Brazil Asks for Input in Implementing Mercosur-Gulf Free Trade Agreement

The Brazilian government wants to know from companies in the country what products should benefit from the free trade agreement between the Mercosur, the customs union between Brazil, Argentina, Paraguay and Uruguay, and the Gulf Cooperation Council (GCC), the economic bloc that includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman.

According to a statement published by Brazil’s Ministry of Development, Industry and Foreign Trade, the government wants to "harmonize" the interests of the government and private sector. The idea is for companies to point out what items they would like to see in the list of products to be negotiated and may receive preferred tariffs or total exemption of import fees.

"This is an opportunity to open more markets for Brazilian products and for this reason it is necessary to insert new products," stated the secretary-general of the Arab Brazilian Chamber of Commerce, Michel Alaby.

"It is now time for companies that have difficulties in exporting to the region or are interested in increasing sales to collaborate with the government so as to simplify negotiations," added the president of the organization, Antonio Sarkis Jr.

Alaby recalled that the tariffs practiced by countries in the Gulf are already lower than those of developed nations. "The maximum tariff is 12% and the minimum is 5%," he declared.

Among the products that could be included in the list, he mentioned industrialized food, auto parts, plastic products, handicraft, capital goods and agricultural machinery.

Sarkis recalled that without consolidated trade agreements, although three are already in negotiation – apart from the GCC, the Mercosur is also negotiating with Morocco and Egypt -, bilateral trade between Brazil and the Arab countries has been growing in a consistent and balanced manner.

In 2005, Brazilian exports to the Arabs totaled US$ 5.2 billion, 29% more than in 2004, and imports, US$ 5.3 billion, presenting growth of 28% in comparison to the previous year.

To the president of the Arab Brazilian Chamber, the treaty will simplify trade and increase the number of partnerships between Brazilian and Arab countries. In the same line, Alaby stated that, with the signing of the agreement, there will be real possibilities to double trade relations.

"And this may occur in a period of three to four years. It is possible, but with the introduction of new products into the basket," he added. "This is a chance for Brazil to start shipping new products to the Gulf," he added.

Between January and November 2005, exports from Brazil to the countries in the GCC totaled US$ 2.15 billion and imports added up to US$ 1.33 billion.

Nations in the Gulf, like Saudi Arabia, Qatar, the United Arab Emirates and Kuwait are large producers of oil and gas and had great revenue increases due to rising oil prices on the foreign market. At the same time, these countries have great demand for various imported products.

Arab Chamber

The ministry stated that the company information should be sent "preferably" through associations and sector organizations. The Arab Brazilian Chamber is going to help in the negotiations. The companies interested should contact the organization. "We place the Arab Brazilian Chamber services at the disposal of companies," stated Alaby.

The deadline for presentation of the proposals to the Ministry of Development is January 23. Alaby has asked companies interested to send their information to the Chamber up to the 20th. The information may be sent by mail, fax or e-mail.

A joint statement published after the last meeting between representatives from both blocs, in November in Riyadh, says that negotiations for the agreement may be concluded this year.

The next phase is the exchange of lists of products that may be included in the agreement, as well as offers in the areas of services and investment. Then will come a new round of negotiations, which should take place in Buenos Aires at the beginning of 2006.

Further information

Arab Brazilian Chamber of Commerce
General Secretariat
Tel: (+55 11) 3283-4066
Fax: (+55 11) 3147-4077
E-mail:
secgeral@ccab.org.br
Address: Av. Paulista, 326, 17th Floor, São Paulo (SP), CEP 01310-902

Department of Foreign Negotiations at the Ministry of Development
Tel: (+55 61) 2109-7013
Fax: (+55 61) 2109-7385
E-mail:
deint@desenvolvimento.gov.br
Address: Esplanada dos Ministérios, bloco J, 7° andar, sala 718, Brasí­lia (DF), CEP 70056-900

Anba – www.anba.com.br

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