Following the US exit from the Paris climate agreement in January, Argentina’s government, under President Javier Milei, is evaluating whether to follow suit – but analysts say leaving the global accord would be legally tricky and could damage relations with some of the country’s key trading partners and donors.

Earlier this month, right-wing populist leader Milei told French news magazine Le Point he was considering quitting the Paris pact “because I do not adhere to the environmentalist agenda”.

Milei campaigned on a ticket of climate change denialism, has supported major oil and gas projects and cut the environment ministry’s budget by almost half. He also pulled Argentina’s negotiating team out of the COP29 climate conference in Baku last year.

On February 5, the same day the president’s comments were published, his spokesman Manuel Adorni told journalists that Argentina was mulling a withdrawal from the Paris Agreement, but no decision had been taken at that point.

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For the past year, even before Trump announced he would pull the US out of the Paris pact, Milei’s administration has been considering the implications of such a move. But analysts warn that doing so could hurt trade relations with close partners like China and the European Union (EU), and cripple climate finance flows into the country.

Experts also told Climate Home Milei would need to follow due process by seeking parliamentary approval for a withdrawal.

Congressional hurdle

On his first day in office on January 20, US President Donald Trump issued an executive order to kick-start the one-year process of pulling the US out of the Paris Agreement – the same way former President Barack Obama joined the accord. But Argentina is a different story.

The Latin American nation ratified the 2015 climate agreement through a law approved by Congress, which means that Milei would need to follow the same route to leave it.

“It was approved as an integration treaty, with a status below human rights treaties and above general laws,” said Andrés Nápoli, executive director of the Environment and Natural Resources Foundation (FARN).

“If (Milei) does not go through Congress and decides to adopt the decision unilaterally, (he) would be committing a crime,” Nápoli told Climate Home.

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Despite lacking a majority in both legislative chambers, Milei managed to negotiate his way through his first year in office, but a Paris Agreement exit might be more complex, as the low-carbon transition represents an economic opportunity for several provinces.

Argentina’s recently appointed new undersecretary of environment, Fernando Jorge Brom – a business consultant with no experience in the sector – is yet to reveal his climate agenda, including his stance on the Paris Agreement, according to local NGOs. His predecessor, Ana Lamas, resigned two weeks ago “because of personal reasons due to exhaustion”.

Trade partners back Paris

The EU is Argentina’s third-largest trade partner, with food products like soy and peanuts being the main exports. Its biggest trade partner is Brazil, the host of this year’s COP30 climate summit.

Last December, the renegotiation of the commercial agreement between the EU and Mercosur – a trade bloc that includes Argentina, Paraguay, Brazil and Uruguay – included a new article citing the Paris Agreement as an essential element.

“Recognizing the role of trade in contributing to the response to the urgent threat of climate change, each party shall remain a party, in good faith, of the UNFCCC and its Paris Agreement,” states a key clause in the text.

If Argentina were to leave the climate accord, the trade deal with the EU would be partially or totally suspended, according to its terms. It would also isolate the country from the rest of the Mercosur members, which could remain in the agreement.

The updated EU-Mercosur agreement still needs to be reviewed by legal teams and approved by respective parliaments.

Argentina’s second trading partner is China. Last month, in response to the US decision to leave the Paris Agreement, Beijing’s foreign ministry spokesperson Guo Jiakun said, “China’s resolve and actions to actively respond to climate change will remain unchanged,” adding that “China will work with all parties to actively address the climate challenge and promote a global green and low-carbon transition.”

Finance needs

For the past two decades, Argentina has been struggling with economic instability, macroeconomic imbalances and a stratospheric inflation rate. More recently, climate impacts resulted in a production loss of 50 million tonnes of cereal crops between 2022 and 2023 due to a record drought.

Remaining in the Paris climate pact would allow Argentina to use the treaty as a framework to channel investments, said Enrique Maurtua Konstantinidis, an Argentinian climate policy analyst and consultant.

“It gives [Buenos Aires] access to adaptation funds, capacity building programmes and international cooperation for the development of projects aligned with climate action that contribute to a country’s infrastructure and society,” he explained.

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Of the 72 projects the World Bank approved for Argentina in the last decade, 23 were directly linked to policies to reduce emissions and adapt to climate change.

The Inter-American Development Bank has also financed projects supporting the emergency response to floods in Corrientes and Entre Ríos provinces, as well as forest fires in Córdoba.

IMF indifference?

In 2018, Mauricio Macri’s government contracted debt with the International Monetary Fund (IMF) of $44 billion, making it the largest disbursement in the fund’s history at the time.

In 2022, Argentina and the IMF agreed an extension to pay back the debt over 10 years. In December 2024, the interest part of the loan for the first two years was paid. Now Milei’s government is seeking to negotiate a debt restructuring of the same loan, which could include climate considerations.

“The IMF has an important role to play in helping its members institute fiscal and macroeconomic policies to help address these climate-related challenges,” the fund says on its website, adding that “climate considerations are now embedded in their bilateral and multilateral surveillance, capacity development, and lending.”

In the 2022 agreement, the objectives set for Argentina included three specific climate policies: a new electric mobility law, a “Green Productive Development Plan” to boost green skills and the circular economy, and a stronger environmental perspective in the national budget.

Yet those are not mandatory conditions to access funds, said Mercedes D’Alessandro, analyst and former director of economy, equality and gender at the Ministry of Economy in the previous administration.

“For the debt restructuring sought by Milei’s government, the [IMF] might have a deeper interest in macroeconomic goals,” said D’Alessandro.

In a recent evaluation, the IMF drew attention to certain commitments in Argentina’s 2022 programme of policy objectives that were not met – among them gender goals – but not climate policies.

“Climate change is not on the IMF’s agenda of priorities – or not specifically with Argentina,” D’Alessandro told Climate Home.

While that may be the case with the country’s individual fiscal situation, Maurtua Konstantinidis warned that snubbing the international climate regime could shut Argentina out of a broader global effort – now gathering pace – to ease the high debt burdens of many developing countries so they can spend more on climate action.

“At a time when there are talks of reforms to the financial system in pursuit of a more sustainable and fair future, staying outside of these spaces means losing opportunities for the future – opportunities that a country like Argentina needs,” he added.

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Risk of financial fallout may deter Argentina from leaving Paris Agreement