Negotiations now underway for a free trade agreement between China and Uruguay could open up more ties between the world’s second-largest economy and Latin America.
Uruguay and China completed a feasibility study on a free trade deal last month, putting them one step closer to a deal.
Maria Supervielle, an international relations and negotiations consultant in Uruguay, said there is a relationship of respect and trust between China and Uruguay.
“This favors trade between the two countries, especially the meat sector, a major sector in Uruguayan exports,” Supervielle said.
In the first half of this year, Uruguay exported about 1.8 billion dollars worth of meat to global markets. China bought about 60 percent of Uruguay’s sheep and beef during that period.
However, any deal must be approved by the Mercosur trade bloc, a four-member group of Argentina, Brazil, Paraguay and Uruguay.
In principle, Mercosur prohibits members from conducting trade negotiations with third-party countries individually. According to its rules, any trade agreement with third parties must be jointly negotiated by all members of the bloc.
Uruguay is not against the participation of other members in the negotiations with China. In fact, the country is leading a dialogue between the bloc to have all four members participate in the negotiations, or to remove any opposition to Uruguay to at least move forward with the agreement.
While Mercosur has traditionally focused on trade with other Latin American countries, it recently completed negotiations for an FTA with Singapore, highlighting a continuing shift in focus towards trade with Asia.
Henrique Reis, manager of international relations at the China Trade Center Group that promotes commercial, technological and cultural cooperation between China and Brazil, said there is room for Mercosur to create greater efficiencies. He told China Daily that the group is not as efficient today as it was 30 years ago when it was founded.
Obstacles to the China-Uruguay deal have come from Paraguay, which currently has no diplomatic relations with Beijing, and Argentina, which opposes the idea of bilateral trade deals outside the bloc.
“Countries have to look for the best opportunities. If Mercosur is not efficient now, countries will have to look for solutions to develop their business; that’s what Uruguay is doing,” Reis said.
Argentina has insisted on the need for an FTA between China and Uruguay to be discussed and approved by the bloc, a conversation that could lead to Argentina joining the deal.
The writer is a freelance reporter for China Daily.
