South Americans hope for easing of trade barriers with GCC

South America and the GCC are forging closer trade ties, spurred by new flights and stagnation in developed economies.

South American countries are targeting free-trade agreements with GCC states as both look for new markets amid sluggishness in the developed world.

Peru and Brazil aim to secure deals to lower trade barriers with Arabian Gulf nations, say South American officials.

"The terms of reference in the world are changing," said José Beraún Araníbar, the vice minister of foreign affairs of Peru, on a visit to the region this week.

"Today the regions have a duty by the circumstances to look for new partners, aside from the areas we are historically linked, either because of the crisis elsewhere or because there are more possibilities with doing business with other regions," he said.

Peru, which last September established a consulate general and trade and investment office in Dubai, is expecting to almost double its US$6.9 million (Dh25.3m) exports to the UAE. Peruvian firms secured supply contracts worth $4m during Gulfood, the world's largest annual food and hospitality show, in Dubai last February.

"Since we arrived you could only find [Peruvian] asparagus in the UAE, now you can find asparagus, avocado and evaporated milk and other goods," said Alvaro Silva Santisteban, the director of Peru's trade and investment office.

Peru is also targeting home decor. For the first time a container-load of home decor items will be arriving by the end of the month to be displayed at the Bloomingdale's store in Dubai.

UAE exports to Peru rose 30 per cent last year to $8.2m and the number is expected to rise further this year.

Ten business delegations from the Emirates have visited Peru in the past year to explore new markets.

But officials say trade would be given a further boost by a free-trade agreement. "The GCC has become the next important objective," said Mr Beraún Araníbar. "We have presented an economic cooperation agreement proposal which is under consideration by the GCC."

Brazil too is pushing for a free-trade agreement with governments in the GCC, said Michel Alaby, the director general of the Arab-Brazilian Chamber of Commerce.

Last year, the trade flow between the Brazil and the GCC reached $12.43 billion, a 31 per cent growth compared with 2010.

The opening of flights from the GCC to Brazil had been integral in encouraging trade, said Mr Alaby. Emirates Airline flies to Sao Paulo and Rio de Janeiro, while Qatar Airways also operates services between Doha and Sao Paulo. In a reflection of growing ties, Etihad Airways plans to start services to Sao Paulo next June.

"The logistics we facilitated and the perception of Brazilians regarding the region has increased considerably," said Mr Alaby.

"Earlier, only a few Brazilians knew about Dubai, but today the UAE, Doha and other Arab cities have emerged as a new destination for tourism and business."

Published: July 19, 2012 04:00 AM


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