MercoPress. South Atlantic News Agency

Botnia/UPM conflict: Argentina retaliates against Uruguay with trade and port measures

The Botnia/UPM plant as seen from the Argentine side.

Argentina has made public its first retaliation against Uruguay over the Botnia/UPM pulp mill controversy and has banned Argentine exports from being trucked to Montevideo for shipment overseas. The resolution was published Tuesday in the Official Gazette and invokes maritime transport agreements in the framework of Mercosur.

“Export cargoes originated in Argentine ports can only be transshipped to other ports of Argentine jurisdiction or to ports from Mercosur and associate members which have cargo maritime transport agreements with Argentina” reads the resolution.

The catch is that Argentina only has a transshipment accord with Brazil, by which, “cargoes originated in Argentine ports and destined to Brazilian ports and vice versa, will be obligatorily transported in vessels with the national flag of the contracting parties, with equal participation in the whole of the freights generated”.

The resolution signed by the Under secretary for Ports and Navigable waterways Horacio Tettamanti argues that all efforts to sign a similar agreement with other Mercosur country members have failed, and in particular Uruguay has resisted signing such an accord, not accepting matching efforts.

As of the signing of the resolution Argentine shipments to Uruguay arriving by land and to be loaded in vessels to other continents are banned. It is estimated that Argentine ports will benefit with an additional 100 million dollars a year, which will be lost by Montevideo and Nueva Palmira.

Argentina is furious with Uruguay for having allowed the Botnia/UPM pulp mill increase its annual production, allegedly approved without consulting with Argentina and 'further exposing the river Uruguay to more pollution'. The Argentine government also insists that UPM/Botnia forced the Uruguayan government into accepting what is described as a 'fait accompli', or closing the plant until the end of the year..

Uruguay however argues that the proposal from the pulp mill has been on the table of the joint administration for at least eighteen months, and also wants to make public all the surveys measuring contamination 'on both sides of the shared river', which apparently the government of President Cristina Fernandez refuses to do so.

Furthermore Uruguay approved the production increase conditioned to additional environmental measures.

However according to the well informed Buenos Aires daily, Ambito, this maritime trade ban is just one of a score of trade, export and financial decisions planned by the administration of President Cristina Fernandez in retaliation for the UPM/Botnia increased production authorization.

Likewise apparently the Argentine government has finished the draft of its presentation to the International Court of Justice in The Hague accusing Uruguay of ignoring that court's ruling in 201.

From Montevideo President Jose Mujica adopted a sober attitude and admitted growing trade impediments with Argentina including slower Customs controls and delayed exports.

“You must understand countries. Confrontation leads nowhere; we were forced and we had to decide what we decided regarding the pulp mill. And now things happen...” said Mujica reluctantly.

However he anticipated he was prepared to publish all the information on environmental surveying of the pulp mill, surrounding areas and across the river, “but I will wait until Cristina Fernandez fully recovers, before talking with her”.