MercoPress. South Atlantic News Agency

Brazil terminates bilateral shipping agreements with Argentina and Uruguay

The decision had been made on December 9, 2020

Brazil's President Jair Bolsonaro has decided to terminate both bilateral maritime transport agreements with Argentina and Uruguay, it was announced.

The presidential decree, which was released through the Official Gazette, “makes public the decision of the Federative Republic of Brazil not to renew the validity of the Agreement between the Federative Republic of Brazil and the Eastern Republic of Uruguay on Maritime Transport, signed in Rivera, on June 12, 1975, and the Agreement on Maritime Transport between the Federative Republic of Brazil and the Argentine Republic, signed in Buenos Aires, on August 15, 1985.“

The agreement with Argentina expires in February 2022 and the one with Uruguay ends next month.

Bolsonaro's decision has reportedly been criticized in his country because it jeopardizes Brazil's shipping business. Although Bolsonaro had expressed his intention not to renew the agreements, Brazilian merchants had hoped for a transition to unrestricted openness to international shipping services.

Argentina's shipping operators are now waiting to see how things unfold to assess the full implications of the unilateral decision, which will become fully effective on February 5, 2022.

The deal with Uruguay has less than a month before it expires on October 7, 2021.

According to a statement released Wednesday by Brazil's Government, the decision had been made on December 9, 2020, and conveyed to Uruguayan and Argentine authorities on Feb. 9, 2021, and Feb. 3, 2021, respectively.

The treaty with Uruguay, signed in Rivera on June 12, 1975, provides that cargo between the two countries should be carried exclusively in Uruguayan and Brazilian flag vessels and that cargo should be split equally between ships of the two nationalities. However, the document also specified that cargoes may be carried in ships under a third flag only when there was no availability of vessels belonging to one of the two signatories.

In practical terms, Bolsonaro's decision will have no impact on Uruguay's economy, because the country lacks a merchant navy to benefit from the treaty.

”Uruguay has abandoned the stimulus and development of its merchant marine and has only a few river transport vessels, but this, concerning Brazil, is not the most worrying thing. What should deserve particular attention from our authorities is the high cost of the operation in the port of Montevideo, which has generated cargo from the east of the country to be transported by land to the Port of Rio Grande in Brazil to be shipped on overseas vessels,” an expert quoted by Montevideo's El País daily explained.

Brazil's decision was aimed at speeding up the country's joining the Organization for Economic Cooperation and Development (OECD).