The countries of the Mercosur trading bloc (Brazil, Argentina, Paraguay and Uruguay) signed, during the summit that took place this week in the city of Tucumã, Argentina, a framework agreement with Jordan. The signing is the formal release of negotiations between the South American bloc and the Arab country for a trade agreement.
The agreement was signed July 1st by the business attaché of the embassy of Jordan in Santiago, Chile, Hazem Al Khatib, and by the ministers of Foreign Relations of the countries of the Mercosur.
On behalf of Brazil, the agreement was signed by Foreign Minister Celso Amorim. According to the director of the Foreign Negotiations department at the Brazilian Foreign Office (Itamaraty), Evando Didonet, who participated in the summit, the document already states that the final agreement with Jordan will be for free trade.
This means that there will be zero tariffs for import and export between both regions and that practically the whole trade basket should be included. In the case of a tariff preference agreement, the number of products included is lower.
Didonet stated that the intention is to begin talks during the temporary Brazilian presidency of the Mercosur, which began in the last summit and should go on up to the next summit, in December this year. The objective is to organize at least one more meeting before that date.
The initiative of establishing an agreement with the Mercosur came from Jordan. The country showed interest through a request made to the secretariat of the South American bloc, at the end of last year, when the group was presided by Uruguay.
After the final agreement is signed, it should boost trade between the countries of the Mercosur and Jordan. Brazilian exports to the country are already on the rise. Between January and May this year, Brazil sold US$ 111.9 million to Jordan. There was expansion of 7.4% over the same months in 2007.
The main products exported by Brazil to the Arab country were meats, sugar, aluminum and coffee. Jordan, in turn, had a 78% reduction in sales to Brazil in the same period, which fell to US$ 536,000 and involved mainly aluminum, garments and inorganic chemical products.
Jordan is in the Middle East and has around six million inhabitants. The country has a large part of its economy – 86.2% – connected to the service sector. Industry answers to 10.3% of the Gross Domestic Product and agriculture to 3.5%.
The local industry produces garments, phosphates, fertilizers, pharmaceuticals, cement, potassium, chemical products and also refines oil. In agriculture, production involves foods like tomatoes, fruit, cucumber and olives. The country also produces chicken and lamb.