The relationship between trade and wages has been subject to intense scrutiny in the academic literature with no clear consensus emerging. This paper adds to this body of research by moving beyond the single country analysis level to a panel including developed and developing countries and data through the mid 2000‟s. First we examine the relationship between wages and trade using the approach of Feenstra and Hanson to calculate mandated wage changes for our dataset.

I. Introduction and Context

Country Context

The Government of Uruguay has a long term vision to place Uruguay as a regional logistic platform; the country has been developing into a regional hub for the Southern Cone for the last two decades. Uruguay's attractiveness as a logistics hub is due to several factors, including its strategic location and an enabling free-trade-zone legislation.

With a network on 1,600 km and about 1.5 million tons transported per year, the railway sector is underperforming; yet, rail transport has a significant potential in Uruguay, both for some kinds of products and to serve logistics centers such as ports.

Uruguay has recently initiated a reform of the rail sector and its State-owned enterprise; this reform targets substantial increase of the rail modal share for freight, through efficiency costs brought by increased private sector participation.

The port sector reform, introducing increased intra-port competition based on further private sector participation, resulted in significant port efficiency and maritime traffic increase. Out of the 14 fluvial and maritime ports of Uruguay, more than 80% of the cargo traffic is concentrated in the Montevideo and Nueva Palmira ports. With almost 700,000 TEU containers movements, the Montevideo port ranks fourth among container ports in the Southern cone, but is now facing capacity constraints.

Una misión del Fondo Monetario Internacional (FMI) visitó Paraguay entre el 9 y el 15 de noviembre de 2011 para reunirse con autoridades gubernamentales y con el sector privado, como parte de las consultas regulares del FMI con sus países miembros. Al final de la visita, el jefe de misión, Lisandro Ábrego, emitió el siguiente comunicado el día de hoy en Asunción:

“En los últimos años, Paraguay ha fortalecido su marco institucional e implementado políticas fiscales y monetarias en general prudentes. Estas políticas económicas han llevado a resultados positivos en términos de crecimiento y empleo y han ayudado a reducir la inflación. Hacia adelante, es importante continuar mejorando la formulación de políticas y su implementación, así como el fortalecimiento de las instituciones paraguayas, ya que una vez perdida la tan trabajosamente ganada credibilidad, su posterior recuperación no es tarea sencilla.