Instituto Cultural Minerva

Institute of Brazilian Business and Public Management Issues

The George Washington University

Minerva Program - Fall 1997

 

 

THE IMPORTANCE OF MERCOSUR TO CEARÁ AND TO THE OTHER STATES OF THE NORTHEAST

 

 

BY CARLA MARIA GASPAR LEITÃO

 

 

Introduction

Recently, the rate at which the world economy has changed has intensified. This has made it necessary for countries to open their economies, and at the same time led to increasing regional integration. Countries need to be more efficiency, especially in international trade.

In this context, the major goals are quality-standard and the optimizing means of production. Nowadays, the international trade agreements consider the comparative advantage of each country. Thus, for a country to succeed in the globalization context should integrate into an economic bloc.

Thus, the direct relations between individual countries are turning into multilateral relations between blocs, i.e., European Economic Community (EEC); the North American Free Trade Agreement - NAFTA and the "Asian Tigers" including Japan.

Another factor contributing to the formation of trade blocs is the union among non-industrialized countries and one or more countries with a higher level of development. This is case of the EEC, which gathered several countries around core economies, i.e., Germany, France and the United Kingdom. This also happened in North America (NAFTA - USA, Canada and Mexico) and in the East Asia (Japan, South Korea, Taiwan, Singapore and Hong Kong).

Countries in the Southeast Asia also formed a group 25 years ago: the ASEAN (Malaysia, Singapore, Thailand, Philippines, Indonesia and Brunei). In this case, regional political reasons have also contributed to the formation of the bloc, which today, basically targets the expansion of regional trade. In Central America, Panama, El Salvador, Guatemala and Honduras are trying to form the CAEC (Central American Economic Community) in response to this worldwide movement. Since 1990, the leaders of the Andean Group countries (Bolivia, Colombia, Ecuador, Peru and Venezuela) have been discussing trade liberalization and economic integration.

The Common Market of the South is a consequence of this regional integration process within South America. Also in this case, the individual protectionism policies shall be transformed into a (more difficult) relationship among economies this time based on efficiency and competitiveness. The integration should be centered on Brazil - largest economy of the four.

Thus, the present study aims at determining the implications of the formation of Mercosur for its four member countries, for the two associated countries and specifically for the Northeast region of Brazil with an emphasis on Ceara State.

Furthermore, the tendencies towards regionalization and globalization of the world economy will be analyzed together with the objectives, characteristics, temporary organs and recent guidelines of Mercosur. The study will also present an overview of the four member countries and the two associated counties with some economic, social, export and import indices.

Chapter I - General Aspects of Mercosur

1.1 Background

The Common Market of the South - Mercosur- is a South answer to the new world reality which points towards regionalization, in terms of consolidated economic blocks, and globalization, expressed through an increasing internationalization of national economies.

The very first antecedents of a Latin American integration are from the sixties when the Latin American Association of Free Trade – ALALC – was created; this was later transformed into the Latin American Association of Development and Integration – ALADI- in 1980. Both were inspired by the precepts established by the Latin American Economy Comission – ECLA- that recommended expanding the regional market and elaborating a common industrialization strategy. This study was based on the model of import substitution, closed markets and the active role of the government in productive activities, and even though it met with many difficulties in terms of Latin American Integration it did advance the mutual cooperation to some extent.

According to Espiell (1991, p.111), some of the major factors hindering the integration process were the strong movements related to nationalist ideologies. The authoritarianism prevailing on most of the continent, national development strategies with no room for integration, the great diversity of national realities as far as social, economical and political institutions are concerned, and the foreign debt of practically all the Latin American countries in the eighties.

The integration managed to provide a growth in interregional trade in the sixties and seventies, but in the eighties the foreign debt and the world crisis slowed this down. The industrialization and export of manufactured products, especially by the larger countries of Latin America, may largely be considered a result produced by the import substitution policy inspired by CEPAL and backed up by ALALC/ALALDI.

In 1986, an agreement called Integration and Economic Cooperation Program – PICE- was signed by Brazil and Argentina, following the recent tendencies within ALADI of signing bilateral and minilateral agreements and considering the need for strengthening their new democratic governments and economic development.

This new agreement became a reality after certain controversies between the two countries were solved in the late seventies: such as; the rights to use the Parana river hydro-electric resources, the demilitarization of mutual relations, the cooperation in the strategic energy sector and the change in both countries towards a democratic government.

The PICE agreement produced a development proposal which was not based solely on Trade, but which would also allow for cooperation, collaboration and complementation in the economy of the two countries. It was based on principles of progression, flexibility, balance and symmetry, thus allowing the productive sectors to adopt gradually to the new situation of a partial and selective opening of the market stimulating the partakers¢ interest and implementing projects compatible with the economic situation of each country.

According to Espiell, the main proposals of PICE aimed at:

In spite of the increase in the trade between Brazil and Argentina, the program became less dynamic from 1988 on, as a result of the macroeconomic instability of both countries suffering from inflation, recession and strong oscillations in their respective currencies. Thus, in the same year an important step was taken in order to proceed with the bilateral integration: the signing of the integration treaty through which Mercosur would be formed within the following ten years.

The new governments (Menem in Argentina) and (Collor in Brazil) introduced a significant change in the treaty in 1990, signing the Buenos Aires Agreement which determines that Mercosur should be established by December 31, 1994. It also introduced a mechanism, which progressively reduces tax so as to liberalize the bilateral trade.

While on one hand the anticipated integration time had been drastically reduced, the governments of the two countries allowed trade to take control of the process so that the commercial aspects became priority and the common development alternatives became secondary concerns.

Praguay and Uruguay finally decided to join Brazil and Argentina and signed the Assuncion Treaty on March 26, 1991, which contained the same precepts as the Buenos Aires agreement.

The Treaty defined a " transition period" lying between the moment it was signed and December 31, 1994, during which the members would implement an intra-Mercosur tax reduction program and negotiate a common external rate together with all the usual instruments of common trade policy to be applied from January 1, 1995 (the tax reduction program reduced the rates within Mercosur to zero and was an annex to the Treaty itself; the reduction occurred in bi-annual quotas which were respected by all members without exception).

As established in the treaty of Asuncion, the four member countries agreed to create an institutional structure for Mercosur by signing a protocol modifying/complementing the treaty. This protocol was signed at the end of the transition period, on December 17, 1994, in the Brazilian City of Ouro Preto, state of Minas Gerais.

The importance of this protocol is due primarily to the following aspects (Pereira, 1995):

By approving the Common External Tariff, the Common Market Council has given a new political dimension to the integration process, permitting the end of the transition process and changing the status of the integration process to a Customs Union.

1.2 Objectives, characteristics and temporary organs of Mercosur.

The creation of Mercosur in the terms of the Assuncion Treaty aims at the following:

In the Assuncion Treaty we read that the main instrument for the constitution of a common market is a trade liberalization program consisting of progressive, linear and automatic tax reductions together with the elimination of non-tax related restrictions or measures of equivalent effect or interstate trade restrictions, so that the member countries may arrive at December 31, 1994, free of non-tax restrictions upon the whole of the tax universe.

On the Global scene, Mercosur is now undergoing a consolidation of customs union. As the common market becomes consolidated, South American integration begins to seem possible. With the admission of Chile and Bolivia the adoption of a free trade system, one may also anticipate a partnership between the Americas.

