At a Glance: Uruguay and China's trade ties

Uruguay and China may lie far from one another, but their trade relations have become closer than ever.

China is now Uruguay's main trade partner. Last year, after 30 years of formal diplomatic relations between the two nations, their trade balance was in Uruguay's favor to the tune of US$6mn, with exports to China reaching US$1.68bn and imports from the Asian nation at US$1.67bn.

Historically, Uruguay has had a trade deficit with the Chinese, but its exports to the Asian giant grew 17.3% between 2013 and 2018 and the balance tipped in Uruguay's direction in 2017, according to data from Uruguay's investment, export and brand promotion agency.

Beef and soy account for 66% of Uruguay's exports to China. Meanwhile, Chinese exports to Uruguay are considerably more diversified, with phones currently being what Uruguay buys most, accounting for 11.1% of the total.

Seeking to further deepen these economic ties and attract more Chinese investments, a Uruguayan government delegation has been visiting China over the last two weeks and taking part in various business talks, with some of the deals and agreements signed involving technology and innovation.

This is the case of a memorandum of understanding inked with Chinese technology company Huawei on 5G, industrial digital transformation and ICT training in partnership with Uruguayan universities.

According to Uruguay's industry, energy and mining ministry (MIEM), work will be carried out in the areas of the Internet of Things (IoT), cloud computing and artificial intelligence, in addition to 5G.

Recently, the Inter-American Development Bank (IDB) approved a US$8mn loan to Uruguay for prevention, detection and response to cyberattacks.

In a statement, IDB said the loan operation is the first to be approved in the institution's history that is focused solely on cybersecurity matters.

Huawei has been operating in Uruguay since 2005 and is the main provider of telecommunications networks in the country, including to state-run telco Antel. In April, Antel reportedly become Latin America’s first operator to activate a 5G network.

The Huawei MOU is one of a raft of other deals.

Since 2016, Uruguay and China have signed 13 agreements, including a cooperation deal in August 2018 in the framework of China's audacious Belt and Road Initiative.

In recent past, Uruguay tried to advance talks with China on a free trade agreement (FTA), but the rules of the Mercosur bloc, of which Uruguay is part, prevent its members from negotiating deals bilaterally.

Last month, Mercosur closed an FTA with the EU after 20 years of negotiations. This week, the South American bloc also announced a deal with EFTA, a group formed by the European nations Iceland, Norway, Switzerland and Liechtenstein. Talks are also underway with Japan and South Korea, among others.

The Uruguayan trip to China concluded Tuesday with industry, energy and mining ministry Guillermo Moncecchi, who is chairing the delegation, visiting Tang Liang Zh, the mayor of Chongqing, a major city in southwest China.

The day before, Moncecchi said during a presentation at the Smart China Expo event taking place in that city that “Uruguay could become a gateway to Latin America as a digital hub.”