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Doing Business in Brazil: Political and economic landscape

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Brazil and Israel, the revival of the bilateral relationship

The first visit of a Prime Minister from Israel to Brazil for Bolsonaro’s inauguration ceremony symbolized closer ties between the two countries. Benjamin Netanyahu’s presence is even more noteworthy as only 46 foreign delegations attended the event.  

Besides, during his campaign, Bolsonaro recurrently promised to transfer the Brazilian Embassy from Tel Aviv to Jerusalem, following the path of the US and Guatemala. In his view, as a sovereign state, Israel alone should decide which town is its capital city. This measure, which should satisfy some of Bolsonaro’s domestic supporters, would be a move away from Brazil’s equidistant stance in the Israeli-Palestinian conflict.  

Yet, this measure does not gather unanimity within Bolsonaro’s government in formation. While military officials fear the emergence of security problems by involving Brazil into Middle East geopolitics, economists recognize the importance of the commercial partnership with the Arab world and dread losing access to markets in the region. Brazil is the largest exporter of halal meat; whereas Brazil exported USD 9.3 billion to the League of Arab states from January to October 2018, sales to Israel equaled USD 269.6 million, almost 35 times lower. Yet, Brazil recognizes Israel as a technological pole with large potential for cooperation.  

The transfer led to reactions in the Arab world: the Union of Arab Chambers’ President indicated that Brazilian products would be boycotted by consumers in Arab countries [Link].  Also, in November 2018, Egypt cancelled the visit of then Brazilian Minister of Foreign Affairs Aloysio Nunes, and in January 2019, Saudi Arabia blocked the importation of five out of thirty chicken processing plants for this reason. The risk of retaliation thus seems higher for Brazil than for the US.  

As a result, while Netanyahu declared, after his encounter with Bolsonaro during his trip to Brazil, that the Embassy’s transfer to Jerusalem was only a question of time, the Brazilian government affirmed it was still under evaluation. During his official visit to Israel, Bolsonaro announced the implantation of a commercial representation office in Jerusalem. He went to East Jerusalem, in the heart of the territory occupied by Israel, to visit the Church of the Holy Sepulchre and prayed at the Wailing Wall (with no prior coordination with Palestinian authorities and accompanied by Israel’s Prime Minister). On the other hand, Bolsonaro did not accept Mahmoud Abbas’ offer to visit the occupied territories.  Also, even though he later gave up on the idea, Bolsonaro had considered the withdrawal of Palestine’s diplomatic representation.  

Moreover, Brazil abandoned the traditional voting position (abstention or vote pro-Palestine) during votes in the UN in November 2018 on the Israel-Palestine conflict, and followed Israel and the US on a UN resolution, which condemned Hamas for shooting missiles against Israel. Then, in March 2019, Brazil abstained on the expansion of Israel’s colonies in occupied territories and voted against two resolutions, one calling for justice against violations and crimes supposedly committed by Israel during conflicts in 2018 in Gaza and the other condemning Israel for human rights violations in the occupied Syrian Golan. Since 2006, Brazil had always voted against Israel in 29 resolutions presented by Human Rights Council.