The industry of that country lost competitiveness and according to the union it could be aggravated by the arrival of more products from neighboring countries
The Uruguayan industry has been in a process of retraction and loss of competitiveness for a few years, and according to the sectorial union, this could worsen after the pandemic due to the arrival of more products from neighboring countries.
In Parliament, the Chamber of Industries (CIU) warned that Argentina and Brazil “will flood their production”, because when their economies are reactivated “they will not have the same (internal) market as four months ago” and they will see “With good eyes enter Uruguay with their products.”
This was said by CIU officials a few days ago during an appearance at the Senate Committee on Industry, Energy, Commerce, Tourism and Services.
He The reason was to provide legislators with a review of the sector’s situation, but it led to a collective catharsis about regional trade, what will happen in this regard after the pandemic and the insertion strategy that Uruguay must adopt.
José Pepe Mujica distrusts Argentina.
Former President José Mujica, senator of the Frente Amplio, expressed in the session: “We must foresee that in Argentina there will be a long crisis. There is also lot of dollar crises that is clouding everything. So it is not that we have to become protectionist or non-protectionist; the problem is that you have to foresee that there will be dumping (a commercial practice that involves selling below costs to gain market and eliminate competition), and that this will affect industrial work, not the entire industry, but some very specific ones that are dependent on the Argentine market. ”
Said regarding Brazil it would not be “so categorical”, but that the other neighbor “is going to come with everything, inevitably, with very cheap costs and we run the risk of becoming extremely weak”. He added that “I am old the Argentine film and I have seen it, I think it is an alert that we must keep in mind.”
Mujica’s reflection triggered words from different representatives of the CIU. “We see with great concern what is happening in Argentina; today they are not able to work, but when they start to do so, they will flood us with their production. And we believe that the same will happen with Brazil,” said the vice president of Micro and Small Companies of the CIU, Leonardo García, according to El País.
While CIU President Gabriel Murara admitted that there is “great risk in the region, especially with Argentina, which is very competitive and also very complicated with foreign currency.” Given this, “they send products at any price, they leave the money here and they make dollars that they cannot do there.” In this sense, he maintained that “they send a lot of dumping prices” and the process in Uruguay to prevent these commercial practices “is slow.”
According to the Real Exchange Rate Index published by the Central Bank (BCU) competitiveness with respect to Brazil was lost in the five months of the year -last data available- and in three against Argentina. The indicator for the region as a whole fell in four of the five months, with March being the only positive (when the dollar in Uruguay appreciated 9.85% and was the most important monthly rise in almost a decade).
Mujica expressed that “the problem that this crisis will pose is not easy“and he advised the industrialists” to ask the government to think a lot about this because, according to the country’s history, an Argentina that is doing poorly is like an anchor for us. “He stated that” today more than ever, it is important to see what things can be done to defend the existence of our national industry, because it does not have it easy. “Associated with this, Murara assured that” it helps us that Argentina is well, but we also have to be well from the competitive point of view ” .
In addition, the union leader warned that “You have to look at Paraguay”, because it has been “improving and improving” in commercial matters. “You have to be careful with these neighbors, who today do not have all the conditions but they are going to arrive, they are going to have traceability in the meat in two, three or four years, and we are going to have a much bigger problem, if not We arranged before, “he warned.
Another topic that dominated the session was trade openness and the possibility that Uruguay sign new trade agreements. Sebastián Pérez, economic advisor to the CIU, maintained that “we must be very insightful to see where we start, with whom we do it, in what country and at what time.”
He added that the studies show that “the most convenient thing is to do it with developed countries rather than with those that are developing,” because the latter “will compete with us in those sectors in which we are most vulnerable, in a way that we may not be able to.” bear so easily. ”
In that same tone, Pérez stated that the choice is “what comes first, the chicken or the egg? Do we wait to be in a position to put ourselves in competition or do we force the competition to put us in a position?”
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