May 21, 2013
Argentine restrictions put Uruguay on edge
Government preparing for trade retaliation
Openly mistrustful of neighbouring Argentina, Uruguay is quietly preparing new measures that could counteract those recently adopted by the Argentine government — in particular, the measure announced last week and signed by AFIP tax agency head Ricardo Echegaray in which an additional 15 percent will be charged on all credit card purchases made by Argentines abroad.
This measure, to be published today in the Official Gazette, is a mortal wound to the palliative found by the Uruguayan Tourism Ministry for the coming summer.
A fortnight ago Uruguayan officials had announced that tourists could pay for property rental in credit card installments and at the official rate, saving them from searching for what is hardest to find, dollar bills that are 37% more expensive on the parallel or “blue” market.
Even La República, the Uruguayan newspaper that is most supportive of Uruguayan President José Mujica, yesterday attacked the measures implemented by the administration of President Cristina Fernández de Kirchner (who Mujica refers to as “my friend Cristina”). The daily newspaper, owned by a businessman from Santiago del Estero and members of both the Uruguayan and Argentine governments, yesterday published an article under the headline “Argentine tax director who implemented tourism corral buys flat in Punta del Este” — adding that the new flat is valued at 500 thousand dollars and highlighting the contradiction between the purchase and Echegaray’s comments on Friday, who had responded to the new measures by stating that Argentina “prefers that tourists spend their summer holidays in Argentina.”
Conservative daily El País, aligned with Mujica’s political opposition, stated in an editorial yesterday that “it is about time that President José Mujica loses his patience, puts an end to (the Argentine government’s) smothering attempts and assume that Argentina’s government has no love for Uruguay and, worse, does not respect either words nor treaties.”
The newspaper also demanded that Mujica find “alternatives to (Argentine) tourism right away,” because the annual amount brought in by Argentine tourism in Uruguay surpasses 1.3 billion dollars, and also requesting that the new targets of Uruguayan tourism should be “Brazil and Paraguay — the same Paraguay who we suspended from the Mercosur at the request of President Fernández (de Kirchner).”
Uruguayan Tourism Minister Liliam Kechichian also chose not to mince her words: the minister described Echegaray’s measure as “a new deterrent from holiday-making, not just in Uruguay but anywhere.” Kechichian stated that new measures were being considered by Montevideo to compensate the imbalance, but that announcing measures in advance would be “irresponsible” and that new proposals were being worked on “with much caution” — apparently the norm for dealing with the Argentine government. “We will make announcements at just the right time for doing so,” said the minister over the weekend.
However, the strongest response came from Broad Front and Upper House speaker Lucía Topolansky, who is also President Mujica’s wife. In statements to an Argentine radio station, the Uruguayan First Lady said that her government was analyzing a package of “compensatory or mitigatory measures, which will allow national industry and labour not to be affected” by the successive trade and tourism barriers erected by Fernández de Kirchner’s admininstration.
“Every time that a neighbouring country (an euphemism for Argentina) takes a measure, we in Uruguay inevitably have to take a good look and open our eyes. These measures, or some of them, have brought us problems,” recognized Topolansky. Between January and June this year, Argentine tourists spent 847 million dollars in Uruguay, with an average expenditure per tourist of 118.50 dollars a day.
Uruguay should also be preparing its anti-picket shields (against the Argentine government’s pickets): the federal court in Entre Ríos has just ordered the River Plate Admininstrative Committee (CARP) to “urgently” produce a report on the results of tests carried out in the Botnia-UPM pulp mill. This is a reaction to a request made by the lawyers representing the Gualeguaychú Citizens Environmental Assembly and the claims made through press statements by no less than the Argentine Foreign Minister, who, involved as head of the Foreign Ministry in the midst of the conflict between Argentina and Uruguay over alleged bribes paid regarding the dredging of the Martín García channel, is wagging this decoy to divert public attention from more serious issues.