Uruguay: U.S., Uruguay Sign Social Security Treaty

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By David Haskel

Uruguay and the U.S. signed a Social Security treaty Jan. 10 that according to the South American nation will allow some 60,000 Uruguayans working in the United States and up to 6,000 Americans living in Uruguay to accumulate working years for their home-country retirement benefits.

The deal, which was negotiated in record time in 2015, was signed in Montevideo by U.S. ambassador Kelly Kinderling and Uruguay’s acting Foreign Minister Jose Luis Cancela and Labor and Social Security Minister Ernesto Murro. It needs to be ratified by legislators in both countries before it can be fully implemented.

The treaty will eliminate the need for individuals from each nation working in the other to make double social security payments, both in their home and their host countries, the American embassy in Montevideo reported.

Boosting Trade

These benefits will help boost bilateral business, Kinderling said.

“More trade in goods and services between our two nations would be unlikely without a fluid exchange of technicians, qualified workers and executives from businesses and other Uruguayan and American organizations,” she said.

There are more than 200 American firms operating in Uruguay, most of them in the services sector.

The Uruguayan treaty would be the third totalization agreement Washington has entered into with a Latin American nation, following the ratification of similar treaties with Brazil and Chile, the embassy reported.

For its part, Uruguay has more than two dozen bilateral and multilateral social security deals, Uruguay’s Labor Ministry reported.

Fast Track

This was the fastest negotiation of an international deal Uruguay has ever accomplished. The two sides reached agreement in May 2015 after just two rounds of talks held over a six-month period. Negotiations of these agreements typically demand two to three years. The two sides had agreed to pursue the pact in May 2014, when then Uruguayan leader Jose Mujica met with President Obama in Washington.

Uruguay and the U.S. already have a Trade and Investment Framework Agreement and a Bilateral Investment Treaty in place. The Uruguayan government has also sought a free trade agreement with Washington, but its partners in the Southern Common Market (Mercosur) have blocked the move, saying bloc members are not allowed to go solo on such deals.

Uruguayan President Tabare Vazquez made the initial FTA proposal in 2006, during a previous five-year term in office, and his administration periodically calls on Mercosur partners to adopt a more flexible approach and let Uruguay pursue trade opportunities outside the bloc.

To contact the reporter on this story: David Haskel in Buenos Aires at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

The treaty is available in Spanish here.

For more information on Uruguayan HR law and regulation, see the Uruguay primer.

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