WORLD TRADE  
ORGANIZATION  WT/TPR/M/163 
3 August 2006 
 (06-3760) 
Trade Policy Review Body 
17 and 19 May 2006  
 
 
TRADE POLICY REVIEW 
 
URUGUAY 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Eirik Glenne (Norway) (first day) 
H.E. Mrs. Claudia Uribe (Colombia) (second day) 
 
 
  Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF URUGUAY 4 
III. STATEMENT BY THE DISCUSSANT 8 
IV. STATEMENTS BY MEMBERS 10 V. REPLIES BY THE REPRESENTATIVE OF URUGUAY AND 
ADDITIONAL COMMENTS 19 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 24
 
 
 
 
Note:   Advance written questions by WTO Members and the replies provided by Uruguay are 
reproduced in document WT/TPR/M/163/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/163 
 Page 3 
 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third Trade Policy Review of Uruguay was held on 17 and 19 May 2006.  In the absence 
of H.E. Mrs. Claudia Uribe, who had been called to urgent duties elsewhere, the Chairperson was 
H.E. Mr. Eirik Glenne for the first session of the Review.  H.E. Mrs. Claudia Uribe would chair the second session of the Review.  The Chairperson welcomed the delegation of Uruguay, headed by 
H.E. Mr. Carlos Amorín, General Director of In ternational Economic Affairs in the Ministry of 
Foreign Affairs, and the discussant H.E. Mr. Mario Matus (Chile).  As usual, the discussant would 
speak in his personal capacity and, in accordance wi th established procedures, had made available in 
advance a broad outline of the themes he in tended to raise (document WT/TPR/D/139). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures of the meeting.  The Report by Uruguay was contained in document WT/TPR/G/163 
and that of the Secretariat in document WT/TPR/S/163.  As indicated in document WT/TPR/6/Rev.1, 
the Member under review should provide written answers,  by the beginning of the review meeting, to 
questions submitted at least two weeks before the m eeting.  Questions posed subsequently should be 
answered, to the extent possible, be fore the start of the second session of the meeting.  Questions left 
unanswered at the end of the second session should be  answered in writing no later than one month 
after the meeting.  Questions by the following dele gations had been submitted in writing at least two 
weeks in advance of the meeting and had been tr ansmitted to the delegation of Uruguay:  Japan;  
Chile;  Chinese Taipei;  Colombia;  Canada;  Turkey ;  Argentina;  and Hong Kong, China.  Copies of 
these questions and of the answers provided by th e delegation of Uruguay were available in the 
meeting room.  The European Communities;  Korea;  Singapore;  the United States;  Mexico;  Brazil;  
South Africa;  and Bolivia had submitted written ques tions after the two-week deadline.  Copies of all 
advance questions, as well as the responses receive d from the delegation of Uruguay, are reproduced 
in document WT/TPR/163/Add.1. 
3. The Chairperson observed that, since its l ast Review in 1998, Uruguay had successfully 
overcome a protracted economic recession and a seri ous financial crisis.  Both reports emphasized 
that Uruguay's economy had been expanding rapidly since 2003, and that both export growth and new 
investment had played a crucial role in supporting this recovery.   
4. The Secretariat report observed that Uruguay did not resort to trade policy measures in 
attempting to alleviate the serious financial crisis.  Instead, it continued to take steps to facilitate and 
liberalize its trade regime, and to implement its international commitments.  However, both reports 
pointed out that further efforts were needed to help ensure the sustainability of current economic 
growth.  According to the Secretariat report, it w ould be particularly important for Uruguay to further 
liberalize its economy on an MFN basis, and anchor  these efforts through multilateral commitments.  
The Chairperson believed that Members would be in terested to learn whether Uruguay agreed with 
this view. WT/TPR/M/163 
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II. OPENING STATEMENT BY THE REPRESENTATIVE OF URUGUAY 
5. The representative of Uruguay
 stressed the importance that Uruguay attached to the trade 
policy review mechanism, which was a valuable t ool in ensuring the transparency of the policies 
implemented by the authorities.  The TPRM provided an opportunity to explain to other WTO Members the views of the Uruguayan Government and its current and fu ture trade policy directions.  
In addition, it enabled Uruguay to conduct an inwa rd assessment of the effectiveness of those policies 
and the measures applied.   
6. Uruguay had always seen its obligations under the GATT and the WTO as a firm 
commitment.  It had formulated and implemented its general and sectoral trade policies in accordance 
with these rules, which were also essential to Ur uguay's international integration.  Compliance had 
required Uruguay to adapt its regulations in a num ber of trade policy areas, for example, its anti-
dumping legislation, as well as its technical standards and sanitary and phytosanitary standards.  This 
had also been the case with respect to the rules governing intellectual property rights;  Uruguay had amended and modernized its legislation on trade- marks and patents as well as copyright and related 
rights to bring it into conformity with its obliga tions under the TRIPS Agreement.  The Agreement on 
Services had also helped Uruguay to reassess th e importance of that sector for its economy. 
7. Uruguay attached considerable importance to its  inter-relationships with other countries and 
its integration in the international economy and inte rnational markets on the basis of internationally 
agreed rules.  To that end, Uruguay had drawn up an  overall strategy in which all forms of external 
negotiation, whether bilateral, regional, or multilate ral, were complementary rather than mutually 
exclusive.  In the context of the negotiations un der the Doha Round, Uruguay was seeking to promote 
its trade interests by concluding agreements to eliminate export subsidies, effectively reduce and 
discipline domestic support, and substantially reduce tariffs and other market access barriers. 
8. Uruguay was a determined and convinced proponent  of the principle of multilateralism in the 
relations between states in general, and in its trad e relations in particular.  Uruguay had joined the 
GATT in 1953, and had participated actively in all of the trade rounds.  Uruguay considered that the 
commitment to multilateralism ensured that the right s of all nations, in particular the less powerful 
and less developed among them, were fully protected .  Uruguay had always been a staunch advocate 
of free trade, the reduction of barriers to trad e, and non-discrimination between Members of the 
system, three of the basic principles of the GATT, and of the WTO.  It also believed that these 
principles should be applied equally to all sector s of trade and supported the idea of bringing 
agriculture fully within inte rnational trade disciplines. 
9. Negotiations on agriculture were Uruguay's main ar ea of interest.  It was in this area that 
Uruguay hoped to obtain the greatest benefits, si nce improved access, and commitments with respect 
to other trade distortions, should enable it to de velop higher-value-added exports that met the demand 
of developed countries, which was as yet very limited.   
10. Uruguay had joined the G-20 in 2005, and was one of the founding members of the Cairns 
Group.  This dual membership reflected the prior ity Uruguay gave to proactive export interests, 
bearing in mind the specificities of developing countries. 
11. The representative of Uruguay recalled that agricu lture had been made s ubject to international 
trade disciplines for the first time during the Ur uguay Round, a development that had paved the way 
for the reduction of export subsidies and domes tic support, and obtaining better market access 
conditions for agricultural products.  Although only partial and insuffi cient, this process – supported 
by Uruguay and the Cairns Group – formed the basis of the Doha Round negotiations, with 
agriculture as one of the key and indispensable elements.  WT/TPR/M/163 
 Page 5 
 
 
12. Uruguay wished to see this Round reflect a true development dimension capable of generating 
better terms of trade and of contributing to the we lfare of the developing country WTO Members.  For 
this reason, it was essential to achieve ambitious results in agriculture encompassing solutions for the 
three pillars of the negotiations a nd providing for substantial improve ments in market access, the total 
elimination of all kinds of export subsidies, and the reduction of do mestic support and introduction of 
strict disciplines in that area.  Uruguay hoped that these negotiations would make ambitious progress 
towards strengthening trade in freer and fairer c onditions, with special attention to the needs of 
developing countries. 
13. During 2004-05, the Uruguayan economy had cons olidated its recovery, which had begun in 
early 2003, when Uruguay had found a way out of the crisis in its financial system and had come up 
with a solution to the concentration of public debt  maturity dates.  Overall production of goods and 
services had grown sharply, recovering much of the ground lost between 1999 and 2002.  Tax revenue 
had risen considerably and, coupled with the cont rol of public spending, had led to a significant 
increase in the primary fiscal surplus, helping to a llay uncertainty and boost international investors' 
confidence in the Uruguayan economy.  The Central Bank of Uruguay had pursued a set of monetary 
policy objectives in a floating exchange regime, enabli ng it to bring the retail inflation rate down to 
below 10%.  The process of strengthening the fi nancial system that had begun in 2003 had been 
further consolidated and there had been a signi ficant improvement in the soundness and liquidity 
indicators of the financial intermediation institutions. 
14. Uruguay's macroeconomic outlook for the next few years remained favourable.  Gross 
domestic product was expected to increase by 4% to 5% in 2006, and by 3% to 3.5% in the years that 
followed.  In terms of demand, production growth w as expected to be sustained by an expansion in 
consumer spending, based on the recovery of re al wages and employment, and by exports.  A 
significant recovery was also expected in fixed i nvestment, which was essential to ensuring continued 
medium-term economic growth. 
15. A fair and sustainable growth strategy called for the creation of the right conditions for the 
expansion of productive investment, which, for an  economy such as Uruguay's, presupposed an export 
drive to achieve the scale that made efficient pr oduction possible.  Uruguay had a small economy, and 
attached particular importance to interrelating with  other countries and integrating into the global 
economy and international markets on the basis of in ternationally agreed rules.  It focused trade 
policy on the following basic aims:  at the external level, improving market access for Uruguayan goods and services and securing a competitive suppl y of inputs and capital goods for domestic 
producers;  and at the internal level, producing a ra nge of exports that would satisfy the nature and 
requirements of foreign demand. 
16. Uruguay's strategy should lead to competitiv e integration in the global economy, by 
promoting the marketing both of products with stat ic comparative advantages and of products with 
greater value added that exploited Uruguay's dynamic comparative advantages. 
17. A basic objective of Uruguay's external nego tiations was to achieve better, stable, and 
predictable market access conditions at all levels.  In this respect, economic-commercial integration 
was critical for its growth, and in Uruguay's overall  strategy the various scenarios of the current 
negotiations were complementary and not mutually exclusive. 
18. At the regional level, Uruguay was a full and active member of MERCOSUR and had 
consistently pointed out the need to consolidat e the ties between the countries that made up the 
customs union and to strengthen the latter's ins titutions.  Uruguay saw MERCOSUR as a process of 
open regionalism which should improve access to regi onal markets, and to extra-regional markets 
through joint negotiations with third countries.  The internal and external components, of the customs 
union needed to be developed simultaneously .  MERCOSUR was an essential component of 
Uruguay's growth strategy and the success of the latt er depended on the progress of the former.  Any WT/TPR/M/163 
Page 6  
 