In the interim of the transitional period, the intergovernmental decisions are being channeled through two provisory bodies: The Conselho do Mercado Comum (CMC) and the Group Mercado Comum (GMC). The former is the political branch and the highest level within the hierarchy of Mercosur governing bodies. It is comprised of the presidents of the four member countries, as well as the ministers of economics and foreign relations. The latter is the executive branch, which oversees implementation of the Assuncion Treaty, enforcing negotiation deadlines and decisions of the CMC and also adopting the necessary measures to comply with the terms of the treaty.

An advisory committee with representatives of the respective Ministries of Foreign Relations, Ministries of Economics (or equivalent) and the Central Banks, forms the national section of the GMC. The technical apparatus of the GMC is composed of eleven working groups covering a broad spectrum of issues. During the transition period, all decisions of the governing bodies of the CMC and GMC are made by consensus of the four contracting parties.

Chapter 2 - THE MERCOSUR MEMBER COUNTRIES

2.1 Argentina

The Republic of Argentina is the second largest country of Latin America. It covers an area of 2,776,889 km2 and has 34,665,000 inhabitants (1996) most of whom are of European descent (Spanish and Italian). In 1996 the Argentina GDP was US$ 214.617 billion (in 1990 US$).

In spite of a certain deterioration of the economy since the mid seventies, Argentina still produces huge quantities of grain, so the country is nearly self-sufficient in terms of food; the Argentine population also consumes more calories on the average than does any other Latin America country.

The main agricultural products of Argentina are sugar cane, corn, soybeans and wheat, while cattle and sheep are favorites of animal husbandry. The industry sector is most active in foods, cars, leather, metallurgy, oil and gas, chemicals and textiles. The main mineral resources are coal, lead, iron, gas, oil, silver, zinc and uranium.

Argentina¢ s main trading partners are the USA, Brazil, Germany, Holland and Japan. Exports were US$ 20.962.6 billion in 1995, of which 49.8% were food, 30.4% were manufactured goods, 10.8% machinery and transport equipment, 10.4% fuels, 6.3% chemicals, 5.1% ores and metals and 4.3% agricultural and raw materials (IDB-1997,p.6)

The Argentine farming sector developed in close association with the international market. The most productive region is that which lies within 300 miles from Buenos Aires – 52 million hectares in all. This region, sometimes called the rainy pampas, is accountable for over 50% of the produce of the country. The main products of the agro-industry are fat or oil derivatives, meat, hides and leather.

The rainy pampas have specialized in producing soybeans, corn, wheat and beef, the main export products of the country. The soy bean complex accounts for as much as one quarter of Argentina exports. The rainy pampas are also the main source of food on the home market producing over 85% of the grain and oils consumed and about 90% of the meat.

In other agricultural regions the crops consist largely of vegetables and temperate fruits; these supply over 50% of the agora-industrial production in this sector and are consumed mostly on the home market.

The economic decline of Argentina is due to a poor policy-making in both the exchanges of primary products and the macroeconomic policies, bringing about a lower employment rate, lower salaries, inflated bank rates and a concentration of income. The situation has become so serious that 50% of the population is now living below the official poverty level.

2.2 Brazil

The Federal Republic of Brazil is the biggest country of South America. It covers an area of 8,456,508 km2 and has 163.976 million inhabitants, which represents almost half of the South America population. In 1996 Brazil GDP was US$ 493.038 billion (in 1990 US$).

Brazil¢ s main trading partners are USA, Argentina, Japan, Holland, Germany, Iraq and Italy. Exports were US$ 46145.8 millions in 1995, of which 29% food, 19.9% ores and metals, 19.3% machinery and transport equipment, 18.6% other manufactured goods, 6.8% chemicals, 5.3% agricultural raw materials 0.9% fuels.

The central-south region is the richest part of the country, which is responsible for most of the GDP, besides the better social indicators. The intra-regional disparities are well accented in social economic data.

2.3 Paraguay

The Republic of Paraguay has an area of 406,752 km2 and has 5.025 million inhabitants. In 1996 Paraguay GDP was US$ 7.392 billion (in1990 US$).

It has two natural regions, separated by the Paraguay River. The better lands are located in the east region, which concentrates the majority of population and cultivated lands. The west region, known as Chaco, has little cultivated lands and scarce population; the major active is the cattle raising. The main products are soy and cotton.

The major partners are Brazil, Argentina, United States, Japan and Holland. Exports were US$ 819.6 million in 1995 of which 51.8% were all food, 34% agricultural raw materials, 13.3% manufactured goods, 0.9% ores and metals and 0.1% fuels.

2.4 Uruguay

The East Republic of Uruguay is the smaller country of Mercosur. It covers an area of 177,508 km2 and has 3.203 million inhabitants. In 1996 the GDP was US$10.437 billion (in 1990 US$).

The major agriculture products are sugar, rice, potato, barley wheat, soy and corn. The most important industries are food, textile, chemical, transport equipment, leather and tourism. The country has also iron mineral reserves

The major partners are Brazil, Argentina and the United States. Exports were US$ 2.101 billion in 1996 of which 44.6% were all food, 38.4% manufactured goods, 14.9% agricultural raw materials, 1.2-% ores and minerals and 0.9% fuels.

2.5 Association Agreements

Mercosur has signed association Agreements with Chile and Bolivia to form a Free Trade Zone between these countries and the block, through Progressive Liberalization of Trade Programs. The agreement of association with Chile entered into force on October 1st. 1996; and with Bolivia which was signed during the summit in Fortaleza entered into force on January 1st. 1997.

These countries can not be considered full Mercosur members because they did not show intention to continue in the integration process, adhering to the Customs Union, which would implicate adoption of Common External Tariff, and furthermore constitute also a Common Market.

2.5.1 Bolivia

The Republic of Bolivia covers an area of 1,098,581 km2 and has 7.594 million inhabitants. In 1996 the GDP was US$ 6.956 billion (in 1990 US$).

The main products are: minerals (tin, zinc, natural gas, gold), agricultural (sugar cane, soy, potato), cattle raising.

Bolivia¢ s main trade partners are United States, Brazil, Japan and Argentina. Exports were US$ 1.050 billion in 1995, of which 35.5% were ores and metals, 21.5% were food, 18.6% were manufactured goods, 14.6% fuels and 9.8% agricultural and raw materials.

2.5.2Chile

The Republic of Chile covers an area of 756,626 km2 and has 14.462 million inhabitants. In 1996 the GDP was US$ 49.745 billion (in 1990 US$).

The main products are minerals (copper, natural gas and iron), agricultural (cereals and fruits), fishing.

Chile¢ s main trade partners are United States, Brazil, Japan and Argentina. Exports were US$ 15530.1 million in 1995, of which 49.6% were ores and metals, 24.6% were all food, 13.0% were manufactured goods, 12.6% agricultural and raw materials and 0.3% fuels.

Chapter 3 - THE ECONOMIC CONSEQUENCES OF MERCOSUR

3.1 Member countries

One of the main concerns of the member countries is what individual group, sectors, regions and countries will benefit from the community and which ones will suffer losses.

Thus, the two smallest countries of Mercosur, Paraguay and Uruguay should gain great benefits from such a project. They will be able to open their external economy considerable; in fact, they are quite dependent on the external market, including Brazil and Argentina. There is, however, a new opportunity for these countries to initiate an industrialization process, according to Arocena (1995, p.11) at the expense of Brazil and also of Argentina.

