Trade

UAE expected to sign trade deal with Mercosur bloc next year

December 11, 2024, 3:15 PM

President Luiz Inácio Lula da Silva of Brazil and Sheikh Khaled bin Mohamed Al Nahyan, crown prince of Abu Dhabi, held talks at the G20 summit in Rio

Talks with South American bloc began in 2023
Third round of negotiations held in Uruguay
Brazil-UAE trade reached $4.3bn last year

The UAE is expected to sign a comprehensive economic partnership agreement with the Mercosur bloc of South American countries next year, senior officials have said.

The UAE and Brazil announced that talks about a Cepa were progressing, following a third round of negotiations last month in Uruguay. The talks started late last year and continued at the Mercosur summit in Asunción, Paraguay, in July.

Sheikh Khaled bin Mohamed Al Nahyan, crown prince of Abu Dhabi, and President Luiz Inácio Lula da Silva of Brazil also held talks at the G20 leaders’ summit in Rio de Janeiro last month. After their meeting, both expressed confidence that the negotiations would conclude in the first half of 2025.

The Mercosur bloc includes Argentina, Brazil, Paraguay and Uruguay. Bolivia joined in July.

The UAE said a Cepa with Mercosur would have a “positive impact” on trade and investment ties.

Trade between the UAE and Brazil reached more than $4.3 billion last year, according to the Arab-Brazilian Chamber of Commerce. The majority was from the Brazilian side, which exported poultry, sugar and beef valued at $3.1 billion.

The UAE exported primarily oil and fertilisers, the organisation said.

The UAE’s Cepa programme aims to increase its non-oil trade to $1 trillion in value by 2031 and double the size of its economy to surpass $800 billion by 2030.

It signed a deal with Australia last month, its 14th Cepa since launching the programme in September 2021.

The Mercosur trade bloc signed a free trade with Egypt in 2017.

UAE-Mercosur trade

Brazil is the UAE’s largest trade partner in South America, while the UAE is the second largest trade partner for Brazil in the Mena region.
The UAE is the largest Middle Eastern investor in Brazil, with investments of $10 billion.
UAE’s state-owned defence company Edge Group has acquired 51 percent of a Brazilian tear gas manufacturer.
Argentina is a relatively closed market to international trade, which accounted for about 32 percent of its GDP in 2022. Its main export destinations were Brazil, China, the US, Chile and India.
Uruguay’s Union of Exporters said exports to the Gulf region reached $64 million last year. Exports to the UAE were $24 million, which included dairy products, cereals, beef, meat or fish preparations and live animals.
Paraguay’s exports to the UAE reached $41.3 million in 2022, according to the Observatory of Economic Complexity. They included agricultural foodstuffs, soybean meal and corn.
The UAE exported $191 million to Paraguay, including refined petroleum, glass and steel.
Non-oil foreign trade with Bolivia reached $932 million, according to the Ministry of Economy.