LatAm Daily Briefing: Argentina Claims Progress in Debt Talks; Brazil-Mexico Trade Deal Postponed; Peru Ponders More Social Aid

25 June: Find out what's been happening in Latin America with our latest news update.

25 June: Find out what's been happening in Latin America with our latest news update.


Argentina has reached an understanding with one group of its creditorsto restructure its $65 billion in foreign debt, but major differences remain with another key group, Economy Minister Martín Guzmán said on Thursday. The “understanding” falls short of an agreement however, according to Bloomberg. “We’re in conversations with two major groups. With one of them we have managed to reach an understanding on a number of important issues,” Guzmán was quoted as saying. There have been “bigger differences” with the so-called Ad Hoc Group, he said. After defaulting on its debt payments for the ninth time in May, Argentina has since extended talks with its creditors until July 24th.

A free trade deal in heavy automotive vehicles between Brazil and Mexico has been pushed back for three years, Mexico’s Economy Ministry said on Thursday. The free trade deal was due to come into effect on July 1st, but will now not come into force until 2023, the ministry said. The delay of the start of the treaty was not directly attributed to the Covid-19 pandemic. Mexico’s new free trade deal with the US and Canada, the USMCA, which replaces NAFTA, that came into effect in 1994, will come into effect on July 1st, after having been pushed back a month due to the pandemic.

Workers at Chile’s state-owned copper miner Codelco are demanding an investigation into the death of a third employee at the company from Covid-19. Codelco, the world’s largest copper producer, had on Wednesday reported the death of one of its workers from the virus, but in an internal memo said the miner had contracted the coronavirus outside of work, Reuters reported. Chile´s Federation of Copper Workers (FTC), one of the country’s largest miners’ unions, reportedly rejected the claim, demanding an investigation into the man’s death and calling Codelco´s management of the crisis “incompetent.” Chile’s death toll from Covid-19 currently stands at 4,903, with more than 259,000 infections, and the country remains in lockdown after a spike in cases last month following a relaxing of quarantine measures.

Colombia's natural gas producers are forecasting a shallower long-term decline in production this year compared with 2019, in spite of the country's shrinking reserves. According to Colombian gas chamber Naturgas, the sector's 2020 annual declaration of production capacity for the period of January 2020 to December 2028 averaged 8% higher over 2019, even though projected output is still on course to fall to just under 400mn cf/d at the end of the nine-year period, from around 1.1bn cf/d at the start of 2020. Naturgas highlighted a projected increase in output in 2024-25, while the projection for uncontracted gas available to the market was up by an average of 17.4%, Naturgas said.

Mexico’s President Andrés Manuel López Obrador says he expects to reach an agreement with Spanish power generation company Iberdrola, amid reports the company plans to pull out of a planned $1.2 billion investment to build a power station in the eastern state of Veracruz. Iberdrola is the largest private power generator in Mexico, but has reportedly failed to reach an agreement to sign a power supply deal with the country’s state utility CFE from the proposed plant. López Obrador told reporters at his daily press conference on Thursday that he has received a letter from the Spanish company setting out its willingness to reach an agreement, and to continue to invest in Mexico. The president said his Energy Minister Rocío Nahle and CFE chief executive Manuel Bartlett would meet with the company in an attempt to reach an agreement.

Peru’s government is considering awarding more financial support to the country’s most vulnerable families, according to Economy and Finance Minister María Antonieta Alva. The government has already made handouts to poor families, but which were complicated by the fact that the country’s poor do not use bank accounts, making the delivery of such funds difficult. “We are evaluating important measures to protect [the poorest] households,” Alva said, adding that the poorest families will require additional financial assistance, in addition to the food aid programs they are already entitled to. It is estimated that around 70% of Peru’s population work in the informal employment sector, making them more vulnerable to the economic adversities caused by the closing of the country’s economy during the Covid-19 pandemic.

 

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