MercoPress. South Atlantic News Agency

EU full support for Uruguay in pulp mill dispute

European Commissioner for Trade Peter Mandelson gave full support to the Finnish company Botnia in the dispute with Argentina over the construction of a pulp mill in Fray Bentos in neighbouring Uruguay on the river that marks the border between the two countries.

In an interview with the Finnish daily Helsingin Sanomat Mr. Mandelson revealed that during his recent visit to Buenos Aires he underlined that the Finnish company has the best possible reputation, and that it does not have double standards for investments in Europe and out of Europe.

Currently visiting Finland Mr Mandelson said that he does not understand why Argentina opposes the construction of the pulp mill, which has been approved by Uruguay and the World Bank.

The project has sparked opposition in Argentina, which fears negative environmental consequences.

Mr. Mandelson said Botnia was the "innocent victim" of the Uruguayan/Argentine conflict and warned that if a solution is not forthcoming soon, future European investments in both countries could be jeopardised.

The EU Trade Commissar visited Buenos Aires at the end of March and met with most of President Kirchner's closest aides: Cabinet chief Alberto Fernandez, Federal Planning and Economy ministers Julio De Vido and Felisa Miceli and Martin Redrado president of Argentina's Central Bank.

Botnia investment of over a billion US dollars in Uruguay is the largest Finnish industrial investment abroad. For Uruguay, the project is one of that country's largest ever foreign investments.

"It sounds unreasonable for a European company to be caught in the middle, especially when such a large investment is involved", said Mandelson.

Mr. Mandelson will also be meeting in Helsinki Prime Minister Matti Vanhanen since Finland takes over the EU Presidency in the second half of this year.

On Thursday the Finnish government announced that Minister for Trade and Industry Paula Lehtomaki would be cancelling her planned visit to Argentina. Lehtomäki was to have travelled to Argentina during an upcoming tour of South America with a Finnish trade delegation, but does not want to become "a pawn in the game".

Meanwhile in Buenos Aires President Nestor Kirchner sternly denied "any Brazilian mediation" before the government of Finland regarding the bilateral pulp mills conflict as was reported in the local press.

"Under no circumstances was there a Brazilian mediation in the pulp mills issue. No secret mediation, no mediation of any kind", he underlined.

Mr. Kirchner admitted having talked about the issue with his Brazilian counterpart Lula da Silva "and we laughed about the mediation makeup in the press". However "it's only natural that presidents can talk about every thing they wish", added Mr. Kirchner.

Brazilian president Lula da Silva apparently met with his Finnish counterpart Tarja Kaarina Halonen two weeks ago and is scheduled to have another encounter next week.

"For Brazil as well as for Argentina this is a completely bilateral issue and nobody gets involved in bilateral issues", said Argentine cabinet chief Anibal Fernandez who accused "the stubbornness of Botnia" for the current stall in the bilateral dialogue.

Fernandez insisted that an environmental impact assessment report is needed and the "company refuses to give information or help with the matter".