Insight Focus
Negotiation of the trade deal began last year and has been progressing quickly, according to the Brazilian Ministry of Foreign Affairs. The UAE, considered an important commercial hub, represents the main destination for Brazilian exports to the Middle East.
UAE-Brazil Trade Relationship
After concluding negotiations with the EU, Mercosur has been taking important steps in negotiations with the UAE, a relevant commercial hub in the Middle East – and Brazil’s main trading partner in the region.
Source: COMEX
The expectation is to align the main points by the end of the year, according to sources from the Brazilian Ministry of Foreign Affairs. With this, the agreement could be signed within one or two years, which would be a record deadline.
To give you an idea, the Mercosur trade deal with Singapore, signed in 2023, began negotiations in 2019. The treaty with the EU, more complex, took more than two decades of back and forth.
“In the case of the UAE, there is a clear interest on both sides to move negotiations forward for reasons ranging from the evolution of the trade balance to opportunities in emerging sectors,” says Mohamad Mourad, secretary general of the Arab Brazilian Chamber of Commerce.
Mohamad Mourad
On the UAE side, there is a clear appetite for investment in Brazil in segments such as energy, agribusiness and infrastructure. The country’s growing concern with food security has translated into efforts to increase participation in Brazilian agricultural production and infrastructure.
Brazil, in turn, is keeping an eye on growing shipping opportunities to the Emirates. Between 2013 and 2024, exports increased no less than 73%.
Source: COMEX
Today, foreign sales are concentrated in sugar, poultry and beef. Last year, Brazil exported around USD 1.1 billion of raw sugar to the UAE. Poultry shipments represented almost USD 1 billion. Large Brazilian meatpacking companies, such as BRF, have already shown interest in increasing their presence in the region through direct investments and exports.
Source: COMEX
The evolution of sugar exports to the UAE is also promising. In 2024, the country represented one of the largest export destinations for the commodity.
The Al Khaleej Sugar refinery, in Dubai, considered one of the largest in the world, remains attentive to opportunities in Brazil.
Representatives from the company and the Brazilian government have been in conversation about the construction of a biorefinery in Bahia with the capacity to crush more than 10 million tonnes of sugarcane per year. One of the main focuses will be the manufacture of ethanol.
The Al Khaleej Sugar refinery, in Dubai, considered one of the largest in the world, remains attentive to opportunities in Brazil.
Representatives from the company and the Brazilian government have been in conversation about the construction of a biorefinery in Bahia with the capacity to crush more than 10 million tonnes of sugarcane per year. One of the main focuses will be the manufacture of ethanol.
Macaúba
FTA Forges Path for Future Investment
In the Ministry of Foreign Affairs’ view, these initiatives could be the starting point for a series of other investments and commercial exchanges that should come to fruition with the signing of the free trade agreement. The treaty also provides for easier access to the services sector, including banks and investment funds, and may include government purchases.
Another important aspect is that, with the reduction or elimination of commercial tariffs, Brazil will also be able to benefit from a greater flow of imports of essential products.
Currently, Brazil imports mainly oil, vessels and oil extraction platforms from the UAE. But there is also room for sulphur, used in the manufacture of fertilisers, and fertiliser itself, two fundamental items for Brazilian agriculture. The country imports around 85% of all the fertilisers it consumes.
Source: COMEX
Machinery for civil construction and agriculture, sold by the UAE, also appears in the commercial exchanges between the two countries – and tends to increase its participation in the trade balance in the context of a free trade agreement.
“There are many mutual benefits in this type of trade deal, and, in the future, nothing prevents a similar model of treaty from arousing the interest of other countries in the region to strengthen ties with us,” says Mourad, from the Arab Brazilian Chamber of Commerce.
