The victory of a far right candidate in Argentina's presidential election should not derail the long-awaited trade agreement between South America and the EU, according to an insider.

Javier Milei is set to take office in Argentina after winning close to 56 percent of the vote in a run-off poll, well ahead of his nearest rival.

Milei has promised a radical reshaping of the Argentine state under his premiership. Key policies include dollarizing the economy, closing several government ministries and "blowing up" the Central Bank which Milei blames for the country's acute inflation problem.

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His victory has been welcomed by former U.S. President Donald Trump, who said Milei would "make Argentina great again."

Milei's election has raised concerns in Europe that the EU-Mercosur trade agreement, which has been under negotiation for two decades, could be in peril. Milei has previously pledged to back out of the bloc.

However former Brazilian trade secretary Welber Barral says he does not see Milei, a climate change skeptic, following through on his threats to withdraw from the Mercosur common market encompassing Brazil, Paraguay, Uruguay and Argentina. 

"The opening of markets is part of Milei's discourse, so he will probably support the EU agreement, in spite of his criticism of Mercosur," Barral said. 

Current Brazilian officials involved in the talks, speaking anonymously to Reuters, said they were optimistic Milei would not hold to his hard line position and derail the advanced talks.

The likely candidate to take over as Argentina's new foreign minister, Diana Mondino, has said the country is likely to push for a modification of the Mercosur rules, but that it should not be "eliminated."

"Cows for Cars"

Nicknamed the "cows for cars" accord between the EU and the four-nation group, the proposed deal aims to promote free trade between the two continents by minimizing tariffs and integrating standards.

Negotiations have been delayed by EU calls for stricter environmental conditions on South American exports, namely obliging firms to prove their goods have not been produced on recently deforested land. Brazil and Argentina, which argue that wine and automotive exports could be affected, have been seeking concessions from Brussels.

"Angry communist"

Milei's victory has also raised concerns in South America's biggest economy, over a possible worsening in relations. Argentina's new leader has previously dubbed Brazil's President Inacio Lula da Silva an "angry communist." 

His own election campaign was boosted by support from Brazil's opposition former leader, the far-right Jair Bolsonaro. Brazilian negotiators say it is hoped an announcement on the Mercosur EU deal can be made at the bloc's next summit in Rio de Janeiro on December the seventh, three days before Milei is due to be sworn into office.

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