Uruguay will expand support for its border trade: “Competing with Argentina is impossible”

“Competing with Argentina is impossible! It’s impossible!” Uruguayan President Luis Lacalle Pou said this Friday, putting himself in the shoes of merchants on the eastern border due to the loss of sales due to the foreign exchange disadvantage.

In a press conference when participating in an act for the end of the sugar cane harvest in the northern department (province) of Artigas, the president announced that it is ready and that in the next few days his government will send Congress a project expanding the scope of a law, in force since 2021, which provided tax relief and public utility rates for drinking water and electricity.

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These benefits now reach retail businesses whose gross income in the last fiscal year did not exceed four million inflation-indexed units (approximately US$500,000) and are located no more than 60 kilometers from the border crossing. That, according to the authorities, covers 85% of companies in the border segment.

“We are going to make this border law more extensive for larger companies, as the shopping centers requested,” while other items will be added, explained Lacalle Pou. “This is going to give more air to companies of all sizes,” he added.

He affirmed that the Uruguayan commercial sector “asks for opportunities”, not “protection”, against a level of prices in Argentina with which “it is very difficult” to compete.

These relief measures will be complemented by others, he said. Your government “is working on the issue of imports. It is no longer a legal issue, but one of regulations, some from the Ministry of Industry, Public Health, the Technological Laboratory or other agencies. We are working hard on this. This is not just a law. There are many measures. I insist, with prices as they are with Argentina, it is impossible to compete.”

MERCOSUR

On the other hand, Lacalle Pou reiterated the claim to achieve flexibility in Mercosur to be able to negotiate agreements with third countries or blocs alone, a proposal resisted by Argentina.

“Uruguay has faith to qualify… now that the World Cup begins,” but in order to compete in certain markets the country has the “imperative need” to “enter at more reasonable prices” and not pay tariffs that in some cases reach 35%, he noted.

“We are convinced that the famous decision 32 of 2000 is not internalized. We are an imperfect free trade area” and “we are legally authorized” to negotiate treaties like the one that Uruguay intends to agree with China. On the progress of these talks – which have eluded a feasibility analysis but have not yet entered the actual negotiation phase – he said: “The relationship with China is coming. We are advancing as fast as possible. The sooner the better. It will depend on the work that China does too”.

With information from El Economista