MercoPress. South Atlantic News Agency

Cardoso visits Uruguay

Brazilian president Fernando Cardoso arrives in Montevideo this Tuesday for a 27 hours official visit to Uruguay.
Also:
Chilean sales to Argentina and Brazil during the first six months dropped 310 million US dollars as a direct result of the financial situation in both countries

Mr. Cardoso has scheduled two private meetings with Uruguayan president Jorge Batlle and will address ALADI, the Latinamerican Integration Association, a regional trade organization that was founded in 1980 including all South American countries and other Caribbean nations plus Mexico.

Apparently Mr. Cardoso was invited to pay a formal visit to Mercosur Secretariat in Montevideo, but Brazilian diplomacy kindly declined.

The current financial turmoil among Mercosur country members and the different approaches regarding future alliances of the group have become a stumbling block, in spite of the repeated public commitments of its four founding members.

Brazil is one of Uruguay's main trade partners and shares an open border through which much smuggling takes place. One of the issues in the presidential bilateral agenda is a joint frontiers policy to soften the impact of macroeconomic variations.

Uruguay and Brazil just recently received strong financial assistance from the IMF to help overcome the contagion of the Argentine crisis that has spread to the region.

Chilean exports to Mercosur down

Chilean sales to Argentina and Brazil during the first six months dropped 310 million US dollars as a direct result of the financial situation in both countries.

The Chilean Exporters Corporation said the decline is particularly important in the so called non traditional exports, those requiring intensive labour, for which these countries are the main markets.

These products include supplies for the metal mechanic industry plus preserved foods, dehydrated juices, tomato paste, marmalades, and even fresh apples and pears.

Another area that has had a strong negative impact is Chilean investments particularly in Argentina that has hindered those companies standing in the stock exchange.

Besides, Argentina with its devalued currency has become highly competitive in wines, fresh fruit, fisheries and other food industry products.

The Chilean Exporters Corporation is now promoting direct strategic investments in those areas affected by the slowdown. For example Chilean companies have invested in Mendoza wineries in Argentina and are currently discussing participation in white line manufacturing in Brazil.

Furthermore, Chile is promoting its privileged trade and investment links with the European Union and the United States, which has convinced several world corporations to move their regional headquarters in Santiago.

Another area being seriously explored by Chile is banking and attracting Argentine financial operations, given that the system in this country has collapsed since last December and customers trust is virtually non existent, at least until the current freezing of deposits and accounts is lifted.