In This Article:
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China, Uruguay upgrade ties, sign cooperation documents
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Uruguay-China relations now match Argentina, Brazil
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Mercosur membership restricts Uruguay from China deal
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Uruguay plans to join China-led New Development Bank
(Adds Uruguay President remarks, trade figures in paragraphs 9-10)
By Joe Cash and Ryan Woo
BEIJING, Nov 22 (Reuters) - China and Uruguay upgraded their bilateral ties on Wednesday, setting the stage for further trade and investment and elevating the ambitious South American country's relations with Beijing to those of fellow Mercosur members Brazil and Argentina.
Uruguay is seeking to strike deals abroad that it hopes will be more beneficial to it than a local trade bloc, while China has for years sought closer ties with South America, in large part to secure access to raw materials such as grains and oils.
"China is ready to work with Uruguay to take establishing a comprehensive strategic partnership as a new starting point... and enrich cooperation," President Xi Jinping told his Uruguayan counterpart Luis Lacalle Pou at a meeting in Beijing's Great Hall of the People, Chinese state media reported.
China, the world's second-largest economy, is already a major investor in South America and has offered tariff-free access to its huge consumer market to four countries.
Lacalle Pou first proposed a free trade agreement (FTA) with China in 2021 to secure similar opportunities for its exporters as those enjoyed by Chile, Costa Rica, Ecuador, and Peru, and to boost exports of raw materials, industrial goods and technology.
But Uruguay faces opposition from other members of the Mercosur bloc who want to settle an FTA with Europe instead.
At present, Beijing has no tariff preference for Uruguayan beef, which constituted 67% of the South American country's exports to China in 2022, a market where there is a 12% tariff on the meat, United Nations COMTRADE data shows.
By comparison, other major beef exporters Australia and New Zealand, which have FTAs with China, pay tariffs at 3.3% and 0%.
Lacalle Pou commented on how China has become Uruguay's main trading partner and told Xi during the meeting about plans to join the Shanghai-headquartered New Development Bank.
China received 27% of Uruguay's exports in 2022, COMTRADE data shows, while Brazil purchased 17% of its outbound shipments, and Argentina and the United States 6% each.
MERCOSUR
Uruguay cannot easily sign a unilateral FTA with China because it agreed to a 'Common External Tariff' with Mercosur members, not least because the bloc reached agreement in principle on an FTA with Brussels in 2019.