WORLD  TRADE  
ORGANIZATION   
WT/TPR/S/263/Rev.1 
9 May 2012 
 (12-2499) 
Trade Policy Review Body  
  
 
   
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
URUGUAY 
 
Revision 
 
 
  
This report, prepared for the fourth Tr ade Policy Review of Uruguay, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from Uruguay on its trade policies and practices.  
Any technical questions arising from this report may be addressed to 
Mr Angelo Silvy (022 739 5249) or Ms Ma rtha Lara de Sterlini (022 739 6033). 
 Document WT/TPR/G/263 contains the policy statement submitted by Uruguay. 
 Uruguay WT/TPR/S/263/Rev.1 
 Page iii 
 
 
  CONTENTS 
 
  Page 
SUMMARY vii 
I.  ECONOMIC ENVIRONMENT 1  
 (1)  OVERVIEW  1 
 (2)  MACROECONOMIC TRENDS  2  
  (i)   Production and employment 2  
  (ii)   Structure of the economy 4  
 (3)  FISCAL POLICY  6 
 (4)  MONETARY AND EXCHANGE RATE POLICY  9  
 (5)  BALANCE OF PAYMENTS  11  
 (6)  TRADE AND INVESTMENT FLOWS  13  
  (i)   Trade trends 13  
  (ii)   Breakdown of merchandise trade 13  
  (iii)   Direction of trade in goods 14  
  (iv)   Trade in services 14  
  (v)   Foreign investment 15  
II.  TRADE AND INVESTMENT REGIME 17  
 (1)  OVERVIEW  17 
 (2)  TRADE POLICY FORMULATION AND IMPLEMENTATION  18  
  (i)   General legal and institutional framework 18  
  (ii)   Trade and investment policy objectives 20  
  (iii)   Trade policy formulation and implementation 21  
 (3)  INVESTMENT REGIME  22  
 (4)  INTERNATIONAL RELATIONS  24  
  (i)   World Trade Organization 24  
  (ii)   Preferential agreements 27 
III.  TRADE POLICIES BY MEASURE 33  
 (1)  OVERVIEW  33 
 (2)  MEASURES DIRECTLY AFFECTING IMPORTS  36  
 (i)  Procedures, documentation and registration 36  
 (ii)   Customs valuation 40  
 (iii)   Rules of origin 41  
 (iv)   Tariffs 43  
 (v)   Other charges affecting imports 57  
 (vi)   Import prohibitions, restrictions and licences 62  
 (vii)  Contingency measures 65  
 (viii)  Technical regulations and standards 70  
 (ix)   Sanitary and phytosanitary measures 76  
 (3)  MEASURES DIRECTLY AFFECTING EXPORTS  83  
 (i)  Procedures, documentation and registration 83  
 (ii)   Taxes, levies and other export charges 85  
 (iii)   Export prohibitions, restrictions and licensing regimes 85  WT/TPR/S/263/Rev.1 Trade Policy Review 
Page iv 
  
    Page 
 
 (iv)   Tariff and tax concessions (including subsidies and export-processing zones) 86  
 (v)   Export promotion, financing, insurance and guarantees 91  
 (4)  OTHER MEASURES AFFECTING PRODUCTION AND TRADE  94  
 (i)  Establishment and taxation of enterprises 94  
 (ii)   Price control and competition policy 97  
 (iii)   Incentives 100  
 (iv)   State participation in the economy and State-owned enterprises 108  
 (v)   Government procurement 112  
 (vi)   Protection of intellectual property 118 
IV.  TRADE POLICIES BY SECTOR 127  
 (1)  OVERVIEW  127 
 (2)  AGRICULTURE , LIVESTOCK AND FOOD PROCESSING (INCLUDING FORESTRY ) 128  
 (i)  Characteristics, objectives an d institutional framework 128  
 (ii)   Policy instruments 131  
 (iii)   Forestry 135  
 (iv)   Fisheries 135  
 (3)  MANUFACTURING  136  
 (i)  Special features and policy objectives 136  
 (ii)   Policy instruments 137  
 (4)  SERVICES  138 
 (i)  Main features and multilateral commitments 138  
 (ii)   Telecommunications 139  
 (iii)   Financial services 143  
 (iv)   Air transport and airports 153  
 (v)   Maritime transport and seaports 157  
 (vi)   Tourism 161 
 
