MercoPress. South Atlantic News Agency

Uruguay denies works in free trade accord with US

Uruguay Foreign Affairs minister Reynaldo Gargano vehemently denied Thursday that the Uruguayan government was advancing in a controversial free trade agreement with United States.

"Official policy is in line with what was agreed in the recent Americas Summit in Mar del Plata: negotiations with the US are conditioned to the elimination of farm subsidies and export support programs", said Mr. Gargano who highlighted "We're not against the United States".

The issue which has become controversial both inside the Uruguayan ruling left wing coalition and in Mercosur blew alarms in Brazil and Argentina.

Talk of a free trade deal between the U.S. and Uruguay is a sign Mercosur's larger partners need to improve commercial relations with the trading bloc's smaller partners, said Brazilian Foreign Relations Minister Celso Amorim.

"In reality, when we see declarations of disagreement within Mercosur, they should be the object of reflection from larger partners in the bloc," Amorim said. "If Uruguay doesn't see that Mercosur brings benefits, it's because perhaps we haven't done enough."

Speculation about a free trade deal between Uruguay and the U.S. arose last week after Uruguay Economy Minister Daniel Astori expressed interest in such talks.

However Amorim pointed out that he doubted whether Uruguay would go so far as to complete a deal with the U.S. without the consent of its Mercosur partners.

"From a technical point of view, it's not possible unless they leave Mercosur, which doesn't look like it's on the table at the moment" Amorim said.

According to a clause of the Mercosur agreement approved in 2000, Mercosur members must work as a bloc when drawing up free trade agreements with other nations.

Amorim, meanwhile, said he believed Brazil could work harder to encourage investment and trade with smaller Mercosur members such as Uruguay and Paraguay.

"In my opinion, Brazil has to open itself more and use the purchasing power of its state companies to also assist the industrial development of our partners, especially the smaller ones," he said.

Amorim made the declarations following a meeting Wednesday with recently appointed Argentine Foreign Relations Minister Jorge Taiana, who was in Brasilia ahead of a state visit by Argentine President Nestor Kirchner scheduled for Jan. 18.

Taiana said he preferred not to comment on discussions within governments of neighboring countries, but expressed agreement with Amorim's position.

"I agree that we need to reflect on how we can deepen and enrich Mercosur so that its benefits are evident for the people of all its member countries" remarked Mr. Taiana.