standstill or backward step in building the region could be very costly for the small economies of 
the bloc. 
19. Uruguay had not been able to create the conditi ons to attract investment in manufacturing, 
where efficiency depended on scale.  This woul d help diversify and add value to Uruguay's 
competitive exports, which traditionally consiste d of natural-resource-intensive products. 
20. Due to the delay in consolidating the customs union and the generally slow pace of external 
negotiations, it had become essential to explore the possibilities of improving access to other markets 
through bilateral agreements with a trade conten t, capable of creating opportunities for attracting 
investment and hence for promoting growth, creati ng jobs, and reducing poverty.  Uruguay had signed 
a free-trade-agreement with Mexico on 15 November 2003.  It was also holding trade talks with the 
United States within the framewo rk of the Joint Commission on Trade and Investment, to strengthen 
economic and trade links.  Uruguay was also wo rking on agreements to protect and promote 
investment and on double taxation agreements, wh ich could help expand production opportunities by 
facilitating the incorporation of technology and improving access to foreign markets. 
21. The main objective of Uruguay's investment regime, Uruguay's was to promote and protect 
investment, both domestic and foreign, with a commitment to non-discriminatory treatment on the 
part of the State.  Uruguay's legal provisions clearly  defined the freedom to invest, without any need 
for registration, and the freedom to transfer cap ital and profits abroad.  This general objective was 
supplemented by more specific goals such as greater  efficiency, export expans ion and diversification, 
the establishment and the strengthening of enterpri ses, encouragement for technological development 
and support services for industry, increased pr oductive employment, integration of activities, 
promotion of small and medium-sized ente rprises, and geographical decentralization. 
22. The Executive had submitted a draft competition law that sought to promote competition and 
repress anti-competitive practices in Uruguay.  Th ese objectives would be achieved by improving the 
definition of prohibited practices and making the investigations more  economically efficient.  The 
implementing body was being removed from the Ministry of the Economy and Finance to become a 
decentralized agency of that ministry, which s hould give it greater independence from the political 
sector.  The legislation would incorporate a system of prior notification of mergers and acquisitions;  and a decision-making tribunal would be created.  Co mpetition policy needed to be supplemented by 
rules and regulations on commercial bankruptcy.  A strong competitive system depended on the 
existence of efficient legal mechanisms that ente rprises in financial difficulty could employ;  the 
current system had been substantially the same since 1926 and was clearly obsolete. 
23. The draft competition policy law would enable en terprises to achieve rapid legal resolution of 
their problems, allowing a distinction to be drawn between enterprises that were economically viable 
and those that were not, while ensuring that the la tter were promptly liquidated.  The draft included 
elements that separated ownership from production and, in the last reso rt, allowed for the survival of 
an enterprise despite its owner's intentions, if cer tain requirements were met.  The draft law also 
aimed to incorporate market mechanisms that would enable the quick determination of an enterprise's 
viability, and, if it was found not to be  viable, allow for its rapid liquidation. 
24. The representative of Uruguay noted that the refo rm of the National Customs Directorate was 
part of the strategy of international integrati on, and improved conditions for competitiveness in the 
production of goods.  This presupposed an adaptation to the trends in international trade, in the areas 
of trade agreements, security, cargo risks, sanitary  and environmental conditions, and the trade supply 
chain.  Customs would move beyond its traditional role of controlling imports and collecting duty to 
play a significant part in trade facilitation, both in exploiting the advantages for more competitive 
suppliers and in reducing the access risks resu lting from trade negotiations.  As Uruguay might 
become a distribution and transit centre for the region, Customs needed to facilitate smooth and  WT/TPR/M/163 
 Page 7 
 
 
secure trade flows, in total compliance with regul ations and sanitary and security requirements, 
making it possible to generate new activiti es and sources of income and employment. 
25. The tax reform programme undertaken by the new administration emphasized fairer 
distribution of the tax burden and a greater role for direct taxes, a more efficient tax system, and consistency with the creation of appropriate incen tives for productive investment.  The system would 
be simplified by reducing the numbe r of taxes and eliminating distortionary taxes that produced little 
revenue, the existing exceptions and exemptions w ould be reviewed, and pe rsonal income tax would 
be gradually introduced. 
26. The proposed tax schedule, with lower rates, greater simplicity, greater sectoral fairness, and 
improved audit facilities, would promote the form alization of the economy and discourage evasion, 
which would help to reduce the burden on the honest  taxpayer.  Greater fairness with respect to 
sectors and sources of income would improve tr ansparency.  A dynami c approach to fiscal 
responsibility had been chosen, so as to avoid di sruptions in public accounting and the functioning of 
the State, while allowing the tax burden to be reduced as receipts permitted. WT/TPR/M/163 
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III. STATEMENT BY THE DISCUSSANT 
27. The discussant
 welcomed the delegation of Uruguay and thanked the Secretariat for its 
Report.  His presentation was in three parts:  an ap praisal of the Trade Policy Review Mechanism, his 
perception of Uruguay's foreign trade policy, and Uruguay's political and trade situation, including border protection, crisis, debt, and MERCOSUR. 
28. With respect to the TPRM, he noted that th e original purpose of the mechanism was to 
monitor the trade policies of WTO Members, but not in a neutral way, hence the term "review".  The 
backdrop to the reviews was free trade, and ideally  the exercise should conclude with comments or 
views that the countries under scrutiny would take  into account.  In its last review, it was 
recommended that Uruguay continue its efforts to diversify its trading structure.  This had not 
happened, or not with the necess ary intensity:  analysts had linked the profound economic and 
financial crisis that affected Uruguay between 1999 and 2002 with the country's strong dependency on 
the Argentinean and Brazilian markets.  
29. Uruguay was called the Switzerland of America, although there were differences in size and 
populations.  In addition, Switzerland's GDP per cap ita at US$34,000, in terms of purchasing power, 
was considerably above Uruguay's US$11,500.  Desp ite these differences, the two countries had been 
likened due to their political stability;  this ha d been achieved by Uruguay in the middle of the 
19
th century, and was an important component of its development process.  The second important 
component had been trade, particularly in livest ock.  Livestock production continued to be highly 
efficient, and Uruguay's exports of meat, leather,  and wool were geogra phically diversified.  
Brazil and Cuba consumed Uruguay's meat (dried);  France, Germany and Be lgium, its wool;  and 
Great Britain and the United States, its leather.  Between 1881 and 1885 Urugua y had had a per capita 
income of US$317, which was comparable to or highe r than that of the Unit ed States in the same 
period.  All this had been helped by the free tr ade practised by Britain and Europe, which had gone 
into crisis in 1929. 
30. Thanks to its political and economic stability, Uruguay had seen important social and cultural 
advances;  by the beginning of the 20th century Uruguay was the most modern country in the region.  
Culturally, it was highly developed, illiteracy wa s on the decline, there was a relatively stable 
democracy, a strong middle class and a collegiate Executive along Swiss lines. 
31. A relative decline in economic prosperity in the 20th century had culminated in the latest 
crisis, in 2002.  The causes of the latter had been ma ny, but what mattered was the influence that trade 
policy could have on the country's course towards development.  Uruguay was open to international 
trade, which amounted to nearly 60% of GDP.  Ur uguay depended considerably on this trade, and 
given the size of its economy, it was natural that it should seek the opening of third markets, demand 
clear and stable rules in the international system, a nd adopt an offensive, pro-trade position rather than 
a defensive and mercantilist one.  
32. The Secretariat report had pointed out that, since its last review in 1998, Uruguay had 
continued to revise its laws and regulations to libera lize and facilitate trade.  For example, the average 
MFN tariff had fallen, from 12.2% to 9.3% in 2005.  However, this positive trend was marred by the 
existence of other import charges such as a co mmission charged by the Banco de la República 
Oriental del Uruguay (BROU) and a "consular tax" , amounting respectively to 2.5% and 2% of the 
c.i.f. value of the imports.  Improvements were likewise needed with respect to certain customs 
procedures. 
33. During the period under review Uruguay had also applied "special import duties".  Although 
these duties were not allowed to exceed the WTO bound level, they nonetheless ran counter to the 
spirit of liberalization and the predictability of the multilateral trading system.  Also, there was a wide 
gap between applied and bound tariffs  and it would be interesting to know if Uruguay intended to  WT/TPR/M/163 
 Page 9 
 