REFERENCES 165 
 
APPENDIX TABLES 169 
 
 Uruguay WT/TPR/S/263/Rev.1 
 Page v 
 
 
  CHARTS 
 
  Page 
III. TRADE POLICIES BY MEASURE  III.1 Frequency distribution of MFN tariff rates, 2011 46 
III.2 Tariff escalation of ISIC 2-digit industry, 2011 47 
  
TABLES 
 
 
I. ECONOMIC ENVIRONMENT 
 I.1 Main macroeconomic indicators, 2005-2011 2 
I.2 Structure of GDP and employment, 2005-2011 5 
I.3 Financial accounts of the non-financial public sector (NFPS), 2005-2011 8 I.4 Main monetary indicators, 2005-2011 10 
I.5 Balance of payments, 2005-2011 11 
I.6 Trade in services, 2005-2011 15 
I.7 Foreign investment position, 2005-2010 15 
I.8 Foreign direct investment by country, 2005-2009 16 
II. TRADE AND INVESTMENT REGIME 
 
II.1 Summary of notifications submitted to the WTO, November 2011 24 II.2 Framework and free trade agreements concluded by MERCOSUR, November 2011 30 
III. TRADE POLICIES BY MEASURE 
 III.1 Registration requirements for importers and their products 37 
III.2 Special requirements for customs procedures or documentation 39 
III.3 MFN tariff structure, 2011 44 III.4 Summary analysis of MFN tariff, 2011 44 
III.5 Tariff lines for which the MFN applied ta riff is the same as the bound rate, 2011 49 
III.6 Summary of preferential tariffs, 2011 53 III.7 Specific Internal Tax 60 
III.8 Import prohibitions in effect, 2011 62 
III.9 Requirements on import licensing and prior authorization, 2011 64 III.10 Products subject to loss of tariff preference 69 
III.11 Principal legislation on sanitary and phytosanitary measures, December 2011 78 
III.12 Principal sanitary and phytosanitary requirements for imported goods, August 2011 79 
III.13 Import restrictions for sanitary reasons, 2011 81 
III.14 Free zones, December  2010 (data for 2008) 89 
III.15 Financing terms fo r exports, December 2011 92 
III.16 Principal taxes applicable to production and investment, December 2011 96 
III.17 Classification of projects for the purposes of Decree No. 455/007 and  percentage of exemption from the IRAE 102 
III.18 Tax foregone as a result of the Investment Law, 2006-2010 103 
III.19 State-owned enterprises:  exhaustiv e list, sectors in which they operate, 
 their contribution to GDP and the number of employees 108 
III.20 Procurement by the central Government, 2007-2010 113 
III.21 Procurement by the central Government, 2007-2010 116 III.22 Overall view of the protection of intellectual property rights, 2011 118 WT/TPR/S/263/Rev.1 Trade Policy Review 
Page vi 
  
    Page 
 
III.23 International intellectual property agreements ratified by Uruguay, 2011 120 
III.24 Industrial property statistics, 2006-2010 123 
IV. TRADE POLICIES BY SECTOR 
 
IV.1 Assets, liabilities and net worth of the financial intermediation institutions, 
 December 2010 144 
 
 
APPENDIX TABLES 
I. ECONOMIC ENVIRONMENT 
 AI.1 Merchandise exports (f.o.b.) by product, 2005-2010 171 
AI.2 Merchandise imports (c.i.f.) by product, 2005-2010 173 
AI.3 Merchandise exports (f.o.b.) by trading partner, 2005-2010 175 AI.4 Merchandise imports (c.i.f.) by trading partner, 2005-2010 176 
III. TRADE POLICIES BY MEASURE 
 AIII.1 Technical regulations in force, November 2011 177 
 
