MercoPress. South Atlantic News Agency

“Argentina/Uruguay relations at their worst in 15 years”

Uruguayan Economy minister Danilo Astori said that relations with Argentina are “at their worst moment in fifteen years” and regretted that Brazil has adopted an “indifference” attitude regarding Uruguay's claims in Mercosur.

"I feel distressed" with Argentine president Nestor Kirchner's attitude regarding the pulp mills issue, "but I don't want to make things worse", said Astori who this week is visiting Chile to promote trade and investments.

"You need a lot of patience and appeal to the law and dialogue", but relations with Argentina are "at their worst moment in fifteen years" he underlined.

The Argentine government and residents from Gualeguaychu oppose the construction of a pulp mill on the Uruguayan side of the river which acts as a natural divide between both countries arguing that it will contaminate air and water. The argument is rejected by the Uruguayan government and the Finnish company Botnia, and supported by cumulative environmental impact assessments from the World Bank.

The ongoing conflict was taken to the International Court of The Hague by Argentina and to the Mercosur disputes tribunal by Uruguay.

Furthermore this week a special envoy from the King Juan Carlos of Spain begins shuttle diplomacy between Montevideo and Buenos Aires in an attempt to bring both sides together. A task described by Madrid diplomats who do not wish to expose the King, as a dialogue "facilitating" effort.

President Kirchner requested the King to "facilitate" the dialogue.

A second plant which was to be built in the area by the Spanish company Ence has been frozen on request from Argentina, and a new location for the pulp mill in Uruguay is under way.

Astori also indicated he would like to see "signals of some gesture" from Brazil to help contain and reduce the asymmetries inside Mercosur, the customs' union made up of Argentina, Brazil, Paraguay and Uruguay and lately by Venezuela.

Announcements that Brazil would be taking into account Uruguayan claims "I've been hearing them for a long time but so far I've seen nothing concrete: rather indifference", highlighted Minister Astori.

"We must improve the current situation of Mercosur", he emphasized. "With the coating of the Argentine relation, things are really complicated in Mercosur. Uruguay must therefore continue to work outside the region".

Astori remarks came hours before his scheduled visit to Chile "to promote Chilean investments in Uruguay and develop bilateral trade in the framework of a major effort by Uruguay to expand to the world".

Uruguay's Economy minister has an interview with President Michelle Bachelet Tuesday and will later address the Production and Commerce Confederation, Chile's main business association.

Chile's investments in Uruguay are above a billion US dollars according to Uruguayan Economy Ministry statistics. Astori forecasted the Uruguayan economy would expand 7%, "or more" this year and 4% in 2007. He said 36.000 new jobs have been created in 2006 and since the left centre coalition took office in March 2005, there are 100.000 less Uruguayans living in poverty.