Arab countries are making effort and building relationship with several countries in the world especially those who are emerging in the global market. These countries are focusing on improving the economy and building business relation with the South American countries. Peru, Cuba, Argentina, Brazil and Colombia are the countries showing interest for the Arab countries and having trade with the different Arab countries. Both regions are rich in different natural resources and can provide the best opportunities of trade to each other in this way they can develop strong political as well as the business relationship.
Rising trade between the Latin America and the Arab countries
Arab countries are building the relationship with the Latin America. The prominent economic exchange has been seen between the two regions in past few years. Brazil is playing the key role among the Latin American countries. In 2011, 25.11 billion dollars was seen between the regions which increased 3.26 percent in next year. In 2013 the figure reached to $27.5 billion. The Arab countries are exporting fuels, fertilizers, and salt while the Latin American countries are exporting agricultural products, meat, aircraft, machinery and other high-tech products. Saudi Arabia, Egypt and the United Arab Emirates are the prominent countries doing trade with the Brazil.
Not only the Brazil is doing business with the Arab countries, other countries from the Latin America are also taking interest in doing trade with the developing region n in the world. Argentina conducted about $300 million trade and earned about 500 million dollars from direct investment in the Arab region. In a similar way, the Peru is also participating actively in doing trade with the Arab countries. The country is exporting textile, ceramic, agricultural products and the minerals to the arab region.
The economic activities between the two regions have given rise to many conditions in the world. The working of two regions has dragged the economic condition in the Europe and the United States of America.
Arab Counties suffered from the food security because of the climatic conditions not favorable to grow crops. For that purpose, the Brazil and other Latin American countries are playing role in providing the best food supplies to the Arab region so that they can fulfill the food requirement of the citizens. Both Brazil and Argentina are planning different strategies to develop the infrastructure in the Arab region especially in Saudi Arabia.
To build the strong relationship between two regions, the two blocks have met each other in the four summits organize in different countries to develop the strong trade and commercial relationship to give benefits to each other. Although both the regions are facing obstacles since they are making effort to strengthen the business relationship and increase the trade between two regions.
The ASPA is the organization that arranges different summits between the Arab countries and the South American countries; the main focus of the summit is to build the business relationship between two regions. They discuss different trade strategies, and good to be export and import among the countries. The summit was first organized in 2003 by the Brazil. The main aim of the development of the organization is to discuss the common interest to bring two regions closer.
Members of the Summit
The members of the organization from the Arab countries include
- Saudi Arabia
South American countries include
The first summit was held on 10th may 2005 at the state of the Brasilia, 34 countries participated in this summit. The main purpose of the summit was to enhance the trade relation between two regions. They discussed the
- Science and technology
- Environment issues
- Culture and education
- Social issues
The second summit was held in Doha Qatar a March 2009 the high official and the foreign ministers attended the conference. In the summit, the south-south cooperation agreed to implement the import and export at various trade sectors. The main aim was to force the trade between the two blocks. It was said in the conference that both regions will stand with each other in case of any financial crises. Both the regions have the human capital and natural resources that help in growing the trade volume between two states. In 2005 the trade between the two regions was $14 billion which increase up to 21 billion dollars in 2008, that was 50 percent increase.
In the summit, the leaders also decided about the sectors where they can invest and increase the trade. It was said in a summit that both regions must cooperate and work n competition to overcome the economic crises and improve the business in both blocks. It was forced to establish the chamber of commerce between two regions so that the foreign ministers can attend the business related conference and discuss the trade-related issues.
The third summit was organized in Peru on February 13 to 16 2012. The main aim of the summit was to develop the geopolitical space of global importance. Both the region has more than 50 percent of the natural resources, they can trade and exchange resources for the better lifestyles and economic growth of the regions.
The Republic of Suriname became the official country of Latin America and recognized the Palestinian state.
Fourth ASPA was held in Saudi Arabia in which 12 members from the Latin America and 22 Arab League members participated. The focus was the collaboration between two regions. The trade between two regions has been mounted to 30 billion dollars.
The trading situation between Brazil and the Middle East
both the middle east and Brazil are coordinating with each other to export and import different products. Brazil is an agricultural country and is considered the world’s third agricultural country. The Middle East is well known for the natural petroleum and the gas resources. Both the blocks are trying to grow their economic strength through the trade of different items.
