Phasing out quotas on Brazil

Trade barriers and import tariff

Brazil has been one of the biggest exporters and producer of crude oil petroleum, soybean and
soybean products, bituminous coal. Brazil is largely an export oriented economy and the trade
balance has also been positive so far. The imports in Brazil are subjected to several kind of taxes
and fees which is paid at the time of custom clearance process. There are mainly three kind of
taxes that accounts for the imports in bulk namely, the import duty, industrialized product tax
and the merchandise and service circulation tax. In addition to these taxes there are several kind
of other taxes as well which are smaller but applys to the imports. Most of these taxes are
calculated on cumulative basis.
The regulatory market of Brazil has been quite complicated so, doing business can be very
challenging. Duplicative, arbitrary, or sometimes discriminatory regulations have been
mentioned by U.S. companies as barriers to trade in Brazil. There have also been uncertain
customs systems, high and unpredictable tax burdens, and an overburdened legal system for
doing business in Brazil. Recently, Brazil has taken some significant steps to ease these
regulatory burdens and implementation of good regulatory practices. Brazil has also begun an
extensive regulatory review and reduction effort.

Import Quotas in Brazil -

Brazil generally does not apply any absolute quotas but it does have a number of tariff- rate
quotas. There is no limitation on the amount of the product that may be entered during the quota
period, but quantities entered in excess of the quota for that period are subject to higher duty
rates.

Current Trends-
 There has been an increase in public debt to about 90% of the GDP in 2020.
 In 2020, The GDP of Brazil decreased by 4.1%
 In 2021, the GDP of Brazil increased by 4.6%. This has been enough to cover the losses
of 2020.
 Inflation forced the Central bank to increase rate to 13.25% in 2022, up from a low of 2%
in March 2021.
 Brazil has temporarily reduced import tariffs for 87% on all the kind of tariff lines.
 Exports in Brazil has decreased to 26645.30 USD Million in December from 28164.50
USD Million in November of 2022.
 Brazil Exports
35000
32766.476
30770.1
29647.517 29848.6
30000 29399.041 28619.9 28164.5
28953.976
26937.6 26645.3

25000
23511.628

20000 19781.386 Brazil Exports

15000

10000

5000

0
January February March April 2022 May 2022 June 2022 July 2022 August Septem ber October N ovem ber Decem ber
2022 2022 2022 2022 2022 2022 2022 2022

Brazil Exports –
The economy of Brazil is export – oriented when means they depend more on the exports and
shipments. This includes the shipment of Raw materials which comprises of 50 percent of total
exports and manufactured goods at 36 percent. Most of the exports of Brazil includes Soybeans
and soy related products which comprises of 17 percent of total exports ; transport equipment
and components contributing 12 percent, oil and oil related products at 13 percent. Most of the
exports of Brazil goes to China , US , Argentina, Netherlands and Chile.

Brazil Exports By country-

Brazil Exports by country Last Previous

China 6531.71 7107.74 USD Million

European Union 3776.06 4470.94 USD Million

Argentina 977.63 1192.59 USD Million

Netherlands 778.67 914.51 USD Million

Chile 704.25 856.64 USD Million

Spain 703.27 893.15 USD Million

India 684.87 544.71 USD Million

Brazil Exports by Category-

Brazil exports by category Last Previous

Primary products 12337.31 9904.72 USD Million

Manufactured Products 8269.69 6830.95 USD Million

Mfg Prds – Crude oil 4666.47 4580.60 USD Million
Semi manufactured products 3750.43 3555.50 USD Million
Mfc prds- fuel oils 519.39 410.56 USD Million
Semi Mfc Prds- Crude Soyabean 183.19 213.90 USD Million
Mfc Prds - Ethanol 128.61 68.70 USD Million

How G20 can promote Brazil

Brazil has started foreign policies that aims to expand the country’s presence in the global
political and economic negotiations, multilateral institutions and regional affairs. Brazil has
strengthened the relations with India, China and US it has remained engaged with Russia and
European Union. The foreign policy aims at a humanitarian impact of military action with a view
of balancing peace, solidarity and globalization.
Brazil will take over G20 Presidency in the year 2024, after India. Due to COVID- 19 crisis and
Ukraine there have been some political, social and economic consequences. It has affected the
developing health, employment, food security, energy security, poverty reduction and rising
inflation.

The role of WTO in trade

The view in Brazil in terms of trade is overall positive. There are shortcomings and there is a
need to develop and work a lot for it. The G20 has changed the dynamics of agricultural
negotiations from Blair House Model to NG-5 model when it comes to the concern of decision
making.

Soybeans Exports
Brazil is the world’s largest soy producer and exporter. Soy has been the largest export of Brazil
in 2021. China has been the primary buyer of soybeans, but the demand of soybeans has been
reduced in the year 2022. China has postponed the purchases with the expectations that US
harvest will put pressure on prices. In the year 2019 to 2020 with the expansion of soy plantation
total deforestation and conversion of native vegetation across Brazil also increased. The
expansion of soy plantation became the second largest direct driver of deforestation and
conversion with Expansion of pasture for cattle farming and land speculation being the first. But
after that, the rate of deforestation and land conversion driven by the soy production slowed. It is
expected that Brazil will make a new record amount of soybeans in 2022-23 on the availability
of greater supplies. ( Foreign Agricultural Service of the US Department of Agriculture)

Crude Oil
Exports of Manufacturing Products - Crude Oil in Brazil increased to 4666.47 USD Million in
December from 4580.60 USD Million in November of 2022. In 2020, Brazil became the 11th
largest exporter of Crude Petroleum in the world with an export of $ 19.8 B. At the same time,
crude oil became the 3rd most exported product of Brazil. Most of the Crude oil is exported to
countries like China, United States , India , Spain and Portugal. Nations like Portugal, South
Korea and Singapore is the fastest growing export market for Brazilian Crude Petroleum
between the years 2019 and 2020. Not just exports, Brazil has also become the 31 st largest
importer of Crude Petroleum in the world in the year 2020. The Crude Petroleum is the 14 th most
imported Brazilian product. The major supply of crude petroleum in brazil comes primarily from
Saudi Arabia, United States, Nigeria, Algeria, and Iraq. The fastest growing markets of import
between the year 2019 and 2020 were Argentina, Angola, and Peru. The trade balance have been
positive so far.

Bituminous Coal

This is basically dense coal which is usually black, sometimes dark brown and is used primarily
as fuel in steam- electric power generation, with substantial quantities for heating up power
applications in manufacturing. The moisture content of Bituminous coal ranges from 21 to 30
million. It is the most abundant coal in the regions of United states which are actively mining.
The brazil production of coal has fluctuated a lot in the recent years. Between the period 2002-
2021 it has substantially increased.

Bibliography
HKTDC Research
Trading Economics – Brazil Exports
Global Edge – Brazil Trade Stat0073
WTO , documents data and resources
Ministry of External affairs – Foreign Relations with Brazil
Stockholm Environment Institute
World Grain
OEC World