Message from Ambassadors

Brazil - Japan bilateral trade:a tool to strengthen an oldfriendship
Octávio Henrique Dias Garcia CÔRTESAmbassador of the Federative Republic of Brazil to Japan
Octávio Henrique Côrtes has been a career diplomat since 1986. Graduated in ElectricalEngineering, he has served in Washington, Asunción, La Paz, Tokyo, Baghdad and Addis
Ababa. He was Ambassador in Bolivia and Ethiopia and Representative of Brazil to theAfrican Union and the United Nations Economic Commission for Africa. He has been theAmbassador of Brazil in Tokyo since July 2022.

The bilateral relationship between Brazil and Japan iscomplex and multifaceted, but one feature clearly stands
out: the unique historical bonds connecting our peoples.
Throughout the 20th Century, Brazil became home tothousands of Japanese immigrants and today has thelargest Nikkei population in any country in the world.
On the other hand, Japan hosts one of the largest
Brazilian communities overseas, comprised of morethan 200 thousand people. This intense humanconnection makes our relations particularly dense anddynamic. This is even more remarkable when we bearin mind the fact that our countries are virtuallygeographical antipodes.

The analysis of updated trade figures show that wecould be witnessing a change in recent trends: ourbilateral trade flows in 2022 reached US$ 11.9 billion,
which is not only an 11.5% increase, as compared to2021, but also the highest value since 2014. This could
be a reason for some optimism, albeit of the cautious
kind: even though the increase is significant, trade
growth between Brazil and Japan was smaller than thatbetween Brazil and many of its most relevant partners(India +31.9%, USA +25,8%, Chile +20%, Argentina+19.4%, Germany +16.4%, China +11%), and also
smaller than the growth of Brazilian trade globally(+21.4%).

Japan has been one of Brazil’s most traditional
international partners in the economic domain – thecollaboration between Japanese and Brazilian
businesses since the 1950s have contributed to economic
growth, innovation and job creation in both sides of theworld. However, trade numbers show that ourrelationship has lost momentum over the past decade,reminding us that meaningful, relevant bilateral ties
must be constantly tended to, in order to keep thriving.
From 2002 to 2022, Japan’s share in Brazilianinternational trade more than halved, from 4.1% down
to 2%. In 2021, India overtook Japan to become Brazil’s
second largest trade partner in Asia. In that same year,
trade with South Korea also grew past Japan, and thelatter became Brasil’s fourth partner in Asia.
International trade among countries is obviously not acompetition, but we can rely on these figures to better
understand where we are coming from and, perhaps
even more importantly, where we might be heading.

Further analysis of trade figures also sheds light on thenature of our bilateral exchanges, as well as ourpotentialities. In 2022, Brazil exported goods valued atUSD 6.6 billion to Japan, making Japan its ninth
international buyer (from the Japanese perspective, Brazil
was its seventeenth international supplier). The main
products exported from Brazil were commodities: corn,iron ore, poultry meat, coffee, aluminum and soya beans.

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2023.5The other direction of this flow shows that Brazil
imported USD 5.3 billion from Japan, comprised
mainly of goods of high added value, such as automobileparts, chemical compounds, engines and other types ofmachinery and electrical equipment. Japan was Brazil’s
ninth international supplier; however, Brazil was only
number twenty-four among Japan’s buyers. This shows
significant imbalance and there seems to be room forimprovement. Private-led initiatives such as the BrazilJapan Business Council and the Wise Group for theStrategic Economic Partnership, as well as several
bilateral governmental instances are committed to findcreative ways to create more opportunities for ourbusinessmen, by identifying priorities and developing
specific policies that can foster growth.
In 2022, Japan experienced its largest trade deficit since1979. Japan has traditionally been a major importer ofgoods, particularly food items, being the world’s second
net importer of foodstuffs. Brazil, conversely, is thenumber one net exporter in that category. Thus, it seems
obvious, at least in the area of agribusiness, that we canachieve much more, as long as we keep focused andcommitted.
We export beef to more than 150 countries worldwide,including highly advanced and demanding markets,
such as the USA and the European Union. A considerable
area of the Brazilian territory has been recognized by
the World Organisation for Animal Health as free offoot and mouth disease without vaccination. Yet, we arestill waiting for the appropriate certification from theJapanese authorities. The same applies to pork meat, forwhich only the product originating from a single state(Santa Catarina) is allowed entry in Japan.
Whereas Brazil understands Japan’s sanitary concerns,
we would also expect Japan to acknowledge Brazil’s
improvement in working to eradicate animal diseases
from its territory. Our Ministry of Agriculture has ahighly efficient animal health surveillance system,
capable of implementing sanitary demands from Japanand any other country. Brazilian meat is safe, sustainable,
cost-beneficial and of the highest quality. Japanesehouseholds will benefit greatly once this option finallybecomes available to them.
“Embraer Day” in Japan. November 2022.

Mutual collaboration between our countries can go
beyond agriculture. As one of the largest economies in
the world, Brazil also manufactures and exports
industrialized goods of extremely high added value, suchas cars and airplanes. As for cars in particular, theparticipation of Japanese technology and expertise in ourindustry is longstanding and deeply rooted. Toyota was
the second most lucrative car manufacturer in Brazil in
2022 and is planning further investments to makecompact biofuel hybrids in their Brazilian plant. Japan isalso an important customer of Brazilian aircraft. The
entire fleets of Fuji Dream Airlines and J-Air (a subsidiaryof Japan Airlines) are comprised of Embraer airliners.
We should also recall that all of these goods are produced
in an environment where the use of clean and renewableenergy sources accounts for approximately 50% of theenergy mix – a share well above the world average. One
such source, Brazilian ethanol, is already used in Japan.
There is great potential for further collaboration, byincreasing its use in road transportation, and by making
ethanol-based sustainable aviation fuel more widespread,for instance.
In any case, if Brazil and Japan truly intend to maximize
mutual gains from their bilateral relationship, they must
tackle the issue of negotiating an Economic Partnership
Agreement. In the competitive world of today, it isimprobable that we will be able to strengthen our ties
unless we grant each other some sort of preferential
access to one another’s markets. In the absence of thiskind of pact, it is only natural that our countries’ tradeand investments will flow towards other partners.
Brazil and Japan have the possibility to redefine theireconomic relationship in the coming years, by making a
conscious political decision to collaborate and pursue
mutual growth in areas of common interest. It is in ourhands to explore such vast potential to the fullest, for the
benefit and prosperity of our countries and our peoples.
お問い合わせJOI 事業企画部
E-mail: bd@joi.or.jp

駐日ブラジル連邦共和国大使館

E-mail: comercial.toquio@itamaraty.gov.br
https://www.gov.br/mre/pt-br/embaixada-toquio/

2023.531