President Luis Lacalle Pou returned to raise the tone in the relationship with the neighbors by openly accusing the governments of Alberto Fernandez in Argentina and of Lula da Silva in Brazil of carrying out diplomatic maneuvers to hinder the negotiations for a Free Trade Agreement (FTA) with China.
“I cannot verify it, but I imagine that there have been diplomatic efforts, both from Argentina and Brazil, to state that they do not look favorably on Uruguay advancing alone. I don’t know what attention the Chinese government pays to that, ”he said during his interview with the Spanish newspaper El Mundo. It is a fragment that was not published and that was published today by the newspaper El País.
Currently the Minister of Livestock, Agriculture and Fisheries (MGAP), fernando mattos, is in China on a tour of the utmost importance for the Executive’s ambitions to advance in the FTA. It is a visit that will last 20 days and in which he is accompanied by businessmen from key sectors of the economy who hope to improve access to the Chinese market.
weeks ago the chancellor Francisco Bustillo He had traveled to the Asian giant to try to unlock the negotiations for the trade agreement between Uruguay and its partners in the mercosur. The head of diplomacy returned without announcements in this regard, but with Beijing’s commitment to design a trade cooperation agenda, albeit of a different type.
Bustillo’s trip almost coincided with that of President Lula da Silva to China where, beyond relaunching the bilateral relationship between the two countries, the issue of the Uruguayan FTA was on the table. The Brazilian president rejects Uruguay’s solo path and promotes that the trade agreement be between Mercosur and the power.
Brasilia’s position is not secret, despite what President Luis Lacalle Pou suggests. It was discussed by both at their meeting in Montevideo at the end of January. So, they agreed that each government would play its chips in favor of their positions and it would be seen which one had the luckiest.
It is known that China pays attention to the opinion of Brazil. It is a key partner in the regional geopolitics and also in commercial relations. From the Brasilia side, they appreciate that Beijing has been their main trading partner without interruption since 2009.
The freezing of the FTA negotiations, in fact, occurred long before the Lula da Silva government began the diplomatic efforts to stop it that Luis Lacalle Pou speaks of. The stoppage coincided with the electoral process in Brazil, even when the feasibility study on the Uruguayan side had been presented last June.
The delay of almost a year in moving forward with the negotiations – in the midst of which Ecuador sealed an express FTA with China – not only generated annoyance within the Executive, but also began to be felt at the local economic level.
Sales to China fell in almost all items of the agro-export sectora sector that also suffers the blow of the drought historical. Beijing has limited its pace of imports and, in that decision, Uruguay, which is not a preferential partner, has felt the impact.
Just as an example, meat exports from Uruguay to China collapsed 37.7% in April, the lowest level in 32 months. In turn, in the accumulated of the first four-month period of the year, almost 70,000 tons were sold, which means a decrease of 30,000 tons, that is, 30%, compared to the same period of 2022.
Parallel, Brazil became the main destination for the placement of Uruguayan goods the last two months. In April it represented a market of 730 million dollars (+33%), leaving the Asian country behind (-41%; 526 million dollars).
Almost ironically, the increase in sales of Uruguayan products in Brazil was facilitated by the absence of tariffs as both countries are members of Mercosur. Added to this is the fact that exports are more diversified and also include electricity and dairy products, and not just soybeans and meat as in the case of China.
President Luis Lacalle Pou, who always had a discordant relationship with the Argentine Alberto Fernández, now seems to be adding a certain degree of tension with Lula da Silva. It should be noted that these accusations of secret diplomatic efforts occur in the run-up to a meeting that will have them face to face in Brazil for a retirement of Latin American leaders. Political times do not always coincide with economic ones.