 
narrow it.  The discussant also requested comments re garding the refund of indirect taxes and export 
taxes identified by the Secretariat as fiscal incentives for exports. 
34. Another matter of concern was the high external-debt-to-GDP ratio.  The Uruguayan 
authorities were having to maintain macroeconomic stab ility in order to be able to meet the enormous 
debt service payments.  For largely exoge nous reasons, between 1998 and 2002 outflows had 
increased to unprecedented levels, causing the debt to increase from 40% to 109% of GDP.  The 
World Bank had estimated that poverty had reach ed a level unthinkable for Uruguay (24%) during 
that period.  In only four years, family income  had fallen by 20%.  Nonetheless, the democratic 
system had been maintained and had emerged strong er from the crisis.  Thanks to fiscal orthodoxy, 
the external debt burden currently amounted to "o nly" 91% of GDP, and it was to be hoped that it 
would continue to decline.   
35. The positive side of this crisis scenario was th at Uruguay had not resorted to using restrictive 
measures to deal with the problem.  The measures taken, though unpopular, had been sound from an economic standpoint:  inter alia , a floating exchange rate, a reduction in public spending, a 
strengthening of the financial sector, debt swaps, a stand-by credit.  At the height of the crisis, 
decisions had been taken that were of a more structur al nature and aimed in the right direction.  These 
decisions were being implemented, as in the case of the adoption of competition rules, bankruptcy legislation, the independence of the Central Bank,  a tax reform based on simplicity and equality, a 
reform of the customs system, a single window for investment, etc.  Uruguay had become an example to be followed in such situations. 
36. Although autonomous, Uruguay's trade policy had to be compatible with MERCOSUR.  In 
theory, under MERCOSUR rules parties could not apply any trade policy measures independently 
except where they had waivers.  In practice, and as stated in the Report, in a number of areas policy 
was devised, formulated, and implemented at a national level (certain specific production sectors, services, internal taxes, and investme nt and intellectual property rules). 
37. There was no clear evid ence that MERCOSUR had been pos itive for Uruguay's development.  
In the period from 1998 to the present day, imports  from MERCOSUR partners had remained stable 
(44%);  those from North America, Europe, and Jap an had declined, and those from Russia, Africa, 
the Middle East, and China had increased.  Alt hough import sources had become more diversified, 
MERCOSUR remained the country's main source of supply. 
38. Uruguay's exports to the MERCOSUR had fallen from over 50% to only 26% in just a few 
years.  The main destination for Uruguay's expor ts was currently the United States, which accounted 
for 25% in 2006;  it was formerly a minor partner (5.8%).  Europe's share had risen from 18% to 22% 
and the shares of Africa and Asia had increased, though to a lesser extent. 
39. These figures might have been the source of the assertion in the press that Uruguay was 
seeking greater freedom in MERCOSUR.  According to several newspaper articles, Uruguay was thinking about starting negotiations with the United States for a free-trade agreement.  WT/TPR/M/163 
Page 10  
 
IV. STATEMENTS BY MEMBERS 
40. Members welcomed the delegation of Uruguay led by H.E. Mr. Carlos Amorín.  They 
commended Uruguay for its economic recovery since the financial crisis in 2002, and its avoidance of 
trade restrictive and other distortionary measur es.  They also commended Uruguay for its active 
participation in the WTO and for its  contribution to the DDA negotiations. 
41. The representative of Japan
 welcomed the fact that Uruguay continued to maintain a floating 
exchange rate regime, and that it had taken measures to repay its external debt.  Japan believed 
that Uruguay’s consistency on trade policy helped it  to obtain the confidence of the international 
community. 
42. Japan appreciated that Uruguay’s main objectiv e was to promote and protect domestic and 
foreign investment, with a commitment to non-di scriminatory treatment, a nd that the investment 
regime was relatively open.  However, the stro ng peso under the floating exchange rate was 
influencing the competitiveness of Uruguay’s industr y.  In order to recover and strengthen the 
competitiveness of the economy, Japan hoped that Uruguay would endeavour to establish a more 
investment-friendly environment to a ttract more foreign investment.   
43. Uruguay’s promotion of efficiency of services such as distribution, construction, 
telecommunications, and transport services had helped to strengthen the competitiveness of the whole economy, including the manufacturing sector.  Japan hoped that Uruguay would make further commitments on services during the ongoing services negotiations. 
44. The representative of Chile
 stated that bilateral trade between his country and Uruguay had 
increased in 2005 offering new trade opportunities. 
45. Chile and Uruguay had shared interests in the Doha Round negotiations where they had 
similar positions in key areas, such as agriculture  and NAMA;  both countries were members of the 
G-20 and worked closely in NAMA.  Uruguay had made significant progress in liberalization and 
improving the of predictability of the trade system.   
46. The Secretariat report stated that the average applied MFN tariff had dropped from 12.2% in 
1998 to 9.3% in 2005, that tariff dispersion was low, meaning that there were not many tariff peaks,  
and that Uruguay had bound 100% of its  tariff lines and all its tariffs were ad valorem :  this enhanced 
trade predictability for its partners.  However, ther e was room for further improvement in some areas.  
One example was the progressive elimination of other duties and charges, which were ad valorem  and 
therefore increased the cost of exports by several percentages points, and decreased the predictability 
of the trade regime.  Uruguay could consider revi ewing its tax system to ensure that the various 
internal taxes did not negatively affect imported goods. 
47. The representative of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu  
(Chinese Taipei) observed that, like Uruguay, the economy of Chinese Taipei was also highly dependent on international trade.  Bilateral trade between the two economies had fluctuated but had 
been growing quite rapidly. 
48. He noted that, Uruguay had made little use of an y trade contingency measures, and non-tariff 
trade barriers appeared to be limited.  In add ition, Uruguay had not made use of trade restrictive 
measures to address its very serious economic chal lenges a few years ago.  Instead, it had used a 
macroeconomic adjustment programme  to strengthen its financial se ctor and restore growth.  He 
complimented Uruguay on its efforts and commitm ent to maintaining a liberalized trading 
environment.   WT/TPR/M/163 
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49. The representative of Colombia  noted the existence of the IMESI, the IMEBA and the COFIS 
taxes in addition to the income tax:  There were al so border taxes that were not tariffs, such as the 
BROU's commission of 2.5% and the consular tax at 2%  of the c.i.f. value of all imports, in addition 
to export taxes.  Moreover, the VAT was amongst the highest in the region.  Colombia welcomed the 
decision to eliminate the BROU's commission for ser vices related to trade operations, as well as the 
consular tax, scheduled for July 2007. 
50. Taxes on labour in Uruguay were the highest in  the region, and even higher than the average 
in OECD countries.  The market's response to this high tax burden ha d been the considerable growth 
of the informal sector.  Uruguay had traditionally had a very extensive public sector;  over the years it 
had been delegating responsibility for the productio n of certain goods and services to the private 
sector, and this had led to productivity gains. 
51. In a referendum, Uruguay had rejected the priv atization of the telecom company ANTEL and 
the National Fuel Authority (ANCAP);  both comp anies were running a surplus, which served to 
finance the welfare State.   
52. Uruguay was one of the few developing countries that had a trade surplus in services.  It was 
an off-shore financial centre, and was the only coun try in Latin America that had consolidated the 
provision of cross-border financial services, without  restrictions, thus ensuring the free flow of 
capital. 
53. The vulnerability of the Uruguayan economy la y in its dependency on the fluctuating 
Argentine economy and to a lesser degree the Brazilian economy.   
54. Uruguay had been able to diversify its export markets, and the United States was the main 
destination for exports.  Trade between Urugua y and Colombia was very limited because of 
Colombia's relative distance from Uruguay and b ecause MERCOSUR’s preferences made Colombia’s 
goods less competitive.  Trade in the last 13 y ears between Colombia and Uruguay had been on 
average US$27.5 million per year and Uruguay had traditionally had a trade surplus.  Colombia 
mainly exported foot-and-mouth disease vaccines and books, and imported wool  and woollen fabrics 
from Uruguay.   
55. The representative of Canada  noted that Canada and Uruguay continued to strengthen their 
economic and commercial relations .  In 2005, two-way trade has been around Can$155 million, and 
Canada was an important market for Uruguay’s export s.  The bilateral relationship had been further 
strengthened by the 2001 Memora ndum of Understanding in which they had agreed to establish a 
mechanism for bilateral consulta tion and coordination.  Canada and Uruguay also had a foreign 
investment protection agreement in place. 
56. Uruguay was an important partner in Canada 's trade and investment dialogue with 
MERCOSUR and was instrumental in MERCOSUR ag reeing to conclude a trade and investment 
cooperation arrangement (TICA) w ith Canada in June 1998.   
57. GDP in both Canada and Uruguay was dependant on international trade, and they shared 
similar objectives in regional and multilateral trading systems.   
58. In agriculture, as members of the Cairns Group, Uruguay and Canada were seeking to 
eliminate all forms of export subsidies, substan tially reduce trade-distorting domestic support, and 
substantially improve market access fo r agriculture and food products.  
59. Uruguay had continued to revise its laws a nd regulations to facilitate trade and the 
implementation of its international commitments.  Canada encouraged Uruguay to further liberalize 
its economy on an MFN basis, and anchor th ese efforts through multilateral commitments. WT/TPR/M/163 
Page 12  
 
