Uruguay - International trade

Uruguay is a member of a variety of international organizations that promote free trade. In addition to membership in MERCOSUR, Uruguay also belongs to the World Trade Organization (WTO) and the Latin American Integration Association (ALADI). Membership in these organizations has dramatically lowered the tariffs Uruguay places on imported goods. Tariffs on raw materials have been reduced to 2-6 percent of the value of the imports and now average 8-10 percent on all goods. MERCOSUR rules still allow for tariff rates as high as 23 percent on certain goods, and tariffs of 20 percent are common on some consumer goods .

Uruguay has also sought to develop bilateral (oneon-one) free trade agreements, such as the one signed with Mexico in 1999, with major European and Asian nations. Uruguay does not have such a treaty with the United States, although the United States is a major trading partner and the largest foreign investor in Uruguay (with 32 percent of all foreign investment).

The government actively seeks to attract foreign companies to Uruguay. In 1999, there were 756 foreign companies operating in Uruguay. Foreign investment in Uruguay was US$5.6 billion in 1999. There are no restrictions on foreign ownership of businesses, and the government offers certain tax breaks and other incentives to foreign companies that relocate to Uruguay. In the government-sponsored free-trade zones, companies may be exempt from all taxes except social-security taxes . Goods can be shipped to and from these zones without any tariffs or export duties .

In 2000, Uruguay imported US$3.4 billion in goods and services and exported US$2.1 billion. Uruguay's main export markets are its MERCOSUR partners (45 percent of exports), the EU (20 percent) and the United States (7 percent). The main import providers are the

Exchange rates: Uruguay
Uruguayan pesos per US$1
Jan 2001	12.5610
2000	12.0996
1999	11.3393
1998	10.4719
1997	9.4418
1996	7.9718
SOURCE: CIA World Factbook 2001 [ONLINE].

MERCOSUR nations (43 percent), the EU (20 percent), and the United States (11 percent).