CNI invests in the future of commercial relations between Florida and Brazil


New phase of global value chains increases the strategic importance of the Florida-Brazil relationship and attracts the attention of the National Confederation of Industry

By ACHEIUSA - 09/28/2021

Rodrigo Fonseca*

The pandemic has impacted global production chains with scarcity of inputs, increases in production and transport costs and even interruptions in the supply of goods in extreme cases.
However, efficiencies and economic gains obtained with production through value chains in recent decades should not simply be abandoned or given way to simplistic interpretations.
The pandemic was severe for global trade and left evident regional concentrations of production. But, it should be seen, especially, as a lesson to improve business decisions, public policy measures, including economic relations with partners that generate more gains.
And it is in this context that the Brazil-United States and Brazil-Florida relationship is inserted.
There is more than just the fact that they are the two largest economies on the continent with common international interests and values. There are consistent numbers of a very positive economic relationship for companies and workers on both sides.
For US companies, Brazil ranks as the ninth largest destination for total sales of goods. The United States, in turn, is the second largest destination for Brazilian exports and the second largest source of imports. A striking feature of this trade is that more than half are high-tech products.
Business relationships are also solid in services and investments. The United States is the second largest origin of Brazil's foreign purchases of services and the first in Brazilian sales abroad. US companies have the largest stock of foreign investments in Brazil, with US$110 billion (21% of the total) and Brazil has 65% of its multinational companies with a presence in the United States and more than US$15 billion in invested stocks .
Relations with Florida bring even more impressive numbers. For starters, Brazil is the main destination for Florida exports, with an average of almost US$14.9 billion in the last decade between 2011 and 2020, or 19.2% of the total sold by the US state abroad. It is an amount equal to the four other countries in the sequence.
But the numbers are not only significant in total. They are also in their quality. Seven of the ten main products sold to Brazil are medium-high or high technology, with an emphasis on the aircraft and parts chain (27.5% of the total) and other goods such as processors, transmission equipment, medicines or medical devices.
The other side reinforces the win-win aspect and a global chain relationship. Florida and Texas are the biggest partners in Brazil's exports to the United States. However, while Brazilian sales to Texas have been falling over the last decade, those destined for Florida grew strongly, by 51.3% between 2011 and 2020. If it were a country, Florida would have become the 7th largest sales destination in the Brazil.
Likewise, the technological content of this agenda is noteworthy, with imported aircraft and aircraft parts representing 61.6% of purchases made by the State.
The high added value of trade comes from bilateral investments between Brazil and Florida. Over the past decade, nearly $1 billion has been invested in greenfield investments (investments in new units) alongside at least 75 medium and large companies involved in sectors such as finance, aerospace and consumer goods.
The term value chains arose to describe the most intense production relationships between different regions and the coordination between business functions.
The quality of integration in chains can be observed by the investment statistics, added value of trade in goods and trade in services. And this quality is prominently present in Brazil-US relations and with Florida.
With the end of the pandemic approaching, the world is already witnessing a new phase of global value chains. This phase will not erase the important movement of the past, but it brings with it the search for regional diversification of suppliers. Thus, a great opportunity arises for Brazilian companies to integrate with North American companies, especially those located in Florida.
For this, both companies and the governments of both countries must promote an ambitious agenda. This includes actions to bring the business sectors closer together and government actions to improve the regulatory framework between the two countries, through trade facilitation and the convergence of trade and tax rules.
It is in this challenging and changing scenario that the President of the National Confederation of Industry (CNI), Robson Braga de Andrade, will visit Florida on a coordinated schedule.

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