MercoPress. South Atlantic News Agency

Pulp mills conflict: “EU tilted towards Uruguay”

The European Union is tilted towards Uruguay in the pulp mills dispute with Argentina announced Uruguayan president Tabare Vazquez Saturday in Vienna following a meeting with EU Trade Commissioner Peter Mandelson.

"Members of the EU will tilt the scale towards Uruguay in the conflict with Argentina, and the EU Trade Commissioner will intercede before the World Bank", said Mr. Vazquez.

According to the Uruguayan president Mr. Mandelson in the next few days will be sending a letter to the World Bank strongly requesting a date for the presentation of all the reports to the International Finance Corporation, IFC, on the understanding that the pulp mills under construction in Uruguay "are of excellent quality with minimum contamination, all of which has bee researched and confirmed".

The International Finance Corporation is the private sector arm of the World Bank that promotes sustainable private sector investment in developing countries providing loans, equity, structured finance and risk management products, and advisory services. IFC has promised substantial loans for the pulp mills under construction in Uruguay, one from Finland and the other Spanish.

Mr. Vazquez revealed that on ending the meeting with Mr. Mandelson he met with Paraguayan president Nicanor Duarte Flores who expressed full support with Uruguay's position in the conflict (with Argentina), "which he completely shares and to reiterate his commitment to keep battling for better conditions in Mercosur for junior partners".

"I share president Vazquez' position in striving for a more genuine and fair integration as well as exceptional measures to formalize trade agreements with other countries, leaving aside the corset which Mercosur senior members are demanding", pointed out Duarte Flores.

"Mercosur junior members have always been marginalized and if this continues I don't know what's going to happen with Mercosur, even when global trade affairs are increasingly addressed by blocks", added the Paraguayan president.

"I believe the future of Mercosur is uncertain. I feel pessimistic, but a pessimistic is a well informed optimist", he highlighted.

President Vazquez also denied that before taking office during the electoral campaign he had been against the pulp mills.

"What we said all along is that any industrial undertaking must be strictly monitored to protect the environment. Uruguay has always protected the environment, not only during an electoral campaign. We have always demanded the utmost in environmental impact assessments", underlined President Vazquez.

Actually the Uruguayan ruling coalition has several small groups and trade unions that are against the construction of the pulp mills arguing pollution, but the overall position is of support to the 1.8 billion US dollars operation, the largest ever private investment in the country's recent history.