Alexandre Rocha*
São Paulo – Free trade negotiations between the Mercosur, the customs union between Brazil, Argentina, Paraguay and Uruguay, and the Gulf Cooperation Council (GCC), which includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman, may be concluded in 2006. This is mentioned in a joint statement published by representatives of both economic blocks during a meeting that took place over the weekend in Riyadh, the Saudi capital.
According to sources at the Brazilian Foreign Office (Itamaraty), the forecast, despite tight, is possible, as the desire is present on both sides. "The two sides agreed to launch negotiations towards a Free Trade Agreement between GCC and Mercosur, and scheduled them on an accelerated basis," according to the statement.
This was the first meeting between representatives from both blocs after the Summit of South American – Arab Countries, which took place in May, when a framework agreement was signed marking the beginning of negotiations. In Riyadh, it was decided that the first round of negotiations will take place in Buenos Aires, Argentina. The date has not yet been set, but, according to sources in the Brazilian diplomatic corps, they should begin in early 2006.
Before that, both blocs will exchange lists of products that may be included in the agreement, like offers in the areas of services and investments. According to the rules of the General Agreement on Tariffs and Trade (GATT), to be recognised as a free trade zone, the agreement must contemplate a "substantial" part of the trade involved by both parties. This should therefore correspond to the liberation of around 85% of the free trade between both blocs.
On the Brazilian side, for the production of the lists, the ministries that are connected to foreign trade will be addressed, among them the Ministry of Development, Industry and Foreign Trade, the Ministry of Agriculture, Livestock and Supply and the Finance Ministry, as well as the private sector.
Apart from the negotiations, both blocs decided to promote a series of actions to strengthen economic relations, like trade missions, exchange of macroeconomic experience and exchange of information about customs systems.
*Translated by Mark Ament
