• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  7. 7
    7
  8. 8
    8
  9. 9
    9
  10. 10
    10
  11. 11
    11
  12. 12
    12
  13. 13
    13
  14. 14
    14
  15. 15
    15
  16. 16
    16
  17. 17
    17
  18. 18
    18

Critically evaluate Brazil's International Trade Policy in terms of key trade issues and primary benefits and limitations of current trade policy

Extracts from this document...

Introduction

Brazil is often painted as a country selling raw materials like coffee and cotton s to its big prosperous neighbour, the United States and buying manufactured goods such as cars in return. Today, the process of economic liberalization initiated in 1990s has produced significant changes in Brazil's trade regime: agricultural exports became less important than manufactured exports and the EU, the United States, and Argentina become the main trade partners. Favourable economic and investment climate results in substantial increase of foreign direct investment (FDI) since 1997. As the economy has become more open and competitive, competition policy is gaining importance in Brazil. This report aims to critically evaluate the Brazil's International Trade Policy in term of key trade issues and primary benefits and limitations of current trade policy are identified. For the tariff and non-tariff barrier, although Brazil has liberalised its trading regime in a substantial manner during the past ten years, but still maintains various barriers to trade of both a tariff and a non-tariff barrier nature hamper its products' access to the world's principal markets and it must be lifted to liberalize international trade. A number of standard methods of export financing are used in Brazil, government direct financing, tax concessions and the Export Finance Programme (PROEX) plays a key role for encouraging export production. But it is necessary to broaden the scope of the Export Financing Program to access to a larger number of companies and improve the competitiveness of Brazilian products on the international market. Although some unfair trade practices still inflict upon Brazil export, the government has increasingly utilising the WTO dispute settlement mechanism to tackle trade dispute. Globalisation indicates Brazil's current import and export trade is becoming deeply intertwined with foreign countries and provides immense opportunities for Brazil to balance import and export trade in principle of free trade. In order to overcome the barriers that restrict free flow of International Trade, Brazil's future trade policy is noted in the light of globalization opportunities and internal trade mechanism. ...read more.

Middle

The policy of interest rate equalization in PROEX program makes great contributions to the export production and sales. In order to improve the competitiveness of Brazilian products on the international market, the major step was to broaden the scope of the Export Financing Program and make its operations accessible to a larger number of companies. Brazilian commercial banks, and subsidiaries of international banks are active in trade finance are active in trade finance. They can provide direct loans to exporter so that export can get bank financing of receivable. Now Brazilian commercial banks are becoming more aggressive in providing export financing for Brazilian firms, especially for small, medium or large Brazilian companies investing in capital goods, raw materials, infra-structure, energy or technology which substantially accelerate the export trade (National Import and Export Profile, 1999). 3.5 Foreign Trade Zones Foreign Trade Zones(FTZs) are areas in which domestic and imported merchandise can be stored, inspected, and manufactured free from formal customs procedures until the goods leave the zones (Daniels and Radebaugh, P.555). FTZs are important trading patterns in Brazil because increasing trade activities occurs under FTZ status. Brazilian government benefits substantially from using free zones more intensively, not only for the attraction of foreign investments but for inducing domestic firms to engage in export production. The role of free trade zones in Brazil is to provide a bureaucracy-free environment, free trade conditions such as duty free machinery, equipment and materials and stability for both local and foreign investors who want to process raw materials for export. Till now there are eight Free Trade Zones in Brazil. Manaus, which has been the most important free trade zone in Brazil, is extensively developed to create an industrial, commercial and agricultural center in Amazon (Trade Policy Review Body, 2000). The Free Trade Zone status implies that goods of foreign origin may enter into the Manaus free port without the payment of customs duties or other Federal, State or local import taxes. ...read more.

