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Argentine protectionism drives Uruguay to build new deep-water port with Brazilian funding

  • Uruguay's President Jose Mujica, center wearing sandals, sits between his Vice President Danilo Astori, left, and newly appointed Finance Minister Mario Bergara during Bergara's ceremony to assume office in Montevideo, Uruguay, Thursday, Dec. 26, 2013.  Former Finance Minister Fernando Lorenzo resigned last week in order to stand trial on charges related to the Uruguayan state airline Pluna. (AP Photo/Matilde Campodonico)

    Uruguay's President Jose Mujica, center wearing sandals, sits between his Vice President Danilo Astori, left, and newly appointed Finance Minister Mario Bergara during Bergara's ceremony to assume office in Montevideo, Uruguay, Thursday, Dec. 26, 2013. Former Finance Minister Fernando Lorenzo resigned last week in order to stand trial on charges related to the Uruguayan state airline Pluna. (AP Photo/Matilde Campodonico)  (The Associated Press)

  • Uruguay's President Jose Mujica speaks to reporters after attending a ceremony for the newly appointed finance minister, in Montevideo, Uruguay, Thursday, Dec. 26, 2013. Finance Minister Fernando Lorenzo, resigned last week in order to stand trial on charges related to the Uruguayan state airline Pluna. (AP Photo/Matilde Campodonico)

    Uruguay's President Jose Mujica speaks to reporters after attending a ceremony for the newly appointed finance minister, in Montevideo, Uruguay, Thursday, Dec. 26, 2013. Finance Minister Fernando Lorenzo, resigned last week in order to stand trial on charges related to the Uruguayan state airline Pluna. (AP Photo/Matilde Campodonico)  (The Associated Press)

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."