EXPORT GROWTH GIVEN TOP PRIORITY

Despite a large fall in exports to Argentina, the opening of new markets in China, India, Russia, and the Middle East have more than compensated for the loss

Brazilian exports are a potentially explosive sector and one in which President Lula’s government has placed top priority. The country’s exports registered phenomenal growth of 21% in 2003, albeit aided considerably by the depreciation of the national currency, the Real, and generated revenues of $60 billion. However, external trade has traditionally represented a very small percentage of Brazil’s GDP, hovering between 10% and 15% throughout the last twenty years, when the norm for developing countries was between 30% to 40%. This means that the export sector has considerable room to grow and experts predict at least 10% year on year growth throughout the next decade.

Furthermore, opportunities for FDI on the part of U.S. companies abound, as high interest rates in the country are a limiting factor in domestic business expansion.

The government has implemented initiatives to support export development among the country’s small and medium-size enterprises and the country’s principal export promotion agency, APEX, has been working to promote the international image of ‘Made in Brazil’. According to APEX President, Mr. Juan Manuel Quirós, the agency participated in over 200 projects in the first three months of 2003 and attended 45 international events, generating $50 million in contracts with an expected turnover of $256 million in the first six months of the year. He states, “Brazil is experiencing a period which is very conducive to foreign investment, and our agency actively promotes opportunities for doing business in the country. APEX is available for those who want to export and for those who want to buy. At the same time, investment in the production line is most welcome, especially in the sectors that need significant investment, such as the electronics, chemical, and pharmaceutical industries.”

JUAN MANUEL QUIRÓS President of APEX

The exploration of new non-traditional markets for Brazil, such as Russia and China, is also beginning to pay off. Brazil ran a record trade surplus of around $13 billion in 2002 despite a 50% fall in exports to Argentina, Brazil’s second largest market after the U.S. Increased exports to new markets such as China (up 32%) and Mexico (up 25%) offset this loss, and the trade surplus for 2003 was forecasted for $16 billion. Minister of Development, Industry, and Foreign Trade, Mr. Luis Fernando Furlan, says, “Export is the keyword of this administration, and we are beginning to target the less traditional markets such as China, India, and the Middle East. It is our intention to deliver double-digit growth in the next four years. We have also made contacts with European Union countries, in particular, Italy.”

Brazilian aerospace company, Embraer, is among the country’s leading exporters. Vice President of Corporate Communications, Mr. Horacio Aragones Forjaz says the company is ready to launch a new aircraft in the 70-110 passenger range and has taken orders from U.S. Airways and Jet Blue for 185 of these new planes. In 2002, Brazil’s leading export to the U.S. was finished aircraft, and over half of Embraer’s exports are destined for the country.