Negotiations for a free trade agreement with the Gulf Cooperation Council (GCC), the economic bloc that includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman, are among the priorities in the second half of the year for the Mercosur, the Common Market of the South, a customs union between Brazil, Argentina, Uruguay, and Paraguay.
This information was disclosed by the director of the International Negotiations Department at the Ministry of Foreign Relations, Evandro Didonet, during the 120th Encomex, the foreign trade meeting that took place at the offices of the Federation and Center of Industries of the State of São Paulo (Fiesp/Ciesp), in the city of São Paulo, the largest business center in Brazil.
According to Didonet, negotiations with the Arabs should begin again. Today, September 5, there should be, in Montevideo, Uruguay, a meeting for coordination of the Mercosur's activities, in which the countries that are members of the bloc should propose a new meeting with the Middle Eastern group.
Negotiations for the agreement started officially in May 2005, at the Summit of South American – Arab Countries, in Brazilian capital Brasília, in which both blocs signed a framework agreement that kick-started talks.
The progress of the agreement, however, was halted due to lack of consensus regarding the Mercosur's concessions to the import of petrochemical products made in the Arab world.
According to Didonet, the Brazilian petrochemical industry believes it may not compete with the products made in the Middle East in case they receive tariff benefits. This is due to the heavy investment Arabs are making in the area.
The petrochemical sector, however, said Didonet, is the greatest interest of the Arabs. "We will see where we may go," stated Didonet.
Didonet informed that once the matter of petrochemicals is solved, just one round of talks should be enough for the agreement to be closed.
"The Gulf Cooperation Council is the second main importer or Brazilian agricultural products," stated the minister during his talk at the Encomex, recalling the importance the agreement may have to Brazil, one of the main agricultural producers in the world.
The Gulf is part of a list of five regions that the South American bloc has defined as priority for negotiation of extra-regional free-trade agreements this half.
Apart from the Arabs, the group also includes the European Union, the Southern African Customs Union (Sacu), India and Israel. In the multilateral aspect, however, the priority for Brazilian foreign trade is the Doha Rounds promoted by the World Trade Organization (WTO).
In this case, however, Brazil is not negotiating for the Mercosur, but individually, beside other developing countries that are interested in the matter.
Agricultural nations like Brazil want the United States and European Union to open its agricultural market. On the other hand, the United States and European Union want concessions to sell services and industrial goods in the developing countries.
The Encomex meetings have been taking place since 1997, in different regions of Brazil, and their main objectives are the stimulation of foreign trade, mainly among smaller companies, and also to generate dialogue between the private export sector and the government of Brazil. The Encomex are organized in partnership between public and private organizations.
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