Lacalle Pou: Uruguay and China in talks over bilateral free-trade deal

Uruguay and China will soon open talks over a new bilateral free-trade accord, Uruguayan President Luis Lacalle Pou has announced.

The news is sure to increase tensions within the Mercosur trade bloc, whose members are at odds over the right to negotiate commercial agreements without the approval of other states.

"We have received a formal response from the Chinese government by letter, accepting [our proposal to] advance with a free-trade agreement," Lacalle Pou said at a press conference on Tuesday.

Talks over a potential accord will begin with a feasibility study, which the two governments hope will be finalised by the end of the year. Should the results be positive, representatives from Beijing and Montevideo would then begin drafting a free-trade agreement.

"We will see if it is possible,” said Lacalle Pou, adding that “Uruguay is in a hurry."

The conservative leader announced back in July that his government would begin looking at bilateral trade deals with states outside of the Mercosur, a move that would contravene rules adopted in 2000 that prohibit the bloc’s members (Argentina, Brazil, Paraguay, Uruguay) from seeking external agreements without the approval of others.

Previously, the Chinese government had refused to negotiate with Uruguay without the approval of the bloc’s other members. Quizzed about Beijing’s position, Lacalle Pou read out a section of the letter his government had received: "We highly appreciate and welcome the Uruguayan side's proposal to start negotiations for a free-trade agreement between the two countries."

Lacalle Pou said that indicated Chinese premier Xi Jingping was “clearly talking about a bilateral agreement.”

Addressing tensions in the bloc, the Uruguayan leader said his nation had “a historic vocation" to "belong to Mercosur," yet that it also sought new markets.

Asked how he expected his regional counterparts to react, Lacalle Pou said that “Uruguay has been very transparent and very loyal” to the bloc.