São Paulo – The pandemic has brought changes to foreign trade, and many of them can become permanent in the daily lives of exporters and importers. The impacts of COVID-19 ranged from negotiation to transportation. Part of the new procedures adopted to face the pandemic situation have proven effective and are expected to stay even after COVID-19.
Experts interviewed by ANBA mentioned changes that are expected to remain in international trade, such as streamlined processes; increased virtual negotiations; development of more solid and trustworthy relations between exporters, importers, and service providers; reduction in bargaining; and a higher importance of the environmental and social agendas in international trade.
The professor of Foreign Trade, International Business and International Logistics of the IBMEC College in Belo Horizonte, Frederico Martini, says that in Brazil, the federal government already had the idea of streamlining procedures for foreign trade, and the pandemic hastened this in some points. “Some documents are now being accepted digitally,” he says. Martini understands, however, that this process is not yet finished, and it took place mainly in Brazil, since in most regions of the world, it was already happening.
The senior consultant for International Trade at BMJ Consultores Associados, Monica Rodriguez, recalls that there were drops and exemptions in import tariffs for products used for fighting COVID in Brazil; there was a reduction of over 50% in the requirement for import registrations. “This means greater agility in imports,” says Rodriguez. She believes the world has understood the need for more promptness in foreign trade.
Another trade facilitator mentioned by Rodriguez and adopted in Brazil during the pandemic was the extension of drawback concession acts. The drawback exempts the company from paying taxes on inputs that will be used in export products. The extension gave more time for the benefit to be used for these exports. There is an expectation for the period to be extended again in 2021.
Transportation
In the transportation of goods between countries, the impacts of the pandemic were vast, with a shortage of ships and containers, a surge in shipping prices, and, as a result, in product prices too. This caused suspensions in services, delays in the delivery of goods, and affected relations between importers and exporters. The sector expects a normalization of logistics by mid-2022, but the lesson learned should remain.
Reservations for goods on ships, which were made a week or ten days in advance before the COVID-19 pandemic, now need to be made five weeks prior to secure shipment on routes such as Asia or Europe to Brazil, reports Martini. “More than ever, we have to give our customers a helping hand, showing what the reality is,” says he, who, in addition to being a professor, works at a multinational company in the logistics area.
Martini believes that a relationship of greater trust has been established between importer, exporter, and logistic service provider due to this scenario. He sees that transparency of information has become essential; furthermore, adjustments based only on prices have been left behind. “Compliance, ethics in negotiations, and reliability between the parties have to be more than ever in the day-to-day activities of companies,” says the professor.
Martini believes this will be permanent. “This is an excellent shift, and it is here to stay; before we lived in a very speculative world of trading, now, I clearly see that my clients want reliability,” he says. The professor at IBMEC realizes this due to the decrease in customer turnover in the segment in which he works.
The specialist understands that there will be a readjustment of the logistics, but it will be in the medium and long term. “The pandemic came to warn: we have to review this structure, we have to review the role of everyone in this logistical structure,” he says. The bottlenecks in logistics were more evident in the COVID scenario. “Without a doubt, the pandemic has brought a puzzle that we need to reassemble,” says Monica Rodriguez regarding transportation.
On the Internet
The negotiation of import and export business itself also changed and migrated to the online environment. “It’s a tool that has also come to bring people together,” says Martini, referring to meetings on platforms such as Zoom. He believes that trading over the internet will remain, but the hybrid model will prevail. “It’s different for you to be at a face-to-face show where there are millions of opportunities for negotiations,” he says, noting that displaying, presenting, and testing the products – what is allowed on-site – is necessary.
Consultant Monica Rodriguez believes that Brazil has realized it needs to have more presence in the international scenario and global production chains. In her perspective, this boosted the effort to streamline agreements and dialogues with some regions, in addition to the modernization and revision of Mercosur tariffs. “This revision has been underway for a long time, but the need for it becomes more pressing with the pandemic due to the whole context, because of the impact on foreign trade in Brazil and other countries,” she stated.
The two specialists interviewed by ANBA also notice that the sustainability agenda has gained strength in international trade with COVID-19. “In addition to the concern with the economic upturn and the comeback to the normal world, there is a considerable environmental concern, and Brazil can not be out of this context,” says Monica Rodriguez.
Martini says there are actions for environmental and social sustainability in companies that operate in logistics. Shipowners, for example, now use cleaner fuels, he says. The professor sees an increasing demand for sustainability in international trading. “The pandemic has brought home how volatile life is. Today you are here, tomorrow you may not be – no one used to think about it. And what companies want to is perpetuating themselves. People pass, but industries remain,” he says.
Translated by Elúsio Brasileiro
