What the trade balance reveals

Brazil ended 2012 with exports totaling US$242,6 billion – the second-best result in the historical series – and a surplus of US$19,4 billion, despite the worsening international economic crisis.

However, it was the 34,8% drop in the positive trade balance compared to 2011 that captured the attention of analysts, preventing them from seeing many other aspects of the good results in 2012.

Good results? Yes, and let's see why. First of all, in no other two-year period has Brazil exported as much as in the last two years.

In 2012, we maintained the high level of exports achieved in 2011, a record year for our foreign sales. It is important to remember that in 2011 we already had a 27% increase compared to 2010. In other words, the 5,3% drop in exports in 2012 must be seen in the context of a very high level in the previous year.

The trade flow in 2012 was the second highest in the historical series, with 82% of what Brazil imported last year consisting of inputs and capital goods, in other words, levers for economic growth.

It is well known that imports – within legal parameters – contribute to the competitiveness of Brazilian industry and to the country's exports. Proof of this is that in the list of the one hundred largest Brazilian importers in 2012, 94 also exported.

It may have gone unnoticed that, among all categories, manufactured goods exports showed the smallest decline (-1,7%). In other words, sales of manufactured goods prevented a larger drop in exports in 2012.

In a year marked by external crisis, Brazil broke export records for products such as buses, pumps and compressors, electric motors and generators. Aircraft exports also grew by 21% compared to 2011.

The impact of the international crisis—and, in particular, the fall in commodity prices—on our foreign trade cannot be ignored. Obviously, this is not to deny the reduction in the surplus, but a simple arithmetic exercise allows us to conclude that, if iron ore prices remained at the levels of 2011, exports of this commodity alone would have added US$10,3 billion to the 2012 result.

This difference would have raised our balance to almost US$30 billion in 2011, practically offsetting the drop in exports.

Note that other mineral commodity exporting countries experienced significant declines in their balances. From January to October, Australia recorded losses of 63%. In Chile, the drop was 72% between January and November.

It is also worth commenting on Argentina. Although administrative difficulties persist for Brazilian exporters, few analysts have noted that most of the drop in sales is related to the slowdown in the neighboring country's economy and the price effect on some products: iron ore (-43%), fuels (-71%), airplanes (-100%), and electricity (-39%) experienced a significant drop solely due to reasons related to the economic situation in Argentina itself and the world.

In a scenario where the world is still feeling the effects of the crisis, the result of Brazilian exports in 2012 can be considered clearly positive, reaching, I repeat, the second highest value in the historical series. An interpretation of reality that does not take into account the variables mentioned here certainly does not tell the whole story.

In 2013, the beginning of the recovery of the international economy, combined with the results of measures adopted by the Brazilian government to increase the competitiveness of national industry, will certainly produce positive effects on our foreign trade.

Now it's time to work towards another year of good results.