Gaidar Institute for Economic Policy

26-27 June 2012, Moscow, Russia

2

Brazil – Russia Dialogue: Economic Policy Challenges27 June 2012

Session 4“Managing Foreign Trade in a

Globalized World (1)”

CHAMBER OF FOREIGN TRADE (CAMEX)

Presidency of the Republic of Brazil

André Luís Ribeiro BarbosaTechnical Assistant / Foreign Trade Analyst

Presentation outline

1. Introduction: Living in a Changing World

2. Brazilian Trade Policy: the role of CAMEX

3. An Overview of Brazilian Foreign Trade

4. Bilateral Trade: – Brazil X Russia– Brazil X BRICS

5. Foreign Trade in a Globalized World: Final Considerations

1. Introduction: Living in a Changing World

The World has changed….

…and is changing

The world is not only living a financial crisis, it is going through a massive change: a new reality is on the way, and very fast

No right answers, no ready answers, but new questions

Emerging countries taking the lead (economic growth, population growth, savings and investments, consumption, access to technological progress…)

Developed countries stagnated

The World is changing…

… and will continue to change

(2005) only two Developing Countries among the ten largest economies: China 5th and Brazil 10th

(2010) China 2nd , Brazil 7th, India joins the group 9th

(2011) China 2nd, Brazil 6th, Russia replaces India 9th

Juggernaut: How Emerging Markets Are Reshaping Globalization (Uri Dadush and William Shaw)

(2050) Six out of the seven largest economies will be Developing Countries 3.3 billion people will reach middle or upper class (2 X current situation) Most of those will be in Developing Countries 70% of global trade will be have Developing Countries instead of today’s 1/3

2. Brazilian Trade Policy:The Role of CAMEX

CAMEX (Presidential Decree nº 4.732/2003)

Formulation, coordination and implementation of policies and activities related to foreign trade

Definition of major orientations regarding foreign trade Final decision on the adoption of trade defense

measures Coordination of agencies and trade facilitation

initiatives Establishment of guidances for free trade negotiations Fixation of import tariffs and tariff exemptions Decision on export financing

CAMEX

CÂMARA DE COMÉRCIO EXTERIOR

PRESIDENCY OF THE REPUBLIC / Council of

Government

CAMEX

Council of Ministers

GECEX COFIGCONEX

Executive Secretariat

GTFAC GTDC GTAR 08/08 GTI-LETEC GTCOP GC MERCOSUL UE

Composition

• Ministry of Development, Industry and Foreign Trade

• Ministry of Finance

• Ministry of External Relations

• Home Affairs Office

• Ministry of Planning and Budget

• Ministry of Agriculture

• Ministry of Agrarian Development

GTFAC Technical Group of Trade Facilitation

(CAMEX Resolutions nº 70/2007 and nº 16/2008)

Scope: to advise the Council of Ministers on the formulation and implementation of trade facilitation policies

Operation: coordination and integration of all different governmental agencies dealing with register, license and control of imports and exports aiming trade facilitation principles

3. An Overview of Brazilian Foreign Trade

BRAZIL

13Câmara de Comércio Exterior - CAMEX

Territorial Extension:8.511.965 Km2

Sea boundaries:7.367 km

Land boundaries15.735 km

5 Geographical Regions26 Political entities (States)

and 1 Federal District

Pop. 2010:190 million

GDP 2011: US$ 2,5 trillion

6th largest economy

35 Internacional Airports37 Public Ports

42 Private Terminal Ports64 “Dry” Ports

24 Land Entry Points

Trade Balance EvolutionUS$ Billions – 2002-2011

-5

95

195

295

395

495

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Corrente / Tradeflow Exportação / Export Importação / Import Saldo / Surplus

2011 2010 Δ% 2011/10

Exports 256.040 201.915 26,8

Imports 226.243 181.768 24,5

Surplus 29.796 20.147 47,9

Trade Flow 482.283 383.684 25,7

Brazilian Trade Balance

2011/2010US$ Million

Brazilian Exports - Evolution 2002-2011

US$ Millions

60.43973.203

96.677

118.529

137.807

160.649

197.942

152.995

201.915

256.040

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Products Categories of Exports% Share - 2002-2011

54,7 54,3 55,0 55,1 54,4 52,3 46,8 44,0 39,4 36,1

14,8 15,0 13,9 13,5 14,2 13,613,7

13,414,0

14,1

28,1 28,9 29,5 29,3 29,2 32,136,9 40,5 44,6 47,8

2,4 1,8 1,6 2,1 2,2 2,1 2,6 2,1 2,1 2,1

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Oper. Esp. / Special Operations Básicos / Primarios / Basics

Semimanufaturados / Semimanuf. Manufaturados / Manufact.

