Brazil is increasingly engaging with Asian markets outside China, with trade growth notably seen in the ASEAN countries.
In the first half of 2023, Brazil’s exports to the region reached US$12.1 billion, a significant increase from US$4.5 billion in 2018.
Singapore, a central player in the ASEAN, contributed substantially to this rise, with purchases from Brazil reaching US$4.4 billion in 2023 from US$1.1 billion in 2018.
These numbers reflect Brazil’s strategic shift towards exploring Asia beyond China.
Despite China being a dominant trade partner for Brazil, contributing to over 65% of its exports to Asia, other countries like Singapore, Thailand, and Indonesia are showing significant growth rates.
Singapore’s high trade volume with Brazil is driven by a diverse portfolio of commodities such as bunker fuel oil, crude oil, meat, machinery and equipment, coffee, iron ore, and steel products.
Singapore’s strategic position enables it to act as a distribution hub for Brazil’s exports, thus strengthening the trade relationship.
Furthermore, the potential trade agreement between Mercosur and Singapore would pave the way for Brazil further to expand its presence in the dynamic Asian market.
Given geopolitical and economic trends in Asia, such as rising GDP per capita in high-population nations like Indonesia, the region presents significant growth opportunities for Brazil.
However, the success of this expansion might be jeopardized by the stagnation of reforms and short-term electoral policies.
Hence, addressing infrastructure gaps and securing favorable trade agreements are crucial for enhancing Brazil’s global economic profile.
Meanwhile, trade with Europe advances at a slower pace, partially due to the EU’s mature economy and potential obstacles like the carbon border emission control mechanism.
As such, Brazil must continue expanding its trade relationships with emerging markets, particularly within the Asian region.