Despite being the largest coalition in both of Argentina's Congressional houses, President Mauricio Macri's ruling coalition, Cambiemos, does not have a majority of seats and must negotiate with members of the opposition to implement controversial labor reforms. To this end, Argentine Minister of Labor Jorge Triaca met Nov. 15 with the country's largest labor union, the General Confederation of Labor (CGT), to discuss Macri's labor reform proposals. In the meetings, both sides reached a basic agreement over some points, such as better protection for companies against labor lawsuits and making labor outsourcing practices more flexible. In exchange, CGT demanded the government extend paternity leave. The discussions are notable because the CGT is one of the main roadblocks to labor reform, but their support is crucial to actually passing the measures.

Argentina's private sector has been pressuring the government to enact labor reform since Brazil, Argentina's main trade partner, approved a series of changes to its labor laws. Yet, there remain many pending issues over Macri's labor reform proposals. To address these concerns, the Argentine government in Buenos Aires will create a commission that will have up to 180 days to evaluate with CGT whether to permit small companies to hire independent contractors, which is a measure that CGT is reluctant to accept. Buenos Aires hopes to send a rudimentary labor reform proposal to Congress by the end of the year, but deliberations over certain issues, such as the role of independent contractors in Argentine industry, are likely to drag on through next year.

Buenos Aires' initial agreement with CGT could facilitate other negotiations between the government and opposition figures in Congress, including planned tax and pension reform proposals. The tax reform may reduce taxes for some sectors of the Argentine economy, while the pension reform would likely seek to increase the minimum age to retire to reduce the country's fiscal deficit. These economic reforms aim to reduce the cost of doing business in Argentina and also to help the government streamline trade negotiations that the Common Market of the South (Mercosur) is conducting with several other countries.

Though negotiations over Macri's economic reform proposals may accelerate next year, there will still be substantial pushback from Congress. Nevertheless, the preliminary agreement over labor reform between Buenos Aires and CGT does increase Macri's chances of implementing his key reform policies.