The population of Uruguay is only 1.95% that of Brazil while its GNP mounts to 2.12%. The figures for Paraguay are 3.6% and 1.5%, respectively (IDB, 1997, p.1).

The farming products of these two countries may therefore grow enormously on the market. It should be noted that Paraguay has a comparative advantage in cotton, corn and soybeans, whereas the strength of Uruguay lies in meats, dairy products, cereal and temperate fruits.

The future of the industrial sector seems promising although presently limited. These two small countries never became industrialized for lack of a larger market. Integration through Mercosur will provide the growth for these countries or relocation of both old and new industries, and will allow the trade to benefit from already existing policies concerning remittance of profits, labor legislation, trade restrictions, etc.

Argentina is of course much larger than the preceding countries but its population and GNP are not more than 21.14% and 43.53%, respectively, of those in Brazil. Its farming sector will benefit from a much larger market; the country itself is already extremely rich in natural resources and presents low production costs.

Argentina is more competitive in meat, dairy products, and cereals and temperate fruit than Brazil. The regions most likely to benefit from the Mercosur agreement are the rainy pampas and the wine and fruits producing districts. On the other hand, the northeast regions which have specialized in supplying subtropical products to the large cities of the rainy pampas is made up of small-scale producers and will suffer considerable losses. The integration process might create certain tensions between the regions of the country.

Only few of Argentina¢ s industrial sectors show a competitive advantage over Brazil and future alternatives are unclear. The country is opening is opening its trade, liberalizing its borders and allowing for privatization, so great parts of the local industry is in danger for restriction.

The privatization process in Argentina deprived the government of important powers and attributions and transferred public enterprises to foreign business groups for a symbolic price. Strangely enough, some of these foreign groups are public enterprises in their home countries.

In face of a predictable bankruptcy of the Argentinean industry, the foreign groups, which now control the secondary sector of the country are likely to try to gain influence over Brazil- the only Mercosur member country with a large government participation in foreign productive sectors.

The Brazilian farming sector will pay the initial price for the integration process. Thus Brazil exports from 6 to 7% of its total agro-industrial production to the three other members of Mercosur, but from 60 to 70% of its imports from these countries consist of agro-industrial or farming products. The Mercosur agreement will be very favorable in view of the superiority of Brazilian industries over those of its neighbors.

Argentina, Paraguay and Uruguay are unable to supply all the foods and agroindustrial products consumed in Brazil, but the increase in Brazilian imports in this area will do much harm to the domestic agriculture, especially to small-scale producers who will have to migrate or look for different occupations. This will ultimately imply in very high social costs.

Argentina and Chile have a comparative advantage in temperate fruits while Brazil has comparative advantage in tropical fruits.

However, if the liberal orientation towards countries outside Mercosur becomes prevalent, the integration will seriously threaten many local industries, both private and government owned, which were developed in consequence of the import substitution policy.

3.2 Investment Promotion System

The promotion of exports and the attraction of investments are the priority aims of all governments in the Mercosur region and there is plenty of will to maintain and strengthen the mechanisms needed to achieve this.

There are various Investment Promotion Systems in the region:

for the authorization or rejection of investment bids. It is also important to stress the total lack of discrimination between local and foreign investment, the demand that the environmental impact of the projects be considered and the inclusion of the assets provided in the "leasing" of the available benefits.

3.3 The Northeast of Brazil

The farming sector in Northeastern Brazil is, as it were, complementary to that of the other Mercosur member countries where its tropical products (fruits, vegetables, and flowers) are just as demanded as in Europe, USA, Asia and in the internal market of Brazil.

"The Northeastern region has advantages in this sector, mainly due to available farmland, favorable climate and inexpensive labor. The region also has adequate infrastructure (including irrigation projects) and specialized companies located in four agro-industrial centers", (SUDENE, 1995, p.9).

"The expansion and consolidation of this sector depends on an adequate agro-industrial policy for the region, including research and technical support (some of which private), bank loans, insurance, training, marketing and promotion of Northeastern tropical products", ( SUDENE, 1995, P.9).

However, the sector would require a better sales structure in order to enter the international market, and that will include physical infrastructure (local roads, main roads, railroads, harbors and storage facilities so as to take advantage of the periods between harvests in the imports countries.

"The world fruit market attains some US$ 150 billion, 10% of which come from fresh fruit. The temperate fruits make up the largest part of the market; the exports of Brazilian fruits in nature reached about US$ 100 million in 1992", SUDENE, (1995, p.10).

The incorporation and development of an increasing number of Northeastern farmers capable of supplying the international market will depend on the proportion of the investments in this sector and on the organization and professionalization of individual producers.

When producers get together in associations and cooperatives they may share their costs, produce more, and bargain on the market of both raw materials and products for consumption. Such conditions are sine qua non for a successful participation in the international market,( Freire, 1990, p.104)

It is therefore important that representatives from this sector participate in the present Mercosur negotiations defending their interests, mainly concerning the chapter of sectorial agreements which include the determination of a common phytosanitary legislation, a technical standardization, a quality standard system and the elimination of tropical products from the list of restricted products.

The Northeastern tourist sector will also benefit greatly from the Mercosur agreement. This is due to its natural resources, such as a two thousand-mile coastline (from Bahia to Maranhao), characterized by a tropical climate, a high level of insolation, warm waters and attractive natural scenery.

The Northeast has a rich cultural, artistic, gastronomic and historical heritage and the cheerful, hospitable people of this region seem to have a perfect vocation for tourism. In order to transform this potential into effective income, regional authorities, government agencies and the private sector must become aware of the importance of tourism as a feasible alternative for the regional development and generation of profits.

Tourism does produce a large number of direct and indirect jobs, distribute income more equitably and stimulates agricultural, industrial and service-related activities, so it would be advisable to adopt an adequate development policy for the sector, including improvements in basic infrastructure, training and advertising inside and outside Brazil (but mainly in the Mercosur countries) and the involvement of private entrepreneurs.

Brazil has a 0.6% share in the world tourist market, a rate at which declined some 50% from the mid-eighties to the early nineties. The World Tourist Organization estimates the world market in US$ 3 trillion and it is responsible for one out of every 15 jobs in the world.

Apart from the two sectors described above, the benefits of Mercosur to the Northeast are very limited. The productive restructuring within Mercosur is favorable to the trade so one may expect a tendency towards capital concentration and the formation of trusts, making life more expensive for consumers.

The Mercosur agreement will definitely not solve the development problem of the Northeast, but will present new and different challenges. The local economies, when integrated in the world market, will gradually lose their autonomy becoming more and more influenced by external political and economical forces.

The opening of new markets or liberalization of trade and the access to new sources of private investment will stimulate the development of regional agriculture. But such integration also implies new risks and high costs, mainly related to the increased influence of foreign capital, the dependence upon the world market and the need to participate in very competitive markets. If the government does not intervene efficiently, many groups (e.g. small producers, home farmers and those without land) will have to face hard times.

Over the past years, many government enterprises and agencies have been privatized or closed down, making many worry about the future of Brazil (and especially the Northeast) in the context pf commercial liberalization and highly competitive international markets.

There are five tendencies in the world "agro-food" system of the nineties. These tendencies have invariably led to a weakening of the food production systems of developing countries under the political and economical influence of the rich industrialized nations and of transnational companies working in this sector.

The five tendencies may be summed up as follows:

Therefore, the promotion of exports of tropical and ornamental products from the Northeast to Mercosur should not be harmful to the agricultural policies, which assure self-supply and food security in the region.

