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Regional relations

Argentina: Regional relations

Argentina and Chile reached a settlement in 1991 regarding claims to territory in the Antarctic region; however, the sovereignty of the territory remained under dispute, necessitating the signing of an additional protocol in 1996. In 1998 the Presidents of the two countries signed a new agreement on the border demarcation of the contested ‘continental glaciers’ territory in the Antarctic region (despite the 1991 treaty). In 1999 President Menem and his Chilean counterpart signed a significant defence agreement and issued a joint declaration on both countries’ commitment to the consolidation of their friendship. Relations between the two countries were strained in 2004, however, following President Kirchner’s decision to reduce gas exports in order to meet a shortfall in stocks for domestic consumption. A bilateral group was established in 2006 to resolve any future disagreements over energy matters.

Argentina was a founder member of the Southern Common Market, MERCOSUR (Mercado Común del Sur), which came into effect on 1 January 1995. MERCOSUR, comprising Argentina, Brazil, Paraguay and Uruguay (joined by Venezuela in 2012), removed customs barriers on 80%–85% of mutually exchanged goods, and was intended to lead to the eventual introduction of a common external tariff. Following a series of trade disputes within MERCOSUR, particularly between Argentina and Brazil, the Buenos Aires Consensus was signed in 2003. The agreement was to study ways of resolving trade disputes, in addition to the establishment of a MERCOSUR legislature. A disputes tribunal commenced operations in 2004, while the MERCOSUR parliament was inaugurated in 2007. MERCOSUR heads of state agreed on a new common customs code in 2010. None the less, protectionist measures implemented by the Fernández Government provoked tensions within the bloc. One of the first acts that Mauricio Macri undertook as President was the ending of import restrictions. At the same time, however, relations with fellow MERCOSUR member Venezuela deteriorated after Macri demanded that the Government of Nicolás Maduro release all political prisoners. Relations with Venezuela deteriorated further in 2016, particularly after Venezuela assumed the rotating presidency of MERCOSUR against the wishes of Argentina, Brazil and Paraguay. In September all four original members issued a statement declaring that they would not recognize Venezuelan presidency of the bloc until the Maduro Government complied with MERCOSUR’s membership requirements.

In 2016 Argentina and Paraguay agreed to establish a permanent negotiating mechanism towards settling the long-running dispute over the debt owed by Paraguay over the construction of the hydroelectric dam at Yacyretá on the Paraná river. Both countries operate the dam, and Paraguay allows Argentina to use some of its share of the electricity produced. Paraguay had long argued that this excess energy should go towards paying off the original sum borrowed.

Relations between Argentina and Uruguay were strained from 2005 owing to the latter’s decision to allow the construction of two pulp mills on the River Uruguay by Botnia of Finland and Ence of Spain. Argentina opposed the project on environmental grounds, although a 2006 World Bank study concluded that the mills posed no environmental threat. Argentina demanded an independent assessment (the mills were partly financed by the World Bank) and ecological groups erected roadblocks across bridges spanning the river. Following the failure of negotiations in April, Argentina filed a complaint with the International Court of Justice (ICJ), claiming that the mills violated the 1975 Statute of the River Uruguay. An initial finding by the ICJ in 2006 dismissed Argentina’s claim; however, the dispute prompted Ence to cancel its plans for a mill in September. In the same month a MERCOSUR arbitration panel ruled that Argentina had failed to adhere to the trade agreement’s free trade clauses by not preventing the ongoing roadblocks, albeit unintentionally. A final ruling by the World Bank, stating that the project met all international environmental standards, was dismissed by Argentina in October, and prompted further roadblocks. The inauguration of the Botnia mill in September 2007 provoked large-scale demonstrations by Argentine protesters. The ICJ ruled on the dispute in April 2010, concluding that Uruguay had breached its procedural obligations under the Statute of the River Uruguay by failing to inform Argentina of its plans, but had not violated its environmental obligations. The Court rejected Argentina’s request for the dismantling of the plant in operation (now owned by UPM of Finland) and for compensation. In July President Fernández and Uruguayan President José Mujica signed an agreement on the establishment of a bilateral scientific committee to monitor the environmental impact of all operations on the River Uruguay. At a meeting in Buenos Aires in August 2011, Fernández and Mujica signed a series of bilateral agreements in a number of areas, including transport infrastructure and the business sector. However, friction arose during 2012, with Uruguay notably critical of the Argentine Government’s restrictions on imports and of its continued apparent reluctance to proceed with a joint project to deepen the binational Martín García canal. In October 2013 Mujica announced that he had approved a request by UPM to increase production at the mill by 100,000 metric tons per year, contingent on meeting certain environmental standards. The Argentine Government immediately declared its intention to refer the matter back to the ICJ. In the following month the Argentine Government imposed retaliatory restrictions on the transshipment of goods bound for Argentina via Uruguayan ports. In June 2014 relations deteriorated further after Uruguay’s increase in production took effect. In the following month the Argentine Government announced plans to dredge a 53-km navigation channel along the River Plate which would increase traffic to ports in Argentina to the detriment of Montevideo. The Uruguayan Government claimed the proposed canal was in breach of the River Plate Treaty.

The incoming administration of Mauricio Macri indicated that it would seek to improve relations with Uruguay. To this end, the new President made Uruguay the destination of his first overseas visit in January 2016. The two heads of state signed several co-operation agreements; notably, Macri announced the end of the ban on Argentine imports being shipped via Uruguayan ports. A co-operation agreement on port policy was also signed. The two countries also agreed to construct a pollution monitoring station on the River Uruguay, inauguration of which would, it was hoped, bring an end to the long-running dispute over the pulp mills. However, later in 2016 tensions increased again after UPM proposed to build a further paper mill on a tributary of the River Uruguay.

Citation: Regional relations (Argentina), in Europa World online. London, Routledge. Retrieved 18 December 2017 from http://www.europaworld.com/pub/entry/EE000259

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