Uruguay became prisoner of Argentina, when it rejected a free trade accord with the US
Uruguay has fallen prisoner of Mercosur and Argentina because it did not sign the free trade agreement with the United States which was offered to the country in the previous government of Tabare Vazquez, said two-times President Julio Maria Sanguinetti.
“President (Jose) Mujica is paying the consequences of the mistakes committed by his predecessor, president Vazquez. He had in his hands the chance of a FTA with the US, but finally he desisted and now we are prisoners of Mercosur and Argentina”, said Sanguinetti pointing out that the left leaning ruling coalition, Broad Front rejected such an option.
Likewise Sanguinetti described relations with the Argentine government are ‘very bad’ because Argentina does not assume its responsibilities as a member of Mercosur. However Uruguay should not abandon the trade group.
“The four full members of Mercosur can apply whatever economic policy they wish, but what we can’t do is ignore treaties and contracts. If a treaty says merchandise can circulate freely among country members, we can’t elude that responsibility. Argentina can do whatever they wish with the rest of the world, but inside Mercosur must abide by the rules. Mercosur as it is currently, even the government admits it, is not working: expectations and realities have turned into frustrations, and Uruguay will have to review the situation”, pointed out the two times president.
However Uruguay must not break off unilaterally from Mercosur, but rather discuss inside Mercosur and with third countries, said Sanguinetti who then mentioned as an example to follow the free trade agreement Uruguay has with Mexico.
“We don’t have the capacity to damage Argentina or Brazil: it’s a simple matter of size. And for the same reason the so called ‘mirror counter measures’ are nonsense. It’s like fighting with Mike Tyson: sure we could manage a first rather soft jab but then prepare for the really big punch!! So we must go out to the world and negotiate trade liberalization agreements and hope that Mercosur reacts, because it’s not only a question of trade barriers and quotas. Mercosur is far more than that and it is being repeatedly violated”.
Finally Sanguinetti said that the two Broad Front coalition governments (under presidents Vazquez and currently Mujica) have enjoyed a fantastic and unique economic bonanza period for Uruguay and the whole of South America.
“In that context and in spite of what the Broad Front promised, the great merit has been that they have both continued with pre-established policies referred to foreign debt management, fiscal balance, exchange rate, an open economy. The problems and shortcomings refer to what they tried to change and has turned into real disasters: law and order is appalling; education even worse and the lack of investments in energy, telecommunications and infrastructure conditions development in coming years, it is very serious” indicated Sanguinetti.
Nevertheless, “we must admit Mujica inherited all these problems from Vazquez and has had the sincerity of admitting the problems, but simply does not know how to address them”.
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But perhaps they might break away from Mercosur, and do the deal now ..... better late than never.
.. oh well, about time to go back to USA on bended knee.
Maybe Uruguay is being appropriately ”careful”.
From what you imply, nobody should do business with firms with a US interest.
Are they really so much worse than those elsewhere around the world, or are they just bigger with higher turnovers?
I see a HUGE re-orientation of trading partners across most of South America.
China has made a massive re-evaluation in the US of the power-relationships brought about by asymmetric trade.
Chevron realises this wrt its oil contracts in Brasil.
Goals are one thing - reality is something else.
#3 “about time to go back to USA on bended knee”
Thanks for the honesty, but don't think its going to happen =)
appreciate it in the future.......
@10 - I wish we could. But Argentine is 200 yards away, across the Uruguay river. We have no choice but to be their neighbours. Hopefully, we'll develop alternative markets and learn to rely less and less on them for our exports and tourist trade.
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