Conclusion

Available from: http://web20.epnet.com/citation/browse&_cdi=5817&view/SWVHX5-880c25.pdf [Accessed 15th April 2004] * Wall, S. and Rees, B., 2001, Introduction to International Business. 1st ed. London: Prentice-Hall * Daniels, J. D. and Radebaugh, L. H., (2004). International Business: Environments and Operations. 10th ed. New Jersey: Prentice Hall International Inc. * Hill, C.W., (1997). International Business: Competing in the Global Marketplace. 2nd ed. New York: McGraw-Hill. * Rugman, A.M. and Hodgetts, R.M., (2000). International Business: A Strategic Management Approach. London: Prentice-Hall. * Wall, S. and Rees, B., (2001). Introduction to International Business. 1st ed. London: Prentice-Hall Table 1. Brazil Economic Performance 1999 2000 2001 Nominal GDP (US $bil) 555 610 650 Real GDP Growth Rate (%) 0.8 3.0 4.0 GDP Per Capita (Current $US) 3,400 3,700 3,850 Gov't. Spending as a % of GDP 10.0 4.0 3.0 GDP: Composition by sector: Agriculture 15% 9% 10% Industry 26% 29% 32% Services 59% 62% 58% Annual Inflation Rate % /2 8.4 5.6 4.0 Unemployment Rate % /3 7.5 8.0 8.0 Avg. Exchange Rate (Real/U.S. dollar) 1.82 1.85 1.9 Foreign Exchange Reserves (US $bil) 36.3 40.0 40.0 Source: CIA World Factbook, CountryWatch.com, Country CommercialGuide Table 2. Brazil Import/Export Data 1999 2000 Exports $46.9 billion $55.1 billion Export-commodities manufactures, sugar, soybeans, footwear, coffee Exports-partners U.S. 18% 23% Argentina 13% 11% Germany 5% 5% Netherlands 5% 5% Japan 4% 5% Imports $48.7 billion $55.8 billion Imports-commodities machinery & equipment, chemical products, oil, electricity Imports-partners U.S. 23% 24% Argentina 12% 12% Germany 10% 10% Japan 5% 5% Italy 5% 5% Source: CIA World Factbook Table 3: Product-Specific Aggregate Measurement of Support (millions US$) Crop 1986 1995 1996 Wheat 437 41 26 Coffee 377 11 10 Rise 239 47 22 Soybeans 130 59 45 Maize 94 73 88 Sugar 77 19 16 Other Crops -- 33 30 Total 1354+ 283 237 Committed -- 1039 1025 Actual Support as % of Maximum -- 27% 23% Source: International Trade Statistics Course: MSc International Business Author: Cao Li (0309584) International Business Coursework 1 Co-ordinator: David Lal ______________________________________________________________________________ Page 1 of 18 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Marked by a teacher

    Assess the importance of international trade to the UK economy

    4 star(s)

    production of goods in which it can actually produce more than another country. If this process took place, then world production would increase, through trade, and each country would be at an advantage. This theory has been influential in the way that free trade has increased especially after the Second

  2. Marked by a teacher

    Analyse and Evaluate the significance of Fiscal Policy rules and Fiscal Policy targets and ...

    4 star(s)

    and National Demand (Net Exports) via Exchange Rates as when the interest rate ? so the does the currency's strength. So if the rate of interest increases, so does the strength of the pound, meaning that there is an ?

  1. Robert Keohane and Joseph Nye have described international relations as exhibiting 'complex interdependence'. What ...

    The US government could of course have stopped this from happening but due to the complex levels of linkages between US-Canadian trade issues they knew that it would be in their long run interest to hold their tongues and use it to their advantage at a later date.

  2. 'Critically assess the role of the World Trade Organisation (WTO) as a means of ...

    is the only international organization dealing with the global rules of trade between nations...its main function is to ensure that trade flows as smoothly, predictably and freely as possible...the past fifty years have seen an exceptional growth in world trade...merchandise exports grew on average by 6% annually...total trade in 1997

  1. The value of world trade has been growing at a faster rate than world ...

    come as frequently, nor be as 'breakthrough', and thus will not have the same effect as before. As a result, world GDP is likely to begin to grow at the same rate as world trade in the future. Another source of the rise of globalisation is the reduction in trade barriers.

  2. Write a written report on Globalisation

    De-regulation of global financial markets: This has included the removal of capital controls in many countries which facilitates foreign direct investment. Differences in tax systems: The desire of multi-national corporations to benefit from lower labour costs and other favourable factors abroad , the development and the exploitation of fresh comparative

  1. Assess the view that the main cause of globalization is the increased significance of ...

    However over recent years it can be argued that countries may be introduction protectionist measure after the 2008 financial crash in order to protect their domestic industries, such as the American steel industry which was subsidies by the government. This could be argued that there has been a decrease in trade liberalisation, yet there are still improvements from years ago.

  2. The benefits and harm caused by Transnational Companies.

    With the addition of TNCs into the host countries, it adds to their economic activity. Instead of usual sectors such as agricultural sectors, the host country now can venture into the manufacturing and service sectors.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work