Government strategy: the ‘Belgian-style’ role and the trade agreement it ‘should’ have – Business – 2021/27/08

The business strategy in uruguay The official proposal to achieve greater openness of the Mercosur – and thus the ability to advance in unilateral agreements with markets outside the bloc – has caused an uptick in the past months among trading partners in the region. The tension occurred mainly on both sides of the Río de la Plata. Between accusations of “ballast” and calls to “get off the boat,” the leaders of the two countries have publicly declared their differences regarding business strategy And the role they think Mercosur should play.

In mid-August the president Louis Lacalle Bo Travel to the presidential residence in Olivos to meet Alberto FernandezIn a clear political signal to calm bilateral relations after the confrontations that marked the Mercosur summit in March.

besides Mercosur flexibility In order for the two countries to unilaterally move forward with agreements, another issue in the bloc’s negotiations concerns the goal of significantly lowering the Common External Tariff (CET), a proposal promoted by Brazil, backed by Uruguay but accepted in part for Argentina’s sake.

However, as reported by La Nación, Fernandez’s government is now seeking to “seduce” Brazil with the consensual reduction of the AEC and in this way Uruguay’s proposal loses weight. From Lacalle Pou’s government, the reading was just the opposite. “At the last meeting of the presidents, Brazil did not object to Uruguay’s position, but accompanied it, and the next day (Jair) Bolsonaro frankly supported it. Uruguay understands that at the moment it is Brazil position”, this is what sources close to the Uruguayan Foreign Minister, Francisco Bustillo, told La Nacion newspaper.

In this context, the Uruguayan ambassador to Brazil said, Guillermo VallesHe explained the country’s commercial position and strategy in the context of his appearance on the Foreign Relations Committee of the Brazilian Parliament. In this case, the diplomat emphasized that Uruguay is asking “honesty” from Mercosur “only” given that flexibility is a quality that has accompanied the bloc since its inception.

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Vallis is a longtime diplomat who was Vice-Chancellor and Director of International Trade at Unctad.

Regarding international agreements, Valles said, “Uruguay simply says that Mercosur should not impose a cadence of openness to other partners who are not in a position to make progress in these external negotiations,” noting that, therefore, it should not be an instrument of “prohibition.” or restriction”, particularly economies such as Uruguay which account for 1% of GDP (Start) from Mercosur.

The diplomat explained that historical times have changed but Uruguay maintains the same position regarding its trade strategy and relationship with regional partners.

Despite defending the interests of Mercosur and its members, according to Vallis, the country “wants to be the first” to go out into the world to be able to conclude trade agreements, which not only benefit the state in terms of reducing them. export duties, but also for the world that will demand 50% more food in 2050. “Mercosur accounts for 30% of net food exports. Vallis emphasized that it is a moral obligation for our people to provide the world.

Past, present and future.

The ambassador provided a historical review of Mercosur’s values ​​and the “leading” role Uruguay played in creating the bloc. “The interests to preserve Mercosur have always been there, they are now and they will be in the future,” said Valles, referring to Uruguay as an “integral country” not only because of a constitutional mandate but also a historical mandate.

Similarly, Valles explained that Uruguay’s interest is “the interest of all” political parties. “The three main political forces in Uruguay maintain exactly the same position,” he said.

Flag of the countries that make up Mercosur.  Photo: El País . Archive
Flag of the countries that make up Mercosur. Photo: El País . Archive

The only difference, according to the ambassador, is that times have changed and the current reality requires that Uruguay and MERCOSUR PARTNERS “We should be and be part of the global ‘clubs’ where the rules of trade are discussed. “We can’t be rule-takers, we have to participate in forums where rules are discussed,” Vallis said.

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On this point, the ambassador said Uruguay should “integrate” the Broad and Progressive Agreement for the Trans-Pacific Partnership (CPTPP, for its English acronym), made up of countries such as Australia, Canada, Chile, Japan, New Zealand, and Singapore, among others. , in order to be close to net food importers in Asia and avoid the “absolutely discriminatory” tariffs that Uruguay’s products pay today.

“What we are proposing today in Mercosur is nothing strange. In this sense, he spoke of the three basic principles that have been introduced into the bloc since the Treaty of Asunción (signed in 1991 from which Mercosur was created): gradualism, flexibility and balance.

“So flexibility is nothing new in Mercosur” and it has been used “completely” in the past, Vallis said, giving an example of some of the negotiations that bloc members have had with other countries, which have had different rhythms and special exceptions.

Uruguay was the first to conclude a free trade agreement with Mexico, even within the rules of Mercosur. Brazil also later. However, Paraguay still does not have such an agreement. Has Mercosur entered the stage of institutional crushing? No, because we have come to an agreement on how to use this flexibility,” the ambassador said.

Mercosur’s agenda ‘much richer’

The ambassador emphasized that Mercosur’s agenda “is much richer than what they want to constrain, saying that we are asking for flexibility because we have flexibility from day one.” As Valles explained, from Uruguay’s point of view, Mercosur’s agenda is “not limited to trade issues.” In this sense, he indicated that the country is currently working with the Brazilian authorities in various aspects that seek to improve the competitiveness of the products of both countries through improving infrastructure.

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Uruguay is a “detailed country” and “understands interests”

Containers in the port of Montevideo.  Photo: El País . Archive

From a geopolitical and regional point of view, Uruguay “plays the same role as Belgium,” Valles said, speaking about the role the country has played in relation to business integration regional and global. In the midst of his historical review of the country’s achievements in terms of trade openness, the ambassador emphasized that Uruguay is “a pivotal country and a country articulated in favor of integration”, not only because it is the seat of regional integration in Latin America. . South, but also for his leadership of the Uruguay Round in 1975 (it was the eighth round of multilateral trade negotiations) that later resulted in the World Trade Organization (OMC).

Uruguay got into “international trade, to build, not collapse, to build institutions. This is Uruguay, this is our past and it is something that any Uruguayan government will always respect,” Valles said.

On the other hand, the diplomat focused on the fact that Mercosur’s flexibility is one of the bloc’s values ​​”from day one” and that what Uruguay is doing is “simply” a “sincere” request. In this sense, Valles emphasized that Mercosur “should not impose” opening rates on other partners who are not in a position to move forward and that Uruguay “understands the different needs” of member states.

In this sense, he set an example that Uruguay accepted when Argentina proposed not to actively participate in the negotiations with Korea. “Uruguay understands these needs for flexibility, it is a country that ‘understands the interests’ of others,” the ambassador said.

In this context, Valles also said that he “fully understands Brazil’s needs” and emphasized that it had “different interests from ours” because Uruguay “has already done a re-industrial transformation” upon its accession to Mercosur. “Now we have a very competitive economy, which is concentrated, not in agribusiness, but in services, and this helps us today to have a little less defensive interests than offensive ones. That’s just it “, he concluded.

Aileen Morales

"Beer nerd. Food fanatic. Alcohol scholar. Tv practitioner. Writer. Troublemaker. Falls down a lot."

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