In November 2010 Uruguay ratified the Unasur (Union of South American Nations) Constitutive Treaty, becoming the ninth nation out of 12 to do so. The treaty was written in 2008 and was to come into force 30 days after the date of receipt of the ninth instrument of ratification.

Argentina and Brazil are Uruguay’s most important trading partners: imports from Argentina accounted for 20% of the total in 2009. Since bilateral relations with Argentina are considered a priority, Uruguay denies clearance to Falkland Islands bound British naval vessels and prevents them from calling in at Uruguayan territories and ports for supplies and fuel.

A rivalry between the port of Montevideo and the port of Buenos Aires, dating back to the times of the Spanish Empire, has been described as a “port war.” Officials of both countries emphasized the need to end this rivalry in the name of regional integration in 2010.

The construction of a controversial pulp paper mill in 2007, on the Uruguayan side of the Uruguay River, caused protests in Argentina over fears that it would pollute the environment and lead to diplomatic tensions between the two countries.

The ensuing dispute remained a subject of controversy into 2010, particularly after ongoing reports of growing water contamination in the area were later proved to be from sewage discharge of Gualeguaychú town. In November 2010 Uruguay and Argentina announced they had reached a final agreement for the joint environmental monitoring of the pulp mill.

Brazil and Uruguay have signed cooperation agreements on defence, science, technology, energy, river transportation and fishing, with the hope of accelerating political and economic integration between these two neighbouring countries.

Uruguay has two uncontested boundary disputes with Brazil, over Isla Brasilera and the 235 km2 (91 sq mi) Invernada River region near Masoller, over which tributary represents the legitimate source of the Quaraí River/Cuareim River.

Uruguay has enjoyed friendly relations with the United States since its transition back to democracy. Commercial ties between Uruguay and the United States have expanded substantially in recent years, with the countries signing a bilateral investment treaty in 2004 and a Trade and Investment Framework Agreement in January 2007.

The United States and Uruguay have also cooperated on military matters, with both countries playing significant roles in the United Nations Stabilization Mission in Haiti.

President Mujica backed Venezuela’s bid to join Mercosur and supported the Venezuelan Economy Minister Ali Rodriguez to become general secretary of UNASUR, a position previously held by Néstor Kirchner. Venezuela has a deal to sell Uruguay up to 40,000 barrels of oil a day under preferential terms. Uruguay will officially recognize a Palestinian state in March 2011.