With 165 million inhabitants, Brazil's population accounts for more than half the population of South America. The economic instability experienced in early 1999 was precipitated by the Brazilian government's decision to float the currency on international money markets, the Asian economic crisis and the need to correct internal fiscal imbalances.
Brazil is Canada's largest trading partner in South America.
Brazil is actively engaged in trade policy initiatives, most notably its Mercosur customs union with Argentina, Uruguay and Paraguay through which a common market for most products has been established. Canada has a leadership role in trade liberalization within the hemisphere and is committed to the creation of the FTAA by 2005. Over the past year, trade relations between Canada and Brazil have been strained, however both countries are currently seeking a negotiated resolution to the aircraft dispute. The Brazilian market is exceptionally promising. The support of the International Monetary Fund, the containment of inflation, the drop in interest rates, the privatization of state-owned sectors, the stabilization of interest rates and strong consumer demand indicate that Brazil is well on its way to sustained economic growth in the medium and long term.