CEPAL, quoted by Espiell (1991, p.93), states that despite the contributions of agriculture and agro-industry to the solution of payment balance matters and fiscal deficit, and although they stimulate other sectors of the economy, they are unable to make up for the lack of development of most of the rural population.

Furthermore, it would be arbitrary to make an agricultural development strategy based on natural resources and climate differentiation (temperate versus tropical agriculture) in view of all the advances in biotechnology. The application of biotechnology to agriculture will give the developed nations comparative advantages formally held by the developing countries.

Also of concern to the Northeast is the sharp difference between the nominal Mercosur and the actual Mercosur. The former comprises the four member countries that signed the Assuncion Treaty, while the latter is made up of the regions of these countries which are effectively engaged in trade and other forms of exchange.

The Northeast, which is far from the zone of attraction called " The Southern Cone", will experience a loss and deviation of the capital and investment flows together with an increasing emigration of its labor force, even the specialized one. The socio-economic disparities between the Northeast and the Central/Southern areas will become more intense this way.

The integration process will bring a relative loss of autonomy in terms of decision-making within the Mercosur member countries. This fact and the increasing participation of the Mercosur economies in the international sphere, exposing them to new partners of competition, will make the fiscal incentive policy susceptible to questioning or even renewal as the agreement becomes consolidated.

Other possible losses to the Northeast caused by the Mercosur integration process are:

The action of the BNB (Bank of Northeast Brazil), considering the perspective of a more open economy in Brazil, should confer privileges to the primary sector of the region, since this is the most feasible way of becoming self sustaining, as one may observe in several rich countries.

The support to the primary sector is consolidated according to the following guidelines:

BNB should also support the tourist sector as a means of generating employment and income (as known from other countries), following guidelines such as these:

Ceara¢ s Government is developing a program of coastal tourism- PRODETUR. Its objective is to plan, coordinate actions, and control the future of Ceara¢ s coastal tourism, providing self-sustaining development, with emphasis on an assessment of environmental resources and long term organization of space.

3.4- Trade of the Northeast of Brazil with Mercosur

The Northeast Region trade with Mercosur increased 112.6% during the period from 1992-1995, jumping from US$ 197.8 million to US$ 420.7 million.

In this period, the classification of the Northeast Region to Mercosur was modified. Thus, the State of Ceara which was classified in fourth rank on the regional trade to Mercosur in 1992, with a participation of 5% (11.6 millions) went up to 10.3% (43.2 millions), showing an increase of 272.41%.

At the same time (1992-1995), the State of Bahia remained unaltered in the first place. Pernambuco lost the second position to Ceara and becomes the fourth. Maranhao reamained unaltered in the third place, while Sergipe took Paraiba¢ s place, in other words, went up to the fifth place. (Table 1)

It is important emphasize that along the nine states of the Northeast Region, Sergipe was the only one to show evolution of 14.2% of its exports to Mercosur, when compared to 1992. The States of Alagoas, Rio Grande do Norte and Piaui showed in the same period increase of 28.7%, 2.5% and 178%, respectively. (Table 1)

TABLE 01

NORTHEAST AND BRAZIL¢ S EXPORTS TO MERCOSUL

1992-95

DISCRIMINATION

1992

1993

1994

1995

VARIAÇÃO (%)

US$ FOB

PART.(%)

US$ FOB

PART.(%)

US$ FOB

PART.(%)

US$ FOB

PART. (%)

1995/92

Brazil

4,097,469,000

5,395,242,000

5,921,475,000

6,153,768,000

50.37

Northeast

197,844,826

100.00

234,502,154

100.00

321,256,072

100.00

420,711,489

100.00

112.64

Alagoas

479.344

0.24

998.202

0.43

12,001,540

3.74

617.149

0.15

28.75

Bahia

137,135,429

69.31

141,817,158

60.48

189,959,620

59.13

287,147,616

68.25

109.39

Ceará

11,697,534

5.91

27,066,946

11.54

30,737,156

9.57

43,219,390

10.27

269.47

Maranhão

18,726,427

9.47

27,466,767

11.71

34,530,168

10.75

38,370,745

9.12

104.9

Paraíba

844.507

0.43

2,774,810

1.18

3,135,782

0.98

7,090,830

1.69

739.64

Pernambuco

21,657,888

10.95

25,482,921

10.87

48,592,445

15.13

36,664,169

8.71

69.29

Piauí

485.870

0.25

598.379

0.26

410.996

0.13

1,351,617

0.32

178.18

Rio G. do Norte

2,388,652

1.21

3,432,291

1.46

2,134,668

0.65

2,450,017

0.58

2.57

Sergipe

4,429,175

2.24

4,864,680

2.07

3,793,697

1.18

3,799,956

0.9

-14.21

Source: IPLANCE

TABLE 2

BRAZIL AND NORTHEAST¢ S EXPORTS BY STATES

1994-95

DISCRIMINATION

1994

1995

Variation(%)

US$ 1,000 FOB

PART.(%)

US$ 1,000 FOB

PART. (%)

1994/95

BRAZIL(*)

43,545,162

100.00

46,506,282

100.00

006.8

NORDESTE

3,502,854

8.21

4,239,999

9.28

21

Alagoas

240.949

0.56

488.144

1.02

94.30

Bahia

1,720,587

4.03

1,919,192

4.20

11.5

Ceará

334.861

0.78

352.131

0.77

5.1

Maranhão

575.719

1.35

671.361

1.47

16.6

Paraiba

83.646

0.20

86.065

0.19

2.90

Pernambuco

372.737

0.87

574.321

1.26

54.1

Piaui

53.669

0.13

67.097

0.15

25

Rio G. do Norte

86.729

0.20

79.228

0.17

-8.1

Sergipe

33.957

0.08

22.460

0.05

-33.8

NORTH

2,078,586

4.87

2,433,139

5.32

1.17

SOUTH

10,938,551

25.63

11,401,026

24.95

1.04

SOUTHEAST

25,035,755

58.67

26,634,656

58.29

1.06

CENTRAL-WEST

1,119,235

2.62

986.516

2.16

0.88

Source: IPLANCE

 

Chapter IV - ANALYSIS OF THE FOREIGN TRADE OF CEARA

4.1 Characteristics of the State of Ceara

In 1995, the Northeast region contributed with US$ 4.2 billion in the exchange income of the country, in a total of US$ 46.5 billion. The Ceara State participated with 0.77% of the total exports – US$ 352 million (Table 2). In relation to the Northeast, the state represented 8.3% in the external business, positioning in fifth of the regional classification.

In 1995, Ceara¢ s exports showed a positive variation of 5.1% in relation to the year before, which were US$ 334.9 millions. It is important to emphasize that 63.9% of this value were obtained by the standard product sales, while the industrialized products contributed with 36.1%

In relation to the volume of goods negotiated, there was a decrease of 12.0% when compared to 1994. In 1995, the volume of goods negotiated was 136,981 t. against 154,988 t. in 1994. This reduction on the quantities shows that the increase in exports was related to the prices of goods sold in the international market.

The Cearense Trade balance, in 1995, presented a deficit of US$ 197.8 million. This result is basically due to increase in imports of machines and industrial equipment, cars, wheat, corn and cotton.

The export guideline is still concentrated in a small quantity of goods. Thus, in 1994 only five are responsible for 61% of the external sales of the State, going up to 80% in 1995.

The products with bigger participation were: cashew nuts (36.9%), lobster (14.4%), carnauba wax (10.9%), tissues (12.9%) and cotton fiber (4.5%).

