An agreement between Brazilian and US customs will facilitate exports
2 min readSeven years after the start of negotiations, Brazil and the United States signed a Mutual Recognition Agreement (ARM) that formalizes the partnership between the Authorized Economic Operator (OAS) programs, companies that operate directly in foreign trade. Henceforth, Brazilian companies certified as AEO will be recognized as safer and less risky, and as a result, the percentage of inspections of Brazilian exports to the North American country will decrease.
Through the agreement, the customs of the countries recognize the companies that operate the international logistic chain with the guarantee of the security of the cargo and the tax and customs regulations. The United States is Brazil’s second largest trading partner, accounting for 14% of Brazil’s exports, according to the federal government.
“This agreement is important because it reduces the so-called transaction costs, which are the costs of expediting exports. Once the agreement is in place, companies operating in this international market will be able to predict the movement of goods and have an easier time moving trade. That should really have effects on exports and imports,” the economist said. Renan Pierre assesses.
According to the Ministry of Economy, in the last three years, the companies of the OAS program are responsible for 17% of exports to the United States.
Trade balance surplus
Brazil’s balance of exports and imports remained positive in August. By the end of 2022, Brazil should have one of the world’s largest surpluses, according to economist Cesar Perco. In the eighth month of the year, the Brazilian trade balance ended with a positive balance of US$4.16 billion, according to data released by the Ministry of Economy’s Foreign Trade Secretariat (Secex). As a result, the accumulated positive balance in 2022 is raised to USD 44.05 billion.
“Exports are setting records month after month. The surplus is projected to reach US$80 billion by the end of this year, essentially one of the largest in the world. The stock numbers are good, especially for the agribusiness sector, which is very consistent”, highlights Perko.
The positive number reflects the amount of exports, which grew by 8.4% to reach USD 30.84 billion, and imports rose by 30.5% to reach USD 26.68 billion. According to Secex, this is the highest value of exports for the eighth month of the year.
According to Secex, growth in exports in August was driven by an increase in volumes shipped, mainly in the manufacturing sector (+15.7%), but also in agriculture (+10.7%). Both segments showed higher cost of goods sold, which boosted export values.
According to Renon Pierre, the good performance of balance is due to real stability. “This is due to a certain stability of the national currency, which stopped appreciating as it did in 2021, and mainly due to the rise in commodity prices. Brazil, as a commodity exporter, benefits from this cycle, in which products are more valuable in the international market,” he estimates.
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