Trade deals could generate impact of US$320bn for Brazil through 2040

A series of trade accords being negotiated by Brazil with various blocs and countries could generate a positive impact of 1.7tn reais (US$320bn) for the country’s economy through 2040, according to the government.

Brazil, via South American trade bloc Mercosul (or Mercosur), is in talks on trade agreements the European Union, the European Free Trade Association (EFTA), Canada, South Korea, Singapore, Indonesia and Vietnam.

According to a study by the country's foreign trade secretariat (Secex), part of the economy ministry, if the talks conclude successfully there will be a positive impact of 1.4% on GDP, in addition to an increase in investments and wages, and a reduction in consumer prices. 

“The negotiation of trade agreements is one of the pillars of the strategy for inserting Brazil in the international economy, promoting competitiveness and economic development for the country," said foreign trade secretary Lucas Ferraz in a release.

OTHER INITIATIVES

The Brazilian government is also working to strengthen ties with countries to attract investment in infrastructure projects. 

The country has a partnership with the Global Infrastructure Hub (GI Hub), an initiative of the G-20 – comprising the world’s 20 largest economies – to support a sustainable and inclusive infrastructure agenda. The GI Hub estimate is that, from 2020 to 2022, infrastructure projects auctioned in Brazil will reach US$44.7bn.

A program established at the end of 2019 called Programa de Engajamento do País (Country Engagement Program), in partnership with the Brazilian government and supported by IDB and several international government agencies operating in the infrastructure area, helped Brazil to structure infrastructure projects, acting in four main pillars: consultation on port privatizations; data collection and studies on long-term private financing for infrastructure; a benchmarking study on risk mitigation strategies in terms of foreign currency; and improving the capacity to prepare projects.

According to Erivaldo Gomes, Brazil's secretary of international economic affairs, the partnership with GI Hub is aligned with Brazil's focus on increasing private sector participation in infrastructure, using different models to meet its needs and best international practices. 

"We have a constant dialogue with the market, because this is fundamental for structuring good projects, also to mitigate risks. This initiative helps to attract the investor, because it shows that there is a guarantee regarding risk control," infrastructure minister Tarcísio Gomes de Freitas said during an event hosted by local bank BTG Pactual.