Brazil wants to recover the ground it has lost in the Iraqi market in the last 15 years. Until the Gulf War Iraq was an important trade partner for Brazil.
In the 1980’s bilateral trade attained US$ 2.4 billion, of which US$ 630 million represented Brazilian exports.
Sales to Iraq last year totaled US$ 61.59 million, and so far this year they have amounted to only US$ 1.68 million, according to data from the Ministry of Development, Industry, and Foreign Trade.
To halt this decline and at least recoup the level of 2004 – the third best result in the past 14 years -, the Brazilian Export and Investment Promotion Agency (Apex/Brasil) will sponsor the fair, “Brazil in the Reconstruction of Iraq,” in Jordan from September 10-14. A presentation of the event was made, yesterday, to entrepreneurs.
“There are no official distribution channels for Brazilian products in Iraq; there are only trading companies that buy products when it is in their interest. When we put buyers face-to-face with suppliers, we create a business tie, and this is the chemistry we want to create,” summarizes the president of Apex/Brasil, Juan Quirós.
The president of the Brazil-Iraq Chamber of Commerce and Industry, Jalal Jamel Dawood Chaya, emphasizes the end of other countries’ intermediation in this trade.
“Previously, Brazilian companies’ sales were to Jordan, Syria, and Lebanon, and Iraqi businessmen would go to these countries in search of Brazilian products. Now we are going to place entrepreneurs and buyers in direct contact,” he said.
At least 80 Brazilian companies from 18 sectors chosen on the basis of Iraqi interest, such as food, construction, electro-electronic materials, medical and hospital supplies, footwear, transportation (vehicles and equipment), and water, petroleum, and gas treatment equipment, are expected to participate in the fair in Amman, Jordan. Importers from Jordan, Syria, Lebanon, Iran, Turkey, and Kuwait are also expected to attend.
In the 1980’s Brazil’s list of exports to Iraq included 480 items. The most significant sectors were motor vehicles (mainly trucks) and accessories, mechanical machinery (tractors, harvestors, and compressors), iron and steel, paper, aluminum, refined sugar, and beef.
Bilateral trade came to a halt with the 1991 Gulf War and the subsequent trade embargo imposed by the United Nations (UN). When the embargo was lifted in 2003, trade was reactivated, attaining 168 items and US$ 61.59 million in 2004 (most prominently, sugar, dairy products, tubular steel, and chicken).
Nevertheless, Brazil still represents only slightly more than 1% of Iraq’s US$ 4 billion in imports.
From now on, the Brazil-Iraq Chamber of Commerce and Industry also intends to hold periodic business events in the two regions.
As an incentive to reconstruction, the Iraqi government removed import duties on food, medical and hospital supplies, construction equipment and materials, and educational materials. For other sectors there is a uniform import tariff of 5%.
“During the 15 years of the embargo, the Iraqi economy did not receive any investment, industry was cannibalized, and products were scarce. Money is not lacking in Iraq at present,” Chaya affirms.
According to a study done by the Chamber, the Iraqi government has a budget of US$ 25 billion. Private enterprise will spend another US$ 23 billion on rebuilding the country.
“A market with 29.8 million people is opening after a 15-year embargo.”
To quell the fears of entrepreneurs concerned about the security of contracts, Chaya emphasizes that most transactions are concluded with immediately payable letters of credit, guaranteed by American and European banks.
Anba – www.anba.com.br