Uruguay-U.S.
Bilateral Relations: Constructing a New Reality?
Remarks by U.S. Ambassador Frank E. Baxter
Asociacion de Dirigentes de Marketing del Uruguay (ADM)
Montevideo, Uruguay
July 30, 2008
(begin transcript)
Muchas gracias. Es un honor y un privilegio para mí
dirigirme a tan selecto grupo de líderes uruguayos.
Y también lo hago con mucha humildad. Los uruguayos
parecen ser excelentes oradores por naturaleza. Con frecuencia,
mientras miro las noticias en televisión, me asombra
ver a los uruguayos que son entrevistados en la calle. Todos
parecen ser Cicerón. Nunca seré Cicerón,
pero puedo ser un poco mejor en mi lengua materna, de modo
que continuaré en inglés. Les agradezco me
disculpen.
I have been asked whether Uruguay and the United States
are constructing a new reality. My answer is a resounding
and positive yes. I think our relationship is advancing
economically, politically, socially and culturally. Further,
I think that citizens of both of our countries are benefiting
and will benefit more from this evolving reality. Today,
I would like to talk about that evolution.
To discuss this subject, it is very appropriate to be
addressing a group dedicated to marketing. Marketing is
essential to a free society and a global economy. Every
individual and every group, including every city, region
and country has a brand. A quick definition of a brand is
that it is the perception that others have about an individual,
a group, or a product. Companies spend millions in advertising
in order to improve their brand and have customers think
favorably about them. In our global economy, it is essential
to continuously manage your brand. It is necessary to be
clear about target audiences and to constantly sharpen the
message. Uruguay has been working on its brand with the
“Uruguay Natural” campaign and considerable
outreach. Our embassy has sponsored at least 10 delegations
to trade fairs over the last year. Your profile has been
raised around the world and especially in my country. However,
there is more to be done. I have heard you described as
a secret paradise. I am sure that you can still be a paradise
without being such a secret.
It’s a happy coincidence that today is also the
61st birthday of my friend Arnold Schwarzenegger. I mention
Governor Schwarzenegger because besides being a good friend,
he is also an inspiration. He represents many of the values
and opportunities that have made the United States such
a great country over the last two centuries. He arrived
in the United States at the age of 21 with but a dream.
Forty years later, he has become one of the most successful
public figures in the United States He has said: “If
you work hard and play by the rules, this country is truly
open to you. You can achieve anything.” I believe
that, and I know that most Uruguayans feel the same about
your country.
In my 20 months as U.S. Ambassador to Uruguay, I have gotten
to know many of you, and have often said that you are the
nicest and kindest people in the world. Your hospitality
and kindness to my wife, Kathy, and me have been incredible.
Mi esposa y yo nos sentimos como en nuestra casa, tanto
en Montevideo como en cualquier lugar del interior.
Gracias, gracias y muchisimas gracias! While officially
I represent the President, in reality we both represent
the people of the United States. The strength of our country
is not so much its government as it is its people. We, like
you, are a nation of immigrants. It is always important
to remember that we are really some 300 million different
persons with some important common values. It is impossible
to accurately generalize about us. Generalizations about
both of our countries are usually more misleading than enlightening.
Since I represent the people of the U.S., Kathy and I
have wanted to get to know the people of Uruguay as much
as we can. In order to do that, we have tried to visit every
part of your country. By next month we will have been to
all 19 departments, many more than once. Some generalities
about you that I feel comfortable with are that you are
the nicest people I have met. You are very creative in the
arts and music, but also in businesses like software and
animation. You have a stable society. And you certainly
have a beautiful country.
The world is changing rapidly, and my country is no exception.
Soon we will have a new President and Congress. Regardless
of who emerges victorious, I expect a continuation of the
very positive view of Uruguay that Washington now has.
Another change is that we are presently experiencing some
economic challenges. Our financial sector has been too exuberant
and leveraged in financing homebuilding, and is suffering
huge capital losses. Many new homebuyers have been unable
to pay their mortgages. The concurrent drop in home prices
has resulted in weakness in the retail sector. Petroleum
dependent businesses have also been having a hard time.
There is little consensus among economists. In the latest
Wall Street Journal poll, slightly over ½ of them
thought that the U.S. is in recession. In fact, parts of
our economy remain strong. This is especially true in export
industries. Our government and central bank have instituted
very proactive fiscal and monetary policies addressing the
weaknesses in our financial sector, stimulating the economy,
and helping troubled home owners. The economy has been the
number one topic recently in the presidential race.
