OREANDA-NEWS. Uruguay's business community is hoping for an uptick in activity at the tiny country's ports after Argentina's new government canceled a 2013 measure that had blocked transshipment of exports.

After a meeting with his Uruguayan counterpart in Colonia, Uruguay, Argentina's president Mauricio Macri, who took office on 10 December, said the measure implemented by the administration of his predecessor Cristina Fernandez de Kirchner would be lifted.

The measure issued in October 2013 limited transshipment of Argentinian exports to regional ports that have a valid transshipment agreement with Buenos Aires. Argentina only has a transshipment agreement with Brazil.

The measure "created serious distortions in the operation of foreign trade at a regional level, gravely affecting its fluidity, with the corresponding negative impact on the costs to export Argentinian goods," notes the resolution that Macri presented to Uruguayan president Tabare Vazquez.

Transshipments of Argentinian exports through Uruguayan ports amounted to 200,000 container movements per year, and losing that business represented a plunge in revenue of around US$100mn/yr for the sector, according to Alejandro Gonzalez, president of the Uruguayan shipping chamber Centro de Navegacion.

"This now allows us to compete, which is all that we wanted," Gonzalez told Argus. "Both Uruguay and Argentina are far from the big markets, so I think that if there are short-circuits across the River Plate it is as if we are failing to do our homework."

Before the 2013 prohibition, Uruguayan ports were mostly used as a transshipment point for exports from southern Argentina, mainly fish and fruit.

Montevideo?s Terminal Cuenca del Plata congratulated Vazquez and Macri "for bringing an end to a measure that for more than two years obstructed the flow of cargo between the two countries which caused serious damage to the Uruguayan logistical sector and Argentina's export sector."

Uruguay promoted the transshipment of goods from Paraguay, but the amount was not enough to offset the shortfall from Argentina.

The 2013 measure was issued after bilateral relations between the two countries soured following Montevideo's decision to authorize an increase in production of Finland's UPM-Kymmene pulp mill. The mill, located in the Uruguayan city of Fray Bentos across the Uruguay River that separates the small country from Argentina, has triggered multiple bilateral disputes because of environmental concerns.

Macri and Vazquez also agreed to work toward a longer-term binational plan on ports.

"We have very valuable initiatives that will not only improve operations in both our ports but also to complement each other to generate new opportunities for the two countries," Macri said.