Israel to join Mercosur trade bloc

Brazilian President Luiz Inácio Lula da Silva announced today in Jerusalem that Brazil has given its final approval for a free trade agreement between Israel and the Mercosur bloc.

Mercosur (Mercadu Comun del Sur) is a common market established between four countries — Argentina, Brazil, Uruguay and Paraguay — and Venezuela is slated to join soon. Israel is the first country outside South America to sign a free trade agreement with the regional bloc, which boasts over $3 trillion in GDP and represents a combined population of over 270 million people.

President Peres and President Lula opened a joint economic conference with hundreds of Israeli and Brazilian business leaders on hand. The presidents were joined by the Israeli Minister of Industry, Trade, and Labor Mr. Binyamin Ben-Eliezer, the Israeli President of the Manufacturers Association Mr. Sharga Brosh, the Brazilian President of the São Paulo Industrialist Association (FIESP) Mr. Paulo Skaf, and the Brazilian Minister of Development, Industry and Foreign Trade Mr. Miguel Jorge.

President Peres spoke first, thanking President Lula personally for working towards the free trade agreement between Israel and Mercosur.

“Although Israel and Brazil may be distant from each other geographically, we can grow close through economic and scientific cooperation,” he said. “Brazil has a strong and stable economy and we are willing and happy to cooperate with you in every sector including science, defense, high-tech, agriculture, and advanced space technologies.”

“President Peres’ visit to Brazil gave a big push forward to the economic relations between Israeli and Brazil,” noted the president of the São Paulo Industrialist Association. “A joint work group was established between Israel and Brazil to advance and implement the Mercosur agreement. Both countries have declared their intention to triple their current level of trade.”

President Lula said, “This is an important visit for me and for the economic delegation traveling with me to Israel. We hope to advance economic and business ties between Israel and Brazil as trade has increased significantly between our two countries in the past few years. We can continue with the current momentum. I am launching a new investment plan in Brazil soon and I invite Israeli companies to take an active and significant part. Israel is known for its strong capabilities in technology and science. Thus, we encourage intensive cooperation with Israel.”

A free trade agreement between Israel and the Mercosur Common Market was ratified by both chambers of Brazil’s Congress following President Peres’ visit to Brazil in November. The agreement was given final approval right before President Lula’s current visit to Israel. Its passage reflects in large part efforts made by President Lula. When it takes effect in April, the agreement is expected to rapidly increase the level of commerce between the two countries.

Brazil is Israel’s largest trade partner in Latin America and with the approval of the agreement trade is expected to increase by the billions of dollars, especially in agriculture, education, science, medicine and space.

In 2008 trade between the two countries totaled $1.6 billion, with $1.2 billion in exports from Israel. One fourth of Israeli exports were chemicals and fertilizers used in Brazilian agriculture.

Tags: Brazil, business news, Israel, Jerusalem, Lula, Mercosur, Peres