Economic Data
Total GDP: Purchasing power parity = $1.04 trillion (1998)
GDP Growth: 0.5% (1998)
Per Capita GDP: $6,100 (1998)
Inflation Rate: 2% (1998)
Trade Balance: -$6.6 billion deficit.
Trade with RI: Brazil is Rhode Island’s 19th largest trading partner, with $15.7 million in exports in 1998.
Exports: $51 billion; iron ore, soybean bran, orange juice, footwear, coffee, motor vehicle parts. Export trading partners: EU (28%), Latin America, excluding Argentina (23%), U.S. (20%), Argentina (12%).
Imports: $57.6 billion; crude oil, capital goods, chemical products, foodstuffs, coal. Import trading partners: EU (26%), U.S. (22%), Argentina (13%), Japan (5%).
Best Prospects for Exports: Telecommunications, Oil and Gas Field Machinery and Services, Sporting Goods and Recreational Equipment, Medical Equipment and Devices, Automotive Parts and Service Equipment, Drugs/Pharmaceuticals, Pollution Control Equipment and Services, Security and Safety Equipment, Building Products, Mining Equipment, Metalworking Machinery, Electrical Power Systems, Agricultural Machinery, Plastic Production Machinery, Packing Equipment, Food Processing and Packaging Machinery, Architectural/Construction/Engineering Services, Cosmetics and Toiletries, Computer Hardware and Peripherals
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Tariffs, Trade, taxes, trademarks
Trade Regulations and Tariffs: Since 1990, Brazil has made substantial progress in reducing traditional border trade barriers (tariffs, import licensing, etc.), even though tariff rates in many areas are still high. Significant non-border trade barriers remain.
In 1998, to fight increasing under-invoicing, Brazil issued a series of measures that required additional approvals for products subject to non-automatic licensing, and broadened the list of such products. While the Government is now in the process of phasing these out and moving most products to the automatic license category, these requirements still present a barrier. Under Brazil’s new Customs Valuation regulations, Customs will focus its efforts on under-invoicing, and are authorized to hold up imports until the goods are valued.
Tariffs, in general, are the primary instrument in Brazil for regulating imports. For 1997, the average tariff under Mercosul’s Common External Tariff (CET) was 17 percent. The average tariff in 1990, by contrast, was 32 percent. Brazil currently maintains no applied tariff rate higher than 35 percent. Brazil continues to promote significant tariff reductions for many capital goods, which constitute approximately 40 percent of U.S. exports to Brazil.
Brazil and its Southern Common Market (MERCOSUL) partners, Argentina, Paraguay and Uruguay, implemented the MERCOSUL CET on January 1, 1995. In November 1997, after consulting with its MERCOSUL partners, Brazil implemented an across-the-board 3 percent increase on all tariffs (inside and outside the CET), raising the ceiling from 20 to 23 percent.
The CET currently covers approximately 85 percent of 9,500 tariff items. Most of the remaining 15 percent will be covered by 2001, and all will be covered by 2006. The CET levels range between zero and 23 percent, with the exception of tariffs on telecommunications equipment, computers, some capital goods, and products included on Brazil’s national list of exceptions to the CET, such as shoes, automobiles and consumer electronics. These tariffs are generally higher.
The United States signed a trade and investment framework agreement with this emerging common market in 1991. The United States will continue to encourage the reduction of barriers to trade and investment, including tariffs and the creation of a customs union that is open and consistent with the WTO, specifically GATT Article XXIV.
Foreign Investment: The Brazilian Congress approved constitutional amendments in 1995 to eliminate the distinction between foreign and national capital, although some restrictions may return as part of ordinary legislation. The 1962 Foreign Capital law and subsequent amendments govern most foreign investment. Foreign investors have been permitted to invest in the Brazilian stock market since 1991. Gross foreign portfolio investment inflow increased significantly from $760 million in 1991 to $30 billion in 1997 before falling back to $21 billion in 1998, due to growing investor unease with respect to emerging markets.
Free Trade Zones: Manaus, in the State of Amazonas; Macapa/Santana, in the State of Amapa; Tabatinga, in the state of Amazonas, which borders Peru; and Guajaramirim, in the State of Rondonia, bordering Bolivia; Bonfim and Paracaima in the state of Roraima; Brasileia in the State of Acre and Epitaciolandia in the State of Rondonia.
