Nov 27, 1985

URUGUAYAN MINISTER TO PUT LATIN AMERICA'S CASE BEFORE EEC.

BRUSSELS, NOVEMBER 25 (IPS/YOJANA SHARMA) – Uruguayan Foreign Minister Enrique Iglesias meets European Economic Community (EEC) officials here Tuesday on behalf of Latin America’s 11 most indebted nations, and is expected to ask the EEC to reduce barriers to the continent’s exports.

The 11 debtor countries of the Cartegena Group, formed in 1984, insist Latin America can only pay its almost 400 billion dollar external debt if world trade expands, bringing in more export revenue.

In his last visit here, in April, Iglesias emphasised the need for the removal of protectionist measures, Uruguayan diplomats here say.

The EEC’s internal agricultural policies – which protect domestic production through a system of subsidies and import restrictions – hurt Latin American countries, they say.

EEC agriculture policies create huge surpluses, depressing the world price of cereals, according to a recent report sponsored by the World Bank.

This has a spillover effect on other commodities, some of the, like oilseeds, important to Latin America, the report says.

An EEC-sponsored report released in September by the Irish Catholic Agency for world development calculates that the big exporters of meat and grain in Latin America lose some 227 million dollars a year because of depressed prices caused by EEC policies.

Southern cone countries like Uruguay and Argentina have temperate climates like those in Europe so their agricultural produce competes directly with that of EEC nations.

In some cases, EEC exports are displacing Latin American agricultural produce from its traditional markets.

During his last visit, Iglesias specifically asked the EEC to prevent its meat exporters from competing with Uruguayan beef in its traditional Middle Eastern markets.

He suggested the EEC stop paying refunds to refunds to exporters who sell in these markets.

The EEC does not pay its exporters refunds when they sell to markets in Southeast Asia, a market traditionally dominated by Australia, Iglesias pointed out.

Uruguayan president Julio Maria Sanguinetti has recently accused the EEC of being a major destabilising factor in Latin America.

"The greatest threat to our young democracies is the commercial war industrial powers are waging against us", the told a Spanish newspaper last month.

Similarly, Argentina president Raul Alfonsin said Wednesday in Buenos Aires that his country was suffering from the EEC’s "economic aggression".

Latin America politicians have given a cautious welcome to the "Baker Plan", outlined in October by U.S. treasury secretary James Baker.

The plans aimed at helping the Third World overcome its problems repaying external debt, asks commercial banks to lend an additional 20 billion dollars to the big debtor nations over the next three years.

At the same time, multilateral lenders, especially the World Bank, are to increase loans by nine billion dollars, the plan envisages.

In Washington last Wednesday, EEC Commissioner Claude Cheysson supported the Baker Plan, saying European governments should back the efforts of the commercial banks.

He also called for supplementary funding for the World Bank. And increased export credits for to Third World nations.

But Uruguayan diplomats here say this may not be enough to help Latin American countries out of their difficulties.