Brazil carries the mantle of being the 8th largest economy in the world, and according to the IMF, it is soon to leapfrog Italy in 2011 and become the 7th largest. With a $2 trillion economy, Brazil’s economy surpasses Russia, India and South Korea. To add more muscle to its current stature, Brazil is the world’s fourth largest food exporter, and is the world’s 16th largest oil producer.
What Brazil has done differently than other Latin American countries is that it vehemently looked for new markets near and abroad to increase exports. For example, in March 2010 Brazil finalized a trade agreement with Israel, where it is expected to increase trade in the sectors of education, science, agriculture, and medicine, cementing Brazil’s status as Israel’s largest trading partner in Latin America.
In July 2010, Brazil and Kenya signed six agreements as a foundation for future investments in various fields; one of the agreements will allow 5,000 Kenyan students to study at a Brazilian university in various fields.
In April 2010, Brazil and China signed new trade deals that include a plan to build a new steel plant in Brazil by the Chinese.
In November 2010, Brazil and Mexico announced the start of negotiations that could lead to a “strategic economic integration accord” between the two countries. This has the potential to cause many economical waves, due to the fact that Mexico and Brazil are the largest economies in Latin America. Together they make up 74 percent of the region’s gross domestic product.
Brazil has also developed other trade relationships with specific countries that have raised a few eyebrows in the international community. For example, Brazil continues to expand trade with Iran and is Iran’s top trade partner in Latin America. Just last year trade with Iran grew by 4.3 percent to $1.3 billion.
Brazil also spearheaded trade talks with Palestine and the South American trading bloc Mercosur (Argentina, Brazil, Paraguay and Uruguay). According to Palestinian officials, trade between the two countries could exceed $200 million a year.
Interestingly, Brazil has recently purchased 50 military helicopters and five submarines from France for supposedly offensive military strategies.
And in the last six years, trade between Brazil and Saudi Arabia, Bahrain, Kuwait, Qatar, Jordan, Oman, Lebanon and Syria has escalated from $2.5 billion to $6.89 billion. This figure indicates that Brazilian trade in the Middle East is robust, and it appears more is to come.
Why is Brazil so eager to establish trade relationships near and abroad? The answer might be twofold, and it offers a glimpse of Brazil’s new posture in the international arena. First, Brazil is adamant in forming new economic opportunities in the developing world, which gives it an opportunity to enable dialogue and cross-cultural exchanges through trade diplomacy.
Brazil is a good neighbor when it comes to regional trade. It purchases petroleum from Venezuela and Argentina, natural gas from Bolivia, and the Brazilian Development Bank invests in electric energy in Paraguay. Brazilian companies have also invested in Colombian oil and mining, the transportation infrastructure in Peru, and vastly in Argentina’s potassium. Trade within Mercosur and the Andean Community (Colombia, Ecuador, Bolivia and Peru) has dramatically increased between 2000 and 2009—86 percent and 253 percent, respectively. Just by looking at the sheer numbers, it comes to nobody’s surprise that Brazil has become the leading voice of South America, with ambitions of spreading its brand globally.
Brazil is not simply driven by commercial interests; it has genuine aspirations of being a pivotal player in international affairs. In essence, Brazil’s trade policy has a foreign policy element of strengthening (or perhaps improving) Brazil’s influence. For example, in regards to Iran, former President Lula, albeit unsuccessfully, attempted to broker an alternative to UN sanctions to Iran’s nuclear ambitions.
Brazil is a leading voice internationally in the energy and green movements, attributing 40 percent of its energy consumption to renewable sources. At the United Nations, Brazil has campaigned for a Security Council seat next to Great Britain, Russia, U.S., France, and China.
If Brazil continues to increase trade internationally, expand its economy, and further reinvigorate the middle class within its’ own borders its future looks promising. Adopting the forces of globalization can continue to open new paths for Brazil, enabling it to provide a fresh way of doing business internationally.
By. Oscar Montealegre
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