São Paulo, 23 April 2007

Transcription

1 1/38 BRAZIL AND CANADA: TRADE FUNDAMENTALS AND PROSPECTS FOR FURTHER COOPERATION São Paulo, 23 April 2007 Durval de Noronha Goyos Jr. Noronha Advogados São Paulo, Rio de Janeiro, Brasília, Curitiba, Porto Alegre London, Lisbon, Miami, Los Angeles, Buenos Aires, Shanghai

2 POINTS OF PRESENTATION 2/38 1. Geographic Considerations 2. Political l Considerations 3. Macroeconomic Fundamentals 4. Trade Between Brazil and Canada

3 3/38 GEOGRAPHIC CONSIDERATIONS B RAZIL

4 4/38 POLITICAL CONSIDERATIONS Executive Power PRESIDENCY The President of the Federal Republic of Brazil is the head of state and the head of government elected to a mandate of four years. The President is also the supreme commander of the Brazilian Armed Forces. President Mr. Luiz Inácio Lula da Silva Mandate MINISTRIES - 23

5 5/38 POLITICAL CONSIDERATIONS Division i i of Power Palácio do Planalto Executive Power The President, who is elected to a fouryear term, with one re-election allowed National Congress Legislative Power Two separate chambers: Federal Senate and Federal Chamber of Deputies. Federal Supreme Court Judiciary Power Federal Supreme Court Brazilian legal system is based on Roman Law

6 6/38 POLITICAL CONSIDERATIONS Judiciary Power Brazilian Superior Courts STF Federal STJ Superior TST Superior TSE Superior Supreme Tribunal of Labor Electoral Court Justice Court Court

7 Political considerations EXECUTIVE POWER 7/38 Ministeries Avenue

8 8/38 POLITICAL CONSIDERATIONS The Financial Sector Central Bank

9 9/38 POLITICAL CONSIDERATIONS The Brazilian Financial i System National Monetary Council Bank of Brazil Central Bank BNDES Brazilian Securities Commission Financial Institutions Stock Exchanges Private Financial Institutions Development Commercial Investment Multiple Distributors Stockbrokerage Banks Banks Bank Banks Companies Houses

10 10/38 MACROECONOMIC FUNDAMENTALS The Brazilian Economy in the 21 st Century consolidation of democracy stabilisation ti of the economy trade liberalisation resumption in foreign direct investment massive privatization program pre-emptive strengthening of financial sector end of distinction between foreign and domestic companies resumption of economic growth end of monopoly in telecommunications, oil and gas great development of services sector leadership in agribusiness massive trade surplus

11 11/38 MACROECONOMIC FUNDAMENTALS Brazilian Achievements During the First Mandate of Lula s Presidency major investments on electricity production and transmission i resumption of train and ship industry aircraft industry exports reached US$ 11 billion in 2005 development of flex fuel engines cellular phone production jumped from 35 million in 2002 to 75 million in 2005 over 50 Brazilian companies opened branches and facilities in Europe and Ai Asia nearly 30 Brazilian companies opened business at the New York Stock Exchange Brazilian Risk Rating dropped almost 1,000 points reaching the lowest level in January 2006 (220 points) Brazilian inflation dropped from 30% (2002) to 5% (2005)

12 12/38 MACROECONOMIC FUNDAMENTALS Main problems yet tt to be solved taxes are not competitive; interest rates are very high; exchange rates are overestimated.

13 MACROECONOMIC FUNDAMENTALS 13/38 Brazil s GDP in US$ * GDP (US$ ,5 506,8 599,0 174,6 177,9 181,5 2,61 2,85 3, , ,5 million) Population (million) GDP per capita (US$) ,310 3,359 3,321 3,129 3,470 2,899 2,589 3,085 3,655 4,754 5,388 3,311 Source: MDIC, Mercosul, IBGE and US Census database web site * estimate In yellow IBGE s new methodology March, 2007.

