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Brazil’s goal: Mideast FTAs

Brazil’s goal: Mideast FTAs

Israel is the first country outside of South America to sign a free trade agreement with the Mercosur bloc. And Jordan could be next.

March 19, 2010 5:07 by

President Luiz Inacio Lula da Silva is currently on an official tour of the Middle East, the first such visit by a Brazilian head of state in over a century.

Often credited with Brazil’s economic and diplomatic advancements, da Silva’s engagement with the region could lead to MENA countries signing free trade agreements with the Southern Common Market group – or Mercosur. The regional trading bloc is composed of Uruguay, Paraguay, Brazil, and Argentina, and has a gross domestic product estimated at $3 trillion.

The Brazilian leader has been ruffling feathers recently regarding his unwillingness to endorse sanctions of Iran, as the Islamic Republic continues its nuclear development programs. Da Silva has also announced a visit to Tehran before midyear.

That didn’t seem to bode well for the leader’s visit to Israel, the first stop on his Middle East tour, which also includes the Palestinian Territories and Jordan. But, whatever the political tensions, the business climate for Brazil’s trade with regional partners is gaining momentum. For better and for worse, business seems to be trumping politics: Israel became the first country outside of South America to sign with Mercosur – and Jordan could be next.

In Amman, da Silva met with HM King Abdullah to discuss strengthening bilateral economic relations, and in particular, to finalize talks regarding a free trade agreement between Jordan and Mercosur.

The Jordan Times reported that the two nation’s trade volumes decreased significantly last year, down more than $100 million to $189.5 million – attributed to the global economic and financial crisis. The Mercosur agreement could significantly boost trade volume between the two nations – which is currently dominated by meat and sugar imports to Jordan, and military equipment and aluminum imports to Brazil.

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