Flag of Brazil

Brazil country brief

Introduction

Australia opened its first diplomatic mission in Latin America in 1945 in the then-capital of Brazil, Rio de Janeiro. Brazil established its diplomatic presence in Australia the following year. Brazil also maintains a consulate in Sydney, while Australia has an Austrade-managed Consulate-General in Sao Paulo.

The Prime Minister and Brazilian President agreed to elevate the bilateral relationship to a "Strategic Partnership" in June 2012 in recognition of the deepening of bilateral relations in recent years and the growing shared role of the two countries in the world.

Political overview

Background

Brazil is the fifth-largest country in terms of geographic size and population (199 million). It has been inhabited for at least 8,000 years. Brazil was a Portuguese colony from 1500-1822, and holds the distinction of being the only colony to become a seat of its Empire, when the Portuguese court fled to Rio de Janeiro following Napoleon’s invasion on Portugal in 1807. A military coup in 1889 led to the establishment of the Republic of Brazil. Brazil has been a democracy for most of the 20th century, except during several periods of dictatorships (1930-34 and 1937-45) and military rule (1964-1985).

System of government

Brazil is a federal republic composed of 26 states and a federal district, with three tiers of government. Each state has its own government structure mirroring that at the federal level, and there are over 5,500 municipal councils. Voting is universal and compulsory for all literate citizens aged from 18-70, and optional for those aged 16-17, over 70, or who are illiterate. Under Brazil's constitution, the president and vice-president are elected on the same ticket by popular vote for four-year terms. The National Congress consists of the Federal Senate with 81 members serving eight-year terms, and the Chamber of Deputies consisting of 513 members elected by proportional representation to serve four-year terms.

Recent political developments

Dilma Rousseff, a member of the centre-left Workers Party became Brazil's first female president when she assumed office in January 2011. She previously served as Minister for Mines and Energy and Chief of Cabinet (a ministerial role in Brazil) in former President Lula da Silva's administration. President Rousseff has continued many of Lula’s key policies such as focusing on reducing extreme poverty, and seeking a strong role for the government in the economy, including through supporting “national champions” such as Petrobras and Vale. President Rousseff has also sought to improve infrastructure and education in Brazil.

In June 2013, Brazil saw wide-spread, mainly peaceful, protests on a range of issues. Originally a response to increased public transport costs, the protests soon gathered momentum via social media and quickly broadened to include a much larger number of issues, including corruption, the costs associated with hosting the 2014 FIFA World Cup and 2016 Rio de Janeiro Olympic and Paralympic Games, and the general high living costs experienced by the 30-40 million Brazilians who recently entered the middle class. In response to the protests, President Rousseff and other Brazilian politicians announced a range of measures seeking to address the protesters’ concerns, including reducing public transportation costs, increasing health and education funding, fighting corruption, and increasing transparency in politics and government.

Presidential elections are taking place in October 2014. President Rousseff, who is expected to stand for re-election, appears to have recovered somewhat from a sharp dip in popularity following the 2013 protests and stands a good chance for re-election.

International relations

Brazil is a global power. This has been acknowledged by it being chosen to host the 2014 World Cup and the 2016 Olympics and Paralympics. Brazil is a member of a number of key international groupings, including the G20, the G7 grouping of key members of the World Trade Organisation (United States, European Union, Brazil, China, India, Australia, Japan), BRICS (Brazil, Russia, India, China, South Africa), IBSA (India, Brazil, South Africa), the BASIC group in climate change negotiations (Brazil, South Africa, India, China), as well as the G4 that seek permanent membership of the UN Security Council (Brazil, Germany, India, Japan).

In recognition of its growing international clout, Brazil has significantly boosted its global diplomatic presence, particularly in Africa. In recent years, Brazilian candidates have been elected Secretary General of the World Trade Organisation and of the Food and Agricultural Organisation. Brazil continues to view itself as a champion of the rights of developing countries.

