Israel, Mercosur negotiating free-trade agreement

Israeli trade with Mercosur, the worlds fifth largest trade bloc, totaled $600 million in 2005, including $400 million in imports.

Israel has initiated negotiations for a free-trade agreement with Mercosur (Mercado Comun del Sur, the Common Market of the South, comprising Brazil, Argentina, Uruguay, and Paraguay). Ministry of Industry, Trade and Labor director general Raanan Dinur said, This is one of the most important steps Israel has taken in foreign trade in recent years.

A delegation of senior Mercosur officials arrived in Israel yesterday for a two-day visit to hold the first round of talks for the agreement.

A free-trade agreement with Mercosur is expected to significantly improve Israeli exporters access to markets in member countries, especially the expanding Brazilian economy. Among countries with which Israel has no free-trade agreement, Brazil is Israels third most important export destination, after China and Japan.

Israels efforts for a free-trade agreement with Mercosur have included a visit by then-Minister of Industry, Trade and Labor Ehud Olmert to Brazil a year ago, during which Brazils President Luiz Inacio Lula da Silva (Lula) promised to promote the idea. Israel signed a framework agreement with Mercosur during the latters summit in Paraguay in December, in a pre-negotiation step.

Israel hopes that a free-trade agreement with Mercosur will quickly lift current trade barriers, thereby boosting exports to the bloc. Israel and Mercosur are also considering agreements to expand R&D cooperation, government procurements, services, and investment.

Israeli trade with Mercosur, the worlds fifth largest trade bloc, totaled $600 million in 2005, including $400 million in imports. The bulk of trade is with Brazil, although trade with Argentina is slowly growing. Most Israeli exports to Mercosur are chemicals, especially fertilizers, followed by machinery. Imports mainly comprise frozen beef, soy, and chemicals.

Published by Globes [online], Israel business news - www.globes.co.il - on February 16, 2006

 
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