The president’s trip is approaching Luis Lacalle Pou to China, where he will be accompanied by several chambers of the private sector with the aim of achieving one more step in the realization of a Free Trade Agreement (FTA) with the Asian giant, however, from the sector they emphasize the importance of continuing to promote the economic agreement of the Mercosur.
At the beginning of this month, President Lacalle Pou invited the private sector to participate in the trip to China What will he do in November? Among the guests are the Uruguayan Chamber of Information Technologies (CUTI), the Rural Association of Uruguay (ARU), the Commercial Chamber of Products of the Country (CMPP), the Rural Federation (FR), the Chamber of Commerce and Services (CNCS), the Exporters Union (UEU), the Uruguay-China Chamber of Commerce (CCUCH) and the Chamber of Industries (CIU).
An unfavorable trade balance for Uruguay
In dialogue with Radio Carve, the president of the CIU, Fernando Pache, announced that, for now, there is no agenda in sight. However, the president of the CIU assured that they are willing to accompany the president’s initiative because they are “willing to accompany everything that is efforts to market opening that benefit the country. Meanwhile, Pache estimated that by this week it will be possible to know what steps to follow for the trip to China.
“We have the priority of accompanying a government initiative that is, basically, the market expansion in more competitive conditions trying to reduce tariffs that are paid from Uruguay for entering products into China,” Pache explained. Refering to negotiation, Pache stressed that the commercial relationship with China is unfavorable for him Uruguay.
In that sense, he explained that the trade balance of the Asian giant last year was 1.7 billion dollars in imports from Uruguay, while the country exported 1.3 billion dollars, giving a trade deficit of 400 million dollars for the country. “China has been a provider of Uruguay and more competitive than another part of the world could have been, otherwise we would not have this deficit”, Pache explained.
The controversy between Mercosur and the FTA
Yes ok Uruguay is on track to achieve FTA with China, the president of CIU highlighted the importance that Mercosur has in the country’s economy. “In the last year, Mercosur has been the market leader for Uruguay, displacing China,” Pache explained regarding the controversy that the possibility of an FTA with the Asian giant generated within the regional bloc.
The president stressed that, to achieve growth, local companies must have the possibility of compensating the local market with exports. “He Mercosur “It is an agreement that exists, which is imperfect and we all agree, but it is valid,” explained the president of CIU, who highlighted that exports to Mercosur surpass those of China.
The Argentina factor that worries
The president of CIU referred to the foreign exchange income from the exports, that were affected by a decrease in volume and also in the values per ton of those volumes, which generates a double impact on the country’s economy. However, he added that there is an issue that worries him even more: the Uruguayan consumption in Argentina due to the exchange gapwhich causes national production to fall.
Pache assured that close to 40% of sales on the coast of the Uruguay They were lost due to the massive runs towards Argentina. “In the sector of food and pharmacy, has had a 40% impact on decrease in sales. It is a lot of money and companies are doing the most they can to retain staff and restructure their costs,” explained the president, who also brought up the issue of the elections as an important factor.
“We are waiting for a change of government in Argentina, which could cause a different outlook for the end of the year. If there is a very strong devaluation in Argentina, where the official dollar approaches the blue. That will determine that Argentina’s internal costs adjust towards that value,” Pache explained.
Source: Ambito
