Foreign Trade: New Policy in 2023

SÃO PAULO – A survey conducted in April by the National Confederation of Industry (CNI) shows that 72% of 163 surveyed companies confirmed that their production was affected by the continued strike of federal tax auditors from the Federal Revenue, which began at the end of 2021. The main problem pointed out was the slowdown in the clearance of goods, both in imports and exports.

According to CNI data, among importers, 21.2% had production interrupted, nearly three times more than the 7.8% recorded in a survey conducted in January. And 23.9% reported delays in the delivery of goods, an index higher than the 7% recorded in January. Among exporters, the delay in the export of goods increased from 23.4% to 40.2% from January to April. Contract cancellations, on the other hand, rose from 1.8% to 7.6% in the same period.

As there are already numerous structural obstacles that hinder the competitiveness of national products, the extension of the standard operation of tax auditors has greatly aggravated the situation of Brazilian companies. Among these obstacles are the consequences of the coronavirus pandemic (COVID-19), which began in January 2020, port congestion, the lack of containers, and continuously rising freight rates.

To these problems, we must add other well-known ones, such as delays in cargo inspections, additional costs associated with storage, logistics, and cargo handling, greater rigidity in cargo inspections and the use of verification channels, as well as delays in the granting of Customs Transit Declarations, the requirement of more documents, the suspension of shipping operations, and cargo depreciation.

Not to mention that the strike movement has also hindered the progress of the facilitation and modernization agenda for foreign trade, compromising the development of structural and priority programs for the industry, such as the Authorized Economic Operator (AEO) and the Single Foreign Trade Portal, both in the process of implementation.

For all these reasons, it is expected that the government that emerges from the polls in October will already assume a more defined foreign trade policy, which can act as a tool for productivity and technological updating within a larger strategy that favors the expansion of the presence of Brazilian industrial products in the foreign market. To do so, this policy must go beyond being a mere instrument of subsidy defense to compensate for the inefficiency of the production system.

Therefore, it is essential that the foreign trade policy of the new government firmly defends national interests, without being swayed by right-wing ideological prejudices that can be as harmful to the country as those from the left, which, for example, in 2005, prevented the formation of the Free Trade Area of the Americas (FTAA), proposed in 1994 by U.S. President Bill Clinton with the aim of eliminating customs barriers among the 34 countries of the American continent, thus forming a free trade area, which, combined with the North American Free Trade Agreement (NAFTA), would be the world’s largest economic bloc.

It seems clear that if the FTAA had come to fruition in 2005, Mercosur would have had greater bargaining power in negotiations with the European Union (EU) for the signing of a trade agreement and would have extracted more concessions from the Europeans. Today, this agreement still depends largely on a thorough review of the current Brazilian government’s policy of neglect regarding deforestation, as the EU is currently proposing a ban on imports by companies in that bloc of products that promote environmental devastation, which would also impose controls on imports of beef, palm oil, cocoa, and coffee, among others.

In other words, what is expected is a serious and pragmatic foreign trade policy that stimulates the growth of the Brazilian economy.

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Liana Lourenço Martinelli, lawyer, postgraduate in Business Management and International Trade, is the Manager of Environmental, Social, and Corporate Governance (ESG) at the Fiorde Group, consisting of Fiorde International Logistics, FTA Transport and Warehouses, and Barter International Trade. Email: lianalourenco@fiorde.com.br. Website: fiorde.com.br.

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