Strengthening the economic ties between Brazil and Canada stands out among the objectives of every Brazilian ambassador in Ottawa. Trade flows and investments have traditionally sustained bilateral relations. But recent figures show that much more can be achieved.
In 2010, trade was still limited, especially when seen in the context of both countries’ commercial transactions with the rest of the world. Brazilian statistics reveal that our exports to Canada amounted to US$2.3 billion while imports reached US$2.7 billion. Bilateral trade is concentrated. The main Brazilian exports were aluminum oxides, crude oil and raw sugar, accounting for more than 50 percent of the total. Potassium fertilizers, coal and newsprint were responsible for approximately 40 percent of the imports from Canada.
Both countries have recognized the potential to increase and diversify the pattern of trade. Better knowledge of each other’s economic advantages, as well the removal of obstacles to trade, are at the root of our common desire to have Canada and Mercosur (a customs union among Brazil, Argentina, Paraguay and Uruguay) explore the possibility of starting negotiations on a free-trade agreement.
Where investment stock is concerned, the figures are much more revealing. Since 2006, owing to the acquisition of the major Canadian mining company Inco by Vale, a Brazilian company, Brazil has become the fourth largest investor in Canada, just behind the U.S., France and the UK. Brazilian companies have also made major acquisitions in the beverage, cement and steel sectors.
In Brazil, opportunities for Canadian business are promising, especially in the infrastructure sector. By virtue of strong economic growth in the past years, massive investments in upgrading Brazil’s infrastructure will be needed. The Brazilian government has embarked on an ambitious program to accelerate investments in such areas as housing, energy, water and sanitation, urban development and transportation. This initiative is known as the Growth Acceleration Program (PAC). In the next four years, the PAC is expected to attract investments in the amount of US$ 700 billion, from both public and private sources.
Public works are on the top of the government’s agenda, not least because two international games will be held in Brazil: the FIFA World Cup in 2014 and the Olympics in Rio de Janeiro in 2016. Canada has accumulated a wealth of expertise in putting together mega-sports events. Brazil will require substantial investments in infrastructure and services related to those tournaments, as well as for training the staff to manage the many features involved in their operation. A critical sector to be addressed with urgency will be the expansion and modernization of the main Brazilian airports. Also high on the agenda is the construction of a high-speed railway between Sao Paulo and Rio de Janeiro, the expansion of urban metros and the building of numerous hotels.
In addition, Petrobras, the Brazilian oil company, is undertaking a substantial program of investments to put into operation the offshore fields known as “pre-salt.” The initiative will offer big opportunities not only for companies interested in exploring areas allocated under the program, but also for suppliers of off-shore equipment, ships, platforms, pipes, etc.
Nevertheless, Brazil believes that a strong relationship should go beyond economic relations. Cooperation with Canada is possible in many fields. Science and technology, education and tourism are some of the areas in which both countries could be partners.
The outlook is bright on cooperation in science, technology and innovation. A memorandum of understanding, recently signed, has paved the way for joint cooperation of universities and scientific research centres of both countries. Projects are being developed or considered in sectors such as information technology, renewable energies, oceanography, nanotechnology and bio-sciences. Cooperation between educational institutions of both countries will receive an added boost from Brazil’s program to considerably expand the number of Brazilian students benefiting from scholarships abroad.
The significant increase in the flow of passengers between Brazil and Canada has already prompted the conclusion of an open-sky agreement on air services. To facilitate further reciprocal travels, our governments are committed to make less cumbersome the process for issuing visas for multiple entries. This is consistent with the objective to intensify business contacts, student exchange, cultural relations, family ties and tourism.
Canada and Brazil are working together in the G20 to find ways to improve global governance, as well as in the World Trade Organization, to achieve a freer and fairer trading system. Brazil hopes that our efforts could result in making the main multilateral decision-making bodies more representative, legitimate and democratic. Our co-operation with Canada should also extend to our hemisphere, especially in Haiti. Being two major food producers, Brazil and Canada are positioned to develop initiatives to assist the poorest developing countries to fight against hunger and improve their food security.
Brazil is ready to partner with Canada to help build multilateral and hemispheric systems that are able to ensure international peace and security and render more efficient development assistance.
Piragibe dos Santos Tarragô is Brazil’s ambassador to Canada. Reach him at ptarrago@brasembottawa.org or 613-237-1090.
