Brazil & Southern Cone - May 2013 (ISSN 1741-4431)

President José Mujica began the month of May by receiving Venezuela’s President Nicolás Maduro in Montevideo; he will finish it with a four-day tour of China. The two visits showcase the diversification of Uruguayan trade relations in recent years. In the list of Uruguay’s most important trade partners both Venezuela and China have displaced Argentina, with which Uruguay’s relations have grown increasingly strained, as Mujica acknowledged in two characteristically candid interviews granted to the Spanish news agency, Efe, and Britain’s Financial Times at his humble farmland abode on the outskirts of the capital city in mid-May.

For President Mujica, the visit of his Venezuelan peer served the purpose of strengthening increasingly significant bilateral relations. Venezuela is now Uruguay’s second largest export market, absorbing 7.1% of the country’s total exports behind Brazil (22%) but ahead of China (6.2%) and Argentina (6%), the president of the union of Uruguayan exporters (UEU) Teresa Aishemberg claimed. The UEU has also revealed that the sale of 1,550 cars to Venezuela in February was responsible for a 78% year-on-year increase in the figures for this sector. In this context, it is little wonder that Mujica was so keen to bring Venezuela into the Southern Common Market (Mercosur).

Strengthening Venezuela’s relations within Mercosur was the ostensible reason for Maduro’s trip to Uruguay (and then on to Argentina and Brazil), although in the wake of serious post-electoral concerns in Venezuela, the trip also served the purpose of boosting Maduro’s legitimacy. He took the opportunity to announce “a resurgence of the worst kind of fascism” in Venezuela, warning the whole continent to be careful that “the Right doesn’t contract this virus”.

During a joint press conference with Maduro in Montevideo, Mujica said that Venezuela’s inclusion in Mercosur was of “great importance”. He added that given the “asymmetries within Mercosur”, Venezuela would help provide “much more stable (not an adjective frequently applied to the country) and more symmetrical relations” in the bloc.

Maduro like his mentor and predecessor, Hugo Chávez (1999-2013), opted for a more grandly idealistic evaluation of Venezuela’s admittance into Mercosur: “the 19th century was the century of division when we won the first part of our independence; the 20th century was the century of imperial domination, of dictatorships, and the plundering of our countries; the 21st century is the century of liberation and union. For this reason we are here”. Marduro portrayed Mercosur as Chávez’s “Bolivarian vision” of integration.

During the press conference, Maduro also announced the signing of a strategic alliance in the field of energy between Venezuela’s state oil company, Petróleos de Venezuela (Pdvsa), and Uruguay’s Administración Nacional de Combustibles, Alcohol y Portland (Ancap) to ensure “the permanent supply of oil and derivatives to Uruguay”. He provided no further details. Such an alliance had already been declared by Chávez several years ago.

Maduro also hailed “commercial, agricultural, energy, cultural and human union” between the two countries. In practical terms this translated into food accords pertaining to Uruguayan exports of milk and meat to Venezuela signed by the two presidents, as well as other accords on technological development, fishing and space cooperation.

Maduro visited the electrical transformer company, Urutransfor, which will provide supplies and services to modernise the Caracas metro. Urutransfor will also, according to Maduro, provide the know-how to enable Venezuelan firms to do the same in future. Maduro concluded his visit by driving a bus to the headquarters of the radical umbrella trade union Plenario Intersindical de Trabajadores-Convención Nacional de Trabajadores (Pit-Cnt) where he delivered a speech.

Despite the growing importance of trade ties with Venezuela, Mujica has been frank in calling for Maduro to pursue the path of “compromise” in Venezuela and to seize the opportunity provided by the rarefied post-electoral climate to show “his true stature as a leader”. He also went as far as to tell the FT on 16 May that “If he (Maduro) wants to be Chávez it’ll flop”. Sage advice no doubt, but decidedly risky especially given Maduro’s aping of Chávez. Indeed, it is difficult to imagine any other Latin American leader escaping rebuke for such comments. Maduro reacted furiously to the suggestion by Peru’s former foreign minister, Rafael Roncagliolo (who resigned on 14 May), shortly beforehand that his government should seek “a climate of dialogue, tolerance and mutual respect” in Venezuela. Maduro said that Roncagliolo had made the “mistake of his life” for daring to interfere in Venezuela’s internal affairs.

China trip

Mujica will arrive in Beijing on 25 May to begin a four-day tour of China at the head of a large delegation, including Foreign Minister Luis Almagro, Transport & Public Works Minister Enrique Pintado, and Industry, Energy & mining Minister Roberto Kreimerman; as well as the presidents of the association of State railways, Jorge Setelich, the national port administration, Alberto Díaz, and national meat institute, Alfredo Fratti. Mujica will meet Chinese President Xi Jinping, Prime Minister Li Keqiang, and the president of the popular assembly, Zhang Dejiang.

The main purpose of Mujica’s visit is to strengthen bilateral relations and to attract Chinese investment to Uruguay in the naval, forestry, railway and telecommunications industries in particular. Uruguayan exports to China in 2012 totalled US$1.84bn, leaving it with a narrow bilateral trade surplus of US$176m. Mujica’s predecessor, Tabaré Vázquez (2005-2010), became the first Uruguayan president to visit China in March 2009, since then trade has increased dramatically with exports jumping 102% in the first half of 2010 and surging onwards thereafter.

Argentina’s autarchism

Trade ties with China and Venezuela are increasingly important for Uruguay given the uncertainty across the River Plate. In his interview with the Spanish news agency Efe, Mujica said that Argentina had a “very autarchic, very protectionist project” which was “complicating relations and multiplying difficulties” but it is “a consequence of the model they have chosen for economic relations”. And this fresh from his coarse comments about Argentina’s President Cristina Fernández picked up by a microphone he had thought was switched off [RBS-13-04]. Still, the FT recorded him as saying Fernández was a “great friend”, although “It doesn’t mean we agree...We’re on different paths… we think that for our country, stability and the rules of the game, investor security, are a strategic capital that is non-negotiable”.

• Glow-in-the-Dark Sheep

Uruguayan scientists have announced the creation of Latin America’s first genetically modified sheep. This could pave the way for further discoveries in biomedicine and infectious diseases. The scientists used a gene from jellyfish in order to breed the sheep, imbuing them with the ability to glow when under a UV light.

• Foreign tour

After his visit to China, President Mujica will visit Spain on 29 May, where he will be entertained by King Juan Carlos I and Prime Minister Mariano Rajoy. He will then travel on to Vatican City on 1 June for a private meeting with Pope Francis before returning to Spain. He will culminate his foreign tour in Italy on 5 June, where he will meet President Giorgio Napolitano.