Export Development Canada and the trade relations with Brazil.
By Sacha Vaz
Brazil is a major participant in world affairs when it comes to issues related to the lessening or removal of trade restrictions, international security and United Nations reform. Canada recognizes the importance of Brazil in South America and worldwide. Trade relations between Brazil and Canada are growing. The bilateral trade between countries jumped 70% in the last five years, compared with the first half of this decade. Read the interview given to Wave team by Jean Cardyn, executive of EDC – Export Development Canada, a corporation wholly owned by the Government of Canada, which has just completed ten years of operations in Brazil.
How important is the Brazilian market to Canada?
Cardyn – Brazil is not only the largest economy in South America; it also ranks among the top ten economies in the world. Trade between Canada and Brazil exceeds 4 billion dollars per year. Canadian exports to Brazil were close to 1.5 billion last year, and the potential for growth is significant. Last year, Canada ranked as the 10th largest investor in Brazil, but Brazil’s investment in Canada grew by 29%. With a population in excess of 190 million, and a growing middle class, Brazil presents a tremendous potential for trade and investment in sectors such as oil & gas, mining, power, transportation, and infrastructures, to name just a few. The recent award of a contract for a monorail line in São Paulo to a consortium involving Bombardier, is but one example of the opportunities available to Canadian companies in Brazil.
Could you please describe the EDC activities?
Cardyn –EDC has been supporting Canadian exporters and investors doing business in Brazil for decades. Brazil is a key market for Canada. In 2000, EDC opened a first representative office in São Paulo, and in 2004 we opened a second one in Rio. We are open under all our financing, insurance, guarantee, and bonding programs in Brazil. In 2009, EDC supported a total of 282 Canadian companies doing business in Brazil. This number has been steadily increasing over the last five years. In addition to insuring Canadian exporters receivables with small, medium and large companies in Brazil, EDC has also put in place financing facilities with major Brazilian companies such as Petrobras, Braskem, Embratel, Usiminas, Votorantim and Vale. In September this year, EDC provided a US$1 billion financing facility to Vale S.A. to assist with capital expenditures related to Canadian export projects and future Canadian procurement in Vale’s future operations.
Viewing this tremendous growth in business between Canadian and Brazilian companies, we ask you, which factors contribute to this?
Cardyn – Canadian companies are investing in Brazil because they see significant opportunities for growth and they are looking to expand their footprint beyond their traditional markets. It is a priority for Canada to diversify its trading partners in order to be less dependent on one major market. Brazil is a stable country, both economically and politically, a very dynamic market, with a highly diversified and industrialized economy. Brazil also has a growing internal consumer market. Brazil is expanding its activities in all spheres of economic activities where Canadian companies have expertise to offer. Brazil welcomes foreign investments and technology, a perfect fit for Canadians. There are more than 400 Canadian companies active in Brazil. Canada is a trading nation and Brazil is a growing market with huge opportunities which is expanding internationally, and that makes it a perfect fit for Canadian and Brazilian companies to develop partnerships.
In 2009, Canadian merchandise exports were highest in the mining, resources and transportation sectors. Which products are most exported from Brazil m to Canada?
Cardyn – In 2009, main Canadian imports from Brazil were inorganic chemicals, plastic and rubber, followed by agriculture and agrifood products, minerals and metals, machinery, and motor vehicles. It is to be noted also, that with the acquisition of Inco, in 2006 Vale became the largest foreign investor in Canada.
As a new EDC’s regional vice-president for South America, what challenges do you expect?
Cardyn – I find myself lucky to have the opportunity to be in Brazil at this point in time. The future in Brazil is not tomorrow, it is happening right now. This is the time to be here. Brazil “está de vento em popa”. The main challenge for me is the desire to learn everything about Brazil. Learning the culture, the language, and the history of Brazil is not a challenge in the sense of difficulty. Quite the contrary, I see it as an opportunity; one I cherish. I find it very fulfilling to learn Portuguese, and to find myself capable of entertaining conversations all day long with Brazilians after having started to learn the language only a few months ago. I know I still have a long way to learn, and to practice, to get rid of my “portuñol”, but Brazilians do not hold it against me, I find them very patient and supportive. Every Brazilian I meet is a language professor for me, and I thank them for that. From a business perspective, the key challenge I see is expanding our network of contacts and deploying our capabilities in a way that is flexible and responsive to our clients needs.
What’s your favorite characteristic about Brazil?
Cardyn –Brazilians’ warmth and way of life. I also find it very exciting to be in a country where not only everything seems possible, but where so much is actually happening. As I mentioned earlier, in Brazil, the future is today.