MercoPress. South Atlantic News Agency

Uruguay’s economic-trade relations with Argentina at ‘their worst moment in a long time’

Vice-president Astori emphasized that all the Argentine measures are extremely harmful for Uruguay’s exports and tourism industry.

The economic-trade relations with Argentina are going through ‘their worst moment in a long time’, and the latest measures announced by the government of President Cristina Fernandez have a ‘very harmful effect’ on Uruguay, said Vice-president Danilo Astori on Friday.

This week the Argentine tax revenue office, AFIP increased from 15% to 20% the levy on overseas travel and expenditure, which also now includes tourism packages and transport in the visited countries, whether paid with credit or debit card and even cash.

“I don’t want to invade sovereignties but I want to stress that all this harms Uruguay considerably. We are in the worst moment of our economic-trade relations with Argentina in a long time”, said Astori.

Argentina had adopted an economic policy with a clearly different emphasis to Uruguay’s: extremely protectionist regarding international relations, very interventionist and excessively regulatory, which “does not anticipate good results”.

For Uruguay, Argentina is the main source of tourists and the latest package comes just a few hours before Holy Week when traditionally Argentines flock to de-stress in the neighbouring country.

To this must be added the trade restrictions imposed by Cristina Fernandez government, the dollar clamp which created parallel markets with a gap of 70% with the official exchange rate (5.10 and 8.75 Pesos).

Since Monday the dollar in the black and parallel market climbed 10% which becomes an impediment for trade and encourages further rejection of the Argentine Peso.

Astori recalled that this summer season Uruguay implemented some measures to counter Argentina’s restrictions and attract tourists, and “to a great extent it was successful; the number of Argentines crossing the River Plates did not suffer a dramatic fall, maybe they spent less, but the Argentines kept coming”.

Regarding trade and despite Mercosur Uruguay has been facing for several years restrictions to exports because of Argentina’s non automatic licences on imports and later the sworn statements before any overseas purchase is approved.

Uruguay’s Economy minister Fernando Lorenzo last September had warned exporters “to forget about Argentina” and look for new markets.

President Jose Mujica in one of this daily broadcasts said that the relation with Argentina had become an ‘impossible mission’, and according to Uruguay’s Executive sources making trade claims to Buenos Aires has fallen in the list of priorities, “best efforts are concentrated in reaching agreements with Brazil”.

Astori revealed that the government is betting on Brazil and has “a top level group is working on the issue and closer ties with the northern neighbour”. Uruguay is targeting the so called Pacific alliance made up of Chile, Peru and Colombia, which “have policies promoting open markets and foreign investment. We want to reach specific accords with this alliance”.

“We are also looking to Southeast Asia, Russia, India where we have detected promising potentials” added the Uruguayan Vice-president.

Likewise Uruguay’s Chamber of Tourism has requested the government to further extend the measures approved before the 2012/13 season to attract Argentine tourism which includes the reimbursement of 22% VAT on gastronomy and car rental expenses; 10.5% on rents, free shops and a 25 dollars fuel bonus for each car.

The benefits end of March 30 but the chamber is requesting its extension since this year Holy Week for the Argentines extends from Wednesday to April 2, or Malvinas Veterans Day