Argentine President Javier Milei has said he would leave Mercosur if necessary to consolidate a free trade agreement with the United States, although he hopes to reach an agreement without having to take such drastic measures.

"There are mechanisms that can be used even within Mercosur, so we believe that it can be done without necessarily having to leave," he said in an interview with Bloomberg reported by Europa Press at the World Economic Forum in Davos.

Milei has not clarified whether she had discussed a possible free trade agreement with Donald Trump or members of his administration while she was in Washington for the inauguration of the new US leader. However, she has clarified that her government has been "working very hard" on an agreement with the United States.

Mercosur, the bloc originally formed by Argentina, Brazil, Uruguay and Paraguay, represents a major potential obstacle to such a deal. The bloc has in the past opposed its members negotiating individual agreements, as it did when Uruguay tried to join one of Asia’s largest trade pacts in 2022.

Milei has been a fierce critic of Mercosur, which he has called a protectionist “prison.” But so far, he has not followed through on campaign threats to pull Argentina out of the bloc, and last year he joined calls for swift approval of a major trade deal with the EU that was signed in December.