Exporting companies are less than 1% in Brazil – 06/26/2023 – Market

Less than 1% of Brazilian companies export their goods, but they account for about 15% of formal jobs in the country. This is one of the conclusions of a study carried out by Secex (Secretary of Foreign Trade) of the Ministry of Development, Industry, Commerce and Services, tracing an X-ray of Brazilian foreign trade.

The research points out that, of the 2.8 million companies active in Brazil in 2020, 24.9 thousand are companies that export goods – which represents only 0.88% of the total. This percentage has remained relatively stable since 2010, when the share was 0.78%. The magnitude is similar to that of other Latin American countries.

Despite the restricted share, these companies are directly responsible for around 5.2 million formal jobs. In the sample under study, companies that export indirectly are not included, for example, those that produce inputs for these companies.

The survey was based on data from Secex, Rais (Annual Social Information List) and the Federal Revenue Service.

Although Latin American countries continue to be the main destinations for Brazilian exports –61% of the country’s companies chose to sell their products to nations in that region in 2020–, exchanges with other markets have been growing in recent years.

Between 2018 and 2020, there was a 24% increase in the number of Brazilian firms exporting to China. With destination to the United States, the growth was 21%. For the European Union, the increase was 16%. On the other hand, the number of companies exporting to Mercosur was the one that changed the least in the period, with an increase of around 2%.

In the reading of Tatiana Prazeres, Mdic’s foreign trade secretary, the attractiveness of exporting to large markets, despite the high tariffs that Brazilian companies face for certain markets, helps to understand this trend.

She points out that the formalization of trade agreements with new markets has the potential to encourage the number of exporters in the country.

“Making agreements with large economies makes even more sense in light of what we saw here, because companies look at the level of tariffs and also at the size of the market,” he said.

“If we look at the two factors, existence of barriers and market size, it makes sense that you seek trade agreements with economies that have GDP [Produto Interno Bruto] higher,” he added.

Brazil has made recent efforts in this regard, with the entry into force of new trade agreements between 2010 and 2020.

Today, the main discussion is due to the treaty between Mercosur and the European Union, which is at an impasse. With negotiations concluded since 2019, in the first year of the Jair Bolsonaro (PL) government, the text has not yet been ratified by the two blocs and is still under negotiation.

Prazeres also points out that the panorama traced by the study contributes to the formulation of public policies. The data indicate a correlation between the companies that sell abroad and the profile of their employees, showing that these companies employ more qualified people and pay higher wages. In general, firms that sell goods to higher income destinations offer higher remuneration.

In terms of regional concentration, around 90% of the companies that exported in the country in 2020 were concentrated in the Southeast and South regions. In this context, São Paulo (42.8%) and Rio Grande do Sul (11.1%) together represent more than half of the country’s exporting firms.