Brazil's overall trade flow (the sum of imports and exports) increased from US$63.8 billion in 1993 to US$97.2 billion in 1999, a 52 percent rise. Most of the increase in trade flow is due to the 94 percent increase in imports, from US$25.3 billion to US$49.2 billion. Exports increased by 24 percent during the same period, from US$38.6 billion to US$48 billion.
From 1981 until 1994, Brazil exported more than it imported. Beginning in 1995, however, Brazil began to run a trade deficit , due to the stabilization policies adopted by President Fernando Henrique Cardoso. Since then, the imbalance has grown considerably. Brazil's
|Trade (expressed in billions of US$): Brazil|
|SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.|
trade deficit increased to record numbers in 1997, to US$6.8 billion. This continued in 1998 at US$6.6 billion, but in 1999, the trade deficit decreased to US$1.2 billion. Forecasts for the year 2000 are that exports will exceed imports. The decrease in the deficit can be attributed to the devaluation of the real in 1999.
The primary trading partners of Brazil are the United States and Argentina. The United States is the major importing country of Brazilian goods. Exports to the United States reached US$9.7 billion, representing 19 percent of all exports (this percentage has been the same since 1996). Major exports were manufactured goods, iron ore, soybeans, footwear, and coffee. Argentina was Brazil's second largest exporting destination with US$6.7 billion, or 13 percent; followed by Germany with US$3 billion, or 6 percent; the Netherlands with US$2.7 billion, or 5 percent; and Japan with US$2.2 billion, or 4 percent.
Major imports come from the United States. In 1998 Brazil imported goods valued at US$13.5 billion, representing 23 percent of all imports. Major imports were machinery and equipment, chemical products, oil, and electricity. The second largest imports come from Argentina with US$8 billion, or 14 percent of the total imports to Brazil; followed by Germany with US$5.2 billion, or 9 percent; Japan with US$3.3 billion, or 6 percent; and Italy with US$3.2 billion, or 6 percent.
Brazil is a member of the General Agreement on Tariffs and Trade (GATT) and the Law of the Sea treaties. Brazil is also member of MERCOSUR, a South American free trade agreement that includes Argentina, Paraguay, and Uruguay. Bolivia, Chile, and Venezuela were being considered for membership to the MERCOSUR free trade area.