OPINION: A new opportunity for Uruguay and China

President-elect Luis Lacalle Pou will take a pragmatic approach to foreign policy, a central pillar of Uruguay’s development

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Uruguay China relations could improve under new president Lacalle Pou

Supporters of president-elect Luis Lacalle Pou celebrate in Montevideo, Uruguay. The South American country’s relations with China could be less political and more pragmatic under Lacalle Pou (image: Jimmy Baikovicius)

Uruguay’s foreign policy has become increasingly important in national debates. This is partly because the country understands the relationship between foreign policy and economic development.

In a world that is convulsing and we face losing certain universal values, and where institutions are weak, the clarity of countries’ foreign policy becomes increasingly important. Currently, international relations are unpredictable and constantly changing, which will lead countries to have flexible policies and pragmatic views.

Due to Uruguay’s sizeable agricultural production but its small internal market, foreign relations are of central importance. That’s why in recent years, the government’s focus has been on Mercosur and the possibility of the bloc advancing its overseas agenda through trade agreements.

Luis Lacalle Pou aims for a Mercosur that is less political, more modern, flexible and open to the world

Mauricio Macri taking office in Argentina in 2015 boosted the South American common market’s foreign agenda, as it signed agreements with Colombia, the EU and the four countries of the European Free Trade Agreement (or EFTA, which includes Norway, Switzerland, Iceland and Liechtenstein). It also opened negotiations with Canada, South Korea and Singapore.

Although China has recently become Mercosur’s number one South America trading partner in recent years, the possibility of the bloc entering joint negotiations has not yet been considered.

On an official visit to China in 2016, outgoing president Tabaré Vázquez announced that the two countries would negotiate an FTA within two years, which unfortunately never materialised because Argentina and Brazil blocked it. More recently, Brazilian President Jair Bolsonaro announced that he is making progress in negotiations with China, although their scope is still unknown.

With the change of government in Uruguay comes a new opportunity. Luis Lacalle Pou, who won presidential elections last week, aims for a Mercosur that is less political, more modern, flexible and open to the world. This vision is supported by the appointment of Ernesto Talvi as foreign minister.

Leader of the main party of the new government coalition, Lacalle Pou is an expert with very good training who has the necessary capacity and preparation to deploy a very strategic, precise and, at the same time, firm foreign policy in times of extreme regional instability.

The expectation is that Mercosur will fail to reach a consensus on how to interact with China in the coming years. On the one hand, member country Paraguay continues to maintain relations with Taiwan, while for new Argentine president Alberto Fernández, China doesn’t fall within its main priorities. In Brazil, although Bolsonaro has softened his approach to China somewhat, it remains to be how his policies will impact Brazilian industry.

Given this context, it seems that recovering its own commercial sovereignty in order to negotiate a bilateral FTA with China is vital for Uruguay, which is evidently more feasible under a Lacalle Pou government. It would have enormous benefits for Uruguay.