Isaura Daniel
São Paulo – United States and Japanese participation in Brazilian export is dropping in percentage terms. The North Americans answered to 22.52% of Brazilian foreign trade in May 2003, a figure that dropped to 20.51% in the same month this year. The Japanese share, in turn, dropped from 3.19% to 2.76%.
Far from being bad news, this figure variation is justified, largely, by an increase in export to less traditional destinations like Africa, the Middle East, China, and Russia. The diversification of country customers on the foreign market is making traditional buyers, like the United States, the European Union (EU), and Japan lose participation in the trade balance.
The North American country, for example, despite from having increased import from Brazil by US$ 1.3 billion from 2002 to 2003, dropped in participation from 25.44% to 22.84% in the same period. The same occurred to the EU, which purchased US$ 3 billion more, but lost in percentage points, from 25.4% to 24.77%.
"The more consolidated markets have been creating a number of non-tariff restrictions and Brazil has gone after new markets," stated Evaldo Alves, International Economy specialist at Getúlio Vargas Foundation (FGV) Business Administration College, in reference to the United States and the European Union.
Among the barriers are the establishment of import quotas for specific kinds of products, phytosanitary demands, and agricultural subsidies.
Brazil has been selling the agricultural products that have been barred from entering the USA and EU to these so-called alternative countries. There are currently Brazilian disputes at the World Trade Organization (WTO) against both regions. The disputes include soy, corn, cotton, and orange trade.
New partners
In the mean time, new partners are gaining in participation. Africa, for example, increased its import from Brazil by 21% last year as against the 2002 result, the Middle East 20%, China 79%, and Russia 19%. Revenues of US$ 1.2 billion obtained with sales to the Middle East, between January and May this year, for example, have already surpassed trade with Japan, US$ 988 million, which is a traditional Brazilian trade partner.
The region increased its participation in Brazilian trade from 3.10% in May last year to 3.77% in May 2004. Africa rose from 3.6% to 3.7%.
Export revenues to these alternative markets are still small if compared to those to the North Americans and Europeans, which purchased over US$ 30 billion last year, almost half the Brazilian export. Shipping however, should continue rising.
Free trade agreements negotiated between South American and Arab countries, such as the Mercosur (a customs union between Argentina, Brazil, Paraguay, and Uruguay) and Egypt, for example, should help increase trade. The same should occur if an accord between Brazil, Russia, India, and China is put in practice.
Diversification
Foreign Trade Association of Brazil (Abracex) superintendent Benedito de Sanctis Pires de Almeida says that it is healthy for Brazil to diversify. "Brazil must work on increasing the number of markets, products sold, and also companies that export," he stated.
According to Pires de Almeida, the country has conditions to continue selling to its traditional markets and still selling to new destinations. Last year, 17,600 Brazilian companies exported. "But Brazil has around 30,000 companies capable of exporting. We must make them participate continuously in foreign trade, not only occasionally," he stated.
FGV economist Evaldo Alves recalls that Brazil exports just 10% to 12% of its production, whereas the so-called "Asian Tigers" sell 40% of their products on the foreign market. "There is a lot of space for growth," stated Alves.
