MEXICO CITY: Mexican President Andres Manuel Lopez Obrador said on Tuesday that his country will not be a part of a common currency project planned by Brazil and Argentina.
Speaking at a press conference, Lopez Obrador dismissed plans by the governments of the Latin American countries to set up a currency called the “sur” (south) in a bid to reduce the US dollar’s commercial leverage over the region.
“We wouldn’t agree to that,” he said, underscoring the need for a US dollar-backed domestic currency.
“For many reasons, we have to continue keeping the dollar as a benchmark,” he added.
The proposed currency was discussed during the new Brazilian President Luiz Inacio Lula da Silva’s visit to Argentina ahead of the 7th summit of the Community of Latin American and Caribbean States (CELAC) in Buenos Aires.
Proposed currency aimed at reducing reliance on US dollar
The purpose behind the new currency is to boost regional trade and reduce reliance on the US dollar since many countries are not able to obtain dollars, restricting trade in the region.
Lula said while speaking at a press conference in Buenos Aires on Monday, “If it depended on me, we would always have external commerce in the same currency of the other countries so we would not have to depend on the dollar.”
Meanwhile, Argentina’s President Alberto Fernandez called the project challenging but necessary.
“We know what happens to national economies that have to function with foreign currencies, and we know how harmful that is,” said Fernandez.
The envisioned project also seeks to expand to other regional countries.
“If there is something we have in common with Lula, it is the need to integrate Latin America,” said Fernandez.
Mexico’s president Lopez Obrador has twice proposed forming a European Union-like coalition in Latin America and the Caribbean. However, he has also supported Latin America’s economic integration with North America.
Lopez Obrador, during the North American Leaders’ Summit in early January, called on his US counterpart Joe Biden to end the US’ “disdain” for Latin America and the Caribbean.
The Mexican president’s idea of a united Latin America is envisioned within the framework of US, Canadian and Mexican commerce which is looking to act as an economic bloc against Asian trade. — APP
