Brazil posts a 26% drop in international services trade in 2020

RIO DE JANEIRO, BRAZIL – Brazil recorded a drop in its services trade flow in 2020, above the average recorded by G20 countries and the world. A survey by the National Confederation of Industry (CNI), based on data from the World Trade Organization (WTO), shows that last year, the Brazilian services trade flow fell 26% compared to 2019. The value went from US$95 billion to US$75 billion.

Brazilian exports of services totaled US$28 billion in 2020 (-17%), while imports reached US$47 billion (-31%).

The G20 economies traded US$8.8 trillion in services in 2020, a drop of 18% from the US$10.8 trillion figure recorded in 2019. Worldwide, services trade totaled US$9.6 trillion, down 19.9% from 2019, reaching the lowest levels since 2013.

Trade flow between countries is divided into goods and services. In the case of services, it includes items such as equipment rental, insurance, intellectual property, telecommunication, financial, cultural, and architectural and engineering services.

With the Covid-19 pandemic, the increase of this trade flow, historically a deficit producer for Brazil, has become an even greater challenge.

The result of Brazilian services trade, as well as presenting a sharper drop than the G20 and the world, is also the worst in the decade. The lowest value to date over the past 10 years was recorded in 2016, at US$94 billion.

The figures also show that the drop in Brazilian services was sharper than in goods, which stood at 8.2% in 2020 compared to 2019.

CNI’s International Integration Policies Manager, Fabrizio Sardelli Panzini, explains that due to the Covid-19 pandemic services trade was more affected than the trade in goods worldwide. Services such as transportation, equipment maintenance, and others associated with the tourism sector were more directly affected because of restrictions on the circulation of people worldwide.

“Brazil’s service exports are highly dependent on the United States and European Union economies. As these countries also experienced restrictions and a drop in their economic activity, our services trade dropped as a result of this too,” says the manager.

Brazil accounts for 0.6% of world service exports

Faced with a downturn in world services trade, despite this result, Brazil increased its share in world services exports by 0.1 percentage points, reaching 0.6% of the total. The country also climbed four positions in the world ranking of service exports, reaching 32nd place.

The United States, the world’s largest services exporter and importer, recorded a 22% drop in services trade flow in 2020 compared to 2019. The value dropped from US$1.417 trillion to US$1.103 trillion. As a result, the country lost a 0.3 percentage point share in world services exports, from 13.9% to 13.6%.