Brazil Needs More Imports If It Wishes to Export More

The president of the Foreign Trade Studies Center Foundation (Funcex), Roberto Gianetti da Fonseca, said Friday, December 1st, that Brazil must reduce its trade surplus as a means for controlling exchange and fostering its own exports.

The accumulated trade balance surplus between January and November this year reached US$ 41 billion, the result of exports of US$ 125 billion and imports of US$ 84 billion.

"Exchange will only improve if Brazil exports more, because such a surplus generates a structural imbalance in the exchange rate," he said.

The real (the Brazilian currency) is depreciated against the dollar, which in thesis makes Brazilian products more expensive abroad, thus making them lose competitiveness. Today, the dollar is rated at 2.16 reais. "It is time to have a smaller trade surplus," he claimed.

Gianetti said, though, that for imports to increase, the country must grow further, and this will happen only through reduction of interest rates, tax burden and public expenses.

In Gianetti’s point of view, more favorable exchange rates provides safer exports. He said that, out of the 16% increase in foreign sales recorded this year, the increase in product prices in the foreign market accounted for 12%, whereas the increase in the volume of exports accounted for only 3%. "With regard to worldwide trade, the volume of products increased 8%," he said.

According to the president of Funcex, each US$ 1 billion exported represents the generation of 60,000 jobs. "And nothing leads us to believe that international prices will continue to rise in 2007," he said.

In other words, without a significant increase in the volume of exports, there is no guarantee that the value of Brazilian exports will continue to increase at the same rate.

Anba – www.anba.com.br

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