Arab-South America FTA talks to resume in 2013

Arabs and South American states will resume their Free Trade Agreement (FTA) talks next year, said a senior official of the Arab Chamber.

“The GCC is discussing an FTA with Mercosur (Brazil, Argentina, Uruguay and Paraguay), the South American trade block. Talks are currently on hold, but negotiations shall resume in late 2013,” said Michel Alaby, Director-General of the Arab Chamber.

Brazil is a founding member of Mercosur.

Brazilian exports to the Arab countries increased three per cent to $4.2 billion in the first four months of this year while imports registered an increase of 37 per cent to $3.4 billion.

According to the Arab-Brazilian Chamber of Commerce, the instabilities registered last year in some Arab countries have not affected the results. “Trade relations between Brazil and the Arab countries remained active throughout 2011 and has continued so in 2012,” said Alaby.

From the total of $4.2 billion in Brazilian exports during the period from January to April 2012, Saudi Arabia is in the lead as main destination, registering $953 million in exports. Next are the UAE ($812 million) and Egypt ($595 million).

Of Brazilian imports from the Arab countries, Algeria tops the list with $1.5 billion, followed by Saudi Arabia ($723 million) and Kuwait ($378 million). The main products imported were oil, fertilisers and plastics.

In 2011, trade between Arab World and Brazil increased 30 per cent to reach $25.11 billion (Dh92 billion) as compared to $19.53 billion (Dh71.67 billion) in the previous year.

Alaby said the Arab-Brazil trade is expected to continue to grow in coming years. “The trade between Brazil and Arab world is a growing force. We estimate a growth of 15-20 per cent for 2012,” said Alaby.

Alaby said: “The Arabs may invest in several sectors in Brazil, due to the good enviroment capital finds here, but mainly in chemical industry, food industry, real estate, shopping malls, logistics (ports,  airports and railways), tourism (hotels and resorts) and communication services. Banking and finance are also very attractive for Arab investors.”

Last year, the major commodities exported to Brazil include oil and fuels ($8 billion), fertilisers ($1.15 billion), salt and sufur ($261 million), plastics ($176.7 million), inorganic chemicals ($138.9 million); while Arab states’ major imports from Brazil include sugar ($3.855 billion), meat ($3.234 billion), mineral ores ($2.2 billion), cereals ($594 million) and edible oils ($129.23 million), according to Arab Chamber dat

Alaby said there will be several high-profile Brazilian delegations and trade missions visiting the GCC countries between June and November this year. “The underlining purpose of these visits will be to further enhance Brazil-GCC trade relations and boost bilateral investment opportunities.”

He revealed that Brazilian investors are looking  to invest in the food industry (plants and distribution facilities), assembling plants (vehicles, tractors and harvest machines), logistics and communications.

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