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Brazil-Indonesia and Vietnam Trade Agreements: Positive Perspectives

   In June, studies were published on estimates of a possible partnership between Brazil and Indonesia and Vietnam. In it, several advantages were exposed, such as: attraction of investments, increase in total exports and imports, and also a drop in product prices. According to an article published by the Ministry of Economy two months ago, the agreements had their negotiating mandates approved at the meeting of the Commercial Strategy Council (CEC) in December 2020, and public consultations for society's manifestations were open for participation until 19 July .  

The Brazil-Indonesia relationship

  Brazil's relationship with Indonesia began in 1953, and since then, between visits by presidents, signatures and participation in events in both countries, trade between Brazilians and Indonesians in the last five years has remained at around US$ 3 billion, Indonesia being the 11th main destination for Brazilian exports. The main branch of these products are those related to the Manufacturing Industry, which represent around 80%. Along with him, trade in services also plays an important role, which reached US$30 million in 2019. With the adoption of trade agreements, the study presented shows that there may be a reduction in import taxes for Indonesia and Brazil. For the same period, an increase of BRL 8.8 billion in investments is estimated, BRL 130.3 billion in total Brazilian exports and BRL 95.8 billion in imports, totaling an increase of BRL 226.1 billions in the Brazilian trade chain.

The Brazil-Vietnam relationship

   Following this same line, Brazil's relationship with Vietnam, which began in 1989, is also projected onto a positive path. The study shows that exports of goods from Brazil to Vietnam grew by more than 60% in the last 5 years, while imports grew by more than 40% in the same period, totaling a flow of trade in goods of US$ 4.6 billion in 2019. The shipment of products exported from Brazilians to the Vietnamese is mainly composed of products from Agriculture (69%) and from the Manufacturing Industry (31%). On the other hand, Brazilian imports from Vietnam are composed almost entirely of products from the Manufacturing Industry (99%). In addition to an increase of BRL 15 billion in Brazilian GDP from 2021 to 2040, an increase of BRL 14.2 billion in investments is estimated, BRL 192.8 billion in total Brazilian exports and BRL 149.2 billion in imports , totaling an increase of R$ 342.0 billion in Brazilian trade.

The prospects of the agreements for the Brazilian integration inAsia

   In general, the same article by the Ministry of Economy shows that these agreements are part of a strategy for greater insertion of Brazil in international trade. In total numbers, the economic benefits could reach R$ 1.7 trillion to Brazil by 2040, in addition to the positive effect on investments, on the trade flow (sum of exports and imports), on wages and on the drop in consumer prices. These numbers that add up to optimal performance in relation Brazil - Asia, which occupied almost half of exports in the first half of 2021, totaling about $ 67 billion, as indicated in a published matter by Poder360.

The importance of the help of an international consultancy

   Faced with a positive scenario for Brazilian foreign trade in relation to Asia, entrepreneurs and investors who want to seize the moment is critical follow up with case study for a safer and more assertive investment. An international consultancy, such as the services offered by Prisma, are of great value to obtain a better performance in a product internationalization process and to be successful in carrying out your projects.

By Guilherme Cruz Gomes on 08/03/2021