The major export product (cashew nut), showed an increase of 44.8% in the export quantum, which went up from 19,538t., in 1994 to 28,295t., in 1995. In relation to the worth, the increase was 40.4%, US$ 92.5 million in 1994 to US$129.9 million in 1995.

TABLE 3

STATE OF CEARÁ

EVOLUTION OF THE MAIN EXPORTED GOODS – 1994-1995

WORTH

WEIGHT

MEDIUM PRICE

VAR.

1994

1995

Variation

1994

1995

1994

1995

(%)

DISCRIMINATION

US$ FOB

Share

US$ FOB

Share

1995/94

Kg

Share

Kg

Share

US$

US$

1995/94

(*)

96

(*)

96

96

96

Cashew nuts

92,503,335

27.7

129,926,894

36.9

40.4

19,538,541

12.6

28,295,191

20.6

4.73

-2.96

-2.96

Lobster

45,772,876

13.7

50,505,719

14.4

10.3

2,130,600

1.4

2,187,586

1.6

21.48

7.49

7.49

Textile

32,691,213

9.8

45,472,991

12.9

39.1

9,704,234

6.3

11,872,653

8.7

3.37

13.65

13.65

Wax of carnauba

19,562,388

5.9

38,561,219

10.9

97.1

7,058,285

4.5

6,124,345

-4.5

2.77

127.44

127.44

Cotton fiber

13,276,651

3.9

15,881,395

4.5

19.6

4,165,220

2.7

4,016,305

2.9

3.18

24.21

24.21

Polyester fiber

11,155,974

3.3

8,173,035

2.3

73.3

3,769,195

2.4

2,411,86

1.8

2.96

14.53

14.53

Clothes

9,101,723

2.7

2,649,545

0.8

70.9

851.601

0.5

126.474

0.1

10.69

95.98

95.98

Leather

8,988,193

2.7

10,300,020

2.9

14.6

3,047,415

2

4,474,512

3.3

2.95

-22.03

-22.03

Shrimp

6,113,683

1.8

4,687,911

1.3

23.3

690.672

0.4

501.012

0.4

8.85

5.76

5.76

Electric measurer

5,320,490

1.6

4,222,310

1.2

20.6

392.943

0.2

321.170

0.2

13.54

-2.88

-2.88

Stove

4,802,455

1.4

3,786,317

1.1

21.1

1,818,290

1.2

1,338,025

1.0

2.64

7.20

7.2

Shoes

4,264,638

1.3

1,971,057

0.6

53.8

1,281,647

0.8

671.409

0.5

3.33

-11.71

-11.71

Iron cylinders

3,127,257

0.9

3,851,406

1.1

23.1

2,593,481

1.7

3,557,590

2.6

1.20

-10.00

-10.00

Iron cylinder

2,756,815

0.8

1,925,601

0.6

30.1

9,384,565

6.1

5,985,022

4.4

0.29

10.34

10.34

Mica

2,364,790

0.7

2,226,916

0.6

5.8

772.626

0.5

564.062

0.4

3.06

29.08

29.08

LCC(**)

2,347,154

0.7

2,983,765

0.8

27.1

16,719,809

10.8

19,556,846

14.3

0.14

7.14

7.14

Iron strips

2,176,604

0.6

2,632,788

0.7

20.9

5,078,000

3.3

4,170,000

3.0

0.42

50.00

50.00

Granite

1,609,819

0.5

628.739

0.2

60.9

4,957,375

3.2

3,064,237

2.2

0.32

-34.37

-34.37

Melon

657.814

0.2

223.764

0.1

65.9

1,639,425

1

521.988

0.4

0.40

7.50

7.50

Fish

406.142

0.1

1,222,647

0.3

201.0

90.429

0.1

129.533

0.1

4.49

110.24

110.24

Board consumption

45,433,800

13.6

3,450,346

1.0

47,771,204

30.8

26,408,763

7.8

Others

20,427,169

6.1

16,846,850

4.8

17.5

11,532,371

7.5

10,683,427

19.2

Total

334,860,983

100.0

352,131,273

100.0

5.16

154,987,928

100.5

136,981,256

100.0

Source:IPLANCE

 

 

 

 

 

 

TABLE 4

STATE OF CEARÁ

EVOLUTION OF THE MAIN EXPORTED GOODS 1995-1996

WORTH

WEIGHT

MEDIUM PRICE

VAR.

1995

1996

VAR. (%)

1995

1996

1995

1996

(%)

DISCRIMINATION

US$ FOB

PART.

US$ FOB

PART.

1996-95

Kg

PART.

Kg

PART.

US$

US$

1996-1995

Cashew nuts

129,926,894

36.90

150,430,067

39.54

15.78

28,295,191

20.66

32,769,428

20.32

4.59

4.59

-0.03

Lobster

50,505,719

14.34

42,068,730

11.06

-16.71

2,187,586

1.60

2,123,641

1.32

23.09

19.81

-14.20

Tissue

45,472,991

12.91

43,889,179

11.54

-3.48

11,872,653

8.67

11,337,103

7.03

3.83

3.87

1.08

Wax of carnauba

38,561,219

10.95

37,755,516

9.92

-2.09

6,124,345

4.47

6,770,475

4.20

6.30

5.58

-11.43

Cotton fiber

15,881,395

4.51

17,729,646

4.66

11.64

4,016,305

2.93

4,607,388

2.86

3.95

3.85

-2.68

Polyester fiber

8,173,035

2.32

6,779,231

1.78

-17.05

2,411,086

1.76

2,196,459

1.36

3.39

3.09

-8.95

Clothes

2,649,545

0.75

7,055,478

1.85

166.29

126,474

0.09

3,425,170

2.12

20.95

2.06

-90.17

Leather

10,300,020

2.93

9,228,447

2.43

-10.40

4,474,512

3.27

3,058,124

1.90

2.30

3.02

31.09

Shrimp

4,687,911

1.33

1,773,979

0.47

-62.16

501,012

0.37

214,021

0.13

9.36

8.29

-11.41

Electric measurer

4,222,310

1.20

2,994,534

0.79

-29.08

321,170

0.23

181,163

0.11

13.15

16.53

25.73

Stove

3,786,317

1.08

3,999,486

1.05

5.63

1,338,025

0.98

1,313,168

0.81

2.83

3.05

7.63

Shoes

1,971,057

0.56

10,056,629

2.64

410.22

671,409

0.49

3,762,192

2.33

2.94

2.67

-8.95

Iron cylinders

3,851,406

1.09

826,495

0.22

-78.54

3,557,590

2.60

500,962

0.31

1.08

1.65

52.40

Iron strips

1,925,601

0.55

32,903

0.01

-98.29

5,985,022

4.37

12,552

0.01

0.32

2.62

714.75

Mica

2,226,916

0.63

2,762,534

0.73

24.05

564,062

0.41

1,668,784

1.03

3.95

1.66

-58.07

NCFS(**)

