After eight years of economic and trade liberalization, Brazil has changed from a net exporter to a net importer with an overall trade deficit of $6.4 billion in 1998. This shift has forced business and government leaders to rethink their export strategy. In 1998, they developed a national export strategy called the Special Export Program (PEE, in Portuguese).

The PEE is designed to increase exports through a joint effort between the public and private sectors. It addresses 58 sectors of the economy, including 15 related to agriculture, food, and forest products. A Foreign Trade Board (CAMEX) was created to coordinate the functions of foreign trade under the responsibilities of several Ministries. CAMEX is under the Office of the President.

The Brazilian Ministry of Agriculture and Food Supply (MAA) has a goal to specifically increase agricultural and food product exports. The 15 priority sectors for export promotion are sugar and alcohol, coffee, soybean oil and meal, beef, pork and poultry, fruits (mostly tropical fruits), orange juice, tobacco, rum, wine, chocolate and confectionary, wood products, furniture, and hides and skins. FAS estimates that the Brazilian government’s export promotion budget for 1998 was US$17.3 million, a substantial increase over previous years’ budgets.

In 1997, the Brazilian government created a new National Export Promotion Agency (APEX), aimed at promoting Brazilian products overseas and bringing more small- and medium-size businesses into the export business. APEX began work in 1998, with a special fund of $50 million to be allocated on a yearly basis.

Several export market development trade organizations work with APEX. These include ABEF (Brazilian Poultry Exporters Association), ABECS (Brazilian Pork Exporters Association), ABIEC (Brazilian Beef Industry and Exporters Association), IBRAF (Brazilian Fruit Institute), ABICAB (Brazilian Cocoa and Confectionery Manufacturers Association), ABIMCI. (Brazilian Plywood Industry and Exporters Association), ABRABE (Brazilian Beverage Association), CICB (Confederation of Brazilian Hides and Skins Industries), ABECITRUS (Brazilian Association of Orange Juice Exporters), ABIOVE (Brazilian Association of Oilseed Crushers), and SRB (Brazilian Rural Society). Matching funds provided by APEX cannot be over 50 percent of the total export promotion budget of each organization

The Brazilian government does not provide direct subsidies to exporters, but does offer a variety of tax and tariff incentives to encourage production for export, and to encourage the use of Brazilian inputs in exported products. Although most of these incentives are for the production of durable goods for exports, processed and semi-processed agricultural products have also benefitted from these incentives. The best estimate for the total value of subsidies on goods incorporated into export products of agricultural origin is $850 million during 1998.

Brazil is not only a major exporter of agricultural and food products ($17 billion in 1998), but it is also a major importer ($6 billion in 1998). Foreign competitors have increased their market promotion activities in Brazil, including diplomatic and trade missions, and trade shows. There was a slowdown in promotional efforts by the United States’ major competitors in 1998 due to the uncertainties generated by the poor economic performance of the country. U.S. competitors are now more selective in trade show participation, and have concentrated their marketing efforts on niche markets and specialty products, such as wine, cheeses, frozen vegetables, nuts, temperate fruits, such as apples, pears and stone fruits. Mercosur, principally Brazil, has been declared a priority country for trade expansion activities by France, Germany, Great Britain, Netherlands, Spain, and Italy. These countries have staged high-profile trade missions to Brazil. Argentina and Chile also have targeted Brazil for market promotion, mostly for high-value food products, such as canned products, honey, wheat flour, and dairy products.

Last modified: Monday, August 29, 2005