14 MACROECONOMIC FUNDAMENTALS 14/38 Brazil's GDP in purchase power parity Total purchase power parity is US$ trillion Purchase power parity per capita is US$ ,5 506,8 599,0 174,6 177,9 181,5 2,61 2,85 3,32 (2006) Purchase power parity per capita is US$ (2007) Source: IMF

15 15/38 MACROECONOMIC FUNDAMENTALS Economic Growth 6,0 5,5 5,0 4,5 40 4,0 3,5 3,0 25 2,5 2,0 1,5 1,0 0,5 0, * Source IBGE New Methodology March 2007 * estimate IMF

16 16/38 MACROECONOMIC FUNDAMENTALS Brazil: Foreign Direct ti Investment t 35, ,2 33,3 30,000 26,3 25,000 20, ,9 21,0 18,7 20,2 21,5 22,7 15,000 12,9 10,000 9,6 5,000 3,9 0, Source: Central Bank of Brazil / Treasury Department

17 MACROECONOMIC FUNDAMENTALS Brazil: Foreign Direct Investment 17/38 Canada Year Value (US$ Million) Source: Central Bank of Brazil / Fiscalization Department

18 MACROECONOMIC FUNDAMENTALS 18/38 Brazil - Evolution of External Debt Source: IPEADATA Year Value (US$ Billion) , , , , , , , , , ,8 * * Estimate Central Bank of Brazil according JPMorgan, Mar/2007

19 19/38 MACROECONOMIC FUNDAMENTALS International Reserves in Billion Dollars 120,00 100,00 85,8 109,5 80, ,00 52,9 53,8 40,00 20,0000 0, March 2007 Source: Central Bank of Brazil / Treasury Department

20 MACROECONOMIC FUNDAMENTALS 20/38 Inflation 14% 12% 10% 8% 6% 4% 2% 0% * Source: Portal Brasil and IBGE *value of the first two months of 2007

21 MACROECONOMIC FUNDAMENTALS 21/38 Oil Production million barrels a day 2006 Brazil achieves self sufficiency in oil million barrels a day* Source: Petrobrás * forecast: Petrobrás

22 Year MACROECONOMIC FUNDAMENTALS 22/38 Automotive production * 2007* Cars Light commercials Trucks Buses Total ,361, ,161 71,686 22,672 1,691, ,501, ,936 77,431 23,163 1,817, ,520, ,861 68,558 22,826 1,791, ,505, ,702 78,960 26,990 1,827, ,756, , ,038 28,758 2,210, ,009, , ,892 35,266 2,528, ,914, , ,289 29,412 2,403, Source: Anfavea * January and February 2007.

23 MACROECONOMIC FUNDAMENTALS 23/38 Airplane Trade (US$ Million FOB) Exports 3, , , , , , ,442.5 Imports 1, ,234.5 Balance 2, , , , , , ,208.0 Flow of Commerce 4, , , , , , ,676.0 Source: MDIC

24 /38 MACROECONOMIC FUNDAMENTALS Brazilian Trade in Billion Dollars Exports Imports Source: SECEX

25 25/38 MACROECONOMIC FUNDAMENTALS Brazil s Export Markets In 2006 USA Argentina China Netherlands Germany Mexico Chile Japan Italy Venezuela Others Source: SECEX

26 MACROECONOMIC FUNDAMENTALS 26/38 Sources of Brazil s Imports In 2006 Source: SECEX USA Argentina China Germany Nigeria Japan South Korea Chile France Italy Others

27 27/38 INTERNATIONAL TRADE Flow of trade between Brazil and selected economic blocs 21,30% NAFTA 57,31% 10,01% 22,06% EU MERCOSUR SACU ASEAN Others Source: SECEX 3,11% 0,83%

28 28/38 INTERNATIONAL TRADE Flow of trade between Brazil and NAFTA countries 21,30% 11,90% 7,17% EUA 80,93% México Canadá Source: SECEX

