Uruguay - Trade AgreementsUruguay - Trade Agreements
In addition to being a member of the WTO, Uruguay is also a member of the ALADI and the MERCOSUR.
ALADI is a Montevideo-based trade association that includes ten South American countries plus Cuba, Mexico, and Panama. Uruguay holds numerous bilateral trade agreements of different scopes with ALADI partners. Under ALADI’s Economic Complementation Agreements, Uruguay enjoys and grants special preferential access to trade with Bolivia, Chile, Colombia, Cuba, Ecuador, Mexico, Peru, and Venezuela. ALADI’s general regional tariff preference mechanism (PAR, by its Spanish acronym) applies to goods traded between all member countries and it results in a reduction in the percentage of applicable tariffs.
Uruguay is a founding member of MERCOSUR, the Southern Cone Common Market composed of Argentina, Brazil, Paraguay, and Venezuela (Venezuela was suspended from MERCOSUR in December 2016 for failure to incorporate membership requirements), which entered into force in January 1991. Bolivia, Chile, Colombia, Ecuador, and Peru joined the pact as associate members. Montevideo is the headquarters of its Secretariat and its Parliament.
MERCOSUR—Andean Community of Nations (Bolivia, Colombia, Ecuador, and Perú)
The agreement (Acuerdo de Complementación Económica No 59) took effect in October 2004 and contemplated the liberalization of 80 percent of trade between the blocs.
In July 2004, Mexico was accepted by MERCOSUR as an “observer country” within the bloc, with a view to its inclusion as associate member.
The two blocs made a commitment to reach an agreement on integration by October 2004, but several differences between them impeded final negotiations. These differences are broad and include goods, services, investments, government procurement, and intellectual property rights, among other issues. Long-stalled negotiations were re-launched in 2010, and the two blocs have expressed their intentions to finish with negotiations by the end of 2017. Negotiations continue as of this writing and Uruguay places high hopes on a potential agreement between MERCOSUR and the European Union (EU).
Free Trade Agreements
In 2004, Uruguay and Mexico deepened a 1999 agreement, which resulted in Uruguay’s first comprehensive trade agreement with a non-MERCOSUR country. In October 2016, Uruguay signed a free trade agreement with Chile.
Over the past decade, Uruguay faced major problems in exporting to Argentina and has diversified its exports away from MERCOSUR. Trade relations with Argentina and Brazil are still important as the countries account for 20 percent and 30 percent of Uruguay’s exports and imports, respectively. In addition to MERCOSUR, there are separate bilateral agreements with Argentina and Brazil providing for administered trade of certain products, mainly vehicles.
Uruguay Trade Development and Promotion Trade Agreements