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Monday, May 26, 2014

Bitter neighbours

By Andrés Federman
For The Herald

For many years, the idea of an Argentine-Uruguayan “brotherhood” was taken for granted by the local narrative in schools and official speeches. It was based on two pillars: one is the combination of geography, history and economics linking both countries; the other is a shared culture.

As for the latter, perhaps we should use the widest definition. So it ranges from mate and tango to Onetti and Páez Vilaró as well as Punta del Este, the summer haven for many wealthy Argentines. And many would include in that culture, the odd US dollar that gets lost on its way to AFIP and ends up in Punta del Este real estate or a nest egg in a Uruguayan bank. Nothing too serious. Just honest-to-God Argentine high middle-class tax evasion.

In terms of geography, both countries share — and have to “manage” — the River Plate and the Uruguay River. Not an easy job. Moreover, both countries compete for the merchant shipping business using the same river. This, in fact, triggered the latest spat, when Argentina decided to ban trans-shipment of Argentine cargo at Uruguayan ports. Luis Almagro, Uruguay’s Foreign Minister, accused the Argentine Under- Secretary for Ports, Horacio Tettamanti, of wanting to “harm the Uruguayans.” In turn, the latter replied that Argentina is not going to do the “valet parking” service for the Uruguayan ports. And that somebody in that country is delusional in the belief that Uruguay is going to become a major logistics centre while Argentina simply watches things happen. He defined the struggle for developing Argentina’s merchant shipping and logistic services as “a matter of life or death.”

If we leave shipping and paper mills aside, the most evident of Uruguay’s current woes related to its neighbour stem from Argentina’s own problems, namely the drop in its US dollars reserves. This forces trade restrictions harming Urugua-yan businesses that have in Argentina their main export markets. And it discourages foreign tourism much of which has Uruguay as its summer destination: the number of Argentine tourists last January and February dropped by 17 percent, while Brazilian tourism increased by 36 percent in that same period.

So the brotherhood seems to be going sour. In addition to Almagro’s words, an opinion poll made public last month revealed that 61 percent of Uruguayans consider Argentina to be the country which is less friendly to them. Even President Mujica, during his recent visit to the US made some comments which — although not specific — seemed aimed at the brothers across the River Plate. “We do not take bribes,” was one of them. So when and why did the brotherhood become so acrimonious? Many would agree that the controversy over the Botnia paper mill was the starting point. For Uruguay, that industry is important not only in terms of foreign direct investment or exports but also in terms of bringing jobs and business to an impoverished region of the country. The fact that the late President Néstor Kirchner condoned and endorsed the blocking of the Gualeguaychú — Fray Bentos bridge will not be easily forgotten. The problems listed above, which are not the only ones, continue to add controversies, and seem to be marking an end to the brotherhood era.

Obviously, it takes two to tango, so both sides of the bilateral relation could have done things better, bit their tongue every now and then or be prepared to lose some “family battles” with less of a bitter aftertaste. It may be now water under the bridge.

A realpolitik fan could argue that Argentina’s foreign policy has more important problems than Uruguay. And that it is not Argentina’s job to look after a country which — in any case — has a near to nil retaliatory power. True, this would be at loggerheads with the regional integration and Latin American brotherhood narrative. But that is everyday life in international politics.

More importantly: realpolitik can also be mistaken politik, especially in international relations. In the past few years, Uruguay shifted a good part of its Argentine-dependence towards Brazil-dependence. This change in trade and tourism figures was reflected in Uruguay’s Mercosur policies. In any vote related to Mercosur international trade in general, Uruguay is an automatic ally of Brazil.

So rather than the “little country” (paisito in Uruspeak), we might be looking at the rebirth of the myth that went along with “bilateral brotherhood.” It was “Uruguay is South America’s Switzerland.” And it won’t be very wise to have an acrimonious relation with that kind of country.

@andresfederman

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