URUGUAY EXPLORES POSSIBILITY OF FREE TRADE TREATY WITH U.S.
Uruguay's government has expressed an interest in negotiating a free trade treaty (FTA) with the US government. The government completed an investment-protection treaty with the US late in 2005, part of the tiny nation's efforts to integrate economically with the US market and with regional partners like Venezuela. Neighboring countries that are fellow members in the Southern Cone Common Market (MERCOSUR), however, have expressed serious concerns that Uruguay would unilaterally open the South American trade bloc to US entry.
US-Uruguay investment treaty ratified at end of 2005
Uruguay took a first step toward tightening bilateral relations when it completed an investment treaty with the US in December 2005. The process of working out the treaty exposed divisions in the Cabinet of President Tabare Vazquez, with centrist Economy Minister Danilo Astori and his moderate allies advocating the treaty and socialist Foreign Relations Minister Reinaldo Gargano--along with union and political sectors like the communists--opposing. Opposition-party groups like the Partido Nacional (Blanco) and Partido Colorado criticized opponents of the treaty, as well as the efforts of official party Frente Amplio (FA) to coordinate with MERCOSUR to find a common position on external treaties.
The two countries signed the bilateral treaty at the IV Summit of the Americas in November 2005, while groups opposing US President George W. Bush and aggressive trade policies protested outside (see NotiSur, 2005-12-02). Gargano joined Thomas Shannon, US assistant secretary of state for Western Hemisphere affairs, in signing the document, which needed Uruguayan congressional approval before the end of 2005. It was signed previously by adjunct US trade representative Peter Algeier and Isaac Alfie, the outgoing economy minister under former President Jorge Batlle (2000-2005) in October 2004. The Summit of the Americas signing was meant to affirm the two governments' commitment to the treaty, called the US-Uruguay Bilateral Investment Treaty (BIT).
The Senate approved the treaty in December, but not before fierce controversies and a noisy protest by members of the Partido Comunista in the Senate hall, while other leftist opponents protested outside. The Chamber of Deputies, with an FA majority, also passed the BIT.
For Uruguay, the US has become the principal importer of Uruguayan products, especially beef. In the first half of 2005, the US purchased about US$371 million of...
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