Although I make no claims to be a forecaster, I don’t
expect the difficulties in our financial sector to travel
to Uruguay. Your banks do not appear to have anywhere near
that kind of leverage.
One area which both countries need to carefully watch is
the increasing prices of some commodities. Inflation impedes
growth and is especially hard on working people.
For the longer term, I am very optimistic about our economic
future. Businesses in our economy learn from setbacks, and
emerge stronger than ever. Some of the doomsday scenarios
we hear don’t strike me as very realistic. However,
since forecasting isn’t especially reliable, it is
always wise to be prepared for anything. It is also wise
to remember that, in finance, hope is not a strategy.
There are also changes in our military. For more than
a century, we been active in disaster relief around the
world If there is a flood, a tsunami, an earthquake, or
a fire it is likely that our military will be there assisting.
Today, much more emphasis and resources are being devoted
to preparation for and anticipation of disasters. We feel
that an essential part of peace keeping is to reach out
to friendly nations to help in training, including building
medical and educational infrastructure. In our training
exercises in the region, we have been able to provide lasting
benefits such as schools and clinics.
Here I would like to applaud Uruguay for its inspiring leadership
in peace keeping. Your contribution to United Nations peace
keeping programs is an example for the world.
Despite all of the recent controversy about immigration
in my country, it remains as one of the most open countries
to legal immigrants and non-immigrants in the world. For
instance, hundreds of thousands of people whose heritage
is Latin American become U.S. citizens every year. Many of
those new citizens continue to support their native countries
with remittances and in other ways.
We are very open in many ways. We import over $6 billion
in goods and services every single day. We educate hundreds
of thousands of students from foreign lands. We welcome
artists, politicians, government officials, teachers and
others from all over the world. We have welcomed millions
of refuges. We are a leading tourist destination. The lower
dollar makes us a real bargain. Incidently, our consulate
approves over 90% of all non-immigrant visa applicants.
The relationship between our countries has flourished
for a long time. General Artigas expressed approval of our
constitution, and there were communications between him
and the U.S. government during the early part of the 19th
century In 1817 our President Madison sent sailors from
Baltimore to fight on the General’s side against a
Portuguese blockade. When the general had to go into exile,
President Monroe offered him a place to live and a pension,
although he decided to stay closer to Uruguay by moving
to Paraguay. In 1852, Uruguay and the United States signed
a Treaty of Friendship, Commerce and Navigation in which
we pledged “perpetual friendship between the U.S.
and its citizens on one part, and Uruguay and its citizens,
on the other part.” Our pledge still stands today.
At the height of the 2002 crisis, the U.S. granted Uruguay
a 1.5 billion dollar bridge loan and pressed the IMF hard
to negotiate a long-term plan with Uruguay. We reopened
our market to Uruguayan beef in record time. And our relationship
continues to be very robust today.
In the past four years we have signed four important agreements:
1. In 2004, we signed an Open Skies Agreement to improve
the air linkages in both our countries. It allows for extending
flight frequencies and destinations.
2. In 2005, we signed a Bilateral Investment Treaty, known
as the BIT, to protect and to promote bilateral investments.
3. In January 2007, we signed a Trade and Investment Framework
Agreement, the TIFA. The TIFA is an excellent instrument
for achieving substantial progress in many trade areas.
Some 11 working groups are in constant communication, and
their work has already yielded concrete results. The opening
of the $180 million blueberry market to Uruguay was negotiated
under the TIFA and we are also working on certifying de-boned
lamb and in the longer term, citrus. We expect that later
this year we will be signing agreements under the TIFA concerning
the environment, e-commerce and business development.
4. As a result of the TIFA, in May of this year, we signed
a Bilateral Science and Technology Cooperation Agreement.
The new agreement provides a mechanism through which the
United States and Uruguay can broaden cooperation in all
scientific and technology fields, and move forward in areas
of collaboration such as energy, health issues, science
and technology education, engineering, sustainable development,
agriculture, and natural resources. It will support government-to-government
exchanges and scientific partnerships between private, academic,
and non-governmental entities.
To follow up on the Science and Technology agreement our
Undersecretary of State for Democracy and Global Affairs,
Paula Dobriansky recently brought a blue ribbon delegation
of scientists and doctors to Uruguay to discuss possible
exchanges and joint projects.
