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Mercosur and UAE to begin trade negotiations in the first half of next year

MercoPress | 28 November 2023

Mercosur and UAE to begin trade negotiations in the first half of next year

Brazil currently the chair of Mercosur has opened a consultation period until December 18 on a possible trade agreement between the South American block and the United Arab Emirates. The idea is to reach and listen to the private sector, scholars, civil society, academics and other interested parties.

Ana Claudia Takatsu, director of the International Negotiations department of the Brazilian Foreign Trade Secretariat, revealed that during a meeting held last August, UAE conveyed its interest in a comprehensive trade agreement with Mercosur members. The topic was also presented during a visit by the UAE minister of state for Foreign Trade, Thani Ahmed Al Zeyoudi, to the Brazilian Ministry earlier this year.

Al Zeyoudi reaffirmed his interest in strengthening the partnership with Mercosur both in the meeting with Foreign Trade Ministry representatives and with the other Mercosur countries he visited. He presented a term of reference for launching negotiations.

“In this conversation, the UAE’s Foreign Trade minister proposed to start a dialogue. He showed great interest in making a trade agreement with us and the other Mercosur countries,” Takatsu told Brazilian media.

However the director said the Secretariat chooses priority agreements to focus on and conclude. “If there are too many agreements at the same time, we cannot dedicate ourselves fully and properly to any of them,” she said. The same team is responsible for all agreements.

A possible agreement with the UAE was not a priority for this semester, which is to the brim with negotiations on the Mercosur-European Union free trade agreement. “We could make faster and more significant progress in the next semester,” she said.

“Negotiations with the UAE only began in the second half of this year. As this path is long, the first step in launching negotiations is carrying out a public consultation and an impact assessment study, which are ongoing. The program included the possibility of starting negotiations with the UAE in the first half of next year,” said the director.

But first, Brazil needs to carry out internal negotiations. “The public consultation and impact study results will be submitted to the Chamber of Foreign Commerce to authorize the negotiation. Then, a document will be sent to Mercosur embers, and the terms of reference for the negotiation will be signed,” she said.

Once the Mercosur proposal has been drafted, with the interests of the four countries (Brazil, Uruguay, Argentina, and Paraguay), and the interests of the UAE will be heard in the negotiation, according to the director.

The UAE is considered a gateway to the Gulf markets. The Brazilian government sees a potential to promote investments and diversify bilateral trade. “We always receive positive and very encouraging proposals. I look at the Gulf region as a whole – the market there is up-and-coming, and [an agreement with the UAE would be] also essential to gain access to neighboring countries,” said Takatsu.

In 2022, trade between Brazil and the UAE was USD 5.7 billion, a 75% expansion over the previous year. Brazilian exports to the Gulf country totaled USD 3.26 billion in 2022, a 40% increase from 2021. The best-selling Brazilian goods in the Arab country were poultry, sugar, beef and grains.

 source: MercoPress