Diplomats of the Gulf Cooperation Council (GCC) arrive today in Rio de Janeiro to proceed with negotiations of a free trade agreement with the Mercosur. Yesterday, this was one of the topics discussed during the meetings between representatives of the South American bloc for preparation of the Mercosur Summit to take place between January 18 and 19.
According to the Brazilian Foreign Office (Itamaraty), negotiations with the bloc, which includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman, are advanced and part of the agreement may be inked during the summit between South American heads of state. Brazil currently occupies the rotating presidency of the Mercosur.
The Arab delegation will be headed by the GCC undersecretary-general for Economic Affairs, Mohamed Al-Mazrooei. On the South American side, the main negotiator is ambassador Régis Arslanian, director of the Department of International Negotiations at the Itamaraty.
The negotiations began in May last year, during the Summit of South American – Arab Countries, which took place in Brazilian capital Brasília.
The last meeting between diplomats from both regions took place last week, in Brussels, the Belgian capital. According to Arslanian, what is not signed at the meeting in Rio will continue being negotiated during the first half and should be signed during the GCC meeting in June, in Jeddah, Saudi Arabia. He said, however, that the project advanced very much in Brussels.
The Itamaraty expectations are for the agreement, when ready, to cover almost 100% of the trade basket between both blocs, with a schedule for elimination of tariffs to take place in three phases: the first as soon as the agreement is put in place, the second in four years, and the last in eight years.
Summit
Apart from extra-regional negotiations, other themes to be discussed by the Mercosur Summit and at the Council for the Common Market, which brings together the Finance ministers of the five countries that are members, will be the Bolivian request for entry into the bloc as a full member, and the progress of the addition of Venezuela.
The country became a member of the Mercosur in July last year, but there is a four year grace period for the country to adapt itself to the Common Foreign Tariff (TEC), that the members of the bloc charge on goods imported, and to other regulations of the bloc.
Another theme to be discussed will be the enactment of the first project covered by the Mercosur Structural Convergence Fund (Focem), a fund of US$ 100 million, of which Brazil is the main financer, whose objective is to aid in the development of the lesser economies in the bloc (Paraguay and Uruguay).
The question of asymmetry between the states that are members (Argentina, Brazil, Paraguay, Uruguay and Venezuela) and the measures necessary to reduce them are among the topics to be discussed.
The heads of state and foreign ministers of the countries that are associated to the Mercosur (Bolivia, Chile, Colombia, Ecuador and Peru) were also invited to participate in the meeting, as were those of Guiana, Panama and Suriname. The integration of South America as a whole, then, should also be discussed.
To the president of the Association of Brazilian Companies for Market Integration (Adebim), Michel Alaby, other topics outside official minutes should be discussed, like the inquiry made by Argentina in the scope of the World Trade Organization (WTO) about a surcharge imposed by Brazil on the import of Argentine raw material for the production of plastic bottles, and the dispute between Uruguay and Argentina about the construction of a pulp and paper mill on the frontier between both countries. The Argentines are against the enterprise planned by the Uruguayan government due to environmental questions.
Another controversial topic within the Mercosur, according to Alaby, is the possibility of Uruguay signing a trade agreement with the United States. According to the rules of the bloc, countries in the group can only negotiate this kind of agreement together.
Apart from that, he mentioned the need of greater access of Paraguayan and Uruguayan products to the Brazilian and Argentine markets, and more investment of Brazilian and Argentine companies in the smaller countries. Alaby is also the secretary general at the Arab Brazilian Chamber of Commerce.
Anba – www.anba.com.br