works best for Argentina,” he said. “The US is very concerned about what China might do in Latin America but China could do . . . just like the US could do in Latin America, they could come and invest.”

Argentina is building a naval base at Ushuaia in southern Patagonia to support ships patrolling the South Atlantic and Antarctica, but Fernandez called “fictional” news reports that China was involved. He said, “There is no such thing.” “In Argentina you cannot have Chinese, American or French military bases . . . because we are a sovereign country.”

The South American country faces dire economic challenges, with inflation approaching 100 percent annually, access to international financial markets largely cut off after a default in 2020, and exchange controls that have pushed dollars on the black market to nearly double the level. the official.

Fernandez said the Argentine economy was “strange” because, despite high inflation and “unpayable” levels of debt, the country also had record levels of foreign investment and exports in the first half of the year, unemployment was low and consumption was increasing.

“If you cling to the image of an inflated Argentina . . . of an indebted Argentina, you will say Argentina is a mess,” Fernandez said. “But there is also all this data that points to sustainable growth and huge potential.”

He said the solution to the longstanding economic problems of this South American country is to add value to its goods. “Argentina must stop being an exporter of raw materials and become an industrialized country.”

Argentina holds presidential and congressional elections next October, and opinion polls show Fernandez’s Peronist party trailing the conservative opposition. The president has said in the past that he would like to run again but that his approval ratings are low, and he told the Financial Times conference that he was “totally immersed” in governance.

His powerful vice president, Cristina Fernandez de Kirchner, said on Tuesday she would not run again Convicted of corruptiona ruling against which she plans to appeal.

“I’m not thinking of re-election, believe me,” said President Fernandez. I think how to solve all these problems[of the country]. . . I want to finish my tenure having seeded Argentina with opportunities for the person who will succeed me.”

Additional reporting by Andy Pounds in Brussels