60. Uruguay’s GDP was estimated to have grown by  6% in 2005.  While Uruguay had recovered 
well from the economic crisis, it remained vulnerable to external events given the high level of 
external debt and its dependence on oil imports.  Canada supported Uruguay in its efforts to promote 
greater economic efficiency and diversification.  As highly trade-dependant economies, Canada and 
Uruguay benefited from a strong rules-based multilateral trading system.   
61. The representative of Turkey
 noted that Uruguay’s growth rate estimate for 2005 was 
over 6%.  She noted that Uruguay had continued to liberalize even in the middle of its economic crisis.  Although Uruguay remained vulnerable to ex ternal shocks, there were signs that economic 
growth might continue with the implementati on of macroeconomic policies.  Uruguay had a 
predictable trade regime with all tariffs bound on an ad valorem  basis.  However, the considerable gap 
between average applied and bound tariffs undermined the predictability of market access.  Also, the 
various charges on imports increased the tax burde n on importers and weakened market openness. 
62. Turkey hoped that Uruguay's active participation in the trade liberalization process at the 
regional level, especially within MERCOSUR, would continue to be within multilateral trade rules 
and principles.  
63. Uruguay had an open investment regime, but there were some restrictions for foreign 
investors for public interest reasons.  Structural reform had been undertaken recently to increase 
private investment.  She asked Uruguay for further elaboration on this reform process and its yields 
for foreign investment. 
64. Turkey's bilateral trade relations with Uruguay were  limited;  bilateral trade had been slightly 
over US$23 million in 2005.  Turkey considered that the conclusion of bilateral trade and investment 
agreements would help in achieving a higher level of trade. 
65. The representative of Argentina
 noted that Argentina and Uruguay shared an economic area 
in the MERCOSUR.  During the period under review , Argentina had been the destination of more 
than 10% of Uruguay's exports and was one of its ma in suppliers.  Furthermore there was a significant 
reciprocal flow of investment and free movement of factors between the two countries.  Argentinean 
tourists represented 75% of visitors to Uruguay a nd the sector's contribution to GDP was not a minor 
one. 
66. Referring to economic data for the period under re view presented in the Secretariat report, he 
highlighted the remarkable 12% annual growth rate in 2004, the recovery of domestic demand, the 10 
percentage point increase in the share of exports in GDP between 1998 and 2 004, and the drop in the 
level of unemployment over the past three years.  As the Secretariat report noted, and as was the case 
also in Argentina, fiscal balance and the policy of reducing foreign debt were key elements in 
Uruguay's strategy to maintain and c onsolidate macroeconomic stability.   
67. With respect to trade policy, Argentina str essed Uruguay's progress during the review period 
with respect to customs valuation, with the full adoption of the Agreement on Customs Valuation, as 
well as the efforts made to draft competition policy legi slation.  In general, and in conformity with 
MERCOSUR objectives and rules, Uruguay was an open economy providing predictability in its 
foreign trade. 
68. Despite the above some aspect of Uruguay's trade policy merited correction, for example, 
the application of the specific domestic tax (IMESI), and the payment in advance of the VAT 
by importers.  Also, Argentina regretted the fact that Uruguay applied anti-dumping duties on 
Argentina's exports of vegetable oils, and speci fic duties on its exports of paints and resins. 
69. As major exporters of agricultural goods Argen tina and Uruguay had shared interests related 
to the liberalization of trade and agriculture.  Argentina also shared Uruguay's position in the G-20  WT/TPR/M/163 
 Page 13 
 
 
and in the Cairns Group, attempting to reduce the negative effects of subsidies in agriculture and 
market access barriers. 
70. The representative of Hong Kong, China  observed that bilateral trade with Uruguay was 
modest, some US$69 million in 2005, representing plenty of opportunities for further growth.  
71. Hong Kong, China congratulated Uruguay on its economic recovery since 2003, following a 
period of economic contraction and fi nancial crisis.  It was appreciated  that Uruguay did not make use 
of any trade restrictive measures in addressing the cr isis.  Instead, to restore growth, the authorities 
had applied a macroeconomic adjustment progr amme, including reducing public expenditure and 
introducing measures to strengt hen the financial sector.  
72. Hong Kong, China commended Uruguay for its act ive participation in the WTO and the DDA 
negotiations, where Uruguay's main interests were in agriculture.  However, as Uruguay's economy 
had changed shape and services accounted for up some 60% of its GDP, Hong Kong, China 
encouraged Uruguay to participate more actively in the services negotiations. 
73. Uruguay's average applied tariff rate had d eclined from 12.2% in 1998 to 9.3% in 2005 
(mainly because of the elimination of temporary ta riff increases), but the applied rates for certain 
industrial products, like textiles a nd clothing (17%), and leather and footwear (14.3%) were still quite 
high.  There was in general quite a large gap be tween Uruguay's bound rates (average at 30.7% in 
2005) and applied rates (average at  9.3% in 2005), which undermined the predictability of the tariff 
regime. 
74. In addition, a number of taxes and duties applied solely to imports:  the BROU commission 
and a consular fee.  The tax burden on imports was therefore higher than the average tariff.  The 
advance VAT payment scheme for imports also impos ed an additional financ ial burden on importers. 
75. Continued efforts to liberalize trade in ser vices would be crucial for Uruguay's further 
economic development.  Private participation in services had increased since 1998, but public 
enterprises continued to play an important role, par ticularly in the infrastructural sectors such as 
telecommunications and banking.  Hong Kong Chin a therefore encouraged Uruguay  to undertake 
continued and progressive liberalization in trade in se rvices so as to fuel further economic growth and 
development.  Hong Kong, China hoped that Uru guay could include more substantive improvements 
in its future offers in the current  round of negotiations, in terms of  both the number of sectors and the 
extent of market access to be provided. 
76. On maritime transport services, Hong Kong, China noted that Uruguay had not undertaken 
any GATS commitments, nor made any offers, in the sector notwithstanding its open regime in 
international transport.  Noting that the emergen ce of trade competition in port operations had helped 
improve the quality of services and attract new traffic, Hong Kong, China encouraged Uruguay to 
bind its de facto regime on maritime transport in the next service offers. 
77. The representative of the European Communities  noted that the EC was a key investor in 
Uruguay.  The EC and Uruguay had regular and useful  bilateral exchanges, complementary to their 
cooperation in the WTO.   
78. Uruguay’s trading relations took place against an increasingly favourable macroeconomic 
environment.  Uruguay had successfully faced the devastating effects and challenges of the 2002 
financial crisis, which had had a significant im pact on development and growth;  poverty had 
increased by nearly 60%.  Through structural re forms and the new Social Emergency Programme 
(PANES), Uruguay’s recovery had been swift.  Ef forts aimed at reconsolidating the economy had 
made it possible to turn from crisis back to grow th with a GDP of 6.6% in 2005 and a forecast of WT/TPR/M/163 
Page 14  
 
