URUGUAY: GOVERNMENT SPEEDS UP FREE-TRADE NEGOTIATIONS EVEN AS PROTESTS BUILD.
Uruguay's President Tabare Vazquez is stepping up efforts to work out a free-trade agreement (FTA) with the US even as various trade-union groups are stepping up their opposition to such a deal and as the president's political popularity slides. The government of Uruguay, frustrated with its role in the Southern Cone Common Market (MERCOSUR), seeks to expand its trade relations not only with the US but also with India and China.
The socialist turns free-trader
Vazquez, cited as an example of Latin America's leftward shift after his electoral triumph in 2005 (see NotiSur, 2004-11-12 and 2005-03-04), and US President George W. Bush agreed in May to deeper ties and talks that could lead to a free-trade pact with Washington.
With Bush at his side in the Oval Office, Vazquez announced the setup of a joint technical commission to discuss trade issues--an arrangement with the aim of starting formal trade talks later in the year. The US is the biggest trade partner of Uruguay, a small country of 3 million people that is rich in agricultural products.
"We have now also agreed to work to expand, intensify, and strengthen our trade relations," said Vazquez. At the time, he had generally been seen as part of the leftward shift in places like Argentina, Chile, Bolivia, and Venezuela, widely perceived as a backlash against the pro-business policies espoused by the Bush administration.
But Vazquez sounded all business after his May meeting with Bush. Bush said the two talked about "extending our commercial relations" and about renewable energy, "a subject that is very dear to my heart and necessary for our country."
Earlier in his visit, Vazquez told the pro-free trade Council of the Americas in Washington that he welcomed foreign investment and noted that his country respected its contractual obligations.
That was an apparent reference to Bolivian President Evo Morales' announcement that he was nationalizing the natural-gas industry, a move that sent shock waves around Latin America (see NotiSur, 2006-05-12).
Uruguay took a big first step in negotiating with the US at the end of 2005 when it signed a Bilateral Investment Treaty (BIT) with the US (see NotiSur, 2006-02-17).
Trade talks make "strategic sense" for both Washington and Montevideo, said Nelson Cunningham, a Latin American specialist with Kissinger McLarty Associates, a firm that advises companies on political risks. Cunningham said Vazquez needed to strengthen his negotiating position in the...
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