Uruguay trade deals will be key to boost recovery

Significance

The move is part of a trade offensive by President Luis Lacalle Pou, who has instructed the foreign ministry to explore possible FTAs with other countries as well. In a region marked by political conflicts and instability, Uruguay is also seeking to position itself as a model country for investors despite its small domestic market.

Impacts

• Feasibility studies for the possible FTA with China will be done by the end of this year.
• Planned extra-Mercosur trade talks will clash with Mercosur norms and Argentina’s rejection of extra-bloc trade talks.
• The outcome of a possible referendum on the government’s key reform package is not yet clear.