Wednesday, July 6

Uruguay separates itself from Mercosur and announces trade agreements outside the bloc


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Uruguay had been warning that things, as they are, do not work. President, Luis Alberto Lacalle Poú, said it in March and his counterpart from Argentina, Alberto Fernandez, reacted with virulence. The tension between the two countries was evident. Now, in the face of immobility in Mercosur (South American Common Market), the Uruguayan Government officially announced that its country uncheck the block and you will be looking to negotiate business deals on your own.

The Uruguayan Ministry of Foreign Affairs issued a statement in which it notes: «The position of the Foreign Minister (Franciso Bustillo) and the Minister of Economy and Finance (Azucena Arbeleche) consisted of defending the modernization of the bloc, through an agenda of substantive, agile, dynamic, flexible and permanent external negotiations ”. The message, to be clear, does not mean that Uruguay intends to abandon the Mercosur ship, as Fernández suggested to Lacalle Pou in the last scuffle on the occasion of the thirty-year creation of the bloc. Montevideo’s objective, for a long time, is exactly the one expressed in the aforementioned communiqué, to change things from within but, having exhausted its patience, to start negotiating pacts, unilaterally in parallel.

The announcement could collide with a Mercosur article that prevents closing free trade agreements and other types of trade agreements with third countries or blocs, without the consensus of all partners (Argentina, Brazil, Uruguay and Paraguay). However, the Government of Luis Lacalle Pou, “understands that decision 32/00” that conditions or limits these negotiations, “is not in force” because “it was never internalized.”

The delicate moment comes on the eve of Argentina handing over the pro tempore presidency to Brazil, a country with which it also has severe political, economic and skin differences. Alberto Fernández, who until now has avoided having to shake the hand of Jair Bolsonaro (the resistance is reciprocal), will not be able to avoid meeting the president of the South American giant to pass him the witness – or hot potato – of the Mercosur leadership.

Strictly speaking, Uruguay’s position is shared by Brazil while Paraguay tries to make bobbin lace in an issue that raises blisters on both banks of the Río de la Plata. In other words, Argentina, At the moment of truth, it is alone in this pulse due to its closure and refusal to make the doors more flexible to new commercial exchanges and Uruguay, with Brazil in the presidency, has six months to advance its reform agenda and make Mercosur open to the world.

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