Argentina accused of blocking Uruguay port project

BUENOS AIRES, Sept. 8 (UPI) -- Argentina faced renewed charges of trying to scuttle an ambitious Uruguayan project to develop Montevideo as a major regional port in a move seen running counter to recent reconciliation between the two countries.

Uruguayan outrage over Argentine efforts to block the project and promote instead Buenos Aires as a hub with similar aims got polite airing in the media but feelings ran deeper, news reports said.

In contrast to Argentine plans for Buenos Aires, Uruguay President Jose Mujica is promoting the idea of developing Montevideo and Rocha further east as ports that can serve not only the nation's needs but also open trade prospects for land-locked Bolivia and Paraguay.

Uruguay has announced plans to expand Montevideo alongside a multibillion-dollar development in Rocha on a coastal road to the Brazilian border as a deep-water port. Both projects are seen in Argentina as potential threats to the Buenos Aires port.

The latest tension between the neighbors comes only a few weeks after Mujica and Argentine President Cristina Fernandez de Kirchner met to patch up differences over Uruguay's eucalyptus pulp mill on the border, which Argentina claimed was polluting the Uruguay River.

Further trouble over the pulp mill is still likely, analysts said, because Argentine environmentalists refuse to accept a World Court judgment rejecting Argentina's claim and scientists' reports that there is no evidence of pollution from the mill.

Montevideo's Cennave Navigation Center said Argentine measures were clearly aimed against the interests of Montevideo and would undermine its transit trade.

At present, many shippers south of the two countries prefer to transit through Montevideo because of its geographical position, an advantage that Argentina is keen to reverse.

Already, Buenos Aires has announced plans to rush through legislation that practically will bar Argentine ships from passing through ports in countries, including Uruguay, that don't have bilateral transport agreements with Argentina.

Uruguayan officials were also frustrated by delays in reaching agreements with Argentina on deepening the Martin Garcia canal in the River Plate to facilitate shipping. Uruguay hopes further dredging of the canal would benefit its port of Nueva Palmira, used for much of its grain and pulp exports.

The two countries are also poised in diametrically opposite positions as they negotiate the terms for their shipping in the framework of a new maritime transport agreement for the Mercosur trade bloc. Mercosur includes Brazil and Paraguay as full members and Bolivia, Chile, Colombia, Ecuador and Peru as associate members. Venezuela is waiting to be confirmed as a full member after its accession is ratified by the Congress in Paraguay.