The Uruguayan government believes that an FTA with China would allow expanding Uruguayan exports.
To date, Uruguay has reported that it is considering a new FTA with China as part of its strategy to expand exports to new markets.
Meanwhile, on October 8, 2021, the Foreign Ministers of Argentina and Brazil exchanged views regarding the bilateral relationship and agreed to reduce the common external tariff for Mercosur to 10 percent.
The modification of the common external tariff requires the agreement of Paraguay and Uruguay.
Since 2017, Uruguay has entered into bilateral agreements with China under the Belt and Road Initiative (BRI), a global development strategy adopted by the Chinese that involves infrastructure development and investment in nearly 70 countries and international organizations in Asia, Europe and Africa.
During 2019, representatives from Uruguay and the National Development and Reform Commission of China held meetings to discuss projects under the BRI.
FTA with China
Uruguayan exports to China represented 10.7% in 2016, 16.3% in 2017, 16.6% in 2018, 20.9% in 2019 and 17.4% in 2020 of Uruguay’s total foreign sales in each of those same years.
In general, trade between Uruguay and China has historically favored China.
However, this trend has moderated over the years, and by 2020 the trade balance between the two countries was almost balanced.
In recent years, exports to China included live cattle, meat by-products, timber, dairy products, sheep, and wool and barley.
Uruguay has not had major regional or international conflicts in recent years.
Likewise, Uruguay has focused its foreign policy on international economic, political and legal issues and on the development of international agreements aimed at improving economic cooperation between nations, conflict resolution and international law.
Uruguay maintains diplomatic relations with 172 countries and is a member of 105 international organizations, including:
- United Nations.
- Organization of American States.
- World Trade Organization.
- International Monetary Fund.
- World Bank.
- International Finance Corporation.
- Multilateral Investment Guarantee Agency.
- International Center for Settlement of Investment Disputes.
- Inter-American Development Bank.
- Inter-American Investment Corporation.
- Andean Development Corporation,
- Asian Infrastructure Investment Bank.
China and Uruguay announced on July 7 that they will carry out a pre-feasibility study to evaluate the possible signing of a Free Trade Agreement between the two nations, despite Mercosur’s position of not allowing the countries to negotiate agreements outside the bloc. .
But if Uruguay independently maintained its international trade policy (for example through a biliteral FTA with China), it would be difficult to ratify a free trade agreement between Mercosur and the European Union.
For this reason, the FTA with China has attracted the attention of the international community.