ECON MINISTER OPENLY PROMOTES AN FTA WITH U.S.

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E.O. 12958: DECL: 01/04/2011
TAGS: PREL PGOV ECON ETRD EINV UY
SUBJECT: ECON MINISTER OPENLY PROMOTES AN FTA WITH U.S.

REF: A. MONTEVIDEO 0010

B. 05 MONTEVIDEO 1429

Classified By: Charge D'Affaires, a.i. Linda T. Gonzalez
for reasons 1.4 (B) and (D)


1. (SBU) Summary: Economy and Finance Minister Danilo
Astori's openly advocated negotiating Free Trade Agreements
(FTA) with the US and China this year, according to a
recently published interview. He also said that Uruguay's
left had matured and that it realized that investment meant
jobs, and he held out Chile as the regional model to emulate.
Astori's remarks reflect GOU pragmatism and confidence and
help to point the way forward (ref B) in our bilateral
relationship with the EP/FA government. End Summary.


2. (U) Below are selected excerpts from Minister Astoris'
end-of-the-year interview published in the January 5, 2006
edition of the weekly ""Busqueda.""

-- Back page headline: ""Uruguay Will Negotiate 'Free Trade
Agreements' with the U.S. and China to 'Give People Jobs'""

-- Subtitle: ""Astori says that the left ""is learning,"" that
the Executive branch has initiated a 'modernization' process
and 'if you ask me who I feel closest to on these issues, to
reason them out and to adopt government policies, I would say
without a doubt it would be Chile.""

-- (FTAs) ""Are the path to achieving the most important
objective of the Uruguayan left -- job creation.""

-- Uruguay has the image of a country that is serious,
responsible and one that keeps its promises -- that is very
important.""

-- In response to the question, is the idea to negotiate an
FTA with the US in 2006? ""Yes, of course. The sooner the
better.""

-- In choosing to adopt a regional economic model, Astori
clearly decided in favor of Chile's model and noted his
differences"" with the Argentine one. ""I identify much more
with the way in which the Government of Chile focuses on
priorities, utilizes its instruments and even its attitude
towards facing problems. I also share its vision of the
future and its vision about the role of government and its
relations with society and the private sector.""

#¿NOMBRE?
left might make things difficult in concluding a FTA with the
US: ""...but we are talking about our main commercial partner.
We are paying high import duties on meat that we are selling
in the US at very attractive prices. does it hurt us or
benefit us if we don't have to pay the tariffs by signing an
FTA?""

-- ""We also want to negotiate an FTA with China to establish
a more fluid relationship with that country.""

Comment:
--------------

3. (C) Astori's comments are another indication that the GOU
is confident it can continue to pursue orthodox macroeconomic
policies and independence in the face of radicals in its
EP/FA coalition and with its problematic Mercosur partners.
Judging from President Vazquez' adroit handling of the
Bilateral Investment Treaty (BIT) he probably can achieve an
FTA if all other conditions are met. We note, however, that
the radicals have not gone away and that some sectors have
been considerably strengthened by the recent passage of the
Labor Protection and Promotion"" law (ref A). End Comment.
Nealon