 Uruguay WT/TPR/S/263/Rev.1 
 Page vii 
 
 
  SUMMARY 
 
1. Uruguay has an open trade and investment regime , with few border restrictions and limited 
use of non-tariff measures.  Its trade strategy cons ists essentially of continuing to liberalize trade and 
investment both at the multilateral and regional levels.  As a small and open economy, Uruguay 
depends on markets that are free of trade restrictions  and distortions, particularly in the agricultural 
sector which accounts for the bulk of its exports.  In the investment area, Uruguay is actively seeking to improve its business environment in order to c ontinue attracting foreign direct investment as a 
means of supporting economic growth and empl oyment and promoting technology transfer. 
2. Uruguay is a member of MERCOSUR and applies the MERCOSUR Common External Tariff 
(CET), with a few exceptions generally involving ra tes below the CET rate.  Having taken steps to 
streamline and computerize customs formalities and to facilitate international trade, Uruguay would 
do well to consolidate this process, for exampl e by easing its registration requirements and 
eliminating the consular fee on imports.  One of Uruguay's significant achievements during the period under review was the implementation of a tax reform  involving a simplification of the tax structure 
and a reduction in the number of taxes.  However,  the tax component for the consumer remains high, 
both for imported products  and domestic products. 
Economic Environment 
 
3. During most of the review period (2005-2011), Ur uguay's economic growth has been robust.  
Real GDP grew at an average annual rate of 6.2 per cent between 2005 and 2010, and is expected to 
grow at a rate of 5 to 6 per cent in 2011.  Th anks to this strong grow th, GDP per capita doubled, 
reaching US$11,996 in 2010.  At the same time, there was a marked decline in the poverty and 
unemployment rates.  Uruguay's foreign trade (go ods and services) grew sharply during the period 
under review, doubling in dollar value.  On the export front, Uruguay benefitted from a favourable 
external environment, with high international pri ces for agricultural raw materials and strong growth 
among the countries of the region. 
4. Since its last review in 2006, Uruguay has ma de significant progress with regard to fiscal 
consolidation, and has significantly reduced and re structured the public debt.  In 2007, it embarked on 
an extensive tax reform involving the simplificati on and rationalization of the tax system as well as 
greater efficiency in tax administration. 
5. Uruguay has a monetary policy regime whose ultimate objective is price stability.  Since 
June 2011, the annual inflation target has been with in a range of 4 to 6 per cent.  Because of the 
increase in the world prices of food and energy products, it has been diffi cult to maintain these levels.  
Although inflation slowed down in 2009, it bega n to grow again in 2010 and 2011, and in 
October 2011 the annual increase in the consumer price index reached 7.9 per cent.  The current 
account deficit of the balance of payments rema ined reasonable during most of the period under 
review (between 0.4 and 2 per cent of GDP) with the exception of 2009, when it reached 5.5 per cent 
of GDP owing to a sharp increase in imports.  The ra tio of the external public debt to GDP decreased 
considerably during the review period - from close to 69 per cent in 2005 to 45 per cent in 2010 - reflecting the sharp increase in GDP and the appreciation of the peso. 
6. Uruguay is a major global exporter of food and ag ricultural raw materials (chiefly meat and 
soya), which account for 75 per cent of total goods  exports, while imports consist essentially of 
capital goods and manufactures.  Uruguay's main trading partners are the MERCOSUR countries, 
which account for a third of its foreign trade.  Othe r major partners include the European Union, the WT/TPR/S/263/Rev.1 Trade Policy Review 
Page viii 
  
  United States, Russia, and China.  The healthy performance of the Uruguayan economy, the country's 
macroeconomic stability and a suppor tive legal framework all contributed to ensuring a strong growth 
in foreign investment flows to Uruguay during the period from 2005 to 2011. 
Trade and Investment Regime 
 
