all of us and will be common to all. At that moment there was exchange parity both in Argentina and Brazil, parity was 1 to 1 between the dollar, real and peso.

But it seems that after January 13, 1999 as a result of a strong deficit Brazil was forced to float its currency and today 1 dollar is worth 2.78 reals whereas in Argentina 1 peso is 1 dollar and in Uruguay floatation exists at a lower level.

Consequently, that has determined that the disappearance of the monetary parity has made the association in terms of common external tariffs illusory since one of the countries has a totally different monetary parity.

Uruguay considers that in order to restructure the whole system we should implement a sort of monetary serpent just as Europe did where similar situations unfolded among Italy, Germany and France who have handled the monetary issue so as to restore balances and equal situations. This has basically made Argentina’s Economy Minister Cavallo to openly express his disagreement with the system more than once.

‘We are in between two large nations and have no weight to influence in them. The only thing
we try to do is keep our fiscal balances as stable as possible so as to maintain a risk rate enabling
us to take credits below a 5% interest’

Do you think the monetary question affecting the bloc will be solved?

It is very hard for the parties to reach compromise mainly because Brazil should change its policy toward the issue. For another thing, because Brazil calls for Argentina to reform its convertibility act.

In view of this scenario, what is Uruguay’s strategy?

We are in between two large nations and have no weight to influence in them. The only thing we try to do is keep our fiscal balances as stable as possible so as to maintain a risk rate enabling us to take credits below a 5% interest, which is what Uruguay has achieved.

After September 11 the global policy was restructured and today President Bush is closer to get fast track. Do you think this opens a window of opportunity for countries like ours, Argentina, Uruguay and the Mercosur as a whole?

We supported it and even took full part in it, the idea of carrying out what was then called the ‘Rose Garden Agreement’, an agreement materialized three months after the signing of the Treaty of Asuncion in 1991 upon President Bush’s (senior) proposal. Said agreement was ratified by Argentina, Paraguay and Brazil and by Uruguay in 1993. We, in Asunción, along with Argentina and with the active and full participation of Minister Cavallo managed to put this process into practice.

When the Cairns Group gathered by early September this year in Punta del Este with the participation of Robert Zoellick –the US Trade Representative with whom we had already held a meeting in Lima when President Toledo took power- this movement was started up.

Of course, after the September 11 appalling tragedy we doubted whether that would materialize at least in the short-term but the US government quickly told us –through our Ambassador in the US- they were especially interested in preserving ties to foster the ‘Four plus One’ agreement.

The fast track to negotiate trade agreements today called TPA (Trade Promotion Authority) –which has the same purpose- had already been raised in Congress and when Zoellick was in Punta del Este he reported us on that. The had founded expectations that the favorable vote from Congress would be obtained. I do not know whether the current events fueled the decision or not.

I do not think US Democrat lawmakers will give the fast track votes to the Republican party due to what has happened. I think Bill Clinton had began this process during his presidency and so it is very hard for a democrat three months after his party has left the White House to say no to what they had proposed to do sometime ago.

Therefore majorities will be obtained through the natural path of political decision of both parties. Moreover, former President Clinton met with President De la Rúa in Buenos Aires and then on his way back to the US he stopped in Rio de Janeiro and spoke with President Cardoso. We are fully aware that Clinton made positive comments to both rulers about this sort of trade deals with the United States.

‘I do not think US Democrat lawmakers will give the fast track votes to Republicans due to
what has happened (September 11). I believe it may be hard for Democrats, three months after
their party left the White House, to say no to the proposal they had raised some time ago’.

Let us now pass to Uruguay. What are the government’s immediate challenges?

The challenges are quite clearly and predictable. Some aspects have to do with the central government and the administration you (Argentines) called at one time autarchic and we call autonomous. They are mainly related to railways, harbors, telephone service, oil refining, drinking water services but not in the sense of privatization but in some cases term licenses, in other cases concessions and on others partial concessions such as determined cell bands that will give rise to new concessionaries in the market.

From the legal point of view, there are many things to do that relate to changes in certain social pension and welfare funds that are not public but private that group notaries, professionals, bank clerks, the so-called police and military funds and the Army’s organic laws.

Besides, a series of measures to reform the systems of industrial accidents and insurance of the corresponding bank with respect to occupational accidents.

The VAT issue is also pending......

Of course. It is a matter of changing the tax management structure. In sum, aspects related to the optimization of tax management in sync with the demands of the modern world.

After the opening of the beef market, many consider the Uruguayan economic is beginning to pick up and ignite debate of old issues.

The favorable resolution for Uruguay from the Technical Veterinarian Commission of Brussels results from the facts that we have properly conducted the necessary vaccinations and all foot-and-mouth disease focuses. As I said over thirty days ago there have been no new cases of foot-and-mouth in the country so we were in condition to welcome the veterinarian commission of the European Community to make the corresponding controls. The commission prepared the report and took a definite resolution on October 7 by giving Uruguay back the possibility to return to the European beef markets. As immediate result, Russia, the north of Africa, Israel and Chile have also opened their markets to us.

A few days ago, the National Party submitted you a proposal including 57 measures and points for Congress assessment....

The National Party had been considering the possibility including into the government agreement which keeps both parties as members of the Ministry, some issues that were of interest to it. The party raised a series of questions and we in turn had raised another list of issues some of which have already turned into bills in the Congress of the Republic. Tomorrow we will begin discussions with Economy Minister Alberto Bensión about some of the issue he has raised so as to give a right answer about them and define which of them we can endorse, which agree with our point of view , which should be modified and which ones we think are inappropriate right now.