The Role of Brazil's Trade

Brazil is the largest country in the South America, and the economy is the world's seventh largest by nominal GDP. Recent year, Brazil has been talked a lot because it is one of main emerging countries. The economy of Brazil increase very fast and many businessmen in china have concerned this big market.

Brazil’s trade increases very fast in the recent years. The main trade countries are China 15%, United States 10%, and Argentina 9%. The main exports of Brazil are transportation equipment, iron ore, soybeans, footwear, motor vehicles, concentrated orange juice, beef, and tropical hardwoods. The main imports include Machinery, electrical and transportation equipment, chemical products, oil, and electronics.

Agriculture of Brazil is a major part of economy, and it is also the main factor for economic growth and foreign exchange. Agriculture accounts for 6 percent of GDP and 36 percent of exports. Brazil has a trade surplus of $55 billion in agriculture part in 2009. Brazil is also the world’s largest biofuels exporter and sugar-based ethanol makes up over 50% of its vehicle fuel usage.  Brazil is the largest FDI recipient in Latin America and account for half of all South America’s incoming FDI, which was estimated to increase about USD 33 billion.

To increase export, the government tries to access foreign market through trade negotiations and increased export promotion. Brazil has been a leading member in the WTO’s Doha Round negotiations. The Rousseff administration is also trying to strengthen the trade ties with developing countries, such as Mercosul customs union with Uruguay, Paraguay, and Argentina. Mercosul contribute a free trade arrangement with Israel and Egypt. The trade relationship with other countries help Brazil to develop export industries, it also demonstrates that the international trade is important for Brazil’s economy.

According to openness concept, the Brazil’s openness is about 20 percent, which is still low in the countries, and many people still in the poverty. The government should lower the protection to increase trade with other countries. To create jobs, the policy need to focus on attract FDI by providing a better development environment and domestic investment by tax deduction for some area.