Relations between Spain and Uruguay are based on mutual respect, common values, and a long history of diplomatic cooperation. The two countries have continually sought to expand and deepen cooperation in several fields. At the center of this renewed engagement between Spain and Uruguay is the European Union-Mercosur (EU-Mercosur) free trade agreement, with both countries emerging as “strong supporters of the EU-Mercosur agreement since the beginning of the negotiations,” according to Spanish Ambassador Javier Salido Ortiz. The Ambassador stated these views in an interview with Diálogo Chico ahead of Spain’s National Day on October 12 in Montevideo.
A Win-Win Deal
The Spanish envoy said the EU-Mercosur agreement “would be very beneficial for both parties.” Ambassador Javier Salido Ortiz explained that the free trade agreement between the EU and Mercosur is “an opportunity to boost trade and investment on both sides, and everyone wins from it.” On the European side, the EU-Mercosur trade pact would “open an enormous market to export more industrial goods, high-value-added goods, and technology.” For Mercosur countries, the agreement is expected to “open a door for more exports, not just of agricultural goods, but also of raw materials to the EU, and also to attract the foreign investment required to modernize and speed up growth in those economies.”
In a sense, this is the precise balance of interests that the EU-Mercosur agreement is aiming to strike. The 28 EU member states and the four Mercosur countries (Argentina, Brazil, Paraguay, and Uruguay) have been working for nearly two decades to hammer out a comprehensive trade and investment agreement that addresses the concerns and priorities of both sides. At the core of this agreement is the objective of removing tariffs on more than 90% of goods traded between the two blocs, enhancing regulatory transparency, and creating an enabling environment for sustainable, mutually beneficial trade relations.
For Uruguay, a South American nation that exports 30% of its GDP (primarily beef, soy, and dairy products), signing the EU-Mercosur trade deal would represent a major opportunity in the EU, the world’s largest trading bloc.
Building Bridges
In addition to the broader perspective of regional trade integration, Spain and Uruguay have taken important steps to further deepen bilateral cooperation. In this sense, the recent visit to Uruguay by Spanish Prime Minister Pedro Sánchez and Uruguayan President Yamandú Orsi was a clear demonstration of the strong ties that bind the two countries. During the meeting in Montevideo, both leaders signed multiple agreements on cooperation in areas such as sustainable development, gender equality, the fight against organized crime, consular assistance, and cultural exchange.
These accords underscore the multifaceted nature of Spain-Uruguay relations, which go far beyond the strictly economic sphere to include common commitments to social progress, democratic governance, and sustainable development. In this context, Spain’s development cooperation agency, AECID, has been working closely with the Uruguayan government on a range of projects aimed at promoting renewable energy, water management, digital transformation, and other strategic sectors.
Spanish Investment in Uruguay
According to Ambassador Salido Ortiz, “Spain, through its companies, is the leading foreign investor in Uruguay.” This is a significant statement that underscores the depth of the economic ties between Spain and Uruguay. Spanish companies have recognized in Uruguay an attractive destination for investment and expansion due to the country’s democratic stability, robust legal framework, and predictable investment climate.
“Uruguay’s democratic stability and legal security have been key factors that have encouraged so many Spanish companies to invest and create around 30,000 jobs both directly and indirectly,” Ambassador Salido Ortiz said. These investments cover a wide range of sectors, including banking, telecommunications, renewable energy, and logistics. Prominent Spanish companies operating in Uruguay include Telefónica, Banco Santander, and Acciona, among others.
The EU-Mercosur agreement would likely cement these economic links by providing Spanish investors with better access to the Mercosur market, including supply chains and export opportunities. At the same time, for Uruguay, the agreement would help attract more European companies seeking a reliable and stable base of operations in South America.
Emerging Areas with High Potential
Ambassador Salido Ortiz pointed to some “very promising potential” areas of Spanish investment in Uruguay, including renewable energy, water infrastructure, transport, and digitalization. Uruguay has positioned itself as a regional leader in clean energy, with over 95% of its electricity generated from renewable sources, such as wind, solar, and biomass. This fact perfectly aligns with Spain’s strength and technological leadership in the field of wind and solar power.
In the field of water management and infrastructure, Spanish companies have been helping Uruguay to address the challenges of sustainable water use and urban development. Digitalization is another fast-growing area where Spain can contribute its experience in the creation of smart cities, digital public services, and innovation ecosystems. This field, in particular, is becoming increasingly strategic for Uruguay’s long-term development.
In this sense, the EU-Mercosur agreement would provide a necessary institutional framework to support these types of investments. By promoting regulatory convergence, intellectual property rights protection, and sustainable business practices, the agreement would give investors more confidence to commit their long-term resources to projects that promote economic and environmental resilience.
Benefits for the Citizens
Ambassador Salido Ortiz said the biggest beneficiaries of the EU-Mercosur agreement would be the people of the two regions. “They are going to be able to access more variety of products and, with competition, these products will be cheaper,” the Spanish ambassador explained. This is one of the central tenets of free trade: provide consumers with more choice, lower prices, and at the same time stimulate innovation and efficiency among producers.
European consumers would benefit from better access to high-quality agricultural products from Mercosur countries such as Uruguay, Brazil, or Argentina (think, for instance, about Uruguayan beef, Brazilian coffee, or Argentine wine), whereas South American consumers would gain from an increased availability of European technology, pharmaceuticals, and machinery at more competitive prices.
In addition, the agreement places a strong emphasis on sustainable development, with clear provisions on environmental protection, climate change mitigation, and labor rights. This approach to trade and investment dovetails perfectly with Uruguay’s own commitment to sustainable growth and green energy, for which Uruguay is already a regional leader.
A Common Project
Spain’s support for the EU-Mercosur agreement is part of its wider strategy to deepen Europe’s engagement with Latin America. As one of the EU’s main gateways to the region, Spain has a critical role to play in terms of promoting mutual understanding, cooperation, and fair, balanced economic development.
For Uruguay, the EU-Mercosur agreement is a strategic opportunity, not only for export expansion but also to cement its position as a stable, reliable, and investor-friendly destination for European companies.
With a shared vision of democratic governance, open societies, and the rule of law, Spain and Uruguay are setting an example of how like-minded countries can find areas of cooperation to the benefit of their citizens and economies. As Ambassador Javier Salido Ortiz told Diálogo Chico, the EU-Mercosur agreement is not just a trade deal, but a framework for mutual progress and a symbol of a renewed partnership between two dynamic regions at the global stage.