São Paulo – After the fourth round of negotiations last week, in Buenos Aires, the free trade agreement between the Mercosur and Egypt is close to being signed. "Negotiations are at an advanced stage, we have already exchanged initial offers for tariff reductions,” said to ANBA ambassador Evandro Didonet, the head of the International Negotiations Department at the Itamaraty.
According to him, the lists of products exchanged show that the coverage should be “very robust, over 90%”. If that is confirmed, the agreement should be truly for free trade, and not just fixed tariff preference, covering a smaller number of items, as imagined early into the process, in 2004.
The diplomat pointed out that negotiations gained new energy in November last year, after a meeting with the Brazilian foreign minister, Celso Amorim, and the Egyptian minister of Industry and Trade, Rachid Mohamed Rachid, at a meeting at the World Trade Organisation (WTO), in Geneva. “There is clear political disposition for the agreement to be completed fast,” said Didonet.
Since them, Amorim and Rachid, as well as the Brazilian minister of Development, Industry and Foreign Trade, Miguel Jorge, have already declared that they hope to see the meeting signed in July, preferentially at the next Mercosur summit, to take place on the 15th and 16th of next month, in Argentina.
For such, according to the ambassador, the fifth rounds of negotiations should take place from the 12th to the 14th of July. "And we hope that it may be the last,” he said, adding that “expectations are positive”, but when the matter is negotiations, the result only comes out right at the end.
The Brazilian negotiator said that there is still much work to improve the offers on both sides, but not much resistance is expected by sectors considered sensitive, as was the case with talks between the Mercosur and the Gulf Cooperation Council (GCC), paralysed as the petrochemical industry is against the reduction of tariffs on products in the sector that may be imported from the Arab block. The GCC includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman.
Apart from the furthering of negotiations about the products to have fees reduced, some rules regarding the agreement still need negotiation, especially with regard to safeguards and rules of origin.
If the treaty is really signed, it will be the second that the Mercosur signs with a country outside Latin America. The first was signed with Israel. Didonet pointed out that the agreement is “of the greatest importance”, as Egypt is one of the countries with the greatest weight in the Arab world. In his evaluation, it should grant “great visibility” to the South American bloc and open a “gateway” into the Middle East and North Africa.
Egypt is one of the main partners of Brazil in the Arab world. According to figures disclosed by the Ministry of Development, Industry and Foreign Trade, Brazilian exports to the Arab country generated US$ 185.5 million in May, growth of almost 100% over the same period last year. In the accumulated result for the year, the value of shipments reached US$ 535 million.
The trade balance, however, generates a surplus for Brazil. The governments of both countries believe that the agreement should help balance it, granting greater sustainability to trade.
*Translated by Mark Ament