Export from Middle East
The products which are exported from the Middle East to the Brazil and other countries in the Latin America includes
- Diesel oil
- Coking coal
- Fuel oil
- Lubricating oil
- Aviation fuel
Export from Brazil
Brazil mainly export following products to the arab countries
- metallurgical products
- part of vehicles
- chicken and beef
The main mission of the different summits and the conferences held between the two regions is to increase the trade and enhance the commercial relationship between two main blocks in the world. Different companies participate in the forums to get the successful collaboration and implementation of all the points discussed in the forums, conferences, and Summit organized at different times.
Business agreements between Brazil and Arab countries
The Brazilian Arab chamber of commerce is playing an important role in the development of different strategies related to the trade. They discuss the common interest and issues related to the business and also promise to help each other in case of any financial crises if in case the state faces in future. Brazil has developed the trade relationship with different Arab countries. Some of them are discussed below
Brazil Qatar relationship
The first relationship between the two countries developed in 1974. Qatar showed the interest to grow the trade with the Latin American countries especially Brazil. In 2005 the Brazilian embassy was opened in Doha which was the first step to begin the relationship between two countries. In June 2007, the Qatari embassy was reopened in Brazil. Qatar was the 43rd Brazilian trade partner in the world. The trade has been increased from 199 million dollars to more than 1 billion US dollars. The both countries are working in following trade sectors with each other
- building of gas exploration in North field
- The organization of the second summit in Doha to improve the relationship between the Arab countries and Latin America.
- In 2006 the regular flights between two countries started, in this way the visitors now have direct flight from Doha to Brazil and vice verse
- Start of different projects in Brazil by the government of the Qatar
- Brazil is exporting different agricultural products to the Qatar.
Brazil Israel relationship
The Israel has the strong economy because of the high exports to different countries in the world. Brazil is focusing on the Israel trade and had built the relationship with the nation for many years. Brazil was the first country to accept the Israel as the nation in 1951. Both the countries share exchanging technical, scientific and the technological products. The different sectors through which the trade between two regions has been improving dare as the following
- Agribusiness is the core factor in enhancing the business relationship between two countries. The Brazil exports the agricultural products to the Israel while it imports technology and the scientific products from the Israel. The Brazil and Israel trade is not balanced as the graph shown below
- Brazil is buying the technological products from the Israel market. Drip irrigation is one of the products imported from the Arab world. Israel has developed some industries in the Brazil as well as initiated factories and offices in various cities of Brazil. The investment between the two regions is playing role in bringing two countries closer.
- Brazil is trying to improve the agribusiness, if there is the implementation of the agreements then there is the possibility that both the countries will grow the agricultural products together.
- Both the countries having the strong political relationship and signed agreements in the trading in following sectors
- Education, health, science, industry and the customer research. Both will work as a joint venture in these fields.
A number of companies are working in the Brazil in the field of the research and the development. Different aircraft and electronic companies are playing part in Brazil thus strengthening the economic power of both countries.
Each year the Brazilian people visit the holy places in the Jerusalem. The ministry of tourism is getting involved in bringing the foreigners especially the Brazilian people to visit the state. Like the tourism and other commercial sectors, both countries are also doing an effort in an education department. Universities from both the countries are offering scholarship programs to improve the education level as well as attract the students to seek high education from the renowned universities in these countries.
Egypt Brazil relations
Egypt is taking interest to develop the trade relation with the Brazil. This will lead to the presence of the Egyptian products in the Brazilian market. According to the high officials, the strong economic and the political relation exist between the two countries. the Egypt is trying to expand industry in the Brazil. The Egypt is exporting textile, fabrics and other goods to the Brazil and importing garlic, citrus fruits, and other food products from the country.
To improve the relation between the two countries, the arab chamber of commerce play part in this aspect. Chamber is helping in different ways by providing the trade, investment, and financial opportunities and also helping to improve the volume of economic cooperation.
Tourism opportunity in both countries also helps in the growth of the economy of the two regions. Many tourists visit the Egypt as well as the Brazil because of the historical value and the adorable places present in the two countries.
Egypt-Mercosur free trade agreement
Mercosur is the common market of the South America, it comprises of four countries of the Latin America that are Argentina, Brazil, Paraguay and Uruguay. It is one of the successful economic blocs that is providing benefits to other countries to trade with many benefits.
