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Edição nº 15
 · Bilateral Relations
 · Arbitration
 · Education
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  Edition nº 15

Bilateral Relations

Meeting of interests

Commercial trade between Brazil and Canada reached $ 4.1 billion in 2007, revealing the importance of official visits for the divulgence of economic potential between the two countries

Ligia Molina

Strengthening official partnerships and cooperation between Brazil and Canada. Beyond these goals, the presence of President Lula in Canadian territory - scheduled to be there from September 23rd to September 25th - reinforces the image of the country as a source of products and services, with emphasis on opportunities for investments and an increase in commercial exchange, which, according to the Foreign Trade Secretariat (FTS) of the Ministry of Development, Industry and Foreign Trade, amounted to $4.1 billion in 2007.

“It was $ 2.4 billion in exports and $ 1.7 billion in imports, representing a surplus of $653 million favorable to Brazil”, says Fábio Martins Faria, director of Planning and Development of the Foreign Trade Department of the Ministry of Development, Industry and Foreign Trade, who explains that this result shows a growth of 17.1% in trade relations between the countries, compared to 2006.

In fact, over the past five years, the commercial trade between Brazil and Canada has increased 22.2%, showing the potential for the following years. “The analysis of the traded products indicates a strong complement to bilateral trade. Moreover, a balanced participation of basic products (10%) and industrial products (89.2%) in export and import - of 19.1% of basics products and 80.9% of industrial products”, completes Faria.

In 2007, while Brazilian exports to Canada registered an increase of only 3.6%, imports of Canadian products in the country grew 43.1%, a fact that, according to the director, also indicates a greater balance in bilateral trade. In the first half of 2008, the figures showed a fall of 13.1% in exports and a growth of 74.6% in Brazilian purchases, a positive balance of $ 431.9 million favorable to Canada. “The challenge from now on is to enlarge bilateral trade, but in a balanced way so that the benefits of this expansion are equitably allocated.”

Brazil ambassador in Canada, Paulo Cordeiro de Andrade, said that trade relations between the countries are going through a growth process, represented by the presence of Brazilian companies in Canadian territory and the interest of the Canadian companies to expand their resources in Brazil. ”The Brazilian mining industry, offers several alternatives for investments, and is a successful example of partnership between Brazil and Canada. In the near future, Brazil will double its capacity in infrastructure, creating new opportunities for its partners worldwide. The country is in fact a great hidden treasure, a huge economy that grows”, he believes.

While the business potential is promising, the 9th world economy still occupies the 17th position among buyers of Brazilian products, accounting for 1.5% of the total exports exported by the country. Canada, in its turn, is not considered a priority for Brazilian business executives, according to the study - What Is The Image of Canada to the Brazilians? - Conducted by the Chamber of Commerce Brazil-Canada, in partnership with Editora Conteúdo and Instituto Gerp. Among the 374 executives from various activity sectors consulted, 94% made confessions that they had never sought business information on the country. “Perhaps one of the reasons why Canada does not present itself as a priority market is related to the countries integration with the United States, taking into account that efforts are more targeted to the latter,” justifies Fabio Faria, citing the acquisition of Inco’s Canadian mining by Vale as a major shift in the direction of Brazilian investments abroad.

Open dialogue – In the middle of this scenario, the official visits have won an important role. In 2007, the dynamic trade between the countries gained huge repercussions with the announcement that Canada intends to double its relations with Brazil until 2012, declared by the Canada General Governor, Michaëlle Jean. “This established target sets in the plans of the Brazilian government, which wants to increase the participation of national exports within the global landscape to 1.25% in 2010 - a rate above the global average,” highlights Faria. To the Ambassador, President Lula’s visit to Canada will open up the dialogue between the countries. The recent conquest of investment grade, for example, offers more reliability to Canadian investors. Moreover, the presence of Brazilian companies in the country has enabled a large knowledge transfer, which contributes to the image of Brazil as  the Canadians major partner,” Faria mentions. According to him, politically speaking, a visit by President Lula to Canada will help to strengthen the ties of friendship and cooperation of mutual interest, making clear that, for Brazil, the country is a partner of prime importance”, adds Faria.

By strengthening this importance, the director believes that Brazilian and Canadian businessmen will have even more proximity in what refers to their economic interests, providing: an approach where both countries view combating the North American and European policy of agricultural subsidies, the convergence of point of views on environmental issues, together may result in united efforts within the framework of the Doha round, a possible technical cooperation in the bio-fuel field; the growing need to seek natural resources and wider markets, besides the greater proximity to the world market. “The expectation is that the inflow of resources to Brazil increase, especially the investments in the productive sector and in infrastructure, identified as promising in terms of direct foreign investment”, completes.

Facing a stable economy, Brazil still needs, in the ambassador´s opinion, to reveal its full potential, compared to other emerging countries. “The colonies of immigrants from China and India present in Canada are countless when compared to Brazilians. Therefore, we need to work for the country to set its brand as an economic power,” assesses Cordeiro.

Considering all opportunities, Faria reinforces that there is enough space for growth of bilateral trade. “For the intersection of data between Brazilian exports and imports from Canada, we observe possibilities of sales expansion by Brazil, both in agricultural products as well as industrial goods.” For him, facing this reality, relations must, soon, be leveraged to a new level, tracking a fruitful path of cooperation, with the growth of trade flows and investment. Despite the climatic and cultural differences, the countries have economically complement which can be explored” he finalizes.

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