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Germany And Uruguay Working Towards A Free Trade Agreement

Uruguay is the driving force for a free trade agreement

Letras Montevideo solo

Germany and Uruguay are both working for the successful conclusion of a free trade agreement between the EU and Mercosur (Mercado Común del Sur). Relations are also to be expanded in the infrastructure, energy and agriculture sectors, reported Chancellor Angela Merkel during President Tabaré Vázquez’s visit.

Chancellor Angela Merkel praised the positive and sustainable development of Uruguay, especially with a view to shared values in politics. She also pointed to Uruguay’s efforts to reduce poverty and to ensure the sustainable management of natural resources.

Uruguay, with the best Gini coefficient in Latin America, demonstrates that “an effort is being made not only to promote the economy, but also to ensure a fair distribution of wealth”. Uruguay, said the Chancellor, is also a good “example of a country that acts extremely responsibly at international level”.

Expanding bilateral partnership

Angela Merkel gave the example of the industrial sector as being extremely important in bilateral cooperation. Germany can support Uruguay within the scope of an industrial infrastructure programme, she reported. It can, for instance, help develop the country’s rail infrastructure. A declaration of intent will be published with Uruguay’s Ministry of Transport.

Uruguay is also working to put its energy supply on a sustainable basis, building on the use of renewables. “There is common ground here with the Ministry of the Environment,” underscored Angela Merkel. Over and above this, Uruguay attaches great importance to sustainable agriculture. In this context, the President of Uruguay will also be visiting the German Federal Ministry of Agriculture, she said.

Special bilateral relations between the two countries are also marked by the fact that Germany “discontinued classical development cooperation” at the start of this century. Nevertheless, more entry points have been identified to move forward with bilateral cooperation, said Angela Merkel.

President Tabaré Vázquez stressed, “There is scope to step up trade between our two countries, if we harness certain niches, and diversify trade in goods and services.”

Bilateral relations between Uruguay and Germany have traditionally been very good. In July 2016, Federal President Joachim Gauck made a state visit to Uruguay. He paid tribute to the 160 years of diplomatic relations between the two countries, and to the 100th anniversary of the founding of the German-Uruguayan Chamber of Commerce. In 2015 Germany was the main European destination for Uruguay’s exports and the main source of the country’s imports from Europe. That makes Germany one of Uruguay’s most important trading partners worldwide.

Developing fair trading relations

Angela Merkel described Uruguay as an important “driving force for free trade agreements”. With the assumption of the Presidency of Mercosur (Mercado Común del Sur), the country once again has the opportunity to work for free trade with Europe.

A change of direction in Brazil and the change of government in Argentina means that there is now a readiness to engage in negotiations with Mercosur. The next round of negotiations with the EU will take place in March, announced Angela Merkel.

The agricultural sector is a particularly sensitive area in this regard. Because Uruguay, in particular, is committed to the principles of the green economy and sustainable agriculture, “I believe that we have a good partner in Uruguay as a negotiating partner within Mercosur. We need fair solutions which leave both sides breathing space,” stressed the Chancellor.

The Uruguayan President advocated dismantling barriers to trade in order to “foster more equitable and balanced trade architecture worldwide”. Dialogue and economic cooperation between countries is the right way to put in place an enabling environment for inclusive and sustainable relations at global level.

With a view to other trade agreements, in particular with the USA, the Chancellor stressed that the EU is already engaged in negotiations with Japan, India and Australia, in addition to agreements already concluded with Peru, Colombia and Chile. “Within the scope of our G20 Presidency, we will also be addressing free trade. Then we will have more idea precisely what the priorities of the new American administration are,” said Angela Merkel.

Mercosur, Mercado Común del Sur, or the Southern Common Market, sees itself as more than a customs union. It also aims to protect human rights, foster the free movements of services and factors of production between member states, and harmonise their economic policies and legislation. The member states of Mercosur are Uruguay Argentina, Brazil and Paraguay.

[Source: The Federal Government of Germany-Media Relations]

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