Brazil’s Trade with Arabs Up 50%, One Year After Lula’s Trip

December 3 was the first anniversary of President Luiz Inácio Lula da Silva’s arrival in Damascus, the first step of a one-week tour of five Arab countries, which also included Lebanon, the United Arab Emirates, Egypt and Libya.

This was the first visit by a Brazilian head of state to the Middle East and North Africa since emperor Dom Pedro II visited the region in the 1870’s.

Since last year, trade between Brazil and the Arabs has risen, and very much. From January to November, bilateral trade (exports plus imports) exceeded US$ 7.4 billion, against US$ 5 billion in the same period last year, which represents a 48.2% increase.

According to the president of the Arab Brazilian Chamber of Commerce (CCAB), Paulo Sérgio Atallah, the trade volume should exceed US$ 8 billion up to the end of the year, a 48% increase in comparison to the total last year, which was US$ 5.4 billion. The 2003 value was just 11.5% greater than that registered in 2002.

“The trip by President Lula was undoubtedly a catalyst for trade. We always preached that this tour should take place. We knew of its importance and consequences, mostly because we know the economies of the Arab countries,” stated Atallah.

Lula travelled in the company of a delegation made up of ministers, politicians, various businessmen and representatives of sector organizations.

“The direct consequence was a greater guidance of business. People met each other, exchanged visiting cards, sympathized with each other and started seeing each country on the map with greater knowledge,” stated Atallah.

From January to November, exports between Brazil and the Arabs generated almost US$ 3.7 billion, which means an increase of 49.6% in relation to the same period last year.

Up to the end of the year, Atallah stated that shipping is going to exceed US$ 4 billion. In 2005, the CCAB president believes that sales should rise at least 20%.


“And this work is only starting. Now it is time to invest and organize partnerships, and I hope that the summit between Arab and South American heads of state represents a starting kick to this process,” stated Atallah, referring to the event that will take place in Brazil in May next year.

The idea of organizing the summit was presented last year by President Lula, and it won support during the tour, winning more and more support from other countries in South America and in the Arab states.

In May, Brazilian Minister of Foreign Relations, Celso Amorim, visited Cairo to participate as a guest in a meeting with foreign ministers of the League of Arab States. Organization of the summit was unanimously approved.

“The Arabs admire some of the president Lula’s characteristics, among them his frankness, leadership and the fact that he sees the Arab countries as true and permanent partners,” stated the CCAB secretary general, Michel Alaby.

“Brazil is currently inserted in the global economy, all you have to see is the number of heads of state who visited the country in less than one month,” added Atallah.

He was referring to the fact that from November 12 to the beginning of this week, the presidents who visited Brazil included Chinese Hu Jintao, Korean Roh Moo-Hyun, Vietnamese Tran Duc Luong, Russian Vladimir Putin, and Pakistani Pervez Musharraf, as well as Canadian prime minister Paul Martin and Moroccan king Mohammed VI.

Apart from diplomacy and trade, relations with the Arab countries also advanced in other fields, including reciprocal investment, tourism and technological cooperation, among others.


After the visit by President Lula, for example, a Libyan government mission visited Brazil in February. Representatives of the Libyan Foreign Investments Company (Lafico) showed the state-owned company’s interest in investing US$ 450 million in irrigation projects in Bahia, in northeastern Brazil, in partnership with Brazilian companies.

The Arab country government also announced its intention of investing another US$ 50 million in an agricultural complex in Tocantins, in northern Brazil.

Libyan ambassador in Brazilian capital Brasí­lia, Mohammed Heimeda Saad Matri, stated that a Lafico mission should visit Brazil by the end of the year, or at the latest at the beginning of next year, so as to “make the partnerships come true.”

He recalled that, in June, the minister of the Council for Economic and Social Development, Jaques Wagner, visited Libya and delivered a letter from President Lula to President Muamar Kadafi with the objective of attracting investment from the Arab country to Brazil.

“He met colonel Kadafi and the Prime Minister so as to increase the strategic partnership between Brazil and Libya,” stated Matri.

“We must expand our economic presence here (Brazil),” he said.

Matri also declared, however, that his country’s government is awaiting approval of the Public-Private Partnership (PPP) law, which is currently being debated by Congress, so as to sign possible contracts.

The ambassador stated that there is also space in Libya for Brazilian investment, mainly in the energy sector.

Matri stated that Libya is currently undergoing a process of economic change, which involves the privatization of state-owned companies, and explained that Brazilian companies could operate in exploration of oil or even become partners of Libyan companies in sectors such as industry and cement.

Matri recalled that the European nations already have their eye on the economic potential of Libya. This is so true that his country was visited by a series of authorities, among them British Prime Minister Tony Blair, French President Jacques Chirac, and German Prime Minister Gerhard Schrí¶der.


Relations with Arab countries may even, in the future, evolve to the creation of a free trade area. In the case o Egypt, for example, a framework agreement was signed with the Mercosur.

This document started negotiations for a tariff preference treaty between the Arab country and the South American bloc.

“This agreement is a demonstration of the closer relations between South America and the Arab countries, expanded by the visit President Lula took to the region,” stated the Brazilian ambassador in Cairo, Elim Dutra.

“The visit was well accepted in the country, the Egyptians are fond of Brazil. And I, as the ambassador, have been received very well here,” he added.


With regard to Lebanon, the tour President Lula took was paid back in February, when Lebanese President í‰mile Lahoud travelled to São Paulo, the most industrial city in Brazil, in the southeast of the country, Brasí­lia and Rio de Janeiro, the largest tourist center, also situated in the southeast, and during the year, talks for reactivation of a flight between both countries proceeded.

In August, airline TAM and Lebanese Middle East Airlines announced the creation of a shared flight between São Paulo and Beirut, stopping in Paris.

The ceremony for launch of the flight took place in the Lebanese capital and counted on the presence of Brazilian Tourism Minister Walfrido Mares Guia.

During the tour President Lula took, the Lebanese government donated a piece of land for the construction of the “House of Brazil in Beirut”, for the promotion of culture and business.

The city hall of the city of São Paulo recently announced that the city is going to do the same, for the construction of a “House of Lebanon in São Paulo”, with the same objective.


The creation of a direct flight is also part of the agenda for relations between Brazil and the United Arab Emirates, after the tour taken by President Lula.

In June, aeronautical authorities of both countries signed an aviation agreement with Emirates Airlines, based in Dubai, showing the intention of inaugurating a direct flight between São Paulo and, later, another to Rio de Janeiro.

Dubai should also be the site for one of the distribution centers of Brazilian products that the government, through the Brazilian Export Promotion Agency (Apex), intends to start installing around the world next year.

The city already has a Brazilian furniture distribution center which, starting in 2006, should be expanded to receive other sectors.


In Syria, in turn, after President Lula’s visit, Brazilian company Crystalsev established a joint venture with three Syrian companies and Cargill Africa, and they have already started building a mill for refining sugar, with investment of US$ 150 million.

But it was not only the countries that President Lula visited that strengthened relations. Trade, for example, rose to practically all the Arab countries.

In the case of Morocco, like Egypt, during last week’s visit by king Mohammed VI, a framework agreement was also signed, starting negotiations for a tariff preference agreement with the Mercosur.

Accords were also singed in the areas of tourism and diplomacy. Morocco and Brazil already have a cooperation agenda in place in sectors like water resources, popular housing, agriculture and professional training.

Still in the field of diplomacy, in August this year, a treaty that eliminates the need for visas for Brazilians and Tunisians travelling between to both countries was signed.

ANBA ”“ Brazil-Arab News Agency


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