Egypt is hoping to capitalize on recent economic growth and rising demand in Latin America and to boost its trade balance with the region. Egyptian Trade Minister Rashid Mohamed Rashid and Brazil's Minister of Development, Industry and Foreign Trade Miguel Jorge met in Cairo to look into ways of implementing a free trade accord that could well conclude to the advantage of Latin American partners.

Latin American exporters have aggressively targeted Middle East markets, both the Gulf countries that are awash with cash and resource producers like Egypt that want better deals for their commodities outside the West's sphere of influence.

Officials said a Mercosur deal with Egypt could concentrate on agriculture, fisheries and textiles -- sectors where both competition and synergy are possible, depending on who markets what and how effectively, analysts said.

The current talks could take up to three months to complete and a deal on an Egypt-Mercosur partnership is likely in July, they said.

"We expect to reach an agreement and sign the free trade agreement at the start of July ... to start a new page in relations between Egypt and Brazil and the Mercosur countries," Rashid said.

Egypt's immediate strategy is to improve the balance of trade with Latin America as a whole, analysts said. Egyptian imports from Brazil alone amounted to $1.53 billion while its exports to Brazil totaled only $87.7 million in 2009.

"We can't forget that Brazil is considered today one of the strong emerging countries on the global economic stage, and was also one of the first countries to recover from the global economic crisis in 2009," Rashid said.

Analysts cited Brazil's long-standing economic and military export links with the Middle East as an indication that Brazil, currently on the lookout for new markets for its manufactures and revived arms sales, would seek a wider share of the Middle East markets. Brazil's arms industry was the largest supplier of weapons to Iraq under Saddam Hussein.

Rashid didn't mention any military cooperation -- usually outside the scope of Mercosur -- but cited the diversity of trade that could grow between the two sides. "The ventures between us and Brazil are very diverse. There is a lot of cooperation in the industrial sector," Rashid said.

Egyptian industry analysts said the North African Arab country would likely seek to use its expanding presence in Brazil as a springboard for entry into other Central and South American markets.

Egyptian and other Arab efforts to strengthen Latin American ties have been spurred by recent moves by rival non-Arab Iran to expand economic, energy and military ties with Latin America.

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