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New Zealand and Brazil have a friendly and developing relationship with many areas of common interest, both bilaterally and multilaterally. Bilateral relations have strengthened considerably since the launch of the New Zealand Government’s Latin America Strategy in August 2000, and the establishment of the New Zealand Embassy in Brazil in 2001 - one of the key elements of the Strategy. Brazil opened its Embassy in Wellington in 1997.
Nearly 11,000 Brazilians visited New Zealand in the year ended December 2007, with growth averaging 20% per annum over the past three years. Around 2,500 Brazilians now study in New Zealand each year (principally English language courses of varying lengths).
Bilateral trade remains at modest levels (NZ$226 million, year ended June 2008) with the balance of trade in Brazil’s favour. However, merchandise trade levels significantly understate the value of the bilateral economic relationship, which is heavily based on investment, technology licensing agreements and trade in services.
New Zealand has had diplomatic relations with Brazil for several decades, but the history of significant bilateral contact between New Zealand and Brazil is short. Brazil opened an Embassy in Wellington in early 1997. In recognition of increasing trade opportunities for New Zealand in Brazil, the Trade Development Board (now NZTE) moved its regional headquarters from Santiago, Chile, to São Paulo, Brazil in 1999, opening an NZTE office as a New Zealand Consulate-General. The New Zealand Embassy in Brasilia was formally inaugurated in November 2001 by Prime Minister Helen Clark.
Agriculture accounts for eight percent of Brazil’s GDP (increasing to 30 percent when including agribusiness) and 40 percent of exports. Globally, Brazil is the world’s largest net agricultural exporter, and the world’s largest exporter of complex soy products, orange juice, coffee, beef, alcohol, sugar, tobacco and poultry.
New Zealand is developing significant investments in the Brazilian agricultural sector. These are led by Fonterra’s NZ$100 million investment in its dairy processing joint venture, Dairy Partners of America, which is now emerging also as a conduit for the sale of dairy technology and services in Brazil. Investment is taking place in the agritech sector (IBEX, whose Brazilian operation is now the largest supplier of freezing towers to the Brazilian meat industry, is the largest to date), in farming, and in the hospitality sector in São Paulo, Brazil. The Brazilians too are active in New Zealand, with private development banks looking at the New Zealand agribusiness sector and emerging two-way investment flows in the meat sector.
New Zealand business interests in Brazil are primarily focussed in the agriculture sector (including dairying, agricultural technology, consultancies, genetics), information and communications technology (including mobile applications), and services (including hospitality, education, tourism, investment advisory services, environmental services and agricultural and land use services).
Dairy products traditionally dominated New Zealand’s exports to Brazil, but the value of this trade declined significantly following Fonterra’s investment in processing facilities through its joint venture Dairy Partners of America (DPA), launched in 2003. DPA currently operates in Brazil, Argentina, Venezuela, Colombia and Ecuador, and hopes ultimately to expand operations to the whole of the Americas.
Overall trade levels remain low, with two-way trade totalling approximately NZ$226 million in the year ended June 2008. The balance of trade remains in Brazil’s favour. Coal, dairy products, other animal products and machinery account for the bulk of New Zealand exports. Brazil’s exports to New Zealand are dominated by soybean oil and other soy derivatives, fruit juice and machinery.
Given the overlap between principal items of export interest between Brazil and New Zealand, trade in goods is not expected to increase significantly in the coming years. Instead, the economic relationship is likely to be dominated increasingly by investment (in both directions), licensing of technologies, and sale of services.
Cultural links have expanded significantly since the launch of the Latin America Strategy in 2000:
Brazil is recognised as a market for New Zealand education services with considerable potential in English language education, secondary education and post graduate studies. Around 2,500 Brazilians now study in New Zealand each year, the majority at English language schools on courses of varying length. Brazil is New Zealand’s 9th largest education market and the largest source of students for New Zealand in South America.
Brazil is a focus country for New Zealand’s NZ$70 million international education package, which aims to build stronger links with key education partners, including through provision of doctoral and undergraduate scholarships and student exchanges. The range of scholarship options now available for Brazilian students to study in New Zealand is attracting considerable interest more broadly in Brazil in New Zealand as a study destination.
Several New Zealand secondary schools and universities have made joint or independent visits to Brazil to develop bilateral linkages with Brazilian institutions, and most New Zealand Universities, notably Auckland, Otago, Lincoln and Massey - have cooperation agreements with Brazilian counterparts at university or faculty level. Victoria University has recently established courses on Brazilian studies and Portuguese language.
In November 2001, New Zealand and Brazil signed a Memorandum of Understanding to guide scientific and technological cooperation, although most collaboration currently underway between the two countries takes place at individual researcher level. 2007 saw two government-sponsored missions to Brazil, one to explore the scope for collaboration with Brazil on research into biofuels, and the other to promote, successfully, Brazilian participation in the Livestock Emissions Agricultural Research Network, an international research network promoted by New Zealand to harness global research into agricultural greenhouse gas emissions.
Institutional linkages are also developing. New Zealand’s Massey University and Brazil’s National Service for Industrial Apprenticeship (SENAI) have a five year memorandum of understanding focussed on development of Brazilian technicians, researchers and managers in the area of food safety.
Visitor numbers from Brazil have increased steadily over the last five years. 11,000 Brazilians visit New Zealand annually, with numbers increasing by over 20% per annum over the past three years. Brazil accounts for more than half of all South American visitors to New Zealand.