Value Δ% 2011/10

% Share

Total Export 256.040 26,8 100,0

Basics

122.457 36,1 47,8

Manufactured 92.291 16,0 36,1

Semimanufactured 36.027 27,7 14,1

Exports Evolution by categoryUS$ Millions - 2011

Value Δ% 2012/11 % Share

Total Export 74.646 4,5 100,0

Basics

34.622 4,5 46,4

Manufactured 28.379 6,0 38,0

Semimanufactured 9.811 -0,9 13,1

Exports Evolution by categoryUS$ Millions - January–April – 2012

Índice de QuantumQuantum Index

Índice de PreçoPrice Index

Price and Quantum Index of Exports% Growth – 2011/2010

2,9 3,65,6

1,7

23,2

31,3

20,9

14,1

Total Básicos / Basics Semimanuf. /Semimanuf.

Manufat. /Manufact.

ValorValue

Δ % 2011/10

Part % % Share

1 – Minérios / Minerios / Ores 44.217 43,4 17,3 2 – Petróleo e combustíveis / Petroleo y combustibles / Oil and fuel 31.008 35,5 12,1 3 – Material de transporte / Transport material 25.120 15,5 9,8 4 – Complexo soja / Soja y derivados / Soybeans & prods 24.154 41,1 9,4 5 – Produtos metalúrgicos / Productos metalúrgicos / Metallurgic products

17.387 34,3 6,8

6 – Açúcar e etanol / Azúcar y etanol / Sugar & ethanol 16.432 19,3 6,4 7 – Químicos / Chemicals 16.234 20,5 6,3 8 – Carnes / Meats 15.357 15,5 6,0 9 – Máqs. e equipamentos / Máqs. y aparatos / Machines & equipments

10.457 27,7 4,1

10 – Café / Coffee 8.700 51,6 3,411 – Papel e celulose / Papel y celulosa / Paper & pulp 7.189 6,2 2,812 – Equipamentos elétricos / Aparatos eléctricos / Electrical equipment

4.811 -0,1 1,9

13 – Calçados e couro / Calzados y cuero/Footwear & leather 3.659 4,1 1,414 – Têxteis / Textiles 3.012 33,0 1,215 – Metais e Pedras Preciosas / Metales preciosos y piedras / Precious metals

and Stones

2.961 30,4 1,2

Main Products Exported

US$ Millions - 2011

Major Markets for Brazilian Exports

% Share - 2011

30,0

22,4

10,9

11,5

20,7

10,1

4,8

4,8

2,0

Ásia / Asia

América Latina e Caribe / Latin America & TheCaribbean

- Mercosul / Mercosur

- Demais da AL e Caribe / LA & The Caribbean, exc.Mercosur

União Européia / European Union

Estados Unidos / United States

Oriente Médio / Middle East

África / Africa

Europa Oriental / Eastern Europe

,

Exports Share % by Economic Blocks

2011

76

19

52

34 6431 50 33

14

4

16

2015

27 38 25

10

77

32

46

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Manufaturados / Manufactured