Egypt is the first country who signed the free trade agreement, in this way Egypt can do trade in Latin America with fewer import expenses. The main aim of the FTA is to cut down the expenses and the tariffs which the importer has to pay to book the products for shipment. In this way, there is also the cancellation of the customs duties. The FTA cooperates in the field of investment, service and other issues.Egypt minister of trade signed this agreement in 2010 and is the first arab and African country who signed this agreement. The sign to this important agreement has open new markets for the Egyptian export.
The agreement is important as it has developed the trust between the Egypt and the Mercosur countries to do freely the business. It provides a guarantee that the trade will be beneficial and prevent the Egyptian market from any damage. Through this agreement, the trade between the countries will be doubled with the passage of the time the trade volume has been increased by 58.7 % from 2004 to 2009. Egypt is focusing on increasing the trade relationship with the Mercosur countries in different sectors like industry, technology, and tourism.
The FTA is providing following benefits to the Egypt
- It is the best tool for Egypt to access the Mercosur markets
- There are the trade liberalization and the export, as well as import, is exempted from the custom duties
- There is a decrease in the agricultural commodities price.
- The annual meetings of both the blocks help each other to resolve the trade issues.
- There is the development of the trade and mutual investment between two regions.
- They commit to promoting the international trade regime
- The free trade agreement maximize the global stability and develop close relation among the people
Brazil Jordan relationships
Brazil and Jordan ahs about thirty years of the diplomatic relationships. Both the countries have a good relation, not in political aspects but also they have strong trade relations with each other. The value of the trade between two countries is about 298 million dollar while Brazil is doing export with the Jordan of about 292 million dollars.
Trade activities between Saudi Arabia and Brazil
Saudi Arabia and Brazil has the strong trade relationships. They are doing trade for many years. Both the countries show the business interest with each other. The report has shown that trade activity between two regions were 4.118 billion dollars in 2010 which was approximately 43 percent higher than the 2009 trade’s activity between two countries. in 2009 it was 2.835 billion dollars. The export and import between the two countries increase by more than 50 percent in 2010. The Brazil alone did the business of 2.85 billion dollars in 2010.
As the good relation exists between the Saudi Arabia and the Brazil, about 50 well-known companies showed interest to do business in Saudi Arabia. It is the country which is the main export center for the Brazil. The Brazil trade and promotion agency knew as Apex Brazil did the business meeting with Saudi high officials for the development of the industrial and the foreign trade. Different meetings were held in Arab Brazilian Chamber of Commerce t enhance the relationship and focus on the main issues that create hurdles while doing business and implementation of such policies that are beneficial for the countries economy. The Riyadh Exhibition company also organized the event, the main purpose of the event was to meet new distributors, industrialist and the investors who can start a business in two countries to uplift the economies of both countries. in 2010 another event was organized by the name of Brazil trade and investment in Saudi Arabia, where the different Brazilian companies exhibited their products and services to attract the citizens. They also showed their products in developing sectors like infrastructure, development of real estate and agribusiness.
Different events are organized a time to time to give people awareness about the Brazilian products so that investors can strat business relationship with Brazil. The introduction of the flavor of brasil in these events to update the knowledge of the people relate the Brazilian food supplies and the agricultural products. In this mission, the 75 companies from Brazil also visited other Arab countries to improve the trade relationship with the arab countries.
There are different companies who belong to different sectors. 20 were from the real estate and were focussing on the construction and the real estate, while 30 belong to the food and beverages sector while 25 companies were the investors in various sectors. As the Brazil is the sixth strongest economy in the world, it is providing the different trade opportunities in Saudi Arabia so that the investors can invest to grow their business. It is important to build the strategies and the plan to bring the trade relation in line and both regions can have best as well as a strong business relation with each other.
It is favorable to improve the business relation with the Brazil. Previously Brazil has conducted Olympics and the FIFA world cup which has boosted the country’s economy. The arab countries can get benefit from the exports and imports with the Brazil. The global export of Saudi Arabia has increased from 1.6 percent from 1.3 percent. The Brazil is supplying various food products like confectionary, biscuits, milk, fruit juices. Poultry and beef. Brazil is also exporting ceramic products, furniture, plastic products and lighting products. Stone and stone work is also the part of the Brazilian exports.
