São Paulo – The Mercosur is going to resume negotiations for trade agreements with Arab countries. Next week, the head of the division at the Brazilian foreign office (Itamaraty) who is in charge of talks with Morocco is going to meet with negotiators from the country, in order to discuss the follow-up to the first round of talks, and to discuss the start of a second round.
In October, diplomats from Brazil, which currently occupies the rotating presidency of the South American bloc, are going to travel to Amman and Cairo in order to proceed with negotiations with Jordan and Egypt. "In the wake of the visit of the Egyptian minister of Trade, Rachid Mohamed Rachid, to Brazil [in August], we have scheduled the first negotiation meeting for October 16th in Cairo," said to ANBA the head at the International Negotiations Department of the Itamaraty, ambassador Evandro Didonet.
The Mercosur has already signed framework agreements with those three countries. The texts are a statement of purpose of the parties with regard to negotiating trade agreements. The agreement with Egypt was signed in July 2004, with Morocco in November of the same year, and with Jordan last July.
“Only now will the first round with Egypt take place, years after the signing of the framework agreement," said Didonet. Negotiations involve several factors, such as defining what type of agreement the parties are aiming for, whether free trade or fixed tariff preference, depending on the level of market openness that each side is willing to offer; the exchange of proposals for tax reduction on goods and services; rules of origin; dispute settlement; among others.
Talks with Morocco were resumed in April this year and, according to Didonet, the main topic under discussion right now concerns whether the type of agreement desired is free trade or tariff preference. “Text drafts have already been exchanged, however this aspect must be defined," stated the diplomat. In the case of Jordan, the first round of negotiations is going to take place on the 13th and 14th.
Gulf
The Mercosur is also negotiating a free trade agreement with the countries in the Gulf Cooperation Council (GCC), which includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman. When the two blocs signed the framework agreement, in May 2005, diplomats and foreign trade specialists believed that the talks should be relatively quick, given the greater economic openness of the Gulf nations as opposed to the other Arab countries.
In practice, however, that did not occur. Negotiations reached a stalemate because of Brazil, precisely the country that wanted the agreements the most. Resistance was shown by the Brazilian petrochemical industry, which fears the competition of the Gulf, as the region is very strong in this area. According to Didonet, the talks are moving slowly until a formula that pleases both parties is found.
*Translated by Gabriel Pomerancblum