The countries of Uruguay and Argentina used to be in tandem with their economies. However recently Uruguay has started to break away from one of its biggest traders in Argentina, which is now Uruguay’s 4th biggest trader, and now China, Brazil, and the European Union are Uruguay’s biggest traders. Argentina used to suffer like Uruguay, but now because of this drift in trading partners Uruguay’s annual inflation rate was 4.1% in August, the lowest since 2005. If they were still major trading partners with Argentina they would be suffering greatly because Argentina’s inflation hit 124% in August, the highest since 1991.
Uruguay definitely made the right decision in cutting down trades with Argentina because they are thriving without them and I cannot believe they did not do it sooner. I believe more countries will try to slim down their trades with Argentina because of the way Uruguay has succeeded after severing ties with them. For example, in 2002 the economy of Uruguay suffered bank closures, high unemployment and rising poverty during a devastating financial crisis in Argentina, due to their “link”. This could have a lasting impact and could make Uruguay one of the stronger economies in the South American region.
This decision from Uruguay relates directly to the class because of their foreign policy. They have decided through the international community to not trade as much with Argentina and to with other countries instead. This change in Uruguay’s foreign policy has greatly benefited their economy and they are in a much better place than they were when trading with Argentina. Argentina needs to work on their internal affairs because they are clearly struggling with their economy and need to do better.