29 INTERNATIONAL TRADE 29/38 World, Brazil and Canada Trade Exports Imports Value Annual percentage change Value Annual percentage change World Brazil Canada 2000/ 2000/ Values in US$ Billion dollars and percentage Source: WTO, WORLD TRADE 2006, PROSPECTS FOR 2007

30 30/38 MACROECONOMIC FUNDAMENTALS Foreign Trade prospects to Brazil Estimates to 2007 US$ Billion Estimate Imports Exports Bl Balance 35.0 Source: IPEA

31 31/38 MACROECONOMIC FUNDAMENTALS Foreign Trade January, February and March 2007 US$ Millions Value Imports Exports Bl Balance Source: MDIC/SECEX

32 32/38 TRADE BETWEEN BRAZIL AND CANADA Outlook * Exports , , ,275.3 Imports 1, , , Balance , , Flow of 474 1, , , , , , ,468.7 Commerce Source: MDIC/SECEX *January and February Values in US$ Million FOB

33 33/38 TRADE BETWEEN BRAZIL AND CANADA 3.500, , , , , ,00 500,00 0,00-500, , Source: SECEX Exports Imports Balance Flow of Trade

34 34/38 TRADE BETWEEN BRAZIL x CANADA Flow of Trade in US$ Million Source: SECEX

35 35/38 TRADE BETWEEN BRAZIL x CANADA Brazil Exports to Canada in US$ Million 2.500, , , , ,00 500,00 0, Source: SECEX

36 36/38 TRADE BETWEEN BRAZIL x CANADA Brazil Imports from Canada in US$ Million , ,9 926,7 740,1 750,3 866, Source: SECEX

37 37/38 TRADE BETWEEN BRAZIL x CANADA Trade Balance ,80 924,90 227,20 41,4 333, ,4-521,3 Source: SECEX

38 38/38 TRADE BETWEEN CANADA AND BRAZIL Main products Brazil exported to Canada Product 2006 (Jan/Dec) 2005 (Jan/Dec) US$ FOB Participation US$ FOB Participation Airplanes 413, % 437, % Calcined alumina 340, % 124, % Cane sugar 224, % 157, % Iron/Steel billets 168, % 159, % Copper wire 74, % 51, % Non calcined bauxite 48, % 6, % Rolled Steel/Iron 44, % 35, % Coffee beans 41, % 30, % Automobiles 34, % 30, % Leather shoes 32, % 32, % Source: SECEX

39 Product 39/38 TRADE BETWEEN CANADA AND BRAZIL Main products Brazil imported from Canada 2006 (Jan/Dec) 2005 (Jan/Dec) US$ FOB Participation US$ FOB Participation Potassium chloride 230, % 272, % Non agglomerated coal 155, % 116, % Newsprint in rolls 127, % 98, % Brimstone % 36, % Medicine with cyclosporine % 19, % Bituminous coal 37, % 19, % Telephony yp printed circuits 29, % 19, % Copper wire 28, % 5, % Naphtha 16, % Other forms of nickel 13, % 4, % Source: SECEX

40 40/38 AGREEMENTS BETWEEN BRAZIL AND CANADA Brazil and Canada have many agreements in force. The major are: 1. Trade Agreement signed on 17 October, 1941; 2. Convention to Avoid Double Taxation on Income matters; 3. Agreement on Air Transportation; and 4. Memorandum of Understandings to establishing an 4. Memorandum of Understandings to establishing an Economic and Bilateral Trade Council

41 BRAZIL PROSPECTS FOR INTERNATIONAL TRADE 41/38 N egotiation on course for a m ultilateral agreem ent A tlantic O cean Possible P C onstitution ofthe Free Trade A rea of the A m ericas N egotiations for the adm ittance ofsouth A frica to the Southern C om m on M arket a e A Preferential A greem entw as signed betw een the Southern C om m on M arketand India ASSOCIATES MERCOSUL COUNTRIES APPLICATION FOR MEMBERSHIP

42 42/38