4.5% for 2006.  Continued efforts were necessary to ensure that Uruguay continued on the track of 
development and reform. 
79. With respect to trade policies, the EC welc omed Uruguay’s commitment to the WTO.  This 
corresponded fully to the EC's own orientation;  lik e Uruguay, the EC also saw the WTO as its main 
instrument to further develop its trading relations.  Uruguay pursued bilateral liberalisation in parallel 
to the multilateral sphere, including with the EC.  
80. The three pillars of sustainable development – its economic, social and environmental 
components – needed to be fully integrated in any national strategy.  He requested more information 
on how Uruguay assessed the potential for ensuring st rong synergies between trade and sustainable 
development, and how some of the social effects of trade liberalization could best be addressed. 
81. The EC welcomed the introduction of a number of customs reforms, including the single 
customs document.  Uruguay was working on the prob lems posed by different fees affecting imports, 
however, several other import restrictions remained in place.  The EC hoped that the outstanding issues would be solved shortly and requested an upda te regarding, for example, the customs fees for 
standard services, special taxes on imported tex tiles, discriminatory VAT treatment, or the import 
prohibition on used vehicles. 
82. An important aspect of doing business abroad w as predictability and understanding the rules.  
In this sense, timely notification by Uruguay of an y new technical regulations would greatly facilitate 
the situation of the EC's economic operators. 
83. Regarding market access in services, Uruguay had not undertaken extensive commitments 
and would gain from increased openness and furthe r commitments, for example in the area of 
telecommunications, maritime tr ansport, and construction. 
84. Domestic reform in Uruguay should continue  and be reinforced:  this would include 
maintaining efforts to introduce a competition policy as well as private sector reforms, also for sectors 
such as transport, finance, and telecommunications;  these were all core sectors for development.  A 
framework could be introduced alongside the reforms to facilitate and increase direct investment as 
well as market opening towards foreign services providers.  This would directly assist Uruguay’s 
economic development, and indirectly assist it to further diversify its export base from agricultural 
activities.  
85. The EC considered that a transparent and ope n government procurement system, providing 
for stronger participation of foreign companies, w ould also be in Uruguay's development interests. 
86. The representative of Singapore
 noted that Uruguay, like Singapore, was a small economy 
extremely dependent on trade.  However, bilatera l trade relations were modest.  Uruguay had stood 
out as one of the voices of ambition in the area of  NAMA;  and in services, Uruguay had submitted its 
initial and revised offers.  However, while Singa pore recognized Uruguay's efforts in submitting these 
offers, there was room for improvement.  Singapore encouraged Uruguay to be more forthcoming in 
the telecommunications sector, in which it had no WTO commitments. 
87. Uruguay's commitment to the multilateral trading system was carried through in its national 
trade and economic policies.  Despite economi c difficulties during the period, Uruguay had 
maintained an open economy.  Singapore commended  Uruguay for its restraint in the use of trade 
contingency measures.  Since 1998, Uruguay had not applied any countervailing or global safeguard 
measures, and had used anti-dumping duties only in one case.  Uruguay had continued to reduce its average MFN tariff, which had fallen from 12.2% in 1998 to 9.3% in 2005.  Uruguay's tariff lines 
were all bound and ad valorem , and tariff dispersion was relatively low.  WT/TPR/M/163 
 Page 15 
 
 
88. The representative of the United States  commended Uruguay for its long-standing 
contribution to the GATT/WTO, including a posi tive role in the DDA, and its hosting of the 
conference that launched the Uruguay Round in 1986.  The United States’ trade relationship with 
Uruguay was strong, positive, and growing.  They  were working, through the U.S.-Uruguay Joint 
Commission on Trade and Investment, to identify sp ecific measures to strengthen bilateral ties and 
coordinate efforts to suppor t Uruguay’s economic reforms. 
89. One of the most salient features of Uruguay’s tr ade regime was the reorientation of exports to 
countries outside of MERCOSUR;  the United States  had moved ahead of Brazil as Uruguay’s main 
export destination.  Their two-way goods trade wa s US$1.1 billion.  Uruguay’s exports to the United 
States were growing impressively, both overall and in key product areas such as meat, mineral fuels, 
and hides and skins.  Uruguay’s imports from the U.S. had been increasing over the past few years. 
90. The economic data clearly showed that Ur uguay was making impressive headway with its 
economic recovery.  Real GDP grew by 12% in 20 04 and almost 7% in 2005.  The unemployment 
rate, the inflation rate, and interest rates were goi ng down in concert.  Urugua y had taken an important 
step to solidify these gains when it had agreed last year to a new three-year standby arrangement with 
the IMF, committing itself to maintain prudent fiscal and monetary policies and to enact further 
reform in areas such as tax policy, customs, and st rengthening the financial system.  The Secretariat 
Report pointed to further accomplishments, including  the elimination of the minimum price regime 
and adoption of the WTO definition of transaction valu e, and in the transparent publication of many 
trade and investment laws online.  The Unite d States acknowledged these achievements and urged 
Uruguay to stay the course with its promising economic reform programme. 
91. The United States welcomed Uruguay's update on its  reform efforts, especially in light of 
the policy review being undertaken by the Governme nt to ensure that all of Uruguay's trade and 
economic polices were supportive of development and compatible with its international commitments.  
The United States requested additional informatio n on whether Uruguay’s reform plan aimed to 
reduce the differential application of taxes, including the value-added tax and the specific internal tax:  
the Secretariat had observed that the incidence of these and other taxes seemed to vary according to 
the domestic and foreign content of the goods in question. 
92. On customs and trade facilitation, the United St ates noted Uruguay's desire to become a 
bigger regional distribution and transit centre, and asked for more information on any specific plans to 
promote that vision.  In particular, the United St ates was interested to know whether Uruguay was 
considering streamlining other duties and charges,  including the BROU levy and the consular fee 
reinstituted in 2001. 
93. The representative of Mexico  observed that the economies of Uruguay and Mexico were 
bound by their relative proximity and by the ma ny regional trade liberalization and harmonization 
efforts.  But most crucially, a free-trade agreem ent between their two countries, designed in 2004, had 
strengthened their trade and provided legal security to  their investments and foreign trade operations.  
In 1990 bilateral trade between Mexico and Uruguay amounted to US $72 million;  in 2005 it rose to 
slightly over US$509 million. 
94. However, while bilateral agreements were impor tant, liberalization at a multilateral level was 
necessary and was an element sine qua non  to promote the deepening of bilateral trade liberalization.  
In this sense, Mexico, reiterated the importance of Uruguay's active participation in the current  WTO 
negotiations. 
95. The representative of Brazil  noted that Uruguay was gradually consolidating its recovery of 
the financial system and was on track on macroeco nomic stability, as shown by the marked increase 
in tax revenue, the strong rebound of growth of production of goods and services, and the reduction in 
retail inflation as well as fixed investment rates.   Brazil was pleased that Uruguay's policies to WT/TPR/M/163 
Page 16  
 
overcome the crisis had included the improvement of social indicators.  Like Uruguay, Brazil 
believed, that to achieve a sustainable improvement  in living standards, economic stability, sustained 
output growth and more equitable distribution of th e result of this growth were necessary.  The 
outlook for 2006-09 was for the continuation of th e economic growth, due to sustained development 
policies based on recovery in real wages, empl oyment, fixed investment, inflation control, and 
expansion of exports. 
96. Uruguay had bound all of its tariffs in the WTO and applied only  ad valorem  rates.  This 
showed its commitment to the multilateral system, en hanced the transparency of its commitments, and 
conferred greater predictability to its trade regime.  Since 1998, Uruguay had not applied any 
countervailing duties or general safeguard measure s and had imposed anti-dumping in only one case. 
97. Though Uruguay had not made multilateral commit ments in telecommunications in the WTO, 
it had maintained its commitment to liberalization a nd had shown that it was striving to liberalize the 
market gradually, in keeping with special circumst ances.  A first step in this direction was the 
opening up of long-distance mobile and land-line in ternational phone services.  Despite strong state 
participation in the telecoms sector, this ope ning was significant, especially considering how 
important the services sector was to the Uruguayan economy, accounting for some 62% of GDP in 
2004.  Brazil shared Uruguay's perception that agri culture was the area of multilateral negotiations 
from which developing countries had the most to gain. 
98. With respect to regional integration, Urugua y had been one of the main actors in the 
development of the institutional framework and deep ening of the external dimension of MERCOSUR.  
MERCOSUR had signed framework treaties with Indi a, the SACU, Lesotho, Namibia, Swaziland, 
Botswana, and Egypt.  In addition, it was engaged in  negotiations with the EC for the establishment of 
an interregional political and ec onomic association agreement. 
99. Recent LAIA data showed that intra-MERCOSUR trade was very dynamic.  Brazil was still 
one of Uruguay's the main suppliers, and togeth er with Argentina represented about 40% of 
Uruguay’s imports.  It was also one of the larges t investors in Uruguay, together with Germany, 
Argentina, the United States, Spain, France, Me xico, the Netherlands, and the United Kingdom, in 
areas such as financial services, telecoms, manufacturing, agri-food, hotels, and business. 
100. Integration within MERCOSUR had been positive for all partners in creating internal and 
external trade flows promoting investment and inte grating the productive chains.  More could be done 
to promote integration, however, and special at tention needed to be given to the specific 
circumstances and features of the smallest economies. 
101. The representative of Bolivia
 noted that the GDP growth of over 6% seemed to underpin the 
fact that coordinated action in different areas of domestic policy, together with favourable external 
factors, could spur growth in a developing economy.   
102. Trade relations between Bolivia and Uruguay to ok place mainly within the legal framework 
of Economic Complementary Agreement No. 36  signed between Bolivia and MERCOSUR, under 
which, since 1 January 2006 more than 90% of the tariff was duty free. 
103. Uruguay was one of the most active developing countries in the DDA.  Bolivia and Uruguay 
had been involved in very complex issues relatin g to agriculture both in the G-20 and the Cairns 
Group, the objective being to ensure that balanced  benefits were achieved for developing countries. 
104. The representative of Paraguay  noted that Paraguay and Uruguay had a shared vision and 
objectives.  Uruguay had a long-standing tradition of tr ade integration, and in ternational relations.  
Paraguay welcomed Uruguay's courageous measures to  tackle the 2002 financial crisis, which were 
now supported growth.  Uruguay was an example of openness and of discipline.  In the WTO and in  WT/TPR/M/163 
 Page 17 
 
