Brazil & Southern Cone - September 2007 (ISSN 1471-4431

President Tabaré Vázquez is confident that Argentina and Uruguay could resolve their differences over the pulp mill being constructed on the banks of the River Uruguay before the end of the year. Vázquez expressed his optimism after meeting the King of Spain, Juan Carlos de Borbón, who is mediating the dispute, during a visit to Spain on 18 September. He said that the two countries could reach an agreement at the Ibero-American summit of heads of state on 8 and 9 November in Chile. 

The timing is significant: the summit is less than two weeks after the presidential elections in Argentina. President Néstor Kirchner is reluctant to jeopardise support for his wife Cristina Fernández by agreeing to a controversial compromise with Vázquez before the elections. The opposition is trying to derive political capital from the dispute by accusing Kirchner of failing to stop the construction of the pulp mill, which is being built by the Finnish company Botnia, while simultaneously antagonising Uruguay by refusing to allow Mercosur's supranational institutions to consider the dispute. On 19 September the main opposition candidate, Elisa Carrió, said that if she were to win the election, her first action would be to fly to Montevideo, embrace Vázquez, address the Uruguayan congress, re-establish close ties between the two countries and then continue negotiating the conflict.

The two countries presented their cases before the International Court of Justice (ICJ) at The Hague on 12 September but, given that no ruling is likely to be made before 2009 by which time the pulp mill will have been functioning for over a year, a bilateral agreement seems likely. Fernández, who has shown a marked predilection for foreign policy, will not want the dispute souring the early part of her mandate, should she win. She will, however, need to placate Argentine environmentalists and inhabitants of Gualeguaychú.

Uruguay's case before the ICJ was strengthened on 29 August when Vázquez inaugurated storage facilities and improved docks to serve the mill. As Vázquez cut the ribbon a group of Argentine protesters demonstrated 200m offshore. They crossed the River Uruguay in dinghies from Gualeguaychú. The Argentine government has filed a complaint to the ICJ claiming the mill violates a bilateral river protection treaty. Argentine protesters are now effectively guilty of "violating Uruguay's territorial waters".

Strike
Hundreds of workers staged a four-hour strike in Montevideo on 23 August to demand "vital changes" in Uruguay's economic policies. Aside from the usual demands for increases in salary, pension and education and health budget, the leader of Uruguay's main trade union Plenario Inte sindical-Convención Nacional de Trabajadores (PIT-CNT), Luis Puig, accused the government of selling 4m hectares of land to foreigners in the last six years while small domestic producers have to wait years to get hold of a tiny plot of land.