São Paulo – Nearly eight years after it came into force, the free trade agreement between Mercosur and Egypt has led to an increase in trade between the bloc’s member countries and the North African nation, but its full potential has yet to be realized. The sectors that stand to benefit from this growth, as well as the ongoing challenges, were some of the topics discussed during the “Breakfast with Members—Business Opportunities under the Mercosur–Egypt Agreement”, held by the Arab-Brazilian Chamber of Commerce (ABCC) at its headquarters in São Paulo.
At the event, Egypt’s Commercial Consul in São Paulo, Islam A. Taha, said the agreement has encouraged the strengthening of trade exchange “across all areas,” with an increase in the volume of trade between Egypt and Mercosur. The free trade bloc is composed of Brazil, Argentina, Uruguay, Paraguay, and Bolivia, and the agreement came into effect in September 2017.
Out of the bloc, Brazil is Egypt’s top trading partner. According to data presented by the consul, in 2023 Brazil exported USD 2.3 billion to Egypt and imported USD 490 million. By comparison, in 2017 Egypt exported USD 155 million to Brazil. Despite the increase in trade flow, Taha said challenges must be overcome for the partnership to grow beyond trade and benefit investments.
“The trade volume does not reflect the potential that exists with Mercosur. There can be cooperation in several sectors, such as agriculture,” Taha said, referring to partnerships that could enhance agricultural productivity in Egypt.
Among the challenges for business, he mentioned customs barriers, bureaucracy in clearing goods, restrictions imposed by countries on imports to protect their industries, lack of mutual knowledge between companies, and the absence of direct air and shipping routes between Mercosur countries, especially Brazil and Egypt. The Egyptian embassy in Brasília, Taha said, is trying to establish a direct airline route between the two countries.
Rodolpho Vasconcellos, Regulatory Specialist at the Foreign Trade Secretariat – Department of International Negotiations of Brazil’s Ministry of Development, Industry, Trade, and Services, presented to about 60 attendees—mostly ABCC member companies—the details of the agreement, its benefits, and how exporters can take advantage if they understand the rules for production and export. “The agreement’s goal is to boost market gains, increase product competitiveness, diversify trading partners, and access Middle Eastern and North African markets via Egypt,” Vasconcellos noted.
Agreement has produced benefits
Marcus Vinicius, Market Intelligence Manager at the ABCC, presented an overview of the trade relationship between Brazil and Egypt, the business growth since the agreement, and potential opportunities. Since the agreement took effect, Brazilian cotton exports have risen nearly 600%, and processed meat exports by more than 550%. In the opposite direction, PVC plastic exports increased by 764%, and frozen fries exports grew by over 200%.
Although Brazil is the 8th largest supplier to Egypt, its sales to the Arab country represent 5% of all Egypt’s imports and are concentrated in agribusiness products. Conversely, Egypt ranks as the 27th supplier to Brazil, holding a 2% market share, mostly in fertilizer products.
At the event, Mariana Nunes, Internationalization Projects Analyst at the ABCC, presented the Halal do Brasil project, which promotes made-in-Brazil halal food and beverages abroad, with halal meaning fit for Muslim consumption. In addition to the project, she introduced Food Africa, a trade fair held in Egypt that the project will participate in this year.
Present at the event were ABCC Secretary-General & International Relations Vice President Mohamad Mourad, Treasurer Director Mohamad Abdouni Neto, and Board members William Atui and Sami Roumieh.
Read more:
Egypt has new commercial consul in São Paulo
Egypt grows as Brazil’s trade partner
Translated by Guilherme Miranda