 
the DDA, Paraguay and Uruguay shared an offens ive and open policy approach;  they worked 
together in the G-20, the Cairns Group, and other schemes.  Uruguay's objective in trade in agriculture 
was to ensure that multilateralis m prevailed over bilateralism. 
105. The representative of the Dominican Republic  stressed that Uruguay's institutional and 
legislative initiatives had made it possible to handle the 2002 crisis, a nd at the same time had resulted 
in a more solid financial sector.  Uruguay's fiscal austerity measures had created the conditions for a 
return to economic growth.  There had been 6. 6% growth in 2005, and growth of 4%-5% was 
projected for 2006. 
106. The Dominican Republic welcomed Uruguay's efforts through adopting legislative 
instruments to bring it into compliance with th e Agreement on Trade-Related Intellectual Property 
Rights.  Likewise, it had complied with the a pplication of the Customs Valuation Agreement by 
adopting the WTO definition of transactions value a nd the elimination of minimum prices of imports.  
Furthermore the Executive had drawn up a proposed bill for promotion and defence of competition. 
107. The services sector was important for the Uruguayan economy;  Uruguay had submitted an 
initial offer as well as a revised offer for the services negotiations under-way in the WTO.  The 
Dominican Republic trusted that, Uruguay would be able to make further commitments in some 
sectors, like telecommunications, in the future. 
108. The Dominican Republic encouraged Uruguay to c ontinue with reforms oriented towards the 
facilitation and promotion of trade relations with the r est of the world, and to continue being an active 
participant in the multilateral as well as regional trade negotiations. 
109. The representative of Pakistan  noted that Uruguay's trade, like Pakistan's, was relatively 
limited due to the small size of its economy.  Paki stan and Uruguay worked actively for the removal 
of distortions in agricultural trade through membersh ip in the G-20 and the Cairns Group.  Pakistan 
was concerned by Uruguay's use of non-automatic impor t licensing on products such as textiles, along 
with special import duties and a consular fee;  and rice, another item of export interest for Pakistan, 
had been attracting high export subsidies.  
110. The representative of China  noted Uruguay's strong economic growth in 2005, after four 
years of contraction.  Uruguay's fiscal situation had improved with the resumption of economic growth, accompanied by its tax incr ease and reduction in expenditure. 
111. Uruguay had bound 100% of its tariffs in the WT O, thus increasing the predictability of its 
trade regime.  Although there was still a gap betw een average applied and bound rates, this would 
hopefully disappear with the conclusion  of the present round of negotiations. 
112. China and Uruguay had enjoyed a rapid developmen t of bilateral trade and economic relations 
in the past decade.  In 2005, their bilateral trade amounted to US$456 million, an increase of 42.5% 
over the previous year. 
113. China noted that Uruguay had made scant u se of contingency measures and its non-tariff 
trade barriers appeared limited during the period under review.  China also was concerned that 
Uruguay applied special customs valuation with th ird-country reference prices on certain Chinese 
imports, such as footwear, textiles, and clothing.  China strongly requested Uruguay to eliminate this sort of protectionist measure. 
114. The representative of El Salvador
 congratulated Uruguay for its efforts in recent years to 
facilitate trade and apply its international co mmitments.  Some of th ese commitments were 
improvements in areas such as import procedures, customs valuation, and protection of intellectual 
property, and of patent and copyright enforcement. WT/TPR/M/163 
Page 18  
 
115. El Salvador highlighted the measures impl emented by Uruguay to rebound from the 
economic slowdown since 1998.  These measures had included the adoption of a floating exchange 
rate and public spending cuts, togeth er with measures to strengthen the financial sector.  El Salvador 
congratulated Uruguay for its active participation in  the DDA, particularly in agriculture, services, 
and trade facilitation.  
116. Investment stimulation had become one of the central points of Uruguay's development 
strategy.  To this end, priorities had been establis hed to:  defend property rights, protecting debtors 
and creditors through contract enforcement;  devel op capital markets;  strengthen the framework for 
corporate restructuring through a revision of the bank ruptcy law;  improve the management of public 
companies;  and revise investment promotion regimes. 
117. El Salvador congratulated Uruguay on its So cial Emergency Plan which would provide 
assistance to the most vulnerable and promote economic and social integration. 
118. The representative of Australia
 noted that Australia and Uruguay enjoyed modest, but solid, 
commercial links.  Australia and Uruguay had worked  together in a variety of multilateral fora, and 
shared the common goal of supporting global trade lib eralization as a key driver for world economic 
growth and development.  As founding members of  the Cairns Group, Uruguay and Australia shared a 
long-standing commitment to comprehensive agricultural trade reform.  
119. Australia shared Uruguay’s view that genuine mark et access in sectors of direct interest to the 
developing countries was the primary means of contributing to development. 
120. The Report by Uruguay was thoughtful and moderate, reflecting economic stability, fiscal 
prudence, control of inflation, and structural  reforms aimed at incr eased competitiveness and 
investment attraction.  The Uruguayan Government ’s aim to achieve economic development through 
orthodox and market-friendly policies, coupled with  social inclusion and poverty reduction measures, 
was commendable. 
121. In the past decade, Uruguay’s economy had been  substantially liberalized, including opening 
of the economy to market forces in sectors that had been controlled by government monopolies.  
However, while this had led to a more open economic  and trading environment, investors and traders 
were still often faced with lengthy bureaucratic procedures. 
122. Australia supported the Secretariat’s assessmen t of Uruguay’s taxation framework, urging 
greater transparency, equity and stability in order to create a more favourable investment 
environment.  Australia encouraged Uruguay to consider further liberalization in services.   
123. The representative of Costa Rica  noted that the latest data showed 12% growth in 2004 in the 
production of goods and services and GDP was e xpected to grow by about 4-5% in 2006. 
124. Regarding Uruguay's participation in the mu ltilateral trading system, Uruguay had always 
defended liberalization on the basis of the MFN princi ple, despite its small size, and had contributed 
actively to the work of the Cairns Group. 
125. Costa Rica and Uruguay had many things in common, including their belief in development 
based on democracy and solidarity.  They both cons idered that trade liberalization could play a 
fundamental role in economic growth and in the fight against poverty. 
126. The representative of Nicaragua  observed that Uruguay was a serious trading partner with 
policies consistent with the multilateral trading syst em.  Nicaragua greatly appreciated Uruguay's role 
in the Doha process.  WT/TPR/M/163 
 Page 19 
 
 
V. REPLIES BY THE REPRESENTATIVE OF URUGUAY AND ADDITIONAL 
COMMENTS 
127. The representative of Uruguay  thanked WTO Members for th eir valuable comments and 
questions about Uruguay’s trade policy.  He r esponded to queries under three main themes:  
(a) economic and institutional framework;  (b) trade policy my measure;  and (c) sectoral policies.  
Economic and institutional framework 
128. With respect to the economic framework, he noted that Uruguay had experienced a severe 
crisis from 1999 to 2002, and this had brought serious policy challenges in the 2002-03 period and 
during the current administration, to foster a rec overy.  Real GDP had droppe d by about 20% and per 
capita GDP by about 50%.  There were two important elements:  the magnitude of the crisis and the 
swift recovery.  Uruguay had posted st rong growth in subsequent years, especially in the forestry and 
manufacturing sectors.  There had also been a renewal of investment developments, driven mainly by the private sector, while public investment had r ecovered only moderately.  The challenge to achieve 
larger levels of investment to foster growth in the short term therefore relied on private sector initiatives. 
129. The crisis had also seriously affected financ ial confidence ratios.  Country-risk assessment 
had increased during the crisis, although, after 2003 there had been signs of  renewed international 
trust in Uruguay’s economy, based on improved economic  data.  As a result of regained confidence, 
Uruguay was now able to place debt in international ma rkets at a lower cost:  interest rate spreads had 
fallen considerably, and maturities had become longer,  and this had made the debt more manageable.  
Uruguay was confident that it would be able to have its investment grade restored. 
130. The crisis had had a major impact on the banki ng system, but the banks' situation had been 
improving, as shown by some indicators.  Although there had been a recovery in private banks' 
deposits, these had not returned to their pre-crisis level.  There had also been an improvement in 
capital adequacy ratios, as measured by the relations hip between net reserves and adjusted assets.  The 
Central Bank's foreign exchange reserves had surpassed pre-crisis levels 
131. Uruguay had managed to restore fiscal balance.   Although during the crisis Uruguay posted 
primary and overall deficits, it had adjusted spe nding, and the primary fiscal surplus had been 
restored, and it was back on track to cover debt  commitments.  The overall deficit had fallen 
significantly and Uruguay expected to reduce it to  less than half a GDP point by 2009, while 
maintaining its primary surplus stable.  Fiscal c onsolidation would be possible due partly to the 
stabilization of revenue as a share of GDP.  This wo uld result from greater efficiency in tax collection 
due to the reforms, and to a reduction in tax evasion from 38% in 2005 to 30% in 2009. 
132. The crisis had triggered a substantial debt incr ease.  The Government was currently trying to 
control debt growth and expected the debt/GDP ra tio to fall from about 100% to more manageable 
levels of about 60% by 2009.  
133. Uruguay had posted no major trade imbalances in the 1995-05 period.  In recent years, there 
had been an improvement in the trade balance, as exports of goods and servic es had increased faster 
than imports, particularly due to strong service expor ts.  The structure of Uruguay's trade in goods had 
changed with respect to geographical destination in recent years:  there had been an increase in the 
share of exports to the United States, while exports to the EC had remained stable.  Exports to Asia 
had increased, while exports to other Latin Ameri can countries had lost share.  The geographical 
composition of imports of goods had been more  stable, although imports from MERCOSUR had 
increased, even following the crisis, and there had b een strong growth in imports from other areas, 
especially oil-producing countries, while there had been a drop in imports from the EC. WT/TPR/M/163 
Page 20  
 
