Jun 4, 1991

URUGUAY FOR COLLAPSE OF ROUND RATHER THAN BAD AGREEMENT.

MONTEVIDEO (TWN/ROBERTO BISSIO)— "I would rather see the Uruguay Round collapse than have the name of my country associated with a bad GATT agreement" said Uruguayan President Luis Lacalle in Washington during a brief visit at the end of May.

President Lacalle told the Uruguayan press that U.S. President George Bush had "agreed completely" with his all or nothing approach.

During his meetings with American legislators, Lacalle endorsed President Bush's demand for congressional approval of "fast track" procedures for GATT in Congress.

According to recent studies by UNCTAD, Uruguay is one of the few Third World countries that would actually benefit from the U.S. sponsored reduction of subsidies to agricultural production.

But president Lacalle did more than just voice the demands of the Cairns Group of non-subsidising agricultural exporters: he wholly endorsed the American stand on the so-called "new issues" like patents, investments and services.

During his visit, the IMF and IDB (Inter American Development Bank) announced new credits to support the Uruguayan deregulative structural adjustment program.

After an official visit to Canada, Lacalle made a non-official stop-over in Washington, where he talked during ten minutes with U.S. president. According to his spokesman, he was invited by president Bush, but the White House explained that it was "a courtesy visit as requested by president Lacalle". The Uruguayan press explained the visit as a need of the Uruguayan government to show U.S. approval at home, at a moment when the Uruguayan Senate was discussing the recently signed common market agreement between Argentina, Brazil, Paraguay and Uruguay.

Customs tariffs between these countries are due to disappear in four years under the new trade block agreement, and Uruguayan labour and business circles worry about the future competition from Brazilian industry and Argentine agriculture.

Political opposition to Lacalle's government is divided in the appraisal of the "MERCOSUR" (Common Market of the South) treaty. Some groups estimate that integration under neo-liberal governments presently governing all four countries would only benefit transnational corporations and big business, while others see the block as "an alternative to the Bush Initiative, ‘Enterprise for the Americas’, to create ‘a single market from Alaska to Tierra del Fuego’ (the southern tip of South America)".

The MERCOSUR governments have yet to agree on a common Tariff for their imports from northern countries. While Brazil wants a high 40% tariff, in order to protect its industry from developed countries' manufactures, Uruguay and Argentina would prefer a very low 10% tariff; in order to demand similar open doors from Northern countries to their agricultural exports.

President Lacalle said in Washington that with the approval of the "fast-track" for Uruguay Round and the North American Common market (Canada, Mexico and the U.S.), a 114 plus 111 Treaty could be negotiated between the U.S. and the MERCOSUR countries, to establish a "frame agreement" for the MERCOSUR to be included into the Enterprise for the Americas.

"We do not want to build a protectionist wall around our four countries" said President Lacalle in the gardens of the White House.

This stand is clearly different from that of Brazilian diplomacy, which is opposed to U.S. proposals on GATT and has consistently protected his industry, particularly in the area of electronics and computers.

President Lacalle's self-designated role as spokesman of MERCOSUR was not welcomed by the Brazilian government and clearly indicates that inspire of official speeches, the countries involved still have to work a lot in order to work out the basic cohesiveness needed for their ambitious integration proposal to be credible.