7. Uruguay is a founding Member of the WTO a nd an active participant in the multilateral 
trading system.  During the Doha Developmen t Agenda negotiations, Uruguay produced many 
proposals, both individually and with other Member s.  As a primarily agricultural country, Uruguay 
has proposed that agriculture be fully integrated into the multilateral trade rules and that domestic 
support and export subsidies be abolished.  Sin ce its last review in 2006, Uruguay has not had 
recourse to the WTO dispute settlement mechanism, nor has it participated in any new disputes as 
respondent or third party. 
8. Uruguay's trade regime is open, with little in th e way of non-tariff barriers to trade.  As a 
small and open economy, Uruguay considers that the priority objective of its economic and trade 
policies is to continue opening up to the worl d even further through regional integration, in 
conformity with multilateral trade rules.  Uruguay has repeatedly expressed its keen interest in 
strengthening the multilateral trading system.  It cons iders that the growth and development of a small 
country is inevitably linked to the expansion, divers ification and modernization of its external sector. 
9. Uruguay's trade regime is, to a large extent, framed by its participation in the Southern 
Common Market (MERCOSUR).  In the context of  its participation in MERCOSUR, Uruguay has 
signed preferential trade agreements with the Pl urinational State of Bolivia, Chile, the Andean 
Community (Colombia, Ecuador and the Bolivaria n Republic of Venezuela) and Peru, which are 
associate members of the Common Market.  Urugua y also has a number of bilateral preference 
agreements with other member countries of the LA IA.  Since 2006, a partial scope agreement between 
MERCOSUR and India and a free trade agreement with Israel have come into force.  Agreements 
between MERCOSUR and Egypt on the one hand, and the South African Customs Union (SACU) on 
the other, have been signed but have not yet entered into force. 
10. Uruguay has an investment regime that is generally open to private investment, including 
foreign investment.  The Investment Law guara ntees equal treatment of foreign and domestic 
investment.  The only restrictions on private invest ment are in the sectors deemed to be of national 
public interest such as fixed telecommunications, wa ter and sanitation, and specific areas such as 
insurance and transport.  No prior authorization is required for either domestic or foreign investment.  
Foreign companies may act through a branch, a s ubsidiary or a permanent agency, and may own 
100 per cent of the share capital.  There are no restrictions on capital inflows or outflows or on the transfer of profits, dividends or interest.  Foreig n investment benefits from the same incentives that 
are granted to local investors.  Uruguay is a member  of various international arbitration mechanisms 
for the settlement of investment-related disputes. 
Trade Policies by Measure 
 
11. Since its last review in 2006, Uruguay has pur sued its efforts to streamline and computerize 
customs formalities and to facilitate international trad e, and has achieved considerable progress in this 
respect.  It would do well to consolidate the process,  since there is room for improvement in certain 
areas:  for example, it could expand its risk an alysis system, or reduce or unify its different 
registration requirements.  Similarly, the mandatory  use of a customs broker for the different import 
formalities could be pushing up import related costs.   An additional step towards facilitating trade Uruguay WT/TPR/S/263/Rev.1 
 Page ix 
 
