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BRAZIL’S AGRIBUSINESS: MORE OPPORTUNITIES FROM NAFTA EXPANSION? Third Workshop of the North American Agri-food Market Integration Consortium (NAAMIC),

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Presentation on theme: "BRAZIL’S AGRIBUSINESS: MORE OPPORTUNITIES FROM NAFTA EXPANSION? Third Workshop of the North American Agri-food Market Integration Consortium (NAAMIC),"— Presentation transcript:

1 BRAZIL’S AGRIBUSINESS: MORE OPPORTUNITIES FROM NAFTA EXPANSION? Third Workshop of the North American Agri-food Market Integration Consortium (NAAMIC), Calgary, Alberta, June 1-2, 2006 Constanza Valdes U.S. Department of Agriculture, Economic Research Service Elisio Contini Assessoria de Gestão Estratégica, Ministério da Agricultura, Pecuária e Abastecimento, Brazil Ivan Wedekin Secretary of Agricultural Policy, Ministry of Agriculture, Livestock and Food Supply of Brazil Arnaldo Chibbaro Regional Specialist in Policies and International Negotiations, Interamerican Institute for Cooperation in Agriculture

2 Economic Research Service Overview of the Presentation Importance of agri-food in the economy Globalization of Brazil’s agri-food sector Major trading partners and trade barriers Simulation of NAFTA-plus tariff elimination Other trade agreements of Brazil Research conclusions Policy responses to greater economic integration

3 Economic Research Service Brazil’s Growing Dominance in World Agriculture World production rank, 2005 World export rank, 2005 Global export market share %, 2005 Sugar1˚ 42 Ethanol1˚ 51 Coffee1˚ 26 FCOJ (orange juice) 1˚ 80 Soybeans2˚1˚35 Beef2˚1˚24 Poultry3˚1˚35 Pork4˚ 13 Soymeal2˚ 25 Corn3˚4˚35 Source: FAS/USDA and GTIS data.

4 Economic Research Service Brazil's unprocessed and processed agri- food trade surplus

5 Economic Research Service Brazil's exports of bulk and high value agri-food products

6 Economic Research Service Brazil’s Agri-food Exports to NAFTA HS Chapter Description200320042005 Average 2003- 2005 Million US$ 09Coffee, Tea, Mate & Spices334394548425 17Sugars And Sugar Confectionary244209334262 2401Tobacco, Unmanufactured; Tobacco Refuse222237199219 20Prep Vegetables, Fruit, Nuts Or Other Plant Parts218158215197 16Edible Preparations Of Meat, Fish, Crustaceans Etc156204219193 08Edible Fruit & Nuts; Citrus Fruit Or Melon Peel168199206191 18Cocoa And Cocoa Preparations162164197174 22Beverages, Spirits And Vinegar2611713091 12Oil Seeds Etc.; Misc Grain, Seed, Fruit, Plant Etc192021880 Total agri-food products1,7872,2622,4082,152 Source: GTIS data, May 2006.

7 Economic Research Service Brazil’s Agri-food Imports from NAFTA HS Chapter Description200320042005 Average 2003- 2005 Million US$ 10Cereals174321273 5201Cotton, Not Carded Or Combed681012163 21Miscellaneous Edible Preparations30334135 Albuminoidal Subst; Modified Starch; Glue; Enzymes2726 23Food Industry Residues & Waste; Prep Animal Feed20292324 05Products Of Animal Origin, Nesoi10202719 13Lac; Gums, Resins & Other Vegetable Sap & Extract14121514 12Oil Seeds Etc.; Misc Grain, Seed, Fruit, Plant Etc12141113 04Dairy Prods; Birds Eggs; Honey; Ed Animal Pr Nesoi6121511 07Edible Vegetables & Certain Roots & Tubers98109 Total agri-food417335263338 Source: GTIS data, May 2006.

8 Economic Research Service Percent Change from Base Levels for Selected Products with Removal of Tariffs % change in exports % change in imports% change in production BrazilNAFTACAS Brazi lNAFTACASBrazilNAFTACAS Rice21.7728.0826.5022.713.255.94-0.726.498.38 Wheat-1.863.834.4112.2611.8724.36-2.991.501.55 Corn6.553.431.329.542.8011.84-0.170.820.38 Fruits and vegs6.716.829.108.295.9219.25-0.270.061.29 Oilseeds & products1.722.41-0.218.617.1611.610.140.66-0.32 Processed beef1.0410.011.669.229.322.88-0.100.430.14 Proc other meat3.0611.981.6416.9817.8510.400.320.36-0.06 Vegetable oils0.215.660.505.702.354.33-0.131.110.21 Dairy products33.87104.8843.9225.1031.959.59-0.740.381.15 Bev and tobacco6.275.728.373.923.336.83-0.070.330.65

9 Economic Research Service CAS Agri-food Exports by Commodity, 2004

10 Economic Research Service CAS Agri-food Exports by Destination, 2004

11 Economic Research Service Conclusions Creation of a NAFTA-plus brings more opportunities for Brazil Constraints to long-term growth of Brazilian agribusiness include: Macroeconomic factors Farm indebtedness SPS restrictions Restrictions in land expansion Slowing of productivity growth Bottlenecks in marketing and transportation infrastructure Domestic demand will be the principle determinant of Brazilian agricultural production and export potential over the longer term


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