Isaura Daniel
São Paulo – The Mercosur, the customs union between Brazil, Argentina, Paraguay, and Uruguay, is going to propose to Morocco that the framework agreement to start free trade agreement negotiations between the South American bloc and the Arab country be signed up to the beginning of next month. The target, according to information supplied by the Itamaraty (the Brazilian Foreign Office) Extra-regional Negotiations division, is to sign the document before the summit of South American and Arab heads of state, scheduled for April 2005 in Brazil.
The decision was taken yesterday (19) at a meeting between Mercosur technicians and negotiators, in Brazilian capital Brasília. The next step is to send the proposal to the Moroccans. The framework agreement does not include a list of products to have tariff reductions, but formalizes, by means of a document, the start of negotiations.
Egypt signed the same kind of agreement with the Mercosur at the last South American bloc summit, which took place in Puerto Iguazú, Argentina, at the beginning of July.
The technicians are going to proceed with negotiations with Egypt. According to information supplied by the Itamaraty, they are going to send the tariff preference proposal to Egyptian diplomats.
Until recently, reference was being made to a free trade agreement. According to the World Trade Organization (WTO), however, free trade implies in 85% of products traded having tariff reductions or zero tariff.
In the case of tariff preference agreement, the reduction may reach a lower percentage of products. The WTO rules state that this kind of agreement can only be made between developing countries, as is the case with Brazil and Egypt. Normally a free trade agreement is the next step after a tariff preference agreement.
Products
The proposal the Mercosur should send to Egypt still does not include a suggestion of products that Brazil would like export tariff reductions for. According to the Itamaraty, the ministry of Development, Industry, and Foreign Trade is now going to get in touch with the private sector so as to discover what products the sector would like to see included in the proposal.
The objective is for businessmen to identify the products they would like to have foreign trade tariff reductions on and which they would not like to see included in the treaty.
The Paraguayan ministry of Foreign Relations has already shown interest in selling more cattle beef and fruit juice to the Egyptians. Paraguayan trade with the Arab nations totals 2% of total country exports. Argentina sold US$ 400 million to the Egyptians last year. Brazil had revenues of US$ 460 million with shipping to the African country in 2003.
Gulf
The meeting in Brasília included the participation of ten technicians from the four Mercosur countries. They did not reach a decision with regard to the Gulf Cooperation Council (GCC) request for a free trade agreement. Brazil has shown itself favourable to the treaty.
Today (20) technicians will proceed with the meeting to discuss the accord being negotiated with India. The group will have a videoconference with the Indians.
