Uruguayan President Jose Mujica says Brazil will fund 80 percent of a new deep-water port that could thwart Argentine efforts to control trade in the region.

The Republica newspaper reported Tuesday that Mujica said the $500 million port in Rocha will be financed with Brazilian support through the Mercosur's Fund for Structural Convergence, and that construction should begin in about a year.

Uruguay's other ports are at maximum capacity, and Argentina's efforts to block ships from stopping in Uruguay just forced a leading container company to prepare for 500 layoffs. Argentine is trying to promote its ports and force Uruguay to sign a shipping agreement.

Uruguayan Vice President Danilo Astori told The Associated Press the new port "won't neutralize Argentina's influence over Uruguay, but in terms of shipping it will change it completely."