In the last eighteen months Uruguay has been host not
only to our President, but to the most important four members
of our cabinet (Labor, Treasury, Commerce and State). In
addition, U.S. Trade Representatives, Congressional Delegations,
and several high-ranking officials from other Departments
have visited the country. President Vazquez and many cabinet
members have visited the U.S.. There is activity between most
of our Cabinet Departments and commensurate Uruguayan Ministries.
As Ambassador I have made seven trips to Washington on
Uruguay business, I have been with President Vazquez on
his visit to California, where he had a successful meeting
with Governor Schwarzenegger. I have also had two other
meetings with a number of California businessmen. I have
been to Montevideo, Minnesota, where they celebrated General
Artigas’s birthday, and I have visited the partners
of Uruguay in Minneapolis. I was with the Uruguayan delegation
to the Americas Competitiveness Forum in Atlanta, which
was the forerunner of the incredibly successful Americas
Innovation forum held in Punta del Este in March. We have
had scores of important visitors from all walks of life
from the U.S. In our residence we have hosted over 6000
people from all over the world as well as Uruguayans. I
know that many of you have been there. Mi casa is su
casa.
The United States has a strong interest in constructive
relationships with countries that respect fundamental democratic
values and the rule of law. We will work closely with any
government, regardless of its ideological persuasion, as
long as it is committed to our shared principles and the
well-being of its citizens. Therefore, Uruguay is very important
to the United States. Economically, we see you as a valuable
example of a stable, well-managed economy governed by sound
market principles. Politically, you have the values, and
the institutions needed to sustain a vibrant democracy.
Socially, you are an example of rationality in a sometimes
volatile region. I like to use a boxing analogy about you
which is that you punch above your weight! My friend Arnold
has said: “Strength does not come from winning. Your
struggles develop your strengths. When you go through hardships
and decide not to surrender, that is strength.” We
see a Uruguay that has gone through recent struggles, a
Uruguay that in spite of it all did not surrender, a Uruguay
that is now much stronger and much better prepared to take
on any hardships, as well as opportunities, that the future
may bring. You know that falling is not failure. The only
failure is when you don’t get up again. We love that
attitude.
We share beliefs that are essential to a free society:
• The belief that democracy, backed by free press,
regular and transparent elections, and the rule of law,
is the most effective and moral form of government.
• The belief that the free market, under the rule
of law, with universal education, and effective support
for the less fortunate are the best ways to develop economies
and reduce poverty.
• The belief in the role of civil societies in the
formation and policies of modern democracies.
In terms of commerce, we recognize that Uruguay has an
excellent environment in which to do business. You enjoy
many conditions which are unequaled in Latin America. You
boast one of the best telecommunications systems in the
region, You have good infrastructure and transportation
networks which you are striving to improve. Montevideo has
a world-class natural port and Uruguay’s secondary
ports give access a waterway that flows deep into South
America. Your port expansion plans are very creative and
exciting. The new Airport terminal plus the expansion of
Pluna will make you an even more important logistical hub.
You have a creative population, highly literate and capable,
which, with the right training, can be able to adapt quickly
to the technological changes that are required to compete
today. You have the most even income distribution in Latin
America, which is attractive to businesses and investors.
You have a transparent business environment. Additionally,
you show economic prudence, reliability, and an independent
legal system.
The U.S. is already a major investor in your country,
with a stock of direct investment of over $600 million,
according to our Department of Commerce. Over 100 U.S. companies
work here, especially in forestry, tourism, transportation,
telecommunications, services, and agriculture. Just four
U.S. companies - Weyerhaeuser, the Conrad Hotel, McDonald's,
and Sabre - generate approximately 3,000 high-quality direct
jobs. Sabre already employs over 900 people, some of whom
are Uruguayans who have been recruited home from abroad.
Its campus looks like Silicon Valley. These are high-paying,
high-value-added service jobs. Weyerhaeuser employs over
1,000 people in the interior. It makes special efforts to
ensure its projects work hand in hand with nearby communities.
It has changed the face of Tacuarembó, and I encourage
you to go and see for yourselves the positive impact that
it has had on that Department. The McDonald’s chain
of restaurants employs over 1,000 young people across Uruguay,
which is the first job for many of them. The Conrad Hotel
employs approximately 900 people during the low season and
1,500 during the summer. I think you know the very positive
effect the Conrad has had not only in Punta del Este but
in Uruguay as a tourism destination as a whole. I am sure
you also know the very positive impact on Uruguay from American
Airlines’ direct Montevideo to Miami flights. I was
recently on one of those flights in which American Airlines
was hosting 11 travel agents in order to develop more tourism
business. Both of these U.S. companies are increasingly
helping position Uruguay as an easily-accessible and affordable
international tourist destination.
