Bolsonaro’s Jerusalem Move Has Brazil’s Meat Exporters Concerned

(Bloomberg) -- Brazil’s meat exporters are eyeing President-elect Jair Bolsonaro’s plans to relocate the South American country’s embassy in Israel from Tel Aviv to Jerusalem with unease.

Bolsonaro announced his intention to move the embassy in an interview with the conservative Israel Hayom newspaper last week, prompting a congratulatory tweet from the Israeli Prime Minister, Benjamin Netanyahu. Shortly afterwards, Egypt decided to postpone an official visit by the Brazilian foreign minister.

While Bolsonaro has made no secret of his longstanding admiration for Israel, some Brazilian exporters fear he may not have given due weight to the commercial implications of his proposal. While Brazil ran a $419 million trade deficit with Tel Aviv in 2017, it ran a $7.1 billion dollar surplus with the 22 nations of the Arab League that year, a figure that represents 10 percent of Brazil’s total trade surplus.

"Naturally, given we have very important trade with Arab markets, especially the market in Halal meat, this is an issue that worries us," said Pedro Parente, the CEO of BRF S.A, the largest supplier of chicken to the Arab nations in the Gulf Cooperation Council.

The Arab world is Brazil’s second-largest food export market, after China, according to Reubens Hannun, the president of the Arab-Brazil Chamber of Commerce.

Moving the embassy would "at the very least generate noise, and could lead to some negative effects," Hannun said. "Ideally things would remain the way they are." A deterioration in the relationship might also impact potential investment in Brazil by Arab sovereign wealth funds, he added. The Saudi Agricultural and Livestock Investment Company (Salic) is the second-largest holder of Minerva S.A, South America’s top beef exporter.

Food dominates the list of Brazilian exports to the Arab League, and the South American country is the world’s largest exporter of Halal meat, from animals killed in accordance with Islamic law. "Arab people want to consume more Brazilian products," Hannun added. "This could jeopardize their positive disposition."

The Egyptian ambassador in Brasilia, Alaaeldin Wagih Mohamed Roushdy, said that the Brazilian foreign minister’s trip to Cairo was postponed due to scheduling conflicts, but he added that he had taken note of the president-elect’s statements on the embassy.

"Egypt’s position is clear with regards to the issue of Jerusalem and the Palestinian issue in general," he said. "We firmly believe in a two-state solution and the establishment of a Palestinian state with East Jerusalem as its capital."

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