Uruguay: Strategic Partner

Some fascinating things are happening in the South American nation of Uruguay that should catch the attention of policymakers in Washington. If they don't, we run the risk of missing a historic opportunity to re-orient hemispheric relations in a manner consistent with strategic U.S. interests.

Long overlooked as a nation in the shadow of giants Brazil and Argentina, Uruguay has traditionally carved out an important international role, projecting global leadership far in excess of its relative size. From the Uruguay Round of global trade talks that created the World Trade Organization, to the long-serving tenure until recently of a Uruguayan president of the Inter-American Development Bank, to the fact that the nation has had more troops per capita engaged in global peacekeeping activities than any other nation, Uruguay has a proud history of outsized ambition and performance.

Happily, with the election of President Tabare Vazquez in 2004, the tradition of Urugayan leadership is continuing, and indeed expanding. A medical doctor, party leader and former mayor of Montevideo, President Vazquez was supposedly at the vanguard, according to alarmists, of the leftist wave washing over the continent. Since his election by an absolute majority of votes, however, the president has set a course of strong, reasoned leadership in righting Uruguay's economy while engaging the global community.

Shared interests

In fact, if the United States is sensitive and proactive in responding to the signals Montevideo is actively sending, Uruguay could become a key to improved relations with South America, creating a new dynamic in hemispheric trade relations and forging ties based on true mutual interests.

Our relations are already strong. In 2004, perhaps surprisingly, the United States became Uruguay's largest market, followed by neighbors and fellow Mercosur partners Brazil and Argentina. In fact, in 2005 Uruguay's exports to the United States almost reached its total sales to all Mercosur nations combined, $760 million versus $781 million, respectively. In comparison, Uruguay's exports to the European Union totaled $587 million. Partly as a result of this expanding relationship, the United States and Uruguay have now signed the Bilateral Investment Treaty, which has been approved by the Foreign Relations Committee of the U.S. Senate. This treaty is an important step, linking our economies closer together with cutting-edge provisions that will provide important, mutual protections for business. But it is only a first step. In fact, early in August, Vazquez publicly called for a free-trade agreement with the United States, an extraordinary political move for the president who faces intense pressure from Mercosur partners on these issues, to say nothing of opponents in his own government.

Think strategically

It is now up to the United States to decide how to respond. Washington should see strategic opportunity. A trade agreement with Uruguay would go well beyond trade and investment, sending a powerful signal to the hemisphere that the United States is open for business and deepening relations, even with so-called ''leftist'' leaders, based on shared interests.

It would provide additional global linkages for Uruguay, giving it opportunities that would complement its membership in Mercosur. And it would provide an important boost to hemispheric trade talks, since Uruguay was one of a five-nation minority to urge reconsideration of the hemispheric Free Trade Area of the Americas during last year's Summit of the Americas in Mar del Plata, Argentina. As Secretary of State Condoleezza Rice said about the Americas, the United States charges no ideological price for partnership. The hemisphere is watching. If we move with alacrity to engage Uruguay in free-trade talks, we may be able to cement a new strategic opening in the heart of an important region of South America. But if we fail to seize the opportunity that has been offered, we will lose an important chance to advance the strategic interests of the United States in the Western Hemisphere. The choice is ours to make.

Eric Farnsworth is vice president of the Council of the Americas. From 1995-98, he served as an advisor for hemispheric affairs in the White House.