2,983,765

0.85

3,600,809

0.95

20.68

19,556,846

14.28

22,425,010

13.90

0.15

0.16

5.25

Iron

2,632,788

0.75

6,328,897

1.66

140.39

4,170,000

3.04

7,984,000

4.95

0.63

0.79

25.55

Granite

628,739

0.18

140,045

0.04

-77.73

3,064,237

2.24

163,286

0.10

0.21

0.86

317.99

Melon

223,764

0.06

2,930,308

0.77

1209.55

521,988

0.38

2,658,366

1.65

0.43

1.10

157.14

Fish

1,222,647

0.35

666,848

0.18

-45.46

129,533

0.09

164,083

0.10

9.44

4.06

-56.94

Board consumption

3,450,346

0.98

6,488,224

1.71

88.05

26,408,763

19.28

46,535,315

28.85

0.13

0.14

6.72

Others

16,846,850

4.78

22,895,730

6.02

35.91

10,683,447

7.80

7,417,341

4.60

1.58

3.09

95.75

Total

352,131,235

100.00

380,433,715

100.00

8.04

136,981,256

100.00

161,288,031

100.00

2.57

2.36

-8.24

Source: MICT/SECEX/DECEX

Preparation: IPLANCE/DEP/DEAC

(*) Net cashew fruit shell

TABLE 05

CEARÁ STATE

IMPORTS OF THE MAIN GOODS

1994-95

DISCRIMINATION

1994

1995(*)

PARTICIPATTION (%)

1994

1995

Wheat grains

68,256,778

100,958,315

12.5

19.3

Cotton

131,228,114

72,309,264

25.0

13.9

Fuel

51,271,948

48,230,038

9.8

9.2

Corn grains

26,409,035

21,775,063

5.1

4.2

Polyester fiber

13,041,936

18,425,144

2.5

3.5

Gasoline

13,760,887

0.0

2.6

Crude fuel of petroleum

18,839,405

11,997,136

3.6

2.3

Motor vehicles

3,920,103

9,820,481

0.7

1.9

Alcohol etilic carburante

252.533

7,870,916

0.1

1.5

Airplane Kerosene

8,254,028

7,695,693

1.6

1.5

Fresh coconut

4,898,646

6,343,367

0.9

1.2

Newspaper paper

3,593,565

6,099,578

0.7

1.2

Others

194,761,962

197,192,490

37.3

37.7

TOTAL

522,728,053

522,478,372

100.0

100.0

Source:IPLANCE

 

 

 

TABLE 06

STATE OF CEARÁ

ORIGIN OF IMPORTS FROM THE MAIN COUNTRIES

1995

DISCRIMINATION

PARTICIPATION OF THE TOTAL IMPORTED

(%)

United States

20.3

Argentina

18.8

Venezuela

8.2

Canada

8.0

Germany

6.1

Pakistan

3.8

South Korea

3.3

Italy

3.0

Source: IPLANCE

4.2 Trade Exchange of Ceara with Mercosur member countries

The trade between Ceara and Mercosur member countries, in the early nineties were already more than US$ 30.2 million. With the constitution of the new block on November 29, 1991, entering into force immediately with the signature of the Brasilia Protocol, the implementation of the first stage initiated with the change in Customs Union. From that time on, the trade between these countries and the State of Ceara improved significantly, evolving from US$ 31.9 million in 1991(Table 22) to US$ 235.3 million in 1996 (Table 8), showing an increase of 653.5 % in total trade.

It is important to emphasize that although trade between Ceara and Mercosur has increased it represented only 19.71% of the total achieved with the rest of the world and in terms of trade balance it represented deficit for the State mainly because of the imports from Argentina.

The exports between the State of Ceara and Mercosur improved 446,20% from 1991 to 1996, this result is also related to the exchange policy adopted after the Real Plan. During the same period the imports improved 715,92%.

TABLE 07

STATE OF CEARÁ

TRADE BETWEEN CEARA AND MERCOSUR’S COUNTRIES

1990-95

MERCOSUR

TOTAL

SHARE %

YEAR

EXP.

IMP.

EXP. - IMP.

EXP. + IMP

EXP.

IMP.

EXP. – IMP.

EXP. + IMP.

EXP.

IMP.

(A)

(B)

(C)

(D)

A/C

B/D

1991

9,407,996

22,543,729

(13,135,733)

31,9651,725

27,418,734

164,618,357

(105,800,377)

435,037,091

3.48

13.69

1992

11,697,534

25,597,387

(13,899,853)

37,294,921

303,691,509

176,542,180

127,149,329

480,233,689

3.85

14.5

1993

27,066,946

61,129,443

(34,062,497)

88,196,389

295,578,794

396,134,807

(100,556,013)

691,713,601

9.16

15.43

1994

30,737,156

87,702,204

(56,965,048)

118,439,360

334,860,983

523,837,781

(188,976,798)

858,698,764

9.18

16.74

1995

43,219,390

124,021,526

(80,802,136)

167,240,916

352,131,235

582,636,060

(230,504,825)

934,767,295

12.27

21.29

1996

51,386,695

183,939,006

(132,552,311)

235,325,701

380,433,715

813,408,989

(432,975,274)

1,193,842,704

1.35

2.26

Source: IPLANCE

TABLE 8

BALANCE OF TRADE: CEARÁ(*), NORTHEAST AND BRAZIL- 1995-1997

Discrimination

Exports

Imports

Balance

Trade flow

(a)

Var.(%)

(b)

Var.(%)

(c)=(a)-(b)

Var.(%)

(d)=(a)+(b)

Var.(%)

Ceará/World

1995

352,131,235

-

646,953,862

-

(294,822,627)

-

999,085,097

-

1996

380,433,715

8.0

813,408,989

25.7

(432,975,274)

46.9

1,193,842,704

19.5

1996/ 1ºSem.

180,808,018

359,999,991

(179,191,973)

-

540,808,009

-

1997/ 1ºSem.

172,241,938

(4.7)

276,380,734

(23.2)

(104,138,796)

(41.9)

448,622,672

(17.0)

Jan-97

31,336,829

33,804,502

(2,467,673)

-

65,141,331

-

Feb-97

24,307,238

(22.4)

51,957,478

53.7

(27,650,240)

1,020.5

76,264,716

17.1

Mar-97

23,224,685

(4.5)

38,604,125

(25.7)

(15,379,440)

(44.4)

61,828,810

(18.9)

Apr-97

28,933,114

24.6

61,258,130

58.7

(32,325,016)

110.2

90,191,244

45.9

May-97

30,773,137

6.4

45,259,025

(26.1)

(14,485,888)

(55.2)

76,032,162

(15.7)

Jun-97

33,666,935

9.4

45,497,474

0.5

(11,830,539)

(18.3)

79,164,409

4.1

Ceara/Mercosur

1995

43,219,390

124,021,526

(80,802,136)

167,240,916

1996

51,386,695

18.9

183,939,006

48.3

(132,552,311)

64.0

235,325,701

40.7

1996/1ºSem

24,061,048

90,209,566

(66,148,518)

114,270,614

1997/1ºSem

25,398,503

5.6

69,962,450

(22.4)

(44,563,947)

(32.6)

95,360,953

(16.5)

Jan-97

3,357,489

11,851,364

(8,493,875)

15,208,853

Feb-97

2,755,891

(17.9)

12,677,436

7.0

(9,921,545)

16.8

15,433,327

1.5

Mar-97

4,404,175

59.8

9,309,811

(26.6)

(4,905,636)

(50.6)

13,713,986

(11.1)

Apr-97

5,102,136

15.8

14,416,041

54.8

(9,313,905)

89.9

19,518,177

42.3

May-97

4,757,138

(6.8)

14,663,285

1.7

(9,906,147)

6.4

19,420,423

(0.5)

Jun-97

5,021,674

5.6

7,044,513

(52.0)

(2,022,839)