Relationship of Peru with Arab countries
Peru showed its interest to grow the trade relationship with arab countries in the third summit that was held in the Peru. The reports have shown that the trade between two regions was 250 million dollars in 2011 which increased from 206 million dollars in 2008. They signed the trade agreements in different conferences and in the summit, they agreed to cooperate with each other in the business and improve the trade in coming years. Peru is exporting following products to the arab countries
- dairy products
- safety glass.
This has improved the bilateral trade as well as the tourist from the arab region prefer to visit the beautiful land. The both regions are also exchanging technology, energy and agricultural products with each other.
Relationship of Kuwait with Latin America
Kuwait has the long term relation with the Latin America and the Mexican country. The Latin America is trying to build the relationship wth the GCC countries and forced to develop the free trade areas as well as organize the growth and align such policies that are helpful in the tourism, finance and trade sectors. The countries are strengthening the political as well as the business relationship with each other
They are promoting the renewable energies as well as working for global warming to improve the climatic condition of the world. Kuwait is playing an important role in developing the bilateral trade relation between the GCC and the Mexico.
Mexican embassy was opened in Kuwait in 2012, the main aim of the embassy to strengthen the political relationship between two countries as well as to increase the infrastructure project and the service projects s that there is the improvement in the economy of the countries.
UAE and Mexico trade relationship
The two countries developed trade relations in 1975 about four decades ago. Initially, the bothe countries shared the mutual interest and acknowledged the demands of each country to build the strong business relationship.as the UAE is the politically stable and has the strong economic background they build the strong relationship with Mexico and other Latin MAerica countries in various trade sectors. As the country is rich in oil reserves, on the basis of the natural resources, the country is developing different strategies related to science and technology to attract other countries to do business with UAE. It has become the international player worldwide.
Mexico also has the strong economy, the country has done an effort in the trade sector and there is the prominent change in the country’s economy after 40 years of the struggle and the hard work. He GDP amount of the Mexico is 1.2 trillion dollars which have made it the second largest economy in the Latin America and sixteen largest worldwide. It is the best open Economy like the Germany and United States and has done free trade agreements with about 45 countries in the world. The country is committed to free trade, productive integration, and the capital mobility.
The event grade infrastructure and the strong economy make the country best fro the trade system it has become the top three exporting power in G20. Mexico is the political stable as well as has strong infrastructure background that is attractive for the arab world to do trade with the stable country. Mexico is close to the arab countries and has built has built the strong relationship with the UAE and other arab countries.
The main aim of the two regions is to bring the peace and the stability, they have common goals of the development and the stability as well as the cultural heritage is also playing part in creating a strong bond between two states.
Relationship of Mexico with Saudi Arabia
- Mexico and Saudi governments are also taking the initiative to build the business relationship with each other. They have signed about 11 agreement of different issues to build the strong bilateral relationship. The list of the agreements includes the start of the air service between two countries. There is the launching of the direct flights between two countries in this way the people can save time and directly travel without connecting flight system.
- The agreement also has signed to give leniency in the taxation. There is the avoidance of the double taxation and the evasion tax is prevented. As the tax burdens and the heavy customs duties create hurdle sin the export and import of the goods, both the countries decided to give subsidiary in the case of the heavy tax bill.
- The crime rate is increasing especially in the Arab region, to fight with this situation both countries signed the agreement to prevent and stop the transnational crime.
- The agreement also contains the investment policies to grow the business in the two states.
- The other important aspects of the policy include cultural, sports, youth and technical areas.
- The focus is also made in the energy sector. The exchange in the energy policies and trade in various energy sectors proved beneficial in the uplift of the economy of the country.
- Education is an important factor in growing the relationship between the countries, the universities offer different scholarship programs that will provide opportunities to the student of Saudi Arabia to join Mexican university to get higher education and learn about the new upcoming technology.
- In the agreement, the memoranda related to the Saudi companies were also signed.
The Saudi and Mexican chamber of commerce has developed where they can do different business deals, as well as the high officials, can sit there to discuss business related issues as well as the discussion about the new projects.
Mexico is exporting agricultural products, machinery, and the construction material while Saudi government is exporting the fuel and oil to keep the balance in the trade.
Bilateral relationship between Peru and Saudi Arabia
Peru and Saudi Arabia has the bilateral relationship since 1986 and the embassy was opened in Riyadh in 2010. The prime minister of the Peru visited the Saudi Arabia and initiated the bilateral relationship between the countries. like other Latin countries, Peru also has Arabian cultural roots since sixteen century. The Peru showed interest for the bilateral relationship as well as exchange the common interest so that they can do business with each other. The political leadership had signed the agreement to grow the business relationship.
