The Case for Closer U.S.-Uruguay Relations

By Marco Rubio

After witnessing the damage caused by supply chain disruptions and the invasion of Ukraine, it is abundantly clear that authoritarian regimes pose a real threat to the United States, and that America’s dependence on those regimes for basic goods is a dangerous vulnerability.

For policymakers, the proper response should be obvious. We need to hone our efforts to counter authoritarian influences — across the globe, but especially in the Western Hemisphere — and increase the resilience of our critical supply chains.

That begins with becoming less reliant on China’s state-owned industries and strengthening our bilateral relations with allies in the Western Hemisphere, which are closer to the U.S. not only geographically but also in their respect for democratic values. One country in particular that the U.S. should develop closer ties with is Uruguay.

Freedom House and the World Justice Project rank Uruguay as the first nation in Latin America in their indices of democracy and rule of law. The U.S. has a history of working alongside Uruguay in security and counter-narcotics, and Uruguay has long served as an important distribution center for American goods exported to central South America. Furthermore, besides already having a low level of corruption, Uruguay is looking to revise its Trade and Investment Framework Agreement with the U.S. along the lines of the new trade protocols we have established with Brazil and Ecuador. In other words, Uruguay is eager to adopt transparency and anti-corruption measures.

Finally, while 35 percent of Uruguayan products currently go to China, and while the Chinese Communist Party — our nation’s greatest geopolitical adversary — is courting the Uruguayan government with a free trade agreement, Uruguay remains open to balancing its trade with more exports to Europe and the U.S. Not only would strengthening our bilateral relationship with Uruguay empower the democratic coalition in the Western Hemisphere, it would also push back against Moscow and Beijing’s authoritarian and anti-American influence in our region.

What should policymakers in Washington do to advance a closer relationship with Montevideo? First, the U.S. should strengthen trade relations with Uruguay in a way that enhances both of our economies.

Second, policymakers should expand the Development Finance Corporation’s (DFC’s) role in facilitating investment in Uruguay. Uruguay has shown sustained and equitable economic growth since the early 2000s. Moreover, the J. P. Morgan Emerging Markets Bond Index ranks Uruguay the least risky country in Latin America for investment. But the DFC — the official vehicle for directing American investment to developing countries — is barred from lending to “high income” countries, and the World Bank ranks Uruguay as such, even though it still faces many social and economic challenges, and struggles to attract private investment.

Government regulations should prevent the DFC from lending to the People’s Republic of China but not to a democratic partner like Uruguay. We should allow the DFC’s regulations to attract American investment in Uruguay, particularly in infrastructure, renewable energy, and ports.

Third, the U.S. must expand cooperation with Uruguay on security, space, and counter-narcotics. Uruguay already makes good use of the programming of the Bureau for International Narcotics and Law Enforcement Affairs, specifically the International Law Enforcement Academies. Greater cooperation on space and satellite data sharing would help us and our allies in Montevideo crack down on the South American black market.

If the Biden Administration implements these policy changes, both Uruguay and the U.S. will benefit. But there is no reason to stop there. Countries like Paraguay and Ecuador are worthy partners who have shown a willingness to strengthen ties with the U.S. We should strengthen ties with them as well.

We need to remember that a stronger, safer Western Hemisphere means less Chinese and Russian influence in our region, more secure supply chains, and fewer drugs and illegal immigrants crossing our borders. For these reasons, the U.S. should prioritize closer bilateral relations with Uruguay, and with likeminded neighbors.