Semimanufaturados / Semimanufactured

Básicos / Basics

ValorValue

Δ %2011/10

Part %% Share

1 – China 44.315 43,9 17,3

2 – Estados Unidos / United States 25.805 33,7 10,1

3 – Argentina 22.709 22,6 8,9

4 – Países Baixos / Países Bajos / Netherlands 13.640 33,4 5,3

5 – Japão / Japón / Japan 9.473 32,7 3,7

6 – Alemanha / Alemania / Germany 9.039 11,1 3,5

7 – Itália / Italia / Italy 5.441 28,5 2,1

8 – Chile / Chile 5.418 27,2 2,1

9 – Reino Unido / United Kingdom 5.230 12,8 2,0

10 – Espanha / España / Spain 4.706 20,9 1,8

11 – Coréia do Sul / Corea del Sur / South Korea

4.694 24,8 1,8

12 – Venezuela 4.592 19,2 1,8

13 – França / France 4.319 20,8 1,7

14 – Rússia / Russia 4.216 1,6 1,7

15 – Bélgica / Belgium 3.960 13,9 1,6

Major Countries for Brazilian Exports

US$ Millions - 2011

Exporter States Value % Share Value % Share

Brasil 256.040 100,00 Ceará 1.403 0,55

São Paulo 59.909 23,40 Alagoas 1.372 0,54

Minas Gerais 41.393 16,17 Pernambuco 1.199 0,47

Rio de Janeiro 29.445 11,50 Amazonas 914 0,36

Rio Grande do Sul 19.427 7,59 Amapá 603 0,24

Pará 18.337 7,16 Rondônia 490 0,19

Paraná 17.394 6,79 Tocantins 486 0,19

Espírito Santo 15.159 5,92 Rio Grande do Norte 281 0,11

Mato Grosso 11.100 4,34 Paraíba 225 0,09

Bahia 11.016 4,30 Distrito Federal 184 0,07

Santa Catarina 9.051 3,54 Piauí 164 0,06

Goiás 5.605 2,19 Sergipe 122 0,05

Mato Grosso do Sul 3.916 1,53 Acre 17 0,01

Maranhão 3.047 1,19 Roraima 15 0,01

Exports by Company Size

% Share by Value of 2010

Micro e Pequena Empresa /

Small enterprise

1,0%

Média Empresa / Medium enterprise

4,1%

Grande Empresa /

Large enterprise94,8%

Pessoa Física / Physical person

0,1%

Brazilian Exports Share % in World Exports

2002 - 2011

0,960,99

1,08

1,16 1,17 1,18

1,26 1,25

1,36

1,44

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Imports Evolution2002-2011US$ Millions

47.243 48.32662.836

73.600

91.351

120.617

172.985

127.722

181.768

226.243

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Import by Product Categories

Share % - 2002–2011

49,6 53,5 53,5 51,3 49,6 49,3 48,0 46,8 46,2 45,1

13,213,6 16,4 16,2 16,6 16,6 18,2

13,1 14,0 16,0

12,511,5 10,9 11,5 13,1 13,3 13,0

16,9 17,3 17,7

24,7 21,4 19,3 20,9 20,7 20,8 20,8 23,3 22,6 21,2

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Bens de Capital / Bienes de Capital / Capital Goods Bens de Consumo / Bienes de Consumo / Consumption Goods

Petróleo e Combustíveis / Petróleo y Combustibles / Oil and Fuel Bens Intermediários / Bienes Intermedios / Intermediate Goods

Price and Quantum Index of Imports

% Growth

2011/2010

Índice de QuantumQuantum Index

Índice de PreçoPrice Index

8,9

12,915,3

27,1

3,86,5

14,3

4,5

9,3

5,8

38,4

12,8

Bens de CapitalBienes de Capital /

Capital Goods

Bens de consumo não-duráveis

Bienes de consumo no duraderos /

Non-durables consumption goods

Bens de consumo duráveis

Bienes de consumo duraderos /

Durables consumption

Petróleo e Combustíveis

Petróleo y Combustibles /Oil and Fuel

Bens Intermediários

Bienes Intermedios /Intermediate Goods

Total

ValorValue

Δ % 2011/10

Part % %

Share

1 – Combustíveis e Lubrificantes / Combustibles y Lubricantes / Fuel and Oil 41.968 40,1 18,5

2 – Equip. Mecânicos / Aparatos Mecánicos / Mechanical Equipment 33.703 18,1 14,9

3 – Equip. Elétricos e Eletrônicos / Aparatos Eléctricos y Electrónicos / Electrical and Electronical

Equipment

26.395 18,6 11,7

4 – Automóveis e partes / Vehículos y partes / Motor Vehicles and parts 22.621 30,9 10,0

5 – Químicos Orgân. e Inorgânicos / Químicos Orgánicos e Inorgánicos / Organic and Inorganic

Chemicals

11.765 14,9 5,2

6 – Fertilizantes / Fertilizantes / Fertilizers 9.138 84,9 4,0

7 – Plásticos e Obras / Plásticos y Obras / Plastics and its Products 8.104 24,3 3,6