 
  would be to eliminate the consular fee on imports , which Uruguay continues to apply at a rate of 
2 per cent of the c.i.f. value of imports.  During the period under review, Uruguay did eliminate some of the charges affecting imports, such as the commiss ion of 2.5 per cent of the c.i.f. value charged by 
the Banco de la República Oriental del Uruguay  and the Contribution to the Financing of Social 
Security (COFIS), which was applied both to imports and to domes tic industrial products. 
12. Uruguay applies the MERCOSUR Common External Tariff (CET), with certain exceptions 
representing approximately 13.5 per cent of  tariff headings.  All tariffs are ad valorem .  Generally 
speaking, tariff levels remained relatively stable  throughout the period under review, with a simple 
average MFN rate of 9.4 per cent in 2011, slightly hi gher than the 2005 rate of 9.3 per cent.  This was 
largely thanks to the change in the tariff nomenclature involving an increase in the number of tariff 
lines, although there was also an  increase in the average tariff for certain products such as dairy 
produce, footwear and transport equipment.  The average applied MFN tariff was 9.6 per cent for 
agricultural products (WTO definition) and 9.3 per cent for non-agricultural products.  The product 
groups with higher than average tariff rates in 2011  notably include footwear, textiles and clothing, 
and food preparations.  Uruguay has bound all its tariff universe in the WTO at rates ranging from 
6 to 55 per cent, with a total of 23 brackets.  The average bound tariff is 30.7 per cent.  Generally 
speaking, applied tariffs are considerably lower th an bound tariffs, with the exception of 35 lines for 
which the applied rate was e qual to the bound rate in 2011. 
13. At the end of 2011, Uruguay granted tariff prefer ences for imports from Argentina, Brazil and 
Paraguay within the MERCOSUR framework;  a nd from Bolivia, Chile, Colombia, Cuba, Ecuador, 
Mexico, Peru and Venezuela under the various Econo mic Complementarity Agreements (ECAs).  For 
goods not covered by these agreements, the LAIA's  general regional tariff preference mechanism 
(PAR) applies.  Uruguay also grants preferences to countries with which MERCOSUR has concluded 
free trade agreements, such as Egypt and Israel.  In addition, MERCOSUR signed a Fixed Preferences 
Agreement with India.  The applied preferential ta riff varies according to trading partner, and ranges 
from an average of close to zero for Bolivia and Ch ile to 9.3 per cent (just below the MFN average) 
for India. 
14. A major tax reform was carried out during th e period under review, involving a simplification 
of the tax structure and a reduction in the number of taxes.  This led to the elimination of certain 
import charges and to the modification of the Speci fic Internal Tax (IMESI).  However, the IMESI 
duties can be high, adding to import costs.  The go ods that are subject to th e highest IMESI rates are 
alcoholic beverages, tobacco and petroleum pr oducts.  Uruguay applies a value added tax of 
22 per cent (general), and 10 per cent.  Added to th e IMESI, and for imports, to the tariff, this can 
significantly increase the price of certain products for the consumer. 
15. Between 2006 and 2011, Urugua y made no active use of contingency measures.  No 
countervailing or safeguard investigations were  initiated.  Although in 2010 an anti-dumping 
investigation was launched, as of December 2011 no  measures had been applied.  Uruguay has not 
had any anti-dumping measures in force since 2006, when the anti-dumping duties imposed for 
three years on imports of pure refined vegetabl e oil from Argentina expired.  In 2010, Uruguay 
introduced measures to prevent circumvention of anti-dumping duties, creating a mechanism whereby 
anti-circumvention measures could be applied af ter the introduction of an anti-dumping measure 
based on the results of an investigation conducted at th e request of an interested party or ex officio by 
the authorities. 
16. Uruguay applies non-automatic import licensing to certain products, such as motor vehicles, 
sugar and acetic acid.  Some products require pr ior authorization from a government authority for WT/TPR/S/263/Rev.1 Trade Policy Review 
Page x 
  
