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Brazil’s Foreign Trade Tops US$ 200 Billion for First Time

Brazil trade relations with other countries exceeded, for the first time, US$ 200 billion in a 12-month period, between April 2005 and March of this year.

The Ministry of Development, Industry and Foreign Trade released the trade balance with the new numbers and Foreign Trade Secretary, Armando Meziat, celebrated the accomplishment.

According to him, even though this volume represents less than 2% of world trade, numbers show that Brazil is advancing in the process of opening its economy.

The Secretary recalled that current external trade represents 25% of Brazilian Gross Domestic Product (GDP) and added, "The ideal for open economies is that this volume reaches 30% of the GDP." Exports totaled US$ 123.245 billion and imports, US$ 77.446 billion.

Meziat said he believes that external sales will easily reach the 2006 goal of US$ 132 billion.

Small Exporters

In spite of the government’s efforts to get more small businesses into the export sector, a study by the Ministry of Development, Industry and Foreign Trade found that 1,069 small businesses stopped exporting in 2005.

A preliminary analysis of the study shows that 75% of the small businesses that stopped exporting had little experience in the sector, reports Meziat.

Meziat says the valorization of the real against the dollar, which makes Brazilian goods more expensive abroad, was an important factor. He adds that the study found that the average value of exports by businesses that left the sector was US$ 20,000. However, the study also found that businesses entering the sector had average sales of US$ 23,000.

Agência Brasil

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  • Show Comments (2)

  • Guest

    Nice post
    For the first time I see someone writing a clear, interesting and neutral post about Brazil.

    Personnaly, I think that any country that gets richer than its nightbours, will have to tolerate an influx of foreign workers and also other disadvantages like you said.

    Nonetheless, this should not be a reason to stop trying to progress as Brazil is doing now. Live is a game. This applies both for a single person and even for a nation. If Brazil do not undertake risks, it won’t never move ahead.

    Expect to see more critical and neutral posts based on the truth of you on this site.

  • Guest

    Brazilian Industry
    As a non-Brazilian but with close personal connections to the country I was very interested in this article. Certainly it looks like Brazil’s economy is growing and will continue to grow but eventually there will be a price to pay. We all know that Brazilian industry has over the years been mainly geared to supplying the domestic and Mercosul markets. They have done this mainly on the back of cheap labour costs. The average Brazilian blue collar worker currently earns approximately US$180 per month. However, is this surge in interest in Brazilian products temporary? Will it start to fade as Brazil’s trade partners grow to realise that Brazil’s hugely expensive and bureaucratic import duties and procedures will not reduce or disappear quite as quickly as they hope?

    Also, will Brazilian industry have to go through a re-structuring process in order to keep Brazilian products globally competitive? If so, this could easily see many less efficient companies going out of business and others having to automate their production lines much more. This in turn will require more investment which in turn will diminish profits etc. Also, during this initial growth period workers will see their employers profits growing and could then start demanding higher salaries.

    As Brazil grows stronger in relative terms compared to its neighbours, will it start to suffer an increase in illegal immigration from those neighbours who in turn will no doubt be willing to work for less per hour than Brazilian workers. What are the likely social consequences of that?

    Personally, I feel Brazil is facing a major period of transition which will see it either go on to become one of the world’s major industrial powers or possibly implode as the majority of the population become even worse off than they are now.

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