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Negotiations between the Mercosur and the Gulf Cooperation Council (GCC) considering the regime of goods to be included in the free trade agreement that is being negotiated between both blocs should be concluded this year.
This was one of the decisions reached by diplomats of both regions in two meetings in Riyadh, the Saudi capital, on September 9 and 10, according to information disclosed yesterday evening (October 11) by the Brazilian Foreign Office (Itamaraty). According to the Ministry of Foreign Relations, a tariff reduction scheme has been approved. It should include a 100% reduction in tariffs on all goods traded between both blocs, excluding products whose import into the countries of the Arabian Gulf is illegal. Still in the area of products, the questions of the regime of origin, safeguards and controversy solution should also be negotiated in 2006. The reduction of taxes should take place in three phases: the first when the treaty is put in place, which should cover most of the current trade between both blocs, the second for a group of products that should have their taxes reduced progressively over a period of four years, and the third for a smaller group of products to have their taxes reduced over a period of eight years. The offers for tariff reductions will be exchanged on November 15 and a new meeting will take place in Riyadh thereafter. According to the Itamaraty, the terms of reference were approved not only for the regime of goods, but also for services and investment. Negotiations regarding the latter two should proceed in 2007, but the Brazilian diplomacy does not discard the possibility of conclusion this year. With the agreement, according to the Itamaraty, Brazilian exporters will have zero tariff access to a market that demands all kinds of products, has an aggregate Gross Domestic Product (GDP) of US$ 600 billion and imports the equivalent to US$ 200 billion a year. It is the second largest market for Brazilian agricultural products, losing only to the European Union (EU), and has registered the greatest growth in investments in civil construction, information technology, transport and infrastructure, as well as concentrating a large part of global oil reserves. The GCC includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman. On the other hand, the Arab bloc will have free access, including for investment, in the markets in Brazil, Argentina, Paraguay, Uruguay and Venezuela, which recently entered the South American group. Anba
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Or is it a deal for Brazilian exports only, and the GCC can export free of tax to the whole Mercosul bloc ?