Brazil’s membership of Mercosul (Argentina, Brazil, Paraguay, Uruguay and Venezuela) is a key part of its regional leadership. Brazil was also a driving force in the creation of the Union of South American Nations (known as Unasur).

Economic overview

At a glance

For the latest economic data refer to the Brazil country fact sheet [PDF 45 KB].

Economic outlook

In 2012 Brazil overtook the UK to become the world's sixth-largest economy, with its GDP around US$2.2 trillion (due to exchange rate fluctuations the United Kingdom and Brazil fluctuate between being sixth and seventh-largest economies). Brazil's per capita GDP is lower than Chile’s, but higher than in fellow BRICS members, China and India.

Growth in 2013 was estimated to be 2.3 per cent, with inflation at 6.3 per cent. Brazil's unemployment rate averaged around 5.5 per cent in 2013, some 15 million new formal jobs have been created in recent years and the amount of available credit is now more than five times higher than in 2002. The World Economic Forum Global Competitiveness Index for 2012-13 ranked Brazil 48 out of 144 countries and the World Bank's 2014 rankings for 'ease of doing business' placed Brazil 116 out of 189.

With large and well-developed agricultural, mining, oil and gas, manufacturing and service sectors, Brazil is expanding in world markets. China has replaced the United States as Brazil's largest trading partner. Brazil is second to Australia as the world's largest iron ore exporter. Brazil is also the largest, or second-largest, exporter of beef, soybeans, orange juice, sugar and chicken. It is the world's second-largest producer and largest exporter of ethanol. Brazil is facing a number of economic challenges including manufacturing competition from China, low productivity, infrastructure bottlenecks and chronic economic inefficiencies.

Externally, Mercosul is the most important economic grouping for Brazil. Under the Mercosul treaty, tariffs between members are lowered gradually on most products and common external tariffs are applied to non-members. Mercosul represents a market of over 270 million people with an estimated combined GDP in 2013 of more than US$3.6 trillion.

Bilateral relations

Under the 2012 Australia-Brazil Strategic Partnership, leaders agreed to hold regular leaders' meetings, Foreign and Trade Minister consultations at least every two years, and expand the bilateral senior officials' meetings to include defence representatives in a “Strategic Dialogue”. The Strategic Partnership contains initiatives aimed at improving bilateral links, including education, resources and energy, science and technology and trade and investment as well as furthering multilateral and regional cooperation.

Australian and Brazilian foreign and trade policy interests coincide in several important areas and the two countries cooperate multilaterally on issues of mutual interest including climate change and agricultural trade reform in the World Trade Organization (WTO) through the Cairns Group. Brazil and Australia have a close working relationship in the G20. Reform of international financial institutions (such as the World Bank and IMF) to give developing countries a greater voice in these organisations is a shared G20 priority for Australia and Brazil.

Australia and New Zealand participate in the CER-Mercosul Dialogue. The most recent meeting took place in Brasilia in October 2012. The dialogue was established in 1996 as a mechanism to strengthen cooperation on global trade policy issues and to promote inter-regional trade and investment. Both Australia and Brazil are members of the Forum for East Asia-Latin America Cooperation (FEALAC), which aims to increase and improve mutual understanding, political dialogue and cooperation among member states of East Asia and Latin America. In addition to a strong trade and investment relationship, Australia and Brazil have growing people-to-people links. The inaugural Australia-Brazil Dialogue took place in São Paulo in March 2013, bringing together high-level representatives from government, business, academia, media and think-tanks. Brazil is the largest source of international students in Australia outside of Asia and in 2013, it was the sixth largest source of international student commencements in Australia overall. Thousands more Brazilian students have studied in Australia under President Rousseff’s international scholarship scheme for Brazilian students, ‘Science Without Borders’. Brazil is also the largest Latin American market for visitors to Australia. Tourism between the two countries is also growing steadily, with over 30,000 Australian tourists visiting Brazil and over 17,000 Brazilians visiting Australia in the year ending June 2013. Australians are expected to represent one of largest groups of foreigners visiting Brazil for the 2014 World Cup, The Australian Tourist Commission maintains an office in Rio de Janeiro.In 2016, Brazil will be the focus country of the Australian International Cultural Council.