The countries have bilateral relationship in following sectors
- They are doing trade and business for the uplift of the economies of both countries.
- Peru is focusing on the tourism, as the economy of the country grow if the ratio of tourism is high
- Both countries are doing investment to increase the GDP.
- The exchange of science and technological project is also the part of the bilateral relationship.
Trade Relationship of Kuwait with Mexico
Kuwait and Mexico are collaborating with each other for many years. Both the countries have signed the memorandum to build the strong trade relation in various sectors. The main features of the agreement include
- The agreement contains the development of the cultural and technical cooperation so that both countries can exchange their cultural values. Different events are organized so that the people know about the culture and traditions of each other. The organization of different events is good for increasing relationship as well as different business person meet to enhance the business relationship
- The healthcare agreement is important in building the bilateral relationship as the two countries can exchange their medicines and can help in developing the health related strategies.
- In energy sector, it is important to exchange ideas related to the saving of the energy and companies must participate and try to sort out the energy crises and introduce new resources so that industry, as well as economy, remain stable
- The high educational ties are also the key factor in building good relationships and can help in building the high economy.
- The both countries commercial exchange. They are exporting and importing different products. The trade has been increased from 14 million dollars to the 38 million dollars. Mexico is exporting steel, mobile phones as well as the food products to the Kuwait.
Latin America and MENA countries
In the field of biotechnology the Latin American countries and the MENA countries are making effort. They are interacting to build the business relationship. The Israel is doing effort and research in the biotechnological products, there are different companies in the country who are working on the biotech projects. The other arab countries are showing interest to get these products from Latin America. They are searching for the market or the manufacturing place where they can invest to produce the high-tech biotechnological products.
- The arab countries also have started research in the health sector as for example pharmaceutical company in the Israel is conducting studies related to the various diseases. They have started patient screening both in Latin America and the Us. The company has enrolled 120 patients to study the fatty liver disorders that include steatohepatitis. The patients are enrolled from various countries like Mexico and Chile.
- The Latin America is making effort to grow the business relation with the Dubai another Arab country as they are making this region the launching pad to start a business with the Asia. In actual Dubai is the hub for many countries to start the business and spread in the surrounding countries.
- In Latin America there are few companies which are working only inside the countries but not working with other companies in the World, the Brazilian companies are exceptional as they have developed a relationship in different Arab countries as well as other countries in the world.
Hurdles in trade between two regions
Both the regions are facing challenges regarding the trade. Some of the common factors that are creating the hurdles to building the business relationship between the two regions are as following
- Lengthy export and import regulations
- Weak infrastructure
- High cost of moving products from one region to the other
- Language barrier
- Immature regulatory affairs
There is the need to make effort to resolve such issues to make the business relationship strong between two regions. As the countries are rich in natural resources and they are using high technology to produce different products. The export and import between two regions provide benefits not only to the two regions but the surrounding countries also get benefit from this business relationship.
Making planning and strategies to grow the trade and bilateral relationship between the two regions
To overcome the hurdles, the two regions are doing agreements and organizing creates conferences and the summit where they discuss the problems that both the regions are facing. The main purpose of the ASPA is to recognize the trade related issues and providing the solutions to grow the trade and the business with each other. It is important to implement the agreements and all the policies made during the summits in order make the trade easy and simple. Implementation of such policies like the reduction in tax burden, and customs duty as well as the involvement of the person who can understand the language of both region so that the communication become easy.
Both the regions are rich in natural resources. The arab world has plenty of the fuel, oil and gas reserves. If the proper planning and strategies are applied they can export the fuel and get more economically stable. In a similar way, the Latin America has the perfect climate for agriculture, as well as they, are developed countries. by exchanging goods with each other not only make them strong economies but also upgrade their ranking in the world. The Brazil, Peru, Argentina all has the best soil condition awesome landscape and the perfect weather for the cultivation of the crops and food products. The arab region lacks these facilities because of the dry hot weather and the infertile soil. Arab countries are facing food security issues, they can invest and trade with the Latin America in order to overcome the food security. This will help in building the good bilateral relationship as well as they will meet their food requirement.