134. The composition of exports differed accordi ng to destination.  Exports to MERCOSUR 
consisted mainly in cereals and chem ical products;  exports to the rest  of the world were mainly meat 
and leather.  Uruguay's exports to the rest of the world reflected where its static comparative 
advantages lay, while the structure of exports to  MERCOSUR reflected both comparative advantages 
and the effect of trade preferences and agreements.  There had been a decline in the share of consumer 
goods in imports and an increase in the share of capital and intermediate  goods, probably reflecting 
higher oil prices.  These trends showed that Urugua y maintained a very open economy, since this was 
essential in order to have access to the capital good s and inputs needed to advance technologically, 
achieve further specialization, and develop dynamic comparative advantages. 
135. In summary, it should be emphasized that the su stained recovery was due mainly to strict 
fiscal and financial discipline.  To consolidate th is recovery a number of reforms needed to be 
continued and strengthened, including in the fiscal  and tax area, regarding the independence of the 
Central Bank, customs reform, new competition policy legislation, bankruptcy legislation, enhancement of transparency in government procurem ent and in debt management matters, as well as 
the administration of the various in centives offered to the private sector. 
Trade policy by measure 
136. Uruguay emphasized some changes introduced sin ce its previous review in 1998, especially 
regarding customs, tariffs authorities, preferences,  trade defence measures, export taxes, government 
procurement and intellectual property. 
137. Steps taken on customs procedures included:  the introduction of a single customs form;  the 
reduction of controls and checks, a nd the elimination of the red channel in particular;  the elimination 
of minimum import prices in January 2001;  and since 2001, full implementation of the WTO 
Customs Valuation Agreement.  
138. As regarded tariffs, Uruguay stressed the reducti on and complete elimination of the temporary 
3 percentage point CET increase.  Tariffs had b een maintained at a maximum level of 23% since 
December 2003, except on vehicles.  Exceptions to  the CET represented 14% of total tariff lines in 
2006, and in all these cases, involving particular ly intermediate, capital goods, and high technology 
goods, national tariffs were lower than the CET.  The average tariff was about 9.3%, and dispersion 
was low.  Uruguay had bound all its tariffs and did not apply tariffs above bound levels;  only nine 
lines had levels above 23%, and just 25% of lines were subject to a tariff equal to or above 16%.  
There had been a clearly decreasing trend between 1998 and 2006.   
139. Uruguay did not apply tariffs quotas on any MFN imports.  Other trade policy developments 
included the trade preferences agreements reached  by MERCOSUR with Chile, Bolivia, the Andean 
Community, and Peru, as well as the agreement be tween Uruguay and Mexico and the other partial 
agreements with LAIA countries. 
140. With respect to trade remedies and safegua rds, even during the crisis, Uruguay had not 
applied countervailing or safeguard measures.  Ur uguay had applied anti-dumping duties only in four 
cases and always to the same country and type of product.   
141. Since 2004, export taxes had been prohibited with the sole exception of leather.  
Transparency and openness in government procur ement had improved.  Regarding intellectual 
property protection, since 1994 Uruguay had ratified a number of different agreements in different 
areas, totally in line with its TRIPS commitmen ts.  These included:  the MERCOSUR Protocol on 
Harmonization of Intellectual Property Rights and Ru les, related to trade marks and geographical 
indications;  the Locarno Agreement;  the Strasbour g Agreement, the Nice Agreement, the Vienna 
Agreement, and a number of other agreements, whic h showed that Uruguay had made a serious effort 
to comply with intellectual property protection.    WT/TPR/M/163 
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142. Uruguay had not applied significant restrictive trade measures, even during the crisis.  
Uruguay considered it extremely important to emph asize the very limited nature of the measures 
implemented during that period, including the adoption of specific import duties, the BROU commission, the consular fee, and advance VAT payments.  Some of these measures had an end date;  such was the case for the BROU commission and consular fee.  Advance VAT payments would be 
dealt with in the context of the fiscal reform pr ocess.  The specific import duty regime, introduced 
after minimum import prices were eliminated, had b een phased out in Decemb er 2003.  This showed 
that Uruguay’s trade regime was predictable and that measures in period of cris is were limited in time 
and scope.   
143. In general terms, Uruguay's trade policy was ai med at facilitating trade and providing greater 
transparency, without adopting restrictions even during a crisis.  The prohibition of export taxes had 
been an important measure and, in terms of inte llectual property rights protection, Uruguay had made 
a great effort to comply fully with its multilateral commitments. 
Sectoral policies 
144. The representative of Uruguay noted that there had been some sectoral changes following the 
crisis, corresponding to Uruguay's priorities regard ing its opening to foreign markets.  The 
manufacturing sector had expanded s ubstantially, as had agriculture, except during 2004-05, while 
services had decreased in relative terms.  This fall was explained mainly by developments in real estate and business services.   
145. Uruguay privileged the functioning of market forces, while placing greater attention on 
sanitary issues, the tradeability of processes and prod ucts, and certification.  A new law on 
tradeability had been passed recently.  Uruguay was also envisaging adopting mechanisms to cover 
risks through insurance, was cons idering new forms of financing, and was preparing new policies to 
take account of household production and to su pport competitiveness in agri-industrial production 
chains. 
146. With respect to electricity, hydrocarbons, and water, a regulatory authority had been 
established, separating the policy development, regula tion and entrepreneurial roles.  There had been 
a vote in 2005 in favour of keeping water services in  the public sector.  In addition the generation, 
import and export, and commerciali zation of electricity had been liberalized, although the public 
sector was still responsible for distribution.  Measur es had been adopted recently to foster greater 
private sector participation in generation.  Four pr ojects would certainly come on line in 2007, which 
would give a greater diversity to this market. 
147. In services, Uruguay had presented initial and revi sed offers in the multilateral negotiations 
and expected to deepen these co mmitments according to advancements  in the Round.  Uruguay had a 
pro-active position in agriculture  and could adopt a similar pos ition in services depending on the 
global advancements of the round  and on advancements at the MERCOSUR level.  Uruguay had 
ratified the Montevideo Protocol dealing with services in MERCOSUR. 
148. In telecommunications, Uruguay had established an independent regulatory authority and had 
increased competition since 2001.  There was competiti on and foreign investment for all areas, except 
fixed telephony services. 
149. In sum Uruguay clearly favoured market forces playing freely, combined with a policy of 
developing sanitary and certification procedur es and expanding tradeability mechanisms, both for 
agricultural and industrial products, as well as servic es.  It favoured a pro-active position in all areas 
in the current negotiations. WT/TPR/M/163 
Page 22  
 