  sanitary or phytosanitary, safety, or environmenta l protection reasons.  In general, sanitary and 
phytosanitary certificates are required depending on the level of risk and are issued by the country of 
origin for animals, plants, and animal and plan t products.  As of December 2011, Uruguay had 
submitted only six notifications of draft technical  regulations to the WTO and one notification 
concerning an already adopted measure.  The tec hnical regulations generally follow regional or 
international guidelines and apply equally to domest ic and imported products.  At the same date, 
Uruguay had submitted a total of 16 notifica tions to the WTO Committee on Sanitary and 
Phytosanitary Measures, seven since th e last trade policy review in 2006. 
17. Uruguay grants fiscal incentives for exports under a number of schemes, such as the refund of 
indirect taxes, the automotive regime, and the free zon es.  To be eligible for a refund of indirect taxes 
on exports, the exported product must contain a mini mum of 20 per cent of domestic inputs.  Refunds 
vary between 2 and 4 per cent of the f.o.b. value of the exported product, depending on the burden of 
indirect taxation of domestic inputs incorporat ed in the product.  Uruguay notified its export 
promotion scheme for the automotive industry to the WTO as a measure involving subsidies and requested an extension of the transitional period fo r granting export subsidies pursuant to Article 27.4 
of the SCM Agreement.  Uruguay requested and obt ained a further extension of this transitional 
period beyond 31 December 2009 until the end of 2013,  with a final phase-out period of two years to 
end no later than 31 December 2015. 
18. Since 1987, Uruguay has had a free zone regime that exempts companies operating in a free 
zone from all national taxes, but not from social se curity contributions.  Any type of commercial, 
industrial or services activity is permitted in the fr ee zones.  Goods, services and raw materials may be 
imported free of import duty or taxes irrespective of  their origin.  Goods produced in the free zones 
may be sold in the customs territory of Uruguay without any restrictions, subject to payment of all customs duties and taxes. 
19. Export taxes are prohibited by law, with the exception of a 5 per cent export tax on certain 
hides.  Exports of rice and rice products were subject to a withholding tax of 5 per cent of the 
f.o.b. value between February 2004 and July 2008 .  Exports of bovine, sheep, pig, horse and poultry 
meats and small game are taxed at 1 per cent of the th eir f.o.b. value in order to finance the Sanitary 
Inspection Fund (FIS).  This contribution also applie s to the domestic market sale of beef and sheep 
meat for consumption, and bovine and pig meat fo r industry.  Exports of some other agricultural 
products are subject to taxes or levies in order to finance agricultural organizations. 
20. A major achievement since the last review in 2006 was the adoption of the Law on Trade 
Freedom and the Preservation of Free Competition (Law No. 18.159) in July 2007, and of its regulations (Decree No. 404/007).  Law No. 18.159,  which entered into force in August 2007, 
regulates mergers and acquisitions, prohibits an ticompetitive practices and abuse of dominant 
position, creates a new competition authority, estab lishes procedures for investigating anticompetitive 
practices, increases penalties and improves transp arency.  A Commission for the Promotion and 
Defence of Competition was also created, and has be en in operation since 2009.  Its responsibilities 
include regulation, investigation, imposition of  sanctions and prior control of mergers. 
21. Law No. 16.906 on the Protection and Promotion of  Investment of 7 January 1998, regulated 
by the Decree No. 455/007 of 26 November 2007, sets the general framewo rk for investment 
incentives and promotion in Uruguay, mainly in th e form of tax breaks.  During the period under 
review, investment regulations were modified and a wider range of incentives was offered to 
companies in the form of a new investment incen tives scheme.  Uruguayan law allows incentives to Uruguay WT/TPR/S/263/Rev.1 
 Page xi 
 
 
  be granted for activities which, inter alia , facilitate the expansion and di versification of exports or 
promote the use of local labour and inputs. 
22. State participation in the Uruguayan economy conti nues to be significant, particularly in the 
services sector.  State-owned enterprises operate in key sectors such as electricity, fuel, drinking water 
and sanitation.  They are also present in telecommunications, air and rail transport, sea ports and 
financial services.  Some State enterprises perform activities considered to be public services, while 
others operate as legal monopolies or maintain a dominant position in their respective markets.  
Uruguay has notified the WTO that the only State trad ing enterprise in existence is the National Fuel, 
Alcohol and Portland Cement Authority, which h as a monopoly of imports and refining of crude 
petroleum and petroleum products, with the exception of  lubricants and asphalt, and also of the import 
and export of fuel. 
23. Uruguay is not a party to the WTO Plurilateral Agreement on Government Procurement.  Its 
government procurement and contracting regime is  essentially governed by the Harmonized Text of 
the Law on Accounting and Financial Administration (TOCAF).  It is essentially a decentralized regime, although the general regulations apply to al l of the state procurement agencies governed by 
public law, with a few specific exceptions.  Fo r the past few years, procurement of food and 
medicines has been centralized.  Over the past decad e, Uruguay has taken steps to enhance the 
efficiency and transparency of government procur ement procedures and to strengthen the system's 
institutional framework.  At the same time, Urugua y has resorted to the government procurement 
system as a tool for promoting domestic industry by granting preference margins.  In 2008, the 
preference margin was reduced from 10 per cent to 8 per cent, although its scope was expanded by the 
decision to apply it to the price and not only to the domestic component as had previously been the case.  At the same time, the local content requireme nt for a product to be considered as a domestic 
product was reduced from 40 to 35 per cent.  In 2010, specific government procurement preferences were introduced for micro, small and medium-sized enterprises. 
24. Since its last review in 2006, Uruguay has not in troduced any major amendments to its patent, 
trademark and copyright laws, most of the chang es having been made before 2000.  However, there 
have been a number of legal amendments with respect  to the protection of plant varieties.  Parallel 
imports of patented products are allowe d, but not of copyright-protected goods. 
Trade Policies by Sector 
 25. The share of agricultural activities (including forestry) in GDP fell from 11.3 per cent in 2004 
to 8.2 per cent in 2010.  Agriculture and the agro-industrial sector accounted, in 2010, for some 
13 per cent of GDP.  But in spite of this decline in  its relative share, the agricultural sector continues 
to be of fundamental importance in that, fisher ies included, it employs 11.5 per cent of the active 
population.  The main agricultural products are:  bovine cattle, oilseeds (soya), milk, forestry 
products, and cereals, chiefly wheat and rice.  Av eraging 9.6 per cent in 2010, tariff protection for 
agricultural products is slightly higher than for non-agricultural products.  Certain headings, chiefly 
agro industrial products such as food preparati ons, beverages and tobacco, enjoy greater tariff 
protection.  As part of its agricultural strate gy for the period 2011-2015, Uruguay is seeking to 
strengthen agricultural and agro-industrial comp etitiveness to ensure that its development is 
sustainable from the standpoint of social integr ation and environmental conservation.  Efforts are 
being made to create high-value market niches as distinct from the traditional commodities markets. 
26. The manufacturing sector accounted for some 13 per cent of GDP in 2010.  Its main 
components are:  foods, beverages and tobacco;  chemical industries;  textiles, clothing and leather;  WT/TPR/S/263/Rev.1 Trade Policy Review 
Page xii 
  
