Uruguayan Vice-President Danilo Astori said Mercosur must decisively address the signing of a free trade agreement with the United States, but also admits that “opportunities must be built”.
Addressing a business forum on “Uruguay’s insertion in the world” the top official and former economy minister admitted that Mercosur has many problems and needs to address different policies and “it is essential that each Mercosur country should have a multiplicity of memberships”, which opens the possibility for Uruguay to diminish risks and increase its potential.
“Mercosur must have joint international policies, an agreement on moderate protection from third parties and above all must have agreements with other trade blocks”, insisted Astori, who faces strong opposition inside the Uruguayan populist ruling coalition to any trade links with the US.
Astori has also been severely questioned for wanting Uruguay to become a full member of the Alliance of the Pacific (Colombia, Chile, Peru and Mexico, with Panama and Costa Rica in the doorstep), an open economies and markets accord geared to make business with Asia, but which is strongly rejected by Brazil.
Nevertheless Astori underlined that Mercosur for Uruguay is a strategic instrument for the development of the economy and to increase trade, “a platform to the region which must be open to the world”, even when this is not necessarily the case currently because of Argentina’s protectionist policies and Brazil’s policy of safeguarding certain sectors of its economy.
But Uruguay, given its size, “must open to the world, and for this it must think in quality production, in excellence standards” supported with an efficient education system which delivers to the whole population.
Astori pointed out that the vision of the Uruguayan State has been that political and cultural issues are not absent from such a reality of openness to the world, “and that has been the historical position of Uruguay when addressing international affairs, and in this the different political parties agree, although with some minor shades”.
The Vice-president then enumerated some of the advances achieved by Uruguay since the return of democracy, which have been sustained by the three major parties of the country when in office.
He mentioned, an attractive business atmosphere, a generous Investment bill with emphasis in quality jobs, innovation and de-centralization, likewise the system of temporary admission to promote exports, the free-zones, open air terminals and ports, promotion of investments through bilateral agreements and accords to avoid double taxing.
As to the rating of Uruguay with OECD, Astori said the country has advanced considerably in transparency and exchange of information, which has been supported by pro-active legislation on the issue.
Likewise regarding the investment rate in Uruguay, Astori said it currently stands at 22% of GDP, when historically it had averaged above 10%, but the target is to take it to 27% to 29%. Likewise foreign investment which historically had been equivalent to 2% of GDP, now has reached 6 to 7% of GDP.
Finally the Uruguayan Vice-president said the country must target improving education, knowledge, innovation, efficiency, productivity, competitiveness and equal conditions for everyone.
His last words were a message to the teachers unions which have been in conflict with reiterated strikes since March, which means children at the Uruguayan government run primary and high schools on average and if lucky this year will have at the most 130 days of class (instead of the targeted 200 days). The conflict only affects government schools, not private schooling.
Mercosur as an only market ‘remains a fiction’ since it is missing the effective implementation and ironing out of trade and macroeconomic reforms, said Uruguayan foreign minister Luis Almagro, who went on to promote “double and triple membership” for Mercosur members.
The minister made the statements during a forum discussion “Integration for Development” organized by Uruguay’s Proposal 2030 and Ibero-American secretary general Enrique Iglesias.
“Venezuela is a member of ALBA, (Bolivarian Alliance of the Americas Peoples) and Mercosur; Ecuador belongs to ALBA and the Andean Community and also wants to join Mercosur”, pointed out Almagro in support of the Uruguayan government position.
“This weaving of double and triple memberships are positive for the Latinamerican integration convergence”, added Almagro, who nevertheless said that the bilateral process with other regional groups “must have the approval of all countries in the customs union block, made up of Argentina, Brazil, Uruguay, Venezuela and Paraguay, which had been temporarily suspended.
Almagro also called for stronger bilateral relations inside Mercosur since “it will help to improve integration with the rest of the other integration processes in Latin-America”
Uruguay has lately and publicly expressed its intention of coming closer to the Pacific Alliance, made up of Chile, Peru, Colombia and Mexico, and with Panama and Costa Rica in the process of incorporation. Uruguay has observer status.
However the Uruguayan decision was strongly criticized at the latest Mercosur summit in Montevideo, where President Cristina Fernandez warned about the ‘siren songs’ which have an only purpose ‘break up the unity of the Mercosur trade block’.
Almagro statements follow on President Jose Mujica comments in his daily radio broadcast when he gave his full support to, Brazil’s intention of speeding up negotiations with the European Union for a free trade agreement, even if that means a “two speeds” negotiations.
“Frankly we have decided to support Brazil in negotiations with the EU because that is a variable we have to continue along and beware of the danger of having all interests in a single basket”, underlined Mujica.
The Uruguayan president also underlined the significance of China for the region’s trade since that is “a huge country, a continent” and it is possible “to reach specific policies that will enable us to reserve some of our sectors from the aggressive competition from China, because of their costs, scale and efficiency”.
Finally Mujica said that “you can’t bet to an open paddock and likewise to a closed paddock”, that is why negotiations exist and that is why talks with China, you simply can’t ignore relations with Beijing”.
