In a significant development for international trade, Mercosur has commenced the process of establishing a free trade agreement with the United Arab Emirates.
This move was formalized during the first round of negotiations, resulting in the drafting of a term of reference for the proposed commercial treaty.
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The Mercosur summit held on July 8, 2024 in Asunción, Paraguay, marked a significant milestone with the formal commencement of negotiations for a free trade agreement between the Mercosur member countries and the United Arab Emirates.
The inaugural round of discussions, held from July 2nd to 4th, concluded with the establishment of a term of reference outlining the framework for future commercial treaties.
Tatiana Prazeres, Secretary of Foreign Trade at Brazil’s Ministry of Development, Industry and Commerce (Mdic), confirmed the development, highlighting that the term of reference delineates the scope and content of the prospective agreement.
This foundational document sets the stage for detailed negotiations covering various aspects such as goods, services, and technical barriers.
The initiative follows a comprehensive consultation conducted in 2023 by Brazil’s Foreign Trade Secretariat, which assessed the strategic interests of both countries.
The results underscored promising opportunities in sectors like meat, sugar, cellulose, and manufacturing, while also addressing concerns, particularly in the petrochemical domain.
Recent trade figures reflect a considerable growth in the economic relationship, with Brazilian exports to the UAE surging by 50% in the first half of this year compared to the same period in 2023.
Key export drivers included sugar (up 300%), beef (up 249%), and poultry (up 17%). Total trade volumes approached USD 3.1 billion in the first half of 2024, nearing the full-year total of USD 4.3 billion recorded in 2023.
Prazeres also emphasized the complex nature of negotiations, citing recent successes with Singapore and ongoing efforts with the European Union and Efta.
She expressed optimism about advancing negotiations with the UAE, underscoring Brazil's commitment to expanding its network of trade agreements under the leadership of Vice-President and Minister Geraldo Alckmin.
This strategic move by Mercosur to engage with the United Arab Emirates highlights the bloc's commitment to broadening its international trade horizons and fostering new economic partnerships.
For further inquiries and updates on the Mercosur-UAE free trade agreement, please, contact us at LIDE Emirates.