The New York Times
January 20, 2002

Argentina and the U.S. Grow Apart Over a Crisis

              By LARRY ROHTER

              BUENOS AIRES, Jan. 18 When Eduardo Duhalde became Argentina's president at the start of the
              month and ended a decade-long policy of linking the peso to the dollar, it was not just the economic
              model here that changed. Foreign policy is also being refashioned, with a discernible distancing from the
              United States.

              This reorientation "goes far beyond the cosmetic and rhetorical changes" that are to be expected any time a
              new government takes power, said Carlos Escudé, the author of several books about Argentine foreign policy
              and a former government adviser. "The tone of the exchanges has been relatively diplomatic so far, but the
              Duhalde government could be heading toward a major confrontation with the Bush administration."

              Even before President Carlos Saúl Menem, a Peronist, yoked the peso to the dollar in April 1991, Argentina
              had become Washington's staunchest Latin American ally. In a phrase that became famous but horrified many
              within the traditionally anti- American Peronist movement, Mr. Menem's foreign minister, Guido di Tella,
              initially described those ties as "carnal relations" though the term "automatic alignment" later came to be
              preferred.

              Whatever its name, that policy made Argentina the only Latin American country to take part in the Persian
              Gulf war and to vote consistently with the United States on issues like human rights violations in Cuba.

              But the new government has been stung by the Bush administration's
              apparent indifference and lack of assistance during the current crisis, as the
              country has grappled with recession, bankruptcy, default on its debt and a 40
              percent devaluation of the peso. Recent declarations here have made it clear
              that the era of "carnal relations" is over.

              "I don't see why we can't be polygamous" on questions of foreign policy and
              trade, was how the foreign minister, Carlos Ruckauf, described the new
              approach to reporters. Argentina now places an especially high priority, he
              said, on improving relations with Brazil and the European Union.

              Already, the new government has begun firing broadsides at the International
              Monetary Fund, which has long been seen here as an extension of the United States Treasury Department.

              After the fund's officials said that they did not think a new dual exchange rate here was viable and that they
              were waiting for the Duhalde team to present a "coherent" economic plan, the deputy economy minister, Jorge
              Todesca, said, "They should talk less if they don't have anything interesting to say."

              Most analysts here contend that even if relations between Argentina and the United States cool, it is unlikely
              that there will be a return to the outright hostility that prevailed both during Gen. Juan Perón's rule and the
              reign of the military dictatorship that took power after his death.

              "The United States and Argentina had a conflictive relationship for 50 years before Menem," said Jorge
              Campbell, a former deputy foreign minister, "but the Menem-di Tella policy was intended to increase
              Argentina's links with the rest of the world, and that opening up to the outside continues."

              But others contend that a deeper conflict is being masked for the moment and will soon have to emerge.
              Argentina's default on its $141 billion public debt and its "violation of contracts across the board is a major
              challenge to the governability of global capitalism," Dr. Escudé said, "and whether the U.S. likes it or not, it
              has the main responsibility to maintain the rules of the game."

              The principal beneficiary of any reorientation of foreign policy promises to be neighboring Brazil. Once a rival,
              Brazil has become Argentina's main ally and its senior partner in Mercosur, the 11-year-old South American
              trade group.

              "The Brazilians have every reason to be delighted," said Dr. Escudé. "Argentina is now evolving toward a
              relationship in which it will become a sort of a new Rio Grande do Sul," Brazil's southernmost state.

              In an interview here, a senior government official confirmed that approach. "We intend to move toward a
              common market and a common currency" with Brazil, he said, adding that Argentina needed "a more
              balanced situation" in its foreign relations.

              Brazil has responded to those overtures with warmth, pledges of support and symbolic shows of friendship.

              More concretely, the shift means that Brazil now has another ally in its struggle against what it regards as
              American protectionism in foreign trade.

              American officials have long complained of what they call Brazilian "obstructionism" in negotiations to create a
              Free Trade Area of the Americas.