Brazil: Mercosur and Egypt Dreaming of Free Trade

The Mercosur, the customs union between Brazil, Argentina, Paraguay and Uruguay, has already sent the Egyptian government a proposal for the basic text for a tariff preference accord to be signed between the South American bloc and the Arab country.

According to information supplied by the Itamaraty, the Brazilian Foreign Office, the text is a “skeleton” containing the general lines of what may be discussed.


The document was elaborated by the Brazilian Ministry of Foreign Relations and ratified by the remaining members of the Mercosur, as Brazil currently occupies the rotating presidency of the South American bloc.


Now the Itamaraty is awaiting an Egyptian government answer regarding the proposal, but the hope is for a “positive” answer. The objective is to start discussing the matters to be negotiated.


In November, a delegation from Egypt will be meeting Mercosur representatives in Brazilian capital Brasí­lia so as to proceed with the process.


In July, both parties signed a framework agreement in which they agree to negotiate.


The text sent to Egypt, according to sources in the Itamaraty, is similar to those previously sent to India and to the Southern African Customs Union, with whom the Mercosur is negotiating fixed preference treaties, which may be signed by the end of the year.


The document states, for example, that the parties agree on concluding the tariff preference agreements as a first phase to reach a free trade zone.


However, it places the main topics, like the lists of products and tariffs to be contemplated, the rules of origin and the means for controversy solution, in the annexes to be discussed at a later date.


Brazilian ambassador Régis Arslanian, who is currently the main Mercosur negotiator, informed that discussions regarding details of an agreement of the kind may take around one year.


A tariff preference agreement is different from a free trade agreement in that it may contemplate just a specific number of products and tariff lines.


With regard to a free trade zone, according to the rules stipulated by the General Agreement on Tariffs and Trade (GATT), the organization that preceded the World Trade Organization (WTO), most of the products (between 85% and 90%) have zero tariffs.


Fixed tariff preference treaties may only take place between developing countries, as is the case with the Mercosur and Egypt.


They are an exception to the WTO norms, which forecast that if a member gives preference to another, it will have to extend this preference to all other members of the group. The objective is to support trade between less developed nations.


The possibility of an agreement considering only some products also simplifies negotiations, as both parties may opt for leaving out sectors considered sensitive and include just the areas in which the economies are complementary.


ANBA ”“ Brazil-Arab News Agency

Tags:

You May Also Like

USA for Innovation Urges Prompt Action Against Brazil for Patent Breaking

The American organization USA for Innovation yesterday urged the United States Trade Representative’s office (USTR) to immediately ...

Income Rises 8.7% in Brazil, But New Industrial Jobs Grow a Paltry 0.14%

Workers’ income was the index that showed the highest rate of growth in the ...

Tempered Optimism in Brazilian Market Rebound

Brazilian stocks rose thanks to a rebound in Brazilian issues. Yesterday, investors had reacted ...

After Three Decades of Delays and Protests Amazon Hydro Project Ready to Start

In Brazil, building will begin now on what should be the world’s third-largest hydroelectric ...

Vive Les Bleus! A Bungling Brazil Is Sent Back Home.

Thierry Henry finally made his mark in a game that matters, scoring the only ...

Brazil Is Getting Old: 15 Million Are Over 60

The demographer and researcher at the Institute of Applied Economic Research (IPEA), Ana Amélia ...

Spare Me the S

The hastily-assembled Frente Parlamentar Nacionalista (Nationalist Parliamentary Front) made up by 132 congressmen of ...

Lula in a rally in Brazil

Brazil Lula’s Ides of March

The ashes were still being washed from the streets that staged the Rio de ...

Brazil’s Quandary: To Open or Not Dictatorship Archives

Brazil’s president of the Chamber of Deputies, João Paulo Cunha affirmed today that the ...

Brazilian Industry Wants Urgent Reduction of Interest Rates

Brazil’s two biggest industrial trade associations,  did not like the decision by the Monetary ...