150. The discussant
 shared Uruguay’s conviction that trad e was an important instrument for 
development, particularly for relatively sma ll economies.  Small economies had no option but 
openness. 
151. Uruguay was convinced of the need for clear inte rnational rules in all areas of international 
relations, and certainly in trade;  these would pr ovide stability and predictability for trade commercial 
agents.  This was particularly important for sma ll economies.  Despite a severe crisis during the 
period under review, to which the G overnment had had to react with a series of emergency measures, 
a series of advancements had taken place, including the modernization of the custom system and of the government procurement system, efforts to im prove the intellectual property protection regime, 
and the elimination of practically all export taxes.   
152. However, some problems persisted, such as th e differentiated application of some domestic 
taxes to imports and domestic products.   
153. He acknowledged Uruguay's constructive role in  the DDA was heavily concentrated on 
agriculture, it was pro-active in, and aware of the importance of advancing all sectors.   
154. The representative of the United States
 thanked Uruguay for the information it had provided 
during the review.  The number of questions Ur uguay had received was testimony to Members' 
interest in its trade regime.  The United States had a couple of follow-up items to raise:  on other 
duties and charges, which had been the subject of  comments by various Members, the United States 
appreciated Uruguay's assurance that both the c onsular fee and BROU fee were on track for 
elimination in the middle of 2007.  Regarding tax di fferentials, mentioned in the Secretariat Report, a 
variety of taxes potentially ran afoul of national treat ment, including the specific internal tax, which at 
least for some products, seemed to be levied accord ing to the proportion of domestic content.  The 
advance value-added tax payment on imports was also of concern.  The United States urged Uruguay, 
in the process of its tax reform, to consider ways to equalize as far as possible the incidence of the 
taxes on foreign and domestic products. 
155. The representative of Canada  noted that Uruguay's commitment to trade liberalization, 
including through times of economic crisis, was impressive, and that it was a model for many WTO 
Members.  Canada also thanked Uruguay for res ponding expeditiously to a ll of Canada's advance 
written questions.  Canada remained concerned about the difficulties faced by Canadian pork 
exporters in accessing the Uruguayan market, and looked forward to working bilaterally with 
Uruguayan officials toward a mutually satisfactory outcome.  
156. The representative of Colombia  asked Uruguay whether the causes of the financial crisis had 
been only exogenous, or whether there had been so me endogenous triggers.  Uruguay had highlighted 
a number of measures used to tackle the crisis, a nd Colombia enquired to what extent these measures 
had reinforced the economy in order to prevent a crisis of similar nature. 
157. The representative of the European Communities  noted the steps Uruguay was taking to 
remove certain non-tariff trade obstacles and encouraged  Uruguay to continue this work.  The EC also 
shared Uruguay's view on the importance of the services sector, and therefore encouraged Uruguay to 
be even more active in the current services negotiations. 
158. The representative of Chile  thanked Uruguay for the replies provided and noted Chile’s 
interest to continue working with Urugu ay at a bilateral and multilateral levels. 
159. The representative of Australia  commended Uruguay for the substantial achievements in 
liberalizing trade and economic policies, in particular  in the area of agricultural trade reform where 
Uruguay was a very highly valued founding member of  the Cairns Group.  Australia too, encouraged 
Uruguay to consider further liberalization in services.   WT/TPR/M/163 
 Page 23 
 
 
160. The representative of Brazil  stated that the numerous liberalization measures adopted by 
Uruguay in the commercial, tax and financial areas in recent years, illustrated Uruguay's concern not just over domestic economic stabilization, but al so to abide by its multilateral commitments, 
especially in the WTO.  Uruguay was a very important partner for Brazil:  in the context of the recent European Union-Latin America Summit Minister Am orím had recognized the need to continue the 
integration process granting special attention to small economies and their specific interests, and 
analysing the possibility of creating structural funds, in line with those of the EC, but adapted to the 
conditions of developing countries.  Brazil appreci ated Uruguay's position as a bilateral and regional 
partner and believed in the benefits of d eepening regional contacts and integration. 
161. The representative of Uruguay
 observed the current administration's clear belief in a trade 
strategy in which negotiations were held in all areas.  This was necessary in order to ratify its 
commitment to regional integration, but that comm itment depended on two very significant factors.  
First, was the consolidation of the expanded ma rket, from which Uruguay hoped to benefit without 
restrictions, and be able to attract investment to supply the whole market, in competition with its 
partners.  Second, was ensuring that the expande d market, would allow Uruguay to move forward 
external negotiations, with blocks and markets of interest to Uruguay and the rest of MERCOSUR.  
This would allow Uruguay to capitalize on the gains of belonging to a block. 
162. In parallel, Uruguay believed that its interna tional commitments were of utmost importance 
and favoured a pro-active position.  Although Uruguay had not made many clear commitments in 
services, in practice it had a very open investment  regime in services, as witnessed by the strong 
foreign investment in the domestic market.  Urugua y would also be proactive in the negotiations on 
services as long as progress was made, in parallel, in other areas.  
163. While not detracting from its multilateral and regional commitments, Uruguay would engage 
also in bilateral negotiations, as had been done with Mexico.  Uruguay needed to imporve its 
international structure, for which it required compe titive supplies and predictable and secure markets, 
to be able to attract investment.  This was th e only way to advance and sustain the post-crisis 
recovery.  In response to the question by Colomb ia, although the crisis had a significant exogenous 
component, there were also a number of endogenous constraints to which the current administration 
had paid special attention.  These included market diversification, financial sector consolidation, the 
establishment of clear competition rules, and fis cal consolidation.  Uruguay believed that, these 
measures and other reforms mentione d, would boost its capacity to resist crises.  Uruguay was willing 
to engage in bilateral talks, and perhaps after this meeting, with Canada on the subject of pork.  With 
respect to criticism regarding certain measures,  Uruguay assured Members that it would continue 
efforts to comply with its commitments.  Measur es had already been adopted with regard to the 
BROU tax and the consular fee and, in the cont ext of its tax reform, Uruguay was revising the 
advance payments for imports and the differential IMESI rates.  Ur uguay remained willing to answer 
further questions either bilaterally or in other fora. WT/TPR/M/163 
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VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
164. This third Trade Policy Review of Uruguay has helped to paint a clearer picture of the 
evolution of trade and investment policies in  Uruguay and of the country's integration and 
participation in the multilateral trading system.  Our sincere gratitude goes to Ambassador Amorín, 
Ambassador Valles, Mr. Saráchaga and the rest of  the Uruguayan delegation whose participation has 
been highly valuable to the work  of this Body.  We would al so like to thank the discussant, 
Ambassador Matus, for his interesting and learne d contribution to our discussions, Mr. Herreros, and 
the numerous Members that contributed to the success of this Review. 
165. Members expressed their satisfaction with th e sound economic growth that Uruguay has 
experienced since 2003, following a serious economic and financial crisis, which it dealt with by 
adopting a macroeconomic adjustment programme a nd measures to strengthen the financial system.  
A number of participants observed that Uruguayan e xports to markets outside the region had been key 
to reactivating the economy, and spoke of the need to pursue the economic reforms in order to ensure 
sustainable growth. 
166. Members praised Uruguay for its significant contribution to the construction and 
consolidation of the multilateral trading system, including its active participation in the Doha 
Development Agenda.  They invited Uruguay to keep its notifications to the WTO up to date, notably 
in SPS and TBT.  Emphasis was also placed on Uruguay's participation in MERCOSUR, and several participants raised questions as to the benefits  of such participation.  Uruguay replied that 
MERCOSUR is an essential component of its growth st rategy, and that it would be seeking to deepen 
and expand that process.  It was also essential to explore individually the possibility of concluding 
bilateral agreements with a trade component. 
167. Members recognized Uruguay's efforts to mode rnize its trade regime, and welcomed its 
initiatives to facilitate trade.  Among many other measures, Uruguay has adopted the WTO definition 
of customs value, has simplified its customs proce dures, and has reduced its applied tariffs.  Members 
commended Uruguay for resorting so rarely to trade defence measures.  It was also pointed out that 
while Uruguay has bound its entire tariff, it could in crease the predictability of its trade regime by 
narrowing the gap between bound and applied tariffs. 
168. At the same time, Members expressed concern at  certain measures that had been adopted in 
recent years, in particular the use of other ch arges on trade, and welcomed the announcement that 
such charges will be eliminated as of July 2007.  Certain customs procedures were also questioned, as 
was the distinction made between imports and domes tic products in applying certain internal taxes 
(VAT and the specific internal tax - IMESI).  With respect to the numerous qu estions regarding its tax 
regime, Uruguay replied that the regime is currently  being revised, and it is considering eliminating 
exemptions and distortionary taxes.  Members we lcomed Uruguay's efforts to improve the protection 
of intellectual property rights as well as the ongoing process to adopt a new competition law. 
169. Stressing the importance of the services sector to the development of the Uruguayan economy 
and the liberalization that had ta ken place in that sector over the past few years, Members invited 
Uruguay to assume new commitments under the GATS in cluding in sectors in which it had few or no 
commitments, such as telecommunications and ma ritime transport.  Uruguay responded that it is 
considering binding commitments in new areas,  such as professional and distribution services. 
170. In conclusion, I think that this Body sees the general direction of Uruguay's trade policy in a 
very positive light.  Uruguay's commitment to the principles of multilateralism has helped to turn 
international trade into a catalyst for its economic gr owth.  In order to stimulate and consolidate this 
growth, Members urged Uruguay to continue to liberalize its economy and diversify its trade 
relations, and to review a few individual aspects of its  trade regime.  I am certain that Uruguay will 
maintain its traditional commitment to the work of this  organization and that it will continue to play a  WT/TPR/M/163 
 Page 25 
 
 
positive role in the Doha Developm ent Agenda, which could be of pa rticular benefit to Uruguay if 
successful.  I would like to close this meeting by  once again thanking the Uruguayan delegation, the 
discussant, and the Members present for their c onstructive participation in this review. 
__________