Financial Times | September 24 2010
Palestinians open trade talks with Mercosur
By Tobias Buck in Ramallah
The Palestinian Authority has opened trade talks with Brazil, Argentina and other Latin American countries, in an effort to boost economic and political ties with the fast-growing Mercosur bloc.
The two sides held what they described as “exploratory talks” in Ramallah on Thursday, with the Mercosur bloc submitting a proposal for “economic and trade co-operation” that is being reviewed by Palestinian officials.
Officials on both sides stressed that the negotiations were also intended to provide political support to the Palestinian Authority.
Salam Fayyad, its prime minister, has embarked on an ambitious drive to prepare the ground for independence and statehood. Winning recognition by signing bilateral trade agreements or joining international organisations is part of that strategy.
One official said that trade agreements were promising as they could include a reference to the borders of a Palestinian state.
The Mercosur delegates stressed the political importance of the negotiations.
Evandro Didonet, an official in the Brazilian foreign ministry, said: “All four Mercosur countries have been consistently in favour of a viable, contiguous and democratic Palestinian state.”
“In our view, one of the ways to promote this goal is to establish economic and trade relations between the Mercosur states and Palestine,” he said.
Trade between the Palestinian territories and the four members of Mercosur – Brazil, Argentina, Uruguay and Paraguay – is minimal.
However, Abdel-Hafiz Nofal, the Palestinian deputy minister for national economy, said that the potential for improvement was significant, suggesting that trade flows could reach as much as $200m a year.
“Mercosur is one of the biggest economies in the world, and we believe that we should reach an agreement as soon as possible,” he added.
The Palestinians already enjoy preferential trade deals with a number of countries and blocs around the world, including the US, the European Union and Turkey.
Finalising a deal with Mercosur is regarded as promising because several Latin American countries boast large minorities with Arab or Palestinian roots.
The Palestinians hope that an agreement with Mercosur would encourage people from these communities to invest in their territories.
Another goal is to increase the pressure on Israel’s trading partners to clamp down on imports of products made in Jewish settlements in the occupied West Bank.
“We asked our friends from Mercosur not to deal with settlement products and to differentiate between Israeli products and settlement products,” Mr Nofal said.