I strongly believe that you have an attractive environnment
and that much more investment can be available, under the
right conditions. Investors from the U.S. as well as other
nations are looking for opportunities around the world.
Uruguay is very interesting because of its safety, its stability,
its climate, and its time zone. To date your focus has been
on Direct Foreign Investment including buying and/or developing
existing resources such as timber, infrastructure, and agriculture.
You are taking steps to make Uruguay significantly more
important.
First, you are focusing more on human resources. You know
that human capital is the most important capital in the
21st century. This is the key to having state of the art
businesses locate here. U S high tech companies are looking
for trained workers. You know that to be a more serious
competitor you must produce more business people, engineers,
computer specialists, technologists etc. Our Embassy is
helping by being involved in the training of 20,000 young
Uruguayans to learn English, which is an essential tool
to compete in this. We are also soliciting scholarships
from U S business schools for Uruguayan students. Our joint
efforts through the Fulbright Commission to exchange scores
of teachers and other experts produces a signficant contribution
to your human capital. We support DESEM Junior Achievement
which is teaching hundreds of young people how to be entrepreneurs.
Project CEIBAL is an indication of your serious desire to
be a competitor with high quality workers.
I also applaud your current focus on demographics. Recruiting
and retaining talented Uruguayans must be be an important
part of your human resource strategy. This is such a beautiful
place to live, and today it isn’t necessary to leave
in order to have a fulfilling career. Today, trained people
can live anywhere and offer their services to the world.
I like to say that today you can export your brain without
sending your body along.
Looking at polls, it is clear that most Uruguayan youth
do not want to pursue a business career. Instead they would
rather be in a profession such as medicine or law. I can
identify with them. Ever since I was very young, I had wanted
to be a lawyer. I envisioned myself using the law to fight
for right and equality – but whether we like it or
not, our lives are mostly the result of random events. It
is said that if you want to make God laugh, tell him your
plans. An important random event for me was that shortly
after I finished high school, I joined the Air Force, instead
of going on to university as I had planned. I hasten to
add that I wound up flying typewriters rather than jets.
While there, I met an airman slightly older than me who
was trading in the stock market. I worked with him, for
no pay, as he looked for investment opportunities. I became
excited by the dynamics of finance and its role in creating
value. In university I studied economics rather than law,
and since have had a series of jobs as a trader, institutional
salesman, investment banker and eventually running an investment
banking firm. Because of a random set of events, I believe
that I have been able to give more to society than if I
had followed my original plan. In my former firm and the
firms that we served, thousands of good jobs have been created.
We also designed new processes that made financing more
cost effective. I have been able to contribute significantly
to education, health care, and the arts. I hope that more
Uruguayan youth will take a look at business as a path to
be creative, fulfilled and to make a contribution to society.
Jose Pedro Varela, the father of Uruguayan free education
started as a businessman. He said: “It is to the young
people that I am speaking; from young people I expect everything.”
Business is a very good way to meet those expectations.
Bill Gates is an example of someone whose creativity has
changed the world, and who now is using his resources to
improve health and education around the world.
You are also beginning to address another necessary component
for significant growth. That is the development of more
sophisticated capital markets, and particularly revitalizing
your stock market. As I mentioned before, direct investors
are coming into Uruguay buying Uruguayan firms, and developing
existing resources, such as timber and real estate. However,
institutional investors, such as pension funds and mutual
funds-which have the bulk of the world’s capital-,
are also looking for ways to invest in this wonderful economy.
Rather than running businesses themselves they want to buy
shares in businesses. They need the vehicle of capital markets
to invest in Uruguayan businesses, both existing growing
companies as well as new ones. A liquid stock market provides
many other benefits such encouraging risk capital for start
ups and new ideas. Young people would be more anxious to
stay home if they would have a better chance to develop
their ideas here. A stock market also provides opportunities
for existing business owners to liquefy without entirely
selling out, thereby retaining their skills in Uruguayan
businesses. In short, it will be impossible to achieve your
full economic potential without viable capital markets.
Having some background in this area, I stand ready to be
of any help you wish.