8 – Ferro, Aço e Obras / Hierro, Acero y Obras / Iron, Steel and its Products 7.583 -3,8 3,4

9 – Farmacêuticos / Farmacéuticos / Pharmaceuticals 6.499 6,7 2,9

10 – Instr. Ótica e Precisão / Aparatos de Óptica y Precisión / Optical and Precision Equipment

6.302 3,4 2,8

11 – Borracha e obras / Goma y obras / Rubber and its products 5.103 27,9 2,3

12 – Cereais e produtos de moagem / Cereales y productos de molinería / Cereals and milling

products

3.245 16,5 1,4

13 – Cobre e suas obras / Cobre y obras / Cooper and its products 2.775 12,4 1,2

14 – Aeronaves e Peças / Aeronaves y partes / Airplanes and its parts 2.516 9,7 1,1

15 – Filamentos e fibras Sintét. E Artif. / Filamentos y Fibras Sintéticas y Artificiales / Synthetic

and Arificial Filaments and Fibers

2.342 20,1 1,0

Main Products Imported

US$ Millions - 2011

Major Suppliers Markets to Brazil

% Share - 2011

31,0

20,5

16,7

8,6

8,1

15,1

6,8

2,7

2,3

Ásia / Asia

União Européia / European Union

América Latina e Caribe / Latin America & TheCaribbean

- Mercosul / Mercosur

- Demais da AL e Caribe / LA & The Caribbean,exc. Mercosur

Estados Unidos / United States

África / Africa

Oriente Médio / Middle East

Europa Oriental / Eastern Europe

ValorValue

Δ %2011/10

Part %% Share

1 – Estados Unidos / United States 33.962 25,6 15,0

2 – China 32.788 28,1 14,5

3 – Argentina 16.906 17,1 7,5

4 – Alemanha / Alemania / Germany 15.213 21,2 6,7

5 – Coréia do Sul / Coreia del Sur / South Korea

10.097 19,9 4,5

6 – Nigéria / Nigeria 8.386 41,7 3,7

7 – Japão / Japón / Japan 7.872 12,7 3,5

8 – Itália / Italia / Italy 6.222 28,6 2,8

9 – Índia / India 6.081 43,3 2,7

10 – França / Francia / France 5.462 13,8 2,4

11 – México / Mexico 5.130 33,0 2,3

12 – Chile 4.569 9,3 2,0

13 – Canadá / Canada 3.553 30,9 1,6

14 – Taiwan 3.509 13,0 1,6

15 – Reino Unido / United Kingdom 3.376 7,0 1,5

Major Supplier Countries to Brazil

US$ Millions – 2011

4. Bilateral Trade: Brazil X Russia

4. Bilateral Trade: Brazil X BRICS

5. Foreign Trade in a Globalized World:

Final Considerations

A changing world…

What to do?

A new economic reality requires new trade approach• Global companies

Market orientation: one eye out, one eye in:

balance between external market X domestic market New currencies must take over Multilateralism X Regionalism RISKS:

• geopolitical tensions• multiple financial crises• protectionism • climate change

Multilateralism: the stalemate

at the core of the WTO

WTO is complete: Welcome Russia! Doha “Development” Round stuck

(dismantlement of the “single undertaking”) USA X emerging countries (the blame game)

Preassures:

• “Early harvest” - mainly on trade facilitation• Regional integration and the Trans Pacific Partnership (TPP) effect• Financial crisis and the advance of protectionism

Challenges

and opportunities

ahead!

Goverments must follow the timing of the businesses –quick answers

Trade facilitation means competitiveness: transparency, predictability, speed, intelligent risk analysis, elimination of unnecessary burdens and controls, coordination among agencies, customs working for economic operators

Diversification of products and destinies Reorientation of trade relations – new economic alliances Sustainability

46

THANK YOU!

CHAMBER OF FOREIGN TRADE (CAMEX)

Presidency of the Republic of Brazil

Esplanada dos MinistériosMinistério do Desenvolvimento, Indústria e Comércio Exterior Bloco “J”, 7º andar, sala 700Brasília – DF, CEP: 70053-900

Telephones: + (55 61) 2027-7050 / 2027-7090Fax: + (55 61) 2027-7049camex@mdic.gov.br