Uruguay says it is seeking a trade deal with China, with or without a Mercosur partner

Uruguay on Thursday insisted it would seek a free trade deal with China with or without its partners in South America’s Mercosur trading bloc.

When Argentina called for a common front at a Mercosur summit in Paraguay, Uruguay’s President Luis Lacalle Pou stood his ground, announcing that delegations from his country and China would meet “in a few days” to start negotiations on a Free Trade Agreement (FTA). .

Uruguay’s plans appear to violate a Mercosur rule introduced in 2000 that requires members to negotiate joint trade deals with third parties.

Established in 1991, Mercosur – a four-member bloc of Argentina, Uruguay, Brazil and Paraguay – represents a market of approximately 300 million people and an area of ​​nearly 5.7 million square miles (14.8 million square kilometers).

Lacalle Pou said his country will move forward with China amid “fear and uncertainty” caused by the lack of progress on a Mercosur trade deal with the European Union.

The agreement, signed in 2019, has not yet been ratified due to concerns from some signatories about deforestation in Brazil.

Uruguay’s main exports include beef, dairy products, pulp, rice and soybeans.

Argentina’s President Alberto Fernandez said Thursday any free trade deal with China, a potential market of about 1.4 billion people, should be pursued as a bloc.

He insisted that “single solutions” were not the way to go, imploring: “Mercosur has many more years to live. It has to live forever.”

Paraguay, which has diplomatic ties with Taiwan, also called for Mercosur unity and expressed “concern” about the possible importation of Chinese products with preferential tariffs “which may threaten the industries of Paraguay and Argentina, as well as Brazil”.

Lacalle Pou said after the initial negotiations with China: “Of course… the first thing we intend to do is talk to Mercosur to see if we all go ahead together.”

But he insisted Uruguay would go it alone if necessary.

Mercosur on Wednesday said it had struck a free trade deal with Singapore that would boost exports by about $500 million a year from $5.9 billion in 2021.

Brazilian President Jair Bolsonaro was the only head of state who did not attend the summit on Thursday. He sent a pre-recorded message.