Qatar overcomes difficulties arising from embargo and boosts trade with Brazil

Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt decreed an economic embargo on land, sea, and air against Qatar, sparking fear across the world regarding the future of Qatar's trade with several countries, including Brazil. The reason behind such an unprecedented move is believed to be Qatar's alleged support for terrorism.

Seven months later, however, reality showed that, for 250 Brazilian companies exporting to Qatar, the situation is marked by relief. Even though Brazil faces a yearly deficit of $25 million, figures in connection with the country's ties with Qatar indicate an upward trend in sales favorable to Brazil in the near future.

This boost is reported to have been driven by an increase in sales to Qatar, coupled with a gradual reduction in imports from the Middle-Eastern country—factors that may lead to a trade surplus for Brazil in the upcoming months.

“We import from Brazil key commodities like beef, chicken, vegetables; and we export fuels and fertilizers,” said Qatar's Ambassador to Brazil Mohammed Al-Hayki, who expressed optimism towards the expansion of commerce between the two nations.

From January to December 2017, Brazil exported as much as $420.28 million to Qatar, which accounts for a 11.18% increase in sales from the previous year. As for imports in 2017, Brazil purchased a total of $445.86 million—up a mere 3% in shipments from the country to Brazil.

Al-Hayki believes, however, that the importance of current figures is relative. What matters, he argues, is the trend observed in commercial exchange and the opportunities arising for the two countries, involving, for instance, natural gas—a commodity that requires the use of high-precision technology and highly qualified job posts.

Natural Gas

For this reason, the ambassador goes on to say, the year of 2020 will be a landmark to both countries, as Qatar will become a regular supplier of natural gas to Brazil.

The product is expected to address the deficiencies in Brazil's energy grid, which is highly dependent on hydroelectric power plants today. A number of development projects in Brazil have been threatened to be interrupted due to the shortage in rainfall. The spells of drought, recurrent over recent years, have led to a drop in reservoir levels, and may bring the supply of electric energy to a halt as a result.

CELSE (Electric Centers of Sergipe), tasked with the implementation of the Thermoelectric Complex Port of Sergipe I, will be in charge of receiving gas from Qatar. The deal on the supply of natural gas was signed a year and two months ago between CELSE and Ocean LNG Limited, a joint venture between Qatar Petroleum and ExxonMobil.

The Thermoelectric Complex Port of Sergipe I will have a thermoelectric plant to transform natural gas into electric energy, a 33km transmission line, and a set of offshore facilities, including a floating storage and regasification unit (FSRU) and a gas pipeline. The gas will come from Qatar in liquid form and will be regasified in these facilities.

The whole structure will rely on state-of-the-art technology, which is expected to bring the plant to its highest production levels. The FSRU ship will be anchored and ready to receive gas from Qatar. The vessel will be capable of receiving 170 thousand cubic meters of natural gas—enough to serve the thermoelectric unit of the complex for 17 days at full load, in operation 24 hours a day.

Bilateral trade

In order to stimulate bilateral trade, Mohammed Al-Hayki believes that the two countries should pay each other trade visits and display their products. Qatar sent a mission to Brazil late last September. The mission, formed by 14 company leaders and government representatives from Qatar, had among its members the executive director of Qatar's agency for export development, Hassan Khalifa Al Mansoori, a key finance agent for trade. The mission visited government bodies and business entities.

World trade

Al-Hayki notes that Brazil has been through a series of economic and political crises, and nonetheless remains the world's eighth economy, fully capable of standing as a major actor in global trade. To attain such level of development in commerce, the Qatari ambassador suggests that Brazil cut red-tape in exports, build the necessary transport structure from the countryside to port areas, and build warehouses and silos on export corridors.

The impact of the embargo

Despite being among the Middle East's wealthiest countries, Qatar is home to just 2.7 million people, most of whom immigrants. As it is a small nation, the impact of the embargo would not be the cause of considerable concern to Europe, the US, and Asia, were it not for the fact the country is a key supplier of natural resources around the world today. Asia and Europe, for instance, are major buyers of liquified natural gas from Qatar.

To lift the embargo, one of the requirements was that Qatar should shut down broadcaster Al Jazeera, seen by Saudi Arabia and other countries in the region as supportive of terrorism.

Ambassador Mohammed Al-Hayki vehemently denies the accusation, noting that most terrorists involved in the attack on the Twin Towers in New York on September 11, 2001, came not from Qatar, but from Saudi Arabia.

Another topic highlighted by Ambassador Al-Hayki is Qatar's independent foreign policies and the value attributed to democracy by the Middle-Eastern country. Qatar, he says, does not tolerate the pressures of countries enforcing the embargo to reduce the freedom of the press and shut down Al Jazeera, the biggest media organization in the Arabic world. Al Jazeera, he continues, is a corporation founded on freedom of speech, which serves as a model for the whole of the Middle East and stems from the autonomy ensured by Qatar. “This autonomy is beyond any negotiations,” he concluded.

Translated by Fabrício Ferreira