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Uruguay favors more trade accords, with or without Mercosur

MercoPress | Monday, September 15, 2008

Uruguay favors more trade accords, with or without Mercosur

Uruguay formally proposed its Mercosur partners to begin a round of negotiations geared to reach trade agreements with the European Union, United States, South Korea and Canada. The proposal had been advanced early August but was formalized early September in Brazil during a meeting of the Mercosur Foreign Relations Commission.

However delegates from Argentina, Brazil and Paraguay abstained from an immediate reply arguing that their countries still had to define the issue, according to press reports in Montevideo.

Uruguay’s president Tabare Vazquez and a delegation of seventy recently returned from a tour of Israel, Switzerland and South Korea. Mercosur and Israel already have a trade agreement but South Korea is interested in reaching a trade understanding and Uruguay also favors a “bilateral relation” if the other block’s members remain undecided. The idea is the framework accord with Mexico which opened the way for Uruguay to establish a bilateral trade agreement.

Uruguay is currently involved in negotiations with United States for a Trade and Investment Framework Agreement, TIFA. The Socialist oriented Vazquez administration was originally interested in a full free trade agreement with the US, but internal dissidence in the ruling coalition plus an implicit veto from Mercosur partners forced the weaker TIFA option.

President Vazquez, Economy minister and presidential hopeful Danilo Astori plus Foreign Affairs minister Gonzalo Fernandez have a close and fluid relation with the George Bush administration.

Elbio Roselli, head of the Economic Affairs and Mercosur Department in the Foreign Affairs ministry said that “for Uruguay the need of Mercosur trade agreements with other countries is a priority, but also insists in the need for the sufficient “flexibility” so that each member country can advance at different speeds”.

The renewed Uruguayan emphasis on the “different speeds” concept stems from the recent failure of the Doha round negotiations in Geneva, where not only an overall agreement was not reached, but the Mercosur vote was split.

While Brazil was prepared to yield in some points to ensure the success of the extraordinary meeting, Argentina sided with India, China and eventually the duress of United States who insisted in safeguard clauses for the event of a “flooding” of their agriculture markets. For China and India with huge peasant populations the issue is highly sensitive.

 source: MercoPress