MercoPress. South Atlantic News Agency

Uruguay adopts low profile approach to Argentina’s trade hurdles

Uruguay has no plans to appeal before Mercosur against Argentina’s decision to expand the list of products which no longer have access to automatic import licences which is significantly slowing bilateral trade, said Uruguay’s director of the Mercosur Economic Affairs and Integration Office, Walter Cancela.

Speaking with the local press and is spite of reports indicating that the measures imposed by Argentina so far have seen delays in exports to the tune of 50 million US dollars (10% of Uruguay’s 2008 exports to Argentina), Cancela said that “we favour a bilateral approach to the issue”.

Cancela also pointed out that measures implemented by Argentina are contemplated in the framework of the World Trade Organization, although not in Mercosur, and therefore are debateable.

Apparently the Uruguayan strategy has been not to force the issue, much less publicly, but rather lobby strongly before the Argentine Commercial Policies management office for those import licences which are most delayed.

Uruguayan diplomatic sources said that the Argentine government has promised a “quick update” of the import licences, some of which have been delayed for over 100 days when according to regulations they should be dispatched at the most in 60 days.

Uruguayan sectors most vulnerable to these tactics so far have been textiles, plastics and hides and skins.

Following the “official” beginning of the global recession last October, Argentine imposed non automatic import licences on many products, which contemplate a delay of a maximum 60 days.

Other Mercosur members Brazil and Paraguay have also complained about Argentina’s import licence system but have also adopted a low profile attitude towards the situation.

Argentine-Brazilian committees meet regularly at technical and political level to try and moderate impacts and avoid an escalation.

Furthermore Argentine president Cristina Fernandez de Kirchner is scheduled to visit Brazil in the coming days and top of the agenda is bilateral trade which has plummeted 40% in the first two months of 2009.

Argentina and Brazil will also be present in the London G-20 summit representing Latinamerica, together with Mexico, so there’s an ongoing dialogue and exchange on the issue, according to reports from Buenos Aires and Sao Paulo.