(79.6)

12,066,187

(37.9)

Northeast

1995

4,239,999,326

3,603,783,197

636,216,129

-

7,843,782,523

-

1996

3,854,865,022

(9.1)

4,111,481,176

14.1

(256,616,154)

(140.3)

7,966,346,198

1.6

1996/1ºSem

1,963,941,226

1,815,472,184

148,469,042

-

3,779,413,410

-

1997/1ºSem

1,753,781,177

(10.7)

1,874,512,036

3.3

(120,730,859)

(181.3)

3,628,293,213

(4.0)

Jan-97

353,278,322

227,119,198

126,159,124

-

580,397,520

Feb-97

220,999,284

(37.4)

451,631,324

98.9

(230,632,040)

(282.8)

672,630,608

15.9

Mar-97

272,441,674

23.3

274,527,711

(39.2)

(2,086,037)

(99.1)

546,969,385

(18.7)

Apr-97

293,905,599

7.9

383,445,788

39.7

(89,540,189)

4,192.4

677,351,387

23.8

May-97

323,933,209

10.2

296,507,653

(22.7)

27,425,556

(130.6)

620,440,862

(8.4)

Jun-97

289,223,089

(10.7)

241,280,362

(18.6)

47,942,727

74.8

530,503,451

(14.5)

Brazil

1995

46,506,282,414

49,858,000,000

(3,351,717,586)

-

96,364,282,414

-

1996

47,746,728,444

2.7

53,286,000,000

6.9

(5,539,271,556)

65.3

101,032,728,444

(895.2)

1996/1ºSem

22,902,804,153

23,215,000,000

(312,195,847)

-

46,117,804,153

-

1997/1ºSem

24,786,592,210

8.2

28,420,000,000

22.4

(3,633,407,790)

1,063.8

53,206,592,210

(884.6)

Source:IPLANCE/DEP/DEAC

(*) Ceara with Mercosur and the rest of the world.

4.2.1 - Trade between Ceara and Argentina

Trade between Ceara and Argentina has increased since the signing of Brasilia Protocol. During the period 1990-1991, trade was US$ 25 million and it was substantially modified since 1993 to reach US$ 128.5 million in 1995. After the agreement exports growth are bigger than imports, although it represents deficit to the State.

It can be verified that during the previous year of the Agreement, the carnauba wax represented 51.4% (the most exported product) followed by cashew and textiles. Since 1991 until the end of the period textiles become the most exported product, followed by cashew and carnauba wax, which represented together 75.7%.

In relation to Argentina’s imports wheat flower was the most imported product in 1991, followed by wheat, which represented 94.8% of the total imported by the State. This total fell to 70.9% in 1995 because of the growth in cotton and meat imports.

During this year, wheat is the most imported product, followed by corn and diesel oil, while textile is the most exported product followed by textile and cashew nuts.

TABLE 9

STATE OF CEARA

CEARA’S EXPORTS TO ARGENTINA BY PRODUCT

1990-95

PRODUCTS

WORTH

1990

1991

1992

1993

1994

1995

Cashew nuts

389.614

1,120,133

1,308,422

1,221,677

1,650,960

1,403,485

Carnauba wax

654.222

887.028

1,205,786

1,086,664

833.171

1,381,935

Textile fiber

155.303

3,383,197

5,165,269

12,297,835

6,705,147

15,279,928

Clothing

124.356

229.878

85.329

409.085

Mica

179.352

123.057

214.84

171.708

238.924

Stove

6.171

24.357

259.021

289.359

3,532,071

Mac. To clean grain

36.527

35.780

153.935

11.400

321.983

481.705

Electric transformer

423.922

29.568

Electric meter

8.28

235.000

749.344

31,180,000

sub-total

1,241,837

5,613,770

8,340,182

16,070,659

41,661,579

22,756,701

Others

29.881

147.857

749.292

1,471,616

2,135,984

1,104,074

TOTAL

1,271,718

5,761,627

9,089,474

17,542,275

43,797,563

23,860,775

Source:IPLANCE

TABLE 10

STATE OF CEARÁ

IMPORTS FROM ARGENTINA TO CEARA BY PRODUCT

1990-95

PRODUCTS

WORTH

1990

1991

1992

1993

1994

1995*

Meat

254.25

217.218

764.813

2,327,719

3,623,117

Fish

155.200

165.088

223.603

527.863

Corn

5,458,250

12,646,111

25,811,108

23,041,024

22,156,719

Wheat flower

13,598,864

7,816,148

25,741,383

26,732,003

52,046,025

Oil from soup

1,438,299

1,830,959

Cotton bran

771.750

525.000

Cotton

238.860

140.857

24,669,609

9,453,515

Sub-total

19,311,364

21,073,337

54,834,298

78,674,917

88,332,239

Others

778.487

339.660

958.289

4,777,278

16,311,583

TOTAL

24,259,134

20,089,851

21,412,997

55,792,587

83,452,195

104,643,822

Source:IPLANCE

TABLE 11

STATE OF CEARÁ

MAIN EXPORT PRODUCTS TO ARGENTINA

1997

DISCRIMINATION

January

February

March

April

May

June

Total

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

Cashew almond

157,576

8.44

54,268

3.29

0

-

51,240

1.74

77,906

2.10

120,620

3.35

461,610

2.75

Vegetal wax

55,942

3.00

17,100

1.04

10,530

0.35

50,411

1.72

0

-

0

-

133,983

0.80

Textile

650,132

34.83

740,250

44.82

1,782,424

59.02

1,674,583

57.01

2,155,030

58.22

1,849,423

51.32

8,851,842

52.75

Textile fiber

973,111

52.13

650,509

39.38

1,158,673

38.37

893,801

30.43

1,092,656

29.52

1,058,210

29.36

5,826,960

34.72

Clothing

2,290

0.12

85,219

5.16

19,771

0.65

0

-

32,901

0.89

213,056

5.91

353,237

2.11

Shoes

0

-

56,700

3.43

0

-

64,005

2.18

0

-

59,114

1.64

179,819

1.07

Subtotal

1,839,051

98.52

1,604,046

97.11

2,971,398

98.39

2,734,040

93.08

3,358,493

90.74

3,300,423

91.59

15,807,451

94.20

Others

27,695

1.48

47,695

2.89

48,481

1.61

203,417

6.92

342,814

9.26

303,230

8.41

973,332

5.80

Total

1,866,746

100.00

1,651,741

100.00

3,019,879

100.00

2,937,457

100.00

3,701,307

100.00

3,603,653

100.00

16,780,783

100.00

Source: Industry , Commerce and Tourism Ministry, Foreign Relations Secretary’s Office

Preparation: IPLANCE/DEP/DEAC

Preliminary dates.

