Uruguay Denies Works are Underway in Free Trade Accord with US

Uruguay Foreign Affairs minister Reynaldo Gargano vehemently denied Thursday that the Uruguayan government was advancing in a controversial free trade agreement with United States.

The issue which has become controversial both inside the Uruguayan ruling left wing coalition and in Mercosur blew alarms in Brazil and Argentina.

Talk of a free trade deal between the U.S. and Uruguay is a sign Mercosur´s larger partners need to improve commercial relations with the trading bloc´s smaller partners, said Brazilian Foreign Relations Minister Celso Amorim.

“In reality, when we see declarations of disagreement within Mercosur, they should be the object of reflection from larger partners in the bloc,” Mr. Amorim said. “If Uruguay doesn´t see that Mercosur brings benefits, it´s because perhaps we haven´t done enough.”

Speculation about a free trade deal between Uruguay and the U.S. arose last week after Uruguay Economy Minister Daniel Astori expressed interest in such talks. However Minister Amorim pointed out that he doubted whether Uruguay would go so far as to complete a deal with the U.S. without the consent of its Mercosur partners.

"From a technical point of view, it´s not possible unless they leave Mercosur, which doesn´t look like it´s on the table at the moment" Amorim said.

According to a clause of the Mercosur agreement approved in 2000, Mercosur members must work as a bloc when drawing up free trade agreements with other nations.