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Private Sector

A product of the Private Sector Outreach of the Office of Trade Negotiations (OTN), formerly the CRNM

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CARICOM-BRAZIL IMPORT OVERVIEW Brazil remains a lucrative, but under exploited, market for the region’s exporters. CARICOM has been developing stronger trade linkages with Latin America including establishing trade ties with Venezuela, Colombia, Cuba, Costa Rica and the Dominican Republic. However, there is still the need for a clear approach to establishing a stronger trade alliance with the largest Lin American market Brazil, which could assist in facilitating regional economic development. CARICOM incurred a significant

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merchandise trade deficit with Brazil in 2009. CARICOM’s merchandise exports to Brazil increased by over 31% annually between 2001 and 2009 (see figure 1). Merchandise imports from Brazil expanded by 32% annually over the same period, exacerbating the problem of the trade deficit, and indicating some loss of international trade competiveness for the region’s private sector vis‐a‐vis Brazilian firms. However CARICOM and Brazil are increasing their trade dependence. CARICOM firms increased their dependence on Brazil for export earnings from 0.04% in 2001 to 0.15% in 2009. Additionally, CARICOM importers sourced an increasing share of their total merchandise import spending from Brazil. In 2005, CARICOM sourced over 5% of its total import expenditure from Brazil, and this increased to just under 14% in 2008, making Brazil an important import source for the region. Brazil is also a significant global services import market. In 2007, the Brazilian market absorbed over US$37bn in services imports, growing from US$16.7bn in 2000. The fastest growing services imports in Brazil between 2000 and 2007 included legal services (62% growth in import spending per annum between 2000 and 2007); construction in the compiling economy (59%); other direct insurance (34%); operational leasing services (23%); other transport services (21%); passenger air transport (19%); telecommunications (18%); and architectural, engineering and other technical consultancy (13%). These areas provide a long list of services opportunities that CARICOM service providers can explore.

CARICOM’S EXPORTS TO BRAZIL CARICOM’s exports to Brazil are mainly resource based from Trinidad and Suriname. In 2009, Trinidad was the main CARICOM merchandise exporter to Brazil, generating over 92% of total export earnings. Suriname (4% of earnings), the Bahamas (1%), Jamaica (1%), Barbados and Guyana were the remaining notable exporters in 2009 (see figure 2).

Haiti was the most dynamic exporting country from CARICOM to Brazil between 2001 and 2009 with merchandise exports expanding by over 81% per annum. Other dynamic exporting nations were Suriname (70% growth per annum); Jamaica (63%); Guyana (58%); and Trinidad and Tobago (39%). Notable declines in exports were observed for The Bahamas, Barbados, Grenada and Antigua and Barbuda. CARICOM exporters have intensified the export thrust to Brazil in that in 2001, fewer than 20 tariff lines were exported, whilst in 2009, 137 tariff lines were exported. Many of the top exports to Brazil included extractive resources such as Ammonia, LNG, Urea and Aluminium Oxide (see table 1). The most dynamic exports to Brazil between 2001 and 2009 included anhydrous ammonia (42.9% growth per annum between 2001 and 2009); essential oils (107%); and undenatured ethyl alcohol (74.3%).

The recently opened Takutu Bridge (right) links Guyana and Brazil

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CARICOM’S EXPORTS TO BRAZIL CARICOM’s exports to Brazil are mainly resource based from Trinidad and Suriname. In 2009, Trinidad was the main CARICOM merchandise exporter to Brazil, generating over 92% of total export earnings. Suriname (4% of earnings), the Bahamas (1%), Jamaica (1%), Barbados and Guyana were the remaining notable exporters in 2009 (see figure 2).

Haiti was the most dynamic exporting country from CARICOM to Brazil between 2001 and 2009 with merchandise exports expanding by over 81% per annum. Other dynamic exporting nations were Suriname (70% growth per annum); Jamaica (63%); Guyana (58%); and Trinidad and Tobago (39%). Notable declines in exports were observed for The Bahamas, Barbados, Grenada and Antigua and Barbuda.

CARICOM exporters have intensified the export thrust to Brazil in that in 2001, fewer than 20 tariff lines were exported, whilst in 2009, 137 tariff lines were exported. Many of the

Brazil will host the upcoming 2016 Olympiad

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top exports to Brazil included extractive resources such as Ammonia, LNG, Urea and Aluminium Oxide (see table 1). The most dynamic exports to Brazil between 2001 and 2009 included anhydrous ammonia (42.9% growth per annum between 2001 and 2009); essential oils (107%); and undenatured ethyl alcohol (74.3%).

CARICOM’S IMPORTS FROM BRAZIL St. Lucia was the top importer from Brazil in 2009, with its imports representing over three‐quarter of the region’s total imports. Trinidad and Tobago (10%), Jamaica (7%), the Bahamas (2%) and Suriname (1%) jointly account for another 20% of total imports from Brazil (see figure 3). St. Lucia was the most dynamic CARICOM importing nation from Brazil between 2001 and 2009, recording almost 40% growth in import spending from Brazil per annum. Other dynamic importing nations were the Bahamas (27%), St. Kitts and Nevis (28%), Antigua &

Barbuda (21%), Suriname (20%) and Grenada (18%). The top import from Brazil in 2009 was crude petroleum oils which represented over 77% of CARICOM’s total import expenditure from Brazil. CARICOM importers source a large number of products that are also produced regionally (competing products). These products include poultry, sugar, wooden doors and frames, paper products, tobacco products, bovine meats and dairy products (condensed milk). These are areas that could be sensitive to competition from Brazilian imports.

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The fastest growing imports from Brazil observed between 2001 and 2009 included paints and varnishes based on polyesters (79.4% growth per annum in import spending); AC generators (alternators) of an output exceeding 75 KVA (41%); check valves (72%); finishing agents, dye, for use in the textile industry (104%); upright freezers not exceeding 900 litres capacity (54%); worked monumental/building stones , granite (52%); rotary positive displacement pumps (66%); fowls (gallus domesticus) meat, prepared/preserved (132%); tubes, pipes and hoses of plastic (95%); frozen swine cuts (51%); animal feed preparations (127%); maize (corn) groats and meal (70%); prefabricated buildings (55%); sausages (75%); milk and cream sweetened (35%); and crude petroleum (44%). These products are important indications of areas in which the private sector could be facing more import competition from Brazilian imports. Next issue will look at CARICOM‐Chile Trade Performance. Please continue suggesting topics of interest for future trade notes to lincoln.price@crnm.org

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