Trade flows between GCC countries and Latin America and the Caribbean (LAC) reached $16.3bn in 2018, while the UAE remained the top trading partner in the Gulf region, according to a new report.
The study by the Inter-American Development Bank (IDB) in cooperation with Dubai Chamber of Commerce and Industry was released during the 3rd Global Business Forum on Latin America in Panama City.
It said that in 2018 Gulf countries imported $10.9bn worth of products from Latin America and the Caribbean, while they exported products to the region valued at $5.4bn.
The UAE accounted for 27% of exports from GCC region to Latin America and the Caribbean, and 46% of imports from LAC countries, making it the top growth market for LAC traders, the report revealed.
Brazil, Argentina and Mexico were identified as the top trading partners in the region for GCC markets, jointly acquiring 76% of the total intraregional trade between the two regions.
Brazil’s trade with the Gulf countries in 2018 amounted to $9.1bn, followed by Argentina ($2bn) and Mexico ($1.3bn).
The report also outlined several recommendations for boosting trade flows between the two regions, including establishing new trade, investment and double taxation agreements, increasing the number of diplomatic missions, launching additional direct flights, and further facilitating bilateral business exchange.
According to IDB’s estimates, new trade agreements could potentially increase trade flows between the GCC and LAC regions by $9.8bn per year, while it also noted that expanding diplomatic footprint could give a $3.3bn boost to bilateral trade.
It said that simplifying export and import mechanisms and processes, and implementing initiatives such as a single-window system for all procedures, licensing licensed economic agents, and signing mutual recognition agreements with procedures adopted by each country were also important steps to facilitate and accelerate bilateral trade in the future.
The report noted that plastic products and electrical machinery remain the top categories dominating bilateral trade between the two regions, while vehicles, pharmaceutical products, electrical appliances, iron and steel were identified as high-potential products.
Hamad Buamim, president and CEO of Dubai Chamber of Commerce and Industry, said the report clearly show that there are many commercial and investment opportunities for cooperation between the GCC and Latin markets in various sectors and fields.
This edited article first appeared in Arabian Business.