Analysis Trade Defence giant leads UAE charge into Latin America By Andy Sambidge July 10, 2023 Wam Brazil's minister of energy Alexandre Silveira and UAE’s minister of state for International Cooperation Reem bint Ebrahim Al Hashimy Edge partners with Brazilian navy to develop missiles UAE delegation in Brazil after Argentina and Venezuela visits Non-oil trade relationship exceeded $4bn last year UAE defence conglomerate Edge has partnered with the Brazilian navy to develop long-range anti-ship missiles, weeks after opening a new regional office in the federal capital, Brasilia. The deal, described as a “significant milestone” by Mansour AlMulla, managing director and CEO of Edge, was signed during the visit of a delegation led by Reem bint Ebrahim Al Hashimy, the UAE’s minister of state for International Cooperation. The June meeting was a concerted effort to build on a growing non-oil trade relationship that exceeded $4 billion last year. Brazil now has the Edge in defence technology UAE’s Edge buys majority stake in Jordan robotics firm Mubadala invests in $440m LatAm fund Both sides discussed closer collaboration across key sectors including renewable energy, science and technology, sustainable development, aviation, space, food security and agriculture, transport and logistics. Talks, which involved representatives from Mubadala, Abu Dhabi Investment Authority, Masdar and DP World, also focused on possible negotiations to strike a Comprehensive Economic Partnership Agreement (Cepa) between the UAE and Mercosur, an economic bloc of Argentina, Brazil, Paraguay, and Uruguay. A free trade agreement between Egypt and the members of the Mercosur trade bloc came into force in 2017 but Brazil is looking to make other deals in the region. The delegation follows President Lula da Silva’s state visit to the UAE in April, his first official visit to the Middle East since being elected at the beginning of this year. Marcos Casarin, head of Latin America macro research at Oxford Economics, told AGBI that while trade between Brazil and GCC countries is still relatively small, it is growing rapidly. He said Brazil is a major food exporter to the region, particularly of poultry and sugar, while there is also a significant trade in gold. “The news that trade between the two regions is growing fast is testament of Brazil’s and the GCC’s diversified trade relationships, being both the source and the destination of several goods and services sold to an array of countries,” Casarin said. The GCC imports iron ore from Latin America for the production of aluminium, which it then exports back to the region. Brazil also imports fertiliser for its agricultural sector, products from which are then exported to the GCC, according to a 2021 report by Economist Impact and sponsored by Dubai Chamber of Commerce. Al Hashimy also visited Argentina and Venezuela last month to explore business opportunities and forge new partnerships. The UAE and Peru signed an air services agreement to build on non-oil bilateral trade which reached $800 million in 2022. DP World is also expanding its facilities at the Port of Callao, aimed at benefiting the local economy and supporting its foreign trade. Abu Dhabi Ports Group in May signed an agreement with Vale, the world’s largest producer of iron ore and nickel, and one of the largest logistics operators in Brazil. Under the deal, factories in Abu Dhabi will produce low-carbon products for the steelmaking industry for both the local and seaborne markets. “We are encouraged by this opportunity to build a mega hub in the UAE, a country which is strategically positioned to positively influence our drive to significantly reduce CO2 emissions around the globe,” Eduardo Bartolomeo, CEO of Vale, said. According to Dr Thani bin Ahmed Al Zeyoudi, minister of state for foreign trade, Brazil was the UAE's top trading partner in Latin America last year and ranked second only to the United States among the Emirates' most important trading partners in the Americas. Brazil is also growing its trade across the wider Arab countries with exports rising by more than 10 percent during the first four months of the year, according to the Arab Brazilian Chamber of Commerce. Exports totalled $5.7 billion compared to $5.2 billion during the same period in 2022. The top destination for Brazilian exports was the UAE, followed by Saudi Arabia, Egypt, Kuwait and Iraq. The main products from Brazil were sugar, poultry, beef, maize and soybeans. Egypt was Brazil’s biggest beef customer in the region ($116 million) while Saudi Arabia was the top destination for chicken exports ($276 million). Trade levels are still relatively low. In 2020, imports from Latin America accounted for only 3.2 percent of the GCC’s total imports and 1.6 percent of Latin America’s total exports. However, executives from the region are starting to focus more on the GCC for investments. While only 5 percent of those surveyed in 2021 were engaging with the GCC, 28 percent said they were interested in doing so in the future.