MONTEVIDEO, Uruguay, December 7, 2022 – The International Trade Council addresses the tensions that arose during the recent Mercosur summit, as Uruguay expressed its desire to pursue foreign markets despite opposition from Brazil, Argentina, and Paraguay.
Uruguayan President Luis Lacalle Pou highlighted the need for his country to "open up to the world," expressing intentions to negotiate a free trade agreement with China and join the Trans-Pacific Partnership. Uruguay has voiced concerns over the economic impact of the bloc's tariffs and trade restrictions, as well as Mercosur's inability to secure trade agreements with any of the world's top ten economic powers.
Lacalle Pou encouraged fellow Mercosur members to consider an agreement with China, emphasizing the benefits of a unified approach. However, foreign ministers from Paraguay, Brazil, and Argentina warned Uruguay against pursuing unilateral deals, stating that doing so would violate the bloc's consensus-based decision-making rules.
Argentine Foreign Minister Santiago Cafiero cautioned that bilateral agreements could potentially exacerbate existing "productive and scientific-technological gaps" within the bloc. Argentine President Alberto Fernandez acknowledged the concerns raised by Lacalle Pou regarding growing economic asymmetries among Mercosur members since the bloc's inception 31 years ago, suggesting it is time to address these issues.
The Mercosur bloc, home to 295 million people, primarily exports agricultural products. China (29%) and the United States (11%) are its largest trade partners, with exports totaling $339 million and imports amounting to $260 million in 2021.
Marcel Vaillant, a regional trade specialist, pointed out the significant differences in economic scale between Uruguay and its larger counterparts, Argentina and Brazil. He noted Uruguay's preference for open policies and stressed the need to improve market access for its agri-food products.