Uruguay - Market OverviewUruguay - Market Overview
Uruguay’s economic base is its agricultural sector, exporting products such as meat, dairy, grains, and forestry products. 65 percent of exports are agricultural-based products. About half of all industrial production is dedicated to food processing or the refining of agricultural products. In 2018, cellulose became the number one export product. Uruguay is an attractive market for international companies. It is one of the most politically and economically stable countries in the region and has the ability to serve as a regional distribution hub through its Free Trade Zones.
Uruguay is experiencing the longest expansion in its history, with 16 years of economic growth and sucessful management of regional macroeconomic imbalances. However, Uruguay’s economic growth slowed to an annual average of 1.6% in 2018, negatively affected by a decline in international commodity prices and recessions in Argentina and Brazil — two of Uruguay’s top trading partners.
As of 2018, Uruguay’s top export destinations for its goods were (in rank order): China, Brazil, the United States and Argentina. Uruguay’s top sources of imports of goods in 2018 were China ($1.67 billion), Brazil ($1.63 billion), Argentina ($1.1 billion) and the United States ($697million). In 2018, Uruguay’s goods imports totalled $8.95 billion. Around 60 percent of the total were manufactured products such as machinery and electrical equipment, chemical products, transport equipment and foodstuffs. Between 2014 and 2018, imports fell by an annual average of 3.3 percent.
In terms of trade, Uruguay has "decoupled" from Argentina and Brazil in recent years diversifying away from its MERCOSUR partners. The country has opened to inflows of foreign direct investment from various countries over the last 15 years, reflecting greater confidence in the country's institutional framework and economic policy. Also, Uruguay's exports to its MERCOSUR partners have been declining since 2011 resulting in China overtaking Brazil as Uruguay's leading export destination in 2018. The percentage of total Uruguayan exports to China increased steadily from 2011 to 2017.
In 2018, the United States exported $697 million in goods to Uruguay, and imported $456 million from Uruguay, resulting in a U.S. trade surplus of $241 million. U.S. exports to Uruguay decreased 21 percent when compared to 2017, mainly due to the high volume of refined oil imports in 2017.
Top reasons why U.S. companies should consider exporting to Uruguay:
- Uruguay is an institutionally stable democratic country with strong rule of law and a commitment to international agreements and norms.
- Uruguay has a generally open trade policy and equal treatment of domestic and international companies.
- Due to its beneficial customs regimes with MERCOSUR countries and its strategic location between Argentina and Brazil, Uruguay serves as as a regional distribution platform.
- Due to the size of the country (3.4 million people) and the relatively high per capita GDP, Uruguay can function as a test market for those international companies that have no previous experience in the region.
- The U.S.-Uruguay bilateral relationship is strong. Uruguayan officials and business sector representatives have a favorable view of American business.
Uruguay Trade Development and Promotion