Mercosur and the Malvinas: An Argentine question alone

In the previous post, some readers questioned how the Argentine government could unilaterally offer the Falkland Islands access to Mercosur. The answer is easy: Mercosur recognizes Argentine sovereignty over the islands. The Mercosur parliament ratified the previous declaration in stronger terms in August 2016.

The upshot is that Mercosur-Falklands relations are in the hands of Buenos Aires. If the Argentine government chooses to give the Falklands access to its market, then those goods will be Argentine to all extents and purposes. They can therefore not only be re-exported to the rest of Mercosur, they can be exported directly to other Mercosur ports. There is no need for anyone to recognize U.K. sovereignty ... or even the local government of the Falklands. All that is needed is for Argentina to declare that it will treat exports from the Malvinas as local production and ask Mercosur to do the same.

Now, in fact Mercosur is not so legalistic: the European Union this is not. But no other Mercosur nation has ever given any sign of opposing Argentine claims over the island. They all recognize that to do so would cross an Argentine red line and sound the death knell for the troubled organization.  Given that, and the relative unimportance of squid to those countries, they will follow the Argentine lead.

Argentina, of course, will not give the Falklands access to their market without extracting a pound of political flesh from the U.K. I am not sure what form that pound will take: it could be as little as having London agree to discuss the question.  So do not expect revolutionary change. Do, however, expect incremental Argentine gains in what will be a very long game. 

Comments

[J.H.]

Quite interesting!

It does indeed seem like it would be fairly easy to do, but for Mercosur access to be utilized to make up for the loss of the EU squid market due to a chaotic "walk away" Brexit*, Falkland exports would have be to be repackaged or relabelled as coming from Argentina to qualify as a Mercosur export in some jurisdictions outside of Mercosur. This would probably tack with those countries not explicitly recognizing Argentina's claims (so probably in Latin America generally and I think the People's Republic of China, an Argentine declaration that it will treat exports from the Malvinas as local production might be all that is needed). This might include the EU, unless after Brexit the EU drifts towards supporting Argentina's position (especially as the Falklands would no longer be listed as an overseas country or territory of a member state anymore).

*and even an agreed and amicable Brexit might hold surprises like one analysis I saw wherein even a smooth Brexit that resulted in a simple copy and paste of the the EU-Korea FTA for a new UK-Korea FTA would mean cars manufactured in the UK would be subject to an 8% tariff that they now do not face...