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Uruguay/US sign TIFA agreement next week

MercoPress | Thursday, January 18, 2007

Uruguay/US sign TIFA agreement next week

Uruguay and United States will sign next week a trade and investment agreement to strengthen and diversify bilateral trade relations announced in Washington John Veroneau, deputy chief of the US Trade Representative Office.

This is the second agreement Uruguay and United States have signed in the last twelve months and comes short of a full free trade agreement.

“Obviously we’re interested in the expansion of our trade and economic relations with Uruguay”, said Veroneau who will sign in Montevideo a Trade Investment Framework Agreement, TIFA, which is considered a step previous to a full free trade agreement.

United States has signed at least twenty TIFA and one out of three has led to a full free trade agreement. The latest of which was the TIFA with Bahrain signed in 2002 and which two years later concluded in a full free trade agreement.

Veroneau who will also be visiting Chile and Argentina said that “TIFA reflects the commitment of Uruguay and United States to further develop our trade relations”.

Uruguay and the US have since last November an agreement to promote and protect investments geared to a set of rules, “clear and transparent” for foreign capitals that choose to invest in Uruguay.

In a recent visit to Washington Uruguay’s Economy minister Danilo Astori said that TIFA was the starting point to look for further trade and investment possibilities.

However Uruguay as a member of Mercosur (Brazil, Argentina, Paraguay, Venezuela) could theoretically sign a free trade agreement with the US if there’s consensus among members, if not it would have to abandon the customs union.

Mercosur has been consistently criticized by president Tabare Vazquez administration claiming it has not delivered what was expected and for limiting Uruguay’s aspirations of reaching trade agreements with third countries.

Nevertheless President Vázquez who last year met George W. Bush in the White House has repeatedly stated that Uruguay has plans to abandon Mercosur.

If Uruguay finally signs a free trade agreement, it would help United States break Mercosur unity, a block which recently accepted Venezuela as the fifth member and whose president Hugo Chavez is intent in garnering support for its confrontation with Washington.

 source: MercoPress