A visa waiver agreement is in force, which permits New Zealanders and Brazilians travelling to each other’s country to do so without a visa for up to 90 days. A Working Holiday Scheme will be signed with Brazil at the end of August. This will permit up to 300 young New Zealanders and Brazilians to work while holidaying in each others’ countries, for a period of up to 12 months.
There are no direct air links between New Zealand and Brazil, although the legal framework to start air services between Brazil and New Zealand is in place (a 1996 Air Services Agreement). Aerolineas Argentinas (via Buenos Aires, Argentina) and Qantas/LanChile (via Santiago, Chile) currently provide the most direct air services between the two countries.
Brazil and New Zealand have a history of working closely together in international contexts, not least in the WTO, in efforts to liberalise agricultural trade. Both are members of the Cairns Group and are also founding members of the ‘New Agenda’ initiative on nuclear disarmament. Brazil and New Zealand also maintain regular contact on human rights, environment, Law of the Sea, whaling and Antarctic issues.
The New Zealand Agency for International Development’s (NZAID) Latin America Development Programme supports scholarships for Brazilian students, study tours and grants for Brazilian NGOs, with a focus on reducing poverty through initiatives to improve governance and to support sustainable rural livelihoods. Recent initiatives include:
In addition, the New Zealand Embassy in Brasilia, Brazil maintains a small Head of Mission Fund, currently NZ$75,000 annually, to support small projects in Brazil. Projects supported under the fund have included a range of village level food processing operations, micro-credit programmes, and mobile surgical clinics operating in the Amazon.
New Zealand does not have a formal defence relationship with Brazil. Both countries participate in United Nations peacekeeping missions in Timor-Leste and Sudan. Defence Minister Goff’s meeting with the Brazilian Ministry of Defence in September 2007 was the most senior contact in some years. Potential areas for future cooperation are in the civil aviation sector (which is run by Brazil’s military) and training for peacekeeping operations.
Official Name - Federative Republic of Brazil
Land Area – 8,511,965 sq km
Population – 189 million (2007 est.)
Capital City – Brasília
Religion – Roman Catholic 73%, Protestant 15%
Official Language – Portuguese
Currency – Real
Exchange Rate – US$1 = R$1.64 (August 2008)
Political system – Federal Republic
National government – Loose leftist alliance comprised of PT, PPS, PMDB, PL, PSB, PCdoB.
National legislature – Congress comprising 513-member Chamber of Deputies and 81-member Senate.
Last election – October 2006
Next election due – October 2010
Head of State – President Luiz Inácio Lula da Silva
Head of Government – President Luiz Inácio Lula da Silva
Key Ministers –
Chief of Staff - Dilma Roussef
Finance - Guido Mantega
Foreign Affairs - Celso Amorim
Agriculture - Reinhold Stephanes
Development, Industry & Trade- Miguel Jorge
Justice - Tarso Genro
Environment - Carlos Minc
Defence - Nelson Jobim
Other Key figures –
Pres. Chamber of Deputies: Arlindo Chinaglia (PT)
Pres. of Senate: Garibaldi Alves (PMDB)
Pres. of the Central Bank: Henrique Meirelles
Main political parties –
Government alliance:
PT: Workers’ Party
PMDB: Brazilian Democratic Movement Party PPS: Popular Socialist Party
PL: Liberal Party
PSB: Brazilian Socialist Party
PC do B: Brazilian Communist Party
Other main Parties -
PTB: Brazilian Labour Party
PSDB: Brazilian Social Democratic Party
DEM: Democratas
PP: Progressive Party
PDT: Democratic Workers Party
GDP – US$1,316 billion (2007)
GDP Per Capita – US$6951 (2007)
GDP Per Capita (PPP) –
Real GDP Growth – 5.4% (2007); 3.7% (2006); 2.3% (2005)
Exports – US$160.7 billion (2007); US$137.8 billion (2006)
Imports – US$120.6 billion (2007); US$91.4 billion (2006)
Main exports – Aircraft, Vehicles & Parts, Soybean Products, Bulk Metals, Petroleum Products, Chemicals, Meat, Sugar and Ethanol.
Main imports - Machinery and Electrical Equipment, Chemical Products, Oil and Derivatives, Transport Equipment and Parts
Foreign direct investment - US$33 billion (2007); US$16.5 billion (2006)
Forex reserves – US$201 billion (Jun 2008) US$180 billion (Dec 2007); US$95 billion (Dec 2006)
Consumer Price Inflation – 4.6% (2007 est.); 4.2% (2006); 6.9% (2005)
Gross external debt (public and private) – US$162 billion (2007 est.)
Trade balance - US$40 billion (2007); US$46.1 billion (2006)
Current account - US$1.5 billion (2007)
(Sources: Economic Intelligence Unit/Business Monitor International)
New Zealand/Brazil top 20 trade figures are available from Statistics New Zealand.
Exports to Brazil (FOB) |
NZ$75 million (year ending June 2008) |
|
Main exports |
Coal, Communications equipment, Whey, Casein and other products, Agricultural machinery |
|
Imports from Brazil (CIF) |
NZ$151 million (year ending June 2008) |
|
Main imports |
Soybean Oil and Products, Fruit Juice, Heavy Machinery, Coffee, Corn, Animal products for Pharmaceutical Use, Motorcycles, Electric Motors |
|
Brazilian Embassy in Wellington
The Safetravel website provides a travel advisory for travellers to Brazil [external link].
