November 28, 2022
Brazil-US trade hit a record high of US$42.7 billion

Brazil-US trade hit a record high of US$42.7 billion

Brazil recorded a record value in international trade with the United States in the first half of 2022. A study by the Amsam Chamber of Commerce shows that the exchange of goods between our country and the United States is a total of 42.7 billion US dollars. A 43.2% increase compared to the first six months of last year. According to experts, Brazil’s entry into the Organization for Economic Co-operation and Development (OECD) tends to further improve this relationship with trade with other world powers.

Fabrizio Panzini, Superintendent of Government Relations at Amcham, explains that the record identified by the Brazil-US trade watch is one of the main reasons for the international situation that has increased the exchange of goods in the energy sector, such as oil and natural gas. Petroleum oils, and various other products are in high demand in the US.

“In addition, the international situation has created a certain shortage for some products that Brazil needs, such as fertilizers, which has an increase of more than 200% in purchases from the United States. In the case of exports from Brazil to the United States, the topic of oil is also very important and there was a large increase in crude oil sent by Brazil to the United States,” said Fabrizio. points out. “Certain types of other products such as coffee, beef, aircraft and wood products were also high on the agenda.”

International trade with the United States and other world powers, more than 60% of GDP, and Brazil’s entry into the OECD, a group of more than 60 countries, will grow even more, the Amcham watchdog believes. % of International Trade. “The OECD brings together the best practices of public policies in many areas such as education, taxation, environment, international trade, investments etc. Therefore, among these good practices that Brazil can absorb is to be more inserted in the OECD, precisely to improve its business environment and improve the rules to receive more foreign investment and more participation in import and export flows in international trade. ”, he points out.

The United States has been a strong supporter of Brazil joining the system. During a visit to the country in April this year, US Undersecretary for Economic Development, Energy and Environment Jose W. Fernandez emphasized that it is important for Brazil to align its actions with values ​​and standards. The OECD said it would attract more investors, create more direct and indirect jobs in various sectors and improve international trade relations with many countries, including North America.

Renan Gomes De Pieri, Economist at Fundação Getulio Vargas (FGV-SP) Historically, Brazil has always had a very strong trade relationship with the United States, which was Brazil’s main trading partner for decades, until it was replaced by China. . He believes that Brazil’s entry into the OECD could increase this trade not only with the North American country, but also with other developed countries.

“Joining the OECD requires improvement in Brazil’s institutional environment. Also, this progress will take the country to another level of openness by participating in foreign trade. “This increase in trade is very important for Brazil because the dollars coming into the country through exports, the high value of the domestic currency and the import of more goods from other countries means lower costs for companies, more technology, especially when we talk about importing capital goods,” explains Renan.

According to the economist, more dollars than expected in Brazil alone will bring many benefits to the country, boosting economic growth in this post-pandemic period. And, according to him, this is a small example of how much we can get back by joining the OECD.

The industry excels in exports

Brazil’s exports to the US in the first six months of 2022 grew by 31.9% to record US$17.7 billion. The previous highest value in the same period occurred in 2019: R$ 14.7 billion.

Transformation and extractive industries stand out in exports. The top exports to the United States during this period were semi-finished products of iron and steel, up 7.3% from the previous year, in addition to crude oil, which increased by 121%.

Reflections on the conflict in Ukraine

The war between Russia and Ukraine has had a direct impact on exports of goods from the energy and fuel sector, mainly oil and derivatives, fertilizers, chemical inputs, etc. As a result, the demand for these products from other countries has increased significantly, especially in Brazil.

According to data from Amcham’s Trade Monitor, 43.7% of total US domestic imports came from purchases of energy products, particularly fuels and oil products, natural gas, crude oil and coal. Demand for these products was so intense that Brazil’s exclusive imports from the US increased by 52.4% compared to the previous semester.