Brazil and its most important trading partner, China, have agreed to key new bilateral trade deals, expected to generate USD1.5bn in business and lower barriers to entry to the Chinese market for higher added-value products from Brazil.

Brazilian authorities have concluded a significant trade mission to China, during which they sought a diversification of commercial partners, the expansion of exports, including the incorporation of products of a higher added value, the development of bilateral investment, and the identification of business opportunities. According to Brazil's Ministry of Development, Industry and Foreign Trade, the Ministry of Foreign Affairs, and the Brazilian Agency for Export and Investment Promotion, the mission resulted in approximately USD1.5bn of business.

In 2010, Brazil and China signed an agreement designed to facilitate trade between two of the world's largest emerging economies, but the countries have been unable to reach a consensus on a full free trade deal. Nevertheless, in 2010, Brazilian exports to China exceeded USD51.1bn, with imports totalling USD42.4bn. These figures represent a substantial increase in trade between the two countries, for, as government figures show, in 2002, Brazil exported just USD4.1bn worth of products to China, and imports amounted to only USD1.6bn. Brazil's main exports include iron ore, crude oil, aircraft, manganese ore, cut granite, leather, meat, vegetables and orange juice.

A signed statement by both China and Brazil highlights a recognition on the part of both parties of the potential for cooperation. It shows willingness on the part of Chinese authorities to encourage businesses to increase their imports of higher added-value products from Brazil, and in addition, reaffirms Brazilian commitment to addressing the issue of recognizing China as a market economy.

Key market agreements were also reached. Direct Chinese investment, such as USD300m in the building of a soybean processing plant in northeastern Brazil, USD300m in the information technology industry in center-western Brazil, and the announcement of the construction of a research and development centre in southeastern Brazil, forms part of the deal. An aviation partnership between Embraer and the state-run Aviation Industries of China, and the sale of 200 Embraer aircraft to Chinese operators was also agreed to. Furthermore, USD250m will be invested in the creation of Chinese distribution centres by Brazil's Marfrig Group. A number of agreements were also announced that will create a platform for the expansion of new investment in the promotion of Brazilian exports to China: the seeking of opportunities in the energy sector, led by Eletrobras and the State Grid Corporation of China; an agreement between the Bandeirantes TV channel and China's CCTV on an exchange of television programs, and technical cooperation between Petrobras, Sinochem and Sinopec.

April 19^th, 2011

Source: tax-news.com

 

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