Brazil may not earn US$ 10 billion in exports. This money should be left over on the international market because of the crisis between the US and China, but our industry will not be able to compete because “it is falling apart”. The assessment was made by ambassador Rubens Ricupero, director of FAAP (Fundação Armando Alvares Penteado).

Ricupero, who was secretary general of the United Nations Conference on Trade and Development (Unctad) for nearly ten years (from 1995 to 2004), stated that, due to the lack of competitiveness, the Brazilian manufacturing industry has no chance of snatch up those US$ 10 billion estimated by Unctad.

Aged and uninnovated
Júlio Gomes de Almeida, executive director of Iedi (Institute of Studies for Industrial Development), said that the industry has aged and is not renewed.

We have a past that has not yet been resolved. Brazilian industry has aged with protectionism, with the preservation of some sectors and isolation, in addition to having little innovative dynamics. Perhaps a real industrial policy could improve it, but that is yet to come.
Júlio Gomes de Almeida, executive director of Iedi.

According to him, the country’s economy “grows very little, consequently, so does the industry”. “And when the industry grows little, so does the country’s economy. It’s disastrous ping-pong.”

US-China trade war.
The US taxed the importation of more than 800 Chinese items, and China did the same. This should lead to a kind of diversion of trade to other countries, such as Brazil. But, in Ricupero’s view, Brazil would hardly benefit, except in specifically specific items, such as primary products, for example.

José Augusto de Castro, president of the AEB (Brazilian Foreign Trade Association) agrees that Brazil has lost competitiveness.

“We have all the negative aspects, from the obsolete tax system to the exaggerated bureaucracy, from low productivity to low competitiveness. So, we cannot compete out there.
José Augusto de Castro, president of the AEB.
He stated that Brazil is only competitive in primary products (soybeans, corn, coffee, sugar, iron ore, among others), but it is not doing well with industrialized items.

If the country does not reduce its costs to improve its competitiveness, we have no chance of expanding the market for our exports. And it’s no use depending on the exchange rate. This is not a competitiveness factor.
José Augusto de Castro.

To make matters worse, Brazilian exports to the US have fallen instead of rising in recent years: – In 2000, of everything Brazil exported, 25% went to the US – In 2018, this account dropped to less than half: 12% “I usually say that the future of Brazil is the past,” stated Castro. For him, Brazil has been out of the global value chains and off the route of big business in the Northern Hemisphere for a long time.

Fast reaction can benefit Brazil
Some consultants think the situation could improve if the country does its “homework”. It would be necessary to approve structural reforms to reduce the Brazil cost.

Carlo Barbieri, president and partner of Oxford Group, a consultancy for the development of companies and businesses in the US, believes that some durable goods such as Brazilian auto parts, electronic components and electro-electronic products could be exported to the US.

“The ball is with the Brazilian industry. Opening up the market in the United States will depend on the speed of reaction if the trade war between the US and China goes ahead.

Carlo Barbieri, President and Partner of Oxford Group