Cristina Cafferatta CRISTINA CAFFERATTA

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Cuadernos del CLAEH

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Abstract

VAILLANT, Marcel. Why does Uruguay need to negotiate with the United States?.Translated byCristina Cafferatta. Cuad.CLAEH [online]. 2007, vol.3Selected edition, pp. 0-0. ISSN 0797-6062.

The paper discusses the reasons why Uruguay should develop a new framework of trade negotiations with the United States of America (USA). The initial argument starts with a critical assessment of the economic integration performance in the Southern Cone during the past decade. The South-South orientation for common trade negotiations with third parties are not aligned with the small countries interests in Mercosur, this is particularly the case of Uruguay. The second point is a description of the USA administration trade negotiations strategies of competitive liberalization. During the current decade, this global stance justifies the sign of many number of Free Trade Agreement (FTA) by USA government. This year the evolution of the Congress composition and other political events show a change in the trade policy that also is characterized in the article. In the third part there is a specific story about the trade flow and the evolution of trade policy between both economies. In an eventual free trade area with the North American market in the tradable sectors, Uruguay has not a defensive position and on the contrary it has many opportunities to exploit. The comparatives advantages of this developing small country are concentrated in the agriculture sector. In the industry sector Uruguay is currently intensively open to its major neighbors in Mercosur. Moreover, to open the Uruguayan economy to USA in tradable sectors could diminish the trade deviation cost associated with the regional agreement. This benefit from the Uruguayan perspective implies a small deterioration of the Brazilian position. In relation to the service liberalization and the other complementary trade rules of the FTA the country must define what he want to obtain with the agreement. It is possible to reserve some sectors and measures from the general rules of the liberalization process. In all this beyond the borders issues is basically a domestic discussion to define the orientation of the reform process associated with the agreement. The FTA gives the choice to develop some economics reforms that could have an adverse political economy in a conventional contractive adjustment.

Keywords : Uruguay; United States; international relationships; Mercosur; regional integration; international agreements.

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