  paper and printing;  and metal products, machinery and equipment.  The policy objective of the 
manufacturing sector consists of increasing nationa l value added in sustainable industrial production 
while steadily improving the efficiency of production systems and the quality of the goods produced. 
27. The services sector is the economy's leading sector, accounting for 58 per cent of GDP and 
67 per cent of employment.  Although private par ticipation in the sector has grown considerably, 
State-owned companies continue to play an important  role in certain areas.  Considerable progress 
was made in telecommunications markets during th e review period, and Uruguay now has among the 
highest teledensity and Internet penetration rates in Latin America.  While the State maintains a 
de jure  monopoly on fixed telephony within its territory through a State company, there are several 
suppliers of long distance international telephony an d data transmission services.  Mobile telephony is 
open to competition.  Operators may set their ow n rates for their services, with the exception of 
fixed-telephony national calls, which are subject to approval by the Executive. 
28. The financial sector grew stronger during th e period under review, achieving satisfactory 
levels of capitalization and liquidity which enable d it to weather the recent world financial crisis 
without too much trouble.  The sector has undergone a series of reforms, including changes in the 
management of State banks and the restructuring of  one of them, changes in the structure of the 
Central Bank, and improved pruden tial regulation and supervision of  the banking system.  In 2008, 
the provision limiting the number of authorizations to operate new banks was repealed.  Although 40 per cent of assets in the banking sector are owned by a State bank, foreign investors are very much present. 
29. Since 2006, domestic air services can be provi ded by foreign companies, subject to 
reciprocity.  A concession or authorization is requi red to engage in any commercial air operations.  
There are no restrictions on national or foreign privat e participation in the supply of auxiliary services 
such as maintenance and repair of aircraft, which may be contracted abroad.  Airports in Uruguay 
belong to the State, but the law allows the management  of airports to be the subject of a concession.  
In the maritime transport sector, cabotage navigatio n and trade is confined to Uruguayan-registered 
vessels, although preferences may be given based on th e principle of reciprocity.  As of the middle of 
2011, Uruguay applied cargo preferences only to bilate ral passenger traffic with Argentina and cargo 
traffic with Brazil.  Port services are provided by private operators under concessions given by the State, which owns the ports. 
30. As can be seen from the National Plan for Sustainable Tourism 2009-2020 and the policy of 
support for the sector, tourism is treated as a prior ity.  In addition to the incentives provided under the 
Industrial Promotion Law and the Investment Law, th e sector is given special tax incentives.  Foreign 
operators are given national treatment as far as the incentives are concerned.