Since the 1970s, a small but growing number of Brazilians have migrated to Australia. According to the 2011 census, around 14,500 people living in Australia were born in Brazil. More information can be found at the Department of Immigration and Citizenship’s Community Information Summary page.

In 2001, the Australian Government established the Council on Australia-Latin America Relations (COALAR) (http://www.dfat.gov.au/coalar/) which aims to enhance commercial, political and cultural relations between Australia and Latin America. Since its inception, COALAR has been active in promoting business, education, tourism and cultural links between Australia and Latin America.   It has supported a range of activities in Brazil, including cultural and trade promotion events. For updates on COALAR activities and information on the annual grants program, follow COALAR on Facebook.

Recent Ministerial and Head of Government visits

The Prime Minister visited Rio de Janeiro in June 2012 for the Rio+20 Conference on Sustainable Development and met Brazilian President Dilma Rousseff. This was the first visit to Brazil by a sitting Prime Minister. Then Trade Minister Dr Emerson visited São Paulo and Brasília in April 2012. Then-Foreign Minister Rudd visited Brazil in December 2010 while attending the Mercosul summit held at Foz do Iguaçu. Then-Trade Minister Simon Crean visited Brazil in April 2010, where he signed an Air Services Agreement with Brazil's Minister for External Affairs, Celso Amorim. The then-Minister for Foreign Affairs, Stephen Smith, visited Brazil on 24-26 August 2009.

Brazil’s Minister for National Integration, Fernando Bezerra visited Australia in 2011. Then-Brazil Foreign Minister Celso Amorim visited Australia from 26-28 August 2008. In addition, Australia has received a number of Brazilian official visitors, including a Brazilian parliamentary mission in 2012.

Bilateral economic and trade relationship

Australian economic engagement with Brazil has grown steadily since the mid-1990s, most notably in the mining, agribusiness and services sectors. Brazil is Australia's largest trading partner in South America, with two-way merchandise trade between Australia and Brazil totalling A$1.628 billion in 2012. Merchandise trade comprised exports of A$990 million to Brazil and imports of A$638 million from Brazil. Major exports to Brazil included coal, crude petroleum, iron and steel. Major imports from Brazil included civil engineering equipment and parts, medicaments, coffee and fruit juices.

Australian investment in Brazil was A$14.34 billion in 2012. There are currently 100 Australian companies with a presence in Brazil, 25 of which are ASX200 listed. Major Australian companies with a presence in Brazil include BHP Billiton, Macquarie, Pacific Hydro, Rio Tinto and Orica. Brazilian companies with investments in Australia include JB Swift, Vale, WEG and Natura Cosmeticos.

From 2010 to 2014, Australia provided $100 million in development assistance to Latin America, including 250 Australia Awards scholarships.  The regional program has now closed, though some activities which have already been funded will continue until 2017. Separately, Australia has a dialogue mechanism with Brazil, an emerging donor.

Export and investment opportunities

Opportunities exist for increased Australian trade and investment in areas such as information technology, biotechnology, transportation (rail and marine), banking and insurance, mining, water and waste water management, oil and gas, renewable energy, education, agribusiness, tourism and infrastructure. A growing number of Australian companies are now operating in Brazil, though a lack of mutual awareness remains an obstacle to expanding commercial ties.

There are no direct flights between Australia and Brazil though Qantas operates onward services to destinations in South America from Santiago via a code-sharing agreement with Chile's LAN Airlines.

Brazil's simple average most-favoured nation (MFN) applied tariff was 13.7 in 2011, up from 11.5 per cent in 2008 and 10.4 per cent in 2004. Brazil reduced its highest duty rates from 55 per cent in 2004 to 35 per cent in 2008. Brazil has introduced a number of export finance, insurance and guarantee measures aimed at assisting producers and exporters to access credit. Brazil has sought to simplify its import licensing regime and expedited customs clearance procedures.

Updated April 2014