Patents/Trademarks/Copyrights: Brazil is a signatory to the Paris, Bern, and Universal Copyright conventions on intellectual property rights (IPR) protection. The National Institute of Industrial Property (INPI – www.inpi.gov.br) is the government entity responsible for industrial property rights, and examines requests for patents and registration of trademarks.
For an invention to be protected, it must be patented in Brazil. Brazil is a member of the Paris Convention and thus U.S. patent holders have an exclusive right to apply for patents during certain periods: 6 months for industrial designs, and 12 months for inventions and utility models (a new arrangement of known materials which improve a product). A patent holder must use the patent commercially or the patent lapses. Food, medical, chemical- pharmaceutical products or preparations, and microorganisms are patentable. Foreign patent holders have expressed concern about INPI’s slow processing of patent applications.
Application for a trademark may be either as a foreign or a Brazilian trademark. A foreign trademark is registered under the terms of the Paris Convention and thus establishes an exclusive priority. Registering your trademark secures protection and enables the trademark to be licensed or transferred in return for a royalty payment. A registration is valid for ten years and is renewable for successive ten-year periods.
Federative Republic of Brazil
Location: Eastern South America, bordering the Atlantic Ocean.
Geographic Area: 8,511,965 square km, slightly smaller than the U.S.
Climate: Mostly tropical, but temperate in south.
Major Cities: Brasilia (capital), Sao Paulo, Rio de Janeiro, Belo Horizonte, Salvador.
Population: 172 million (1999).
Ethnic Groups: Portuguese, Italian, German, Spanish, Polish, mixed white and African, African, Japanese, Arab, Amerindian.
Languages: Portuguese (official), Spanish, English, French.
Workweek: Monday through Friday, 8:30 a.m. to 5:30 p.m.
Type of Government: Federal Republic
Head of State: President Fernando Henrique Cardoso
Currency: 1 Real (R$) = 100 centavos
Exchange Rate: $1 U.S. = 1.795 Real
Current Economic and Political Conditions: President Fernando Henrique Cardoso introduced the Real economic stabilization program in the second half of the 1990s. It has brought under control decades of hyperinflation and created conditions of price stability, in which long-term planning and investment can occur. Consumer price inflation fell to only 2.5 percent in 1998, compared with nearly 2,500% in the peak inflation year of 1993.
Brazil is now a leading recipient of direct foreign investment. In 1999 alone, investment inflows to Brazil amounted to U.S. $31 billion. Generally lower tariffs, reduced non-tariff barriers, and efforts to modernize Brazil’s productive base have fueled demand for U.S. imports. With the largest economy and population in Latin America, Brazil presents considerable long-term export opportunities in traditional goods and services, economic infrastructure or “new economy” ventures, such as Brazil’s exploding information technology and communications sectors.
Key Contacts
John H. Chafee Center for International Business and World Trade Center, Bryant College
Raymond W. Fogarty, Director
Edward Barr, World Trade Center Manager
Telephone: (401) 232-6407 or (401) 232-6408
Fax: (401) 232-6416
E-Mail: postoffice@itdn.net
Web site: http://www.rieac.org
Rhode Island Economic Development Corporation (RIEDC)
Maureen Mezei, International Trade Director
Telephone: 222-2601, ext. 123
E-Mail: mmezei@riedc.com
U.S. Export Assistance Center, Department of Commerce
Keith M. Yatsuhashi, International Trade Specialist
Telephone: (401) 528-5104
E-Mail: kyatsuha@mail.doc.gov
U.S. Small Business Administration
Marilyn Bogue, International Trade Officer
Telephone: 528-4585
E-Mail: marilyn.bogue@sba.gov
U.S. Embassy In Brazil
Embaixada Americana, Av. das Nacoes, Qd.801, Lote 3,
Brasilia, Brazil. 70403-900
Telephone: 55/61/321-7272
Fax: 55/61/225-9136
E-Mail: brasilia.office.box@mail.doc.gov
Website: www.american-embassy.org.br
Brazilian Embassy in the U.S.
3006 Massachusetts Ave. NW
Washington, DC 20008
Telephone: (202) 238-2700
Fax: (202) 238-2827
E-Mail: webmaster@brasilemb.org
American Chamber of Commerce
Rua Alexandre Dumas, 1976
04717-004 Sao Paulo, SP, Brazil
Country/Area Code: 55 City Code: 11
Telephone: 246-9199
Fax: 246-9080
E-Mail: amhost@amcham.com.br
Country Profile
Compiled by Providence Business News,
in collaboration with Bryant College Export Assistance Center.