Exports will always be a very major component of your
economy. Over the last few years you have managed to diversify
the variety and destination of your exports. The fact that
your exports are shattering record after record is an excellent
indication that your products are considered of excellent
quality and price in markets world-wide. In 2007, the U.S.
was the second largest buyer of Uruguayan products, purchasing
just under half a billion dollars, or 11% of your total
exports. Our total imports from you this year are way down,
because other countries are willing to pay higher prices
for your meat. This is a cyclical phenomenon which will
change. For now, I feel lucky to have access to asados every
day. Besides the traditional agricultural products, the
U.S. purchased over three hundred different types of Uruguayan
products including several non traditional exports such
as gasoline (13% of the total exports to the U.S.), plywood,
parts and accessories for motor vehicles, honey, and even
floor tiles.
In fact, in 2007 the United States was the number one
export destination of almost one hundred different Uruguayan
products. Among these were:
• Sawed wood: taking almost 50% of the total exports
(14.4 of 29.7 million dollars);
• Brake linings and pads: taking again almost 50%
of the total exports (2.5 in 5.4 million);
• Live horses: again almost 50% of the total exports
(1.6 in 3.3. million);
• Woven labels and badges: 22% of the total exports
(.7 million in 3.2);
• Medical implants, mainly gastric stimulators, cardiac
valves and parts for pacemakers: 55% of the total exports
(0.8 million in 1.5);
• Breads and pastries, (HTSUS 1905), 26% of Uruguay’s
total exports go to the U.S.. (1 in 3.9 million);
• Motorcycles and cycles fitted with an auxiliary
motor: 62% (400,000 in 645,000)
I believe that we have only begun to tap the potential
for more commercial activity.
The U.S. is the world’s largest market. As I mentioned
previously, every day, we import over $6 billion in goods
and services. The potential for Uruguay is virtually unlimited.
As you know, the world economy is rapidly switching from
an industrial economy to an information economy. Most of
the employment growth in advanced developing countries and
developed countries is in information technology and services.
Actually, commodity and industrial employment is decreasing
world wide. Uruguay has tremendous potential to take advantage
of this trend. To capitalize, you will need to focus more
on exporting molecules, bytes and services. These don’t
face as many barriers such tariffs and quotas. Such a focus
would be another factor in retaining your best talent.
In addition to information technology, I think the opportunities
in tourism (including medical tourism), logistics, and alternative
energy are also limitless. The U.S. is a demanding market.
To win business, the customer has to come first. Those who
want to sell in the U.S. must study the market and adapt to
it. Quality, price and reliability are keys. Above all,
you must market, market, and market. In my former firm,
the motto was you go broke waiting for incoming calls. Marketing
is not only for businesses. If academics, hospitals, labs,
students or others look hard for opportunities in our country,
I guarantee that they will find them. Our Embassy is always
ready to be of help, but you must take the initiative.
There is much more to be done. Next month a delegation
led by Minister Martinez is going to the Americas Competitiveness
Forum in Atlanta. They will interact with businesses large
and small, with academics, and with government officials
from all over the hemisphere. Uruguay wants to have another
Innovation Forum next year. I am sure that would be another
big step in making you the innovation center of the Southern
Cone or, probably, South America.
These are some of the things that are happening in this
new reality. We are expanding our business ties, deepening
our engagement, and are working together to improve the
lives of the citizens of both of our countries. It is impossible
to describe everything that is happening in and between
free societies. I am certain that there are as many positive
developments below the surface as those that we can see
now. It is a very, very exciting time.
A muchos de ustedes les gusta decir que son un paísito.
Hoy en día, ser un país pequeño es
una gran ventaja. Se pueden adaptar a un mundo que cambia
con mucha rapidez. Mi imagen de Uruguay es que es un país
pequeño que piensa grande. Nos alegra que tengamos
tantos lazos con este pequeño país que piensa
tan en grande. Los lazos van en ambos sentidos. Hay un número
importante de uruguayos / estadounidenses en cada segmento
de la sociedad estadounidense. Muchos de ustedes tienen
familiares en los Estados Unidos. Me alegra profundamente
informarles que Kathy y yo tenemos una bisnieta nacida en
Uruguay, de modo que siempre tendremos un vínculo
muy personal con ustedes.
Mis buenos amigos, hemos hecho grandes cosas juntos
en el pasado. Estamos haciendo grandes cosas en la actualidad.
Tengo plena confianza de que lo mejor aún está
por venir. Muchas gracias por todo.
(end transcript)