October 27, 2019

Argentina President-Elect Calls for Brazil’s Lula to Be Freed
(Bloomberg) -- Alberto Fernandez has set the stage for his first diplomatic tiff even before he takes office as Argentine president. An hour after his election win, he called for Brazil’s left-wing legend Luiz Inacio Lula Da Silva to be freed from prison.Fernandez told supporters in Buenos Aires that Lula, who governed Brazil from 2003 through the end of 2010, was unfairly jailed. While he made similar comments during the campaign, his decision to raise it in the election aftermath risks friction with Brazil’s right-wing President Jair Bolsonaro, a political rival of Lula.Fernandez, whose win puts a left-wing political movement known as Peronism back into national power in Argentina, visited Lula at his prison in the southern Brazilian city of Curitiba in July. Bolsonaro meanwhile has warned Brazil could leave the Mercosur trade bloc if Argentina pivots to the left after the elections.Lula is serving nearly nine years for corruption and money-laundering. Last month he rejected prosecutors’ request that he leave prison for house arrest, in accordance with a Brazilian law that lets prisoners with good conduct and who have already served one-sixth of their jail time complete their sentence under a less-restrictive system.A Latin American Brexit? Analyzing Brazil’s Threat on MercosurWhat Our Economist Says“Bolsonaro has been outspoken against Fernandez throughout the campaign. Economy Minister Paulo Guedes defends more trade openness, and he has suggested in the past that this would be easier outside Mercosur. Fernandez’s victory may provide an additional political incentive for Bolsonaro to seek more independence from the bloc. Less proximity with its main trade partner would be bad news for Argentina -- as boosting exports is one of the country’s best hopes to generate the dollars it needs.”\-- Adriana Dupita, Latin America economist, Bloomberg EconomicsMercosur comprises Brazil, Argentina, Paraguay and Uruguay. The bloc recently reached a trade deal with the European Union after 20 years of talks. Brazil runs a trade surplus with Argentina.Lula Rejects Jail Release as Clash With Brazil Judges EscalatesLula was the most high-profile figure ensnared by a graft probe known as Carwash, which uncovered a kickback scheme involving state-owned companies, construction firms and politicians. His arrest prevented him from running for president last year, even as opinion polls showed him leading the race that ultimately was won by Bolsonaro.To contact the reporter on this story: Juan Pablo Spinetto in Mexico City at jspinetto@bloomberg.netTo contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net, Jon HerskovitzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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