MercoPress. South Atlantic News Agency

US-Uruguay kick-off

Uruguayan and United States trade officials signed this week in Montevideo the starting agreement for trade and investment promotion that eventually could lead to a full free trade agreement between both countries.

The first step is the naming of a joint committee that is expected to hold its starting official meeting in Washington next June. A bilateral agenda will be worked out, particularly identifying obstacles to trade development and different sub committees will be created. "The agreement is very similar to that signed by Chile and the United States to strengthen trade, investments and cooperation", said a spokesperson of the Uruguayan Foreign Affairs Ministry. Uruguayan president Jorge Batlle, who is not very enthusiastic about Mercosur, of which Uruguay is a founding member, is aggressively promoting other markets particularly in North America. Mr. Batlle last week visited Brazil and told president Fernando Henrique Cardoso that Uruguay was forced to look "for alternative markets", given the stagnation of Mercosur and the current Argentine crisis. Uruguay's main trade partners are Brazil and Argentina. Uruguay is in its third running year of recession with a dramatic 7% drop in the first quarter of 2002. The Ministry of Economy estimates the Uruguayan economy will record another negative growth this year, 1,7%, but private analysts forecast a drop between 3 and 4%.