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Last Updated: Tuesday, 21 March 2006, 13:13 GMT
Argentines lift Uruguay blockade
Tower at the pulp mill being built by the Finnish company Botnia
Uruguayan builders are already working on one of the plants
Protesters in the Argentine town of Gualeguaychu have decided to lift a long-running blockade of border crossings with Uruguay.

The blockade began early last month in protest at the planned construction of two pulp mills on the Uruguayan side of a river shared by the two countries.

Local Argentines fear the paper mills will pose an environmental hazard - a claim Uruguayans deny.

The blockade ended after both countries called for the project to be halted.

Argentine President Nestor Kirchner and Uruguayan President Tabare Vazquez agreed to put on hold the construction of the mills on the bank of the River Uruguay until an independent environment study is completed.

Strained relations

A Finnish and a Spanish company want to invest $1.7bn (953m) in the two factories.

Thousands of Uruguayans have expressed support for the project, which they say is safe, legal, and would bring much-needed foreign investment and jobs to the country.


But the residents on the Argentine side, backed by international environmental organisations including Greenpeace, say the pulp mills will pollute the river and deter tourism.

The conflict has strained relations between the two normally friendly countries.

Argentina even threatened to take Uruguay to the International Court of Justice in The Hague claiming its neighbour has broken international treaties over the management of the river - something the government of Montevideo has denied.

River row divides former friends
15 Feb 06 |  Americas
Argentina river row ends in court
26 Jan 06 |  Americas
Country profile: Argentina
02 Dec 05 |  Country profiles
Country profile: Uruguay
23 Nov 05 |  Country profiles

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