Pablo Fonseca P. dos Santos

1
External Trade in Brazil Recent Developments

• Pablo Fonseca P. dos Santos

Paris - OECD November 22, 2004
2
Graph I Nominal and Real Exchange Rate1, 1998 -
2004 (October)(index July 1994 100)
2
3
Graph II Trade Balance, 1998 - 2004
(October)(US billions accumulated over 12
months)
3
4
Table I Exports by Main Markets, 1997 and 2004
(US billions)
4
5
Graph III Exports Quantum by Class of
Products(12 months moving average)
Source Funcex.
5
6
Table II Exports by Main Products, 1997 and
2004 (US billions)
6
7
Some Facts About the Structural Component of the
Brazilian Trade Performance

• Liberalizing reforms of the 1990s
• - Privatizations
• - Reduction of trade tariffs
• Some industry examples
• - airplanes
• - steel
• - textiles
• FDI
• - automobiles
• - mobile phones
• RD and investments in the agricultural sector

8
Graph IV Export Quantum, 1997 - 2004 (
change over previous year)
8
9
Graph V Exports of Goods and Services, 1999 -
2003
9
10
Table III Balance of Payments, 1998 - 2005(US
billions)
10
11
Table IV Balance of Payments Selected
Indicators, 1998 - 2005
11
12
Table V External Debt Indicators, 1999 - 2004()
12
13
Will Export Performance Keep Up?

• Brazilian firms are increasingly becoming more
  export oriented
• Policies to incentive exports
• Macroeconomic Stability
• - Necessary but not sufficient condition
• Microeconomic Reforms Agenda
• - Improvement of the business environment
• - Reduction of the cost of credit
• - Infrastructure investment (PPP, regulatory
  framework)
• - Improvement of the tax structure
• - RD (new law being discussed by the Senate)
• - education
• Trade negotiations
• - High tariffs and non tariff restrictions on
  products that Brazil is more competitive

14
Table VI Improving Business Climate Structural
Reform Checklist
14