TABLE 12

STATE OF CEARA

MAIN PRODUCTS IMPORTED FROM ARGENTINA

1997

DISCRIMINATION

January

February

March

April

May

June

Total

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

Meat

104,722

1.1

84,324

0.7

190,830

2.1

167,319

1.4

146,647

1.0

26,496

0.5

720,338

1.1

Fish

90,180

1.0

194,596

1.6

171,138

1.9

0

-

113,191

0.8

67,509

1.2

636,614

1.0

Wheat

8,548,910

90.8

8,997,784

71.7

7,462,732

81.7

9,731,419

81.3

10,258,195

71.9

445,163

7.8

45,444,203

72.1

Corn

0

-

1,726,564

13.8

0

-

0

-

1,979,201

13.9

189,995

3.3

3,895,760

6.2

Rice

301,725

3.2

138,975

1.1

0

-

572,462

4.8

28,841

0.2

67,704

1.2

1,109,707

1.8

Malt

0

-

0

-

602,000

6.6

344,000

2.9

0

-

189,435

3.3

1,135,435

1.8

Textile

0

-

338,494

2.7

93,000

1.0

0

-

28,665

0.2

68,358

1.2

528,517

0.8

Textile fiber

103,963

1.1

217,129

1.7

153,791

1.7

384,139

3.2

166,926

1.2

253,188

4.5

1,279,136

2.0

Diesel oil

0

-

0

-

0

-

0

-

0

-

3,892,352

68.6

3,892,352

6.2

Subtotal

9,149,500

97.2

11,697,866

93.3

8,673,491

94.9

11,199,339

93.6

12,721,666

89.2

5,200,200

91.7

58,642,062

93.1

Others

264,896

2.8

843,448

6.7

461,417

5.1

765,261

6.4

1,544,454

10.8

473,095

8.3

4,352,571

6.9

Total

9,414,396

100.0

12,541,314

100.0

9,134,908

100.0

11,964,600

100.0

14,266,120

100.0

5,673,295

100.0

62,994,633

100.0

Source: Industry , Commerce and Tourism Ministry, Foreign Relations Secretary’s Office

Preparation: IPLANCE/DEP/DEAC

Preliminary dates.

4.2.2 - Trade between Ceara and Paraguay

Trade between Ceara and Paraguay during the period 1990-1995, shows a surplus to the State. In relation to the exports it was US$ 2.963 million growing to US$ 17.836 million, representing a growth of 501,8%. In relation to imports it was verified a growth of 410,0% in the same period.

The most exported goods were shoes – 37.9%, textiles 28.0%, stove 18.3%, representing a total of 84.2% of the total exported. In 1995 textiles, which had a relevant position, consolidated their position with a share of 68,8%. Nowadays the most exported product is textile, followed by shoes and electric meters.

In relation to Ceara’s imports in 1995 the main goods were cotton and vegetal oil. Nowadays Ceara is importing only textiles from Paraguay.

TABLE 13

STATE OF CEARA

CEARA’S EXPORTS TO PARAGUAY BY PPRODUCT

1990-95

PRODUCTS

WORTH

1990

1991

1992

1993

1994

1995

Fibers textile

828.160

887.414

584.182

4,568,780

9,248,277

12,269,532

Clothing

240.593

114.082

99.900

119.633

123.773

263.502

Bedclothes

100.762

215.082

223.921

364.202

158.469

118.611

Shoes

1,120,707

1,416,575

589.091

1,780,446

1,464,712

1,468,951

Stove

543.844

33.493

138.216

423.476

416.838

Freezer

120.380

303.097

157.292

242.684

123.863

1,086,559

Electric meters

605.5

647.6

1,480,000

Sub-total

2,954,446

2,969,743

1,792,602

8,104,721

11,766,694

17,103,993

Others

1.252

266.011

250.777

349.94

756.314

732.079

TOTAL

2,955,698

3,235,754

2,043,379

8,454,661

12,523,008

17,836,072

Source: IPLANCE

TABELA 14

STATE OF CEARA

CEARA’S IMPORTS TO PARAGUAY BY PRODUCT

1990-95

PRODUTOS

VALOR

1990

1991

1992

1993

1994

1995

Vegetal oil

336.9

523.000

Cotton

2,441,202

4,161,976

2,390,594

1,394,209

6,102,521

Sub-total

2,441,202

4,161,976

2,390,594

1,731,109

6,625,521

Others

2.8

6.950

TOTAL

1,239,840

2,444,002

4.161978

2,390,594

1,731,109

6,632,471

Source: IPLANCE

TABLE 15

STATE OF CEARÁ

MAIN EXPORT PRODUCTS TO PARAGUAY - 1997

DISCRIMINATION

January

February

March

April

May

June

Total

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

Textile

350,750

24.8

522,420

62.0

716,750

56.6

918,870

47.6

594,750

69.6

711,950

67.6

3,815,490

51.9

Shoes

393,626

27.9

256,984

30.5

317,715

25.1

392,995

20.4

211,984

24.8

220,857

21.0

1,794,161

24.4

Clothing

6,615

0.5

37,301

4.4

5,210

0.4

459,928

23.8

2,620

0.3

8,772

0.8

520,446

7.1

Textile fiber

0

-

0

-

0

-

0

-

23,591

2.8

0

-

23,591

0.3

Stove

52,920

3.7

0

-

55,721

4.4

0

-

0

-

0

-

108,641

1.5

Electric meter

591,346

41.9

0

-

0

-

0

-

0

-

0

-

591,346

8.0

Subtotal

1,395,257

98.8

816,705

97.0

1,095,396

86.4

1,771,793

91.8

832,945

97.5

941,579

89.4

6,853,675

93.1

Others

16,346

1.2

25,421

3.0

171,767

13.6

158,222

8.2

21,497

2.5

111,362

10.6

504,615

6.9

Total

1,411,603

100.0

842,126

100.0

1,267,163

100.0

1,930,015

100.0

854,442

100.0

1,052,941

100.0

7,358,290

100.0

Source: Industry , Commerce and Tourism Ministry, Foreign Relations Secretary’s Office

Preparation: IPLANCE/DEP/DEAC

Preliminary dates.

 

TABLE 16

STATE OF CEARÁ

MAIN PRODUCTS IMPORTED FROM PARAGUAY- 1997

DISCRIMINATION

January

February

March

April

May

June

Total

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

Textile

151,696

100.0

0

0.0

0

0.0

305,465

100.0

359,164

100.0

0

0.0

816,325

100.0

Subtotal

151,696

100.0

0

0.0

0

0.0

305,465

100.0

359,164

100.0

0

0.0

816,325

100.0

Others

0

0.0

0

0.0

0

0.0

0

0.0

0

0.0

0

0.0

0

0

Textile Fiber

151,696

100.0

0

0.0

0

0.0

305,465

100.0

359,164

100.0

0

0.0

816,325

100.0

Source: IPLANCE

4.2.3 - Trade between Ceara and Uruguay

In relation to Ceara’s exports, trade with Uruguay was 5,6% on average in 1990, 4,3% in 1992, and finally 3,52% of the total of the block, in other words very small.

In relation to the trade balance, during the period 1990-1995 the balance is favorable to the State until 1992. Since 1993 there was deficit and the most relevant result was in 1995 with a deficit of US$ 11,2 millions.

In 1990 the most exported product was carnauba wax with a share of 44,9% and the fiber textiles. In 1995 textiles represented the largest amount of the total exported and nowadays textiles are still the most exported product followed by clothing and stoves.

The figures if imports from 1990 to 1992 were not available, so it is showed that cereals had bigger share in the amount imported, followed by cotton and textiles. Nowadays rice is the most imported product, followed by wheat and textile.

TABLE 17

STATE CEARA

CEARA’S EXPORTS TO URUGUAY BY PRODUCT

1990-95

PRODUCTS

WORTH

1990

1991

1992

1993

1994

1995

Cashew

11.595

10.439

26.075

5.731

48.735

66.143

Carnauba wax

113.157

151.163

185.518

107.161

163.609

219.918

Textile fiber

103.805

122.925

55.752

132.587

285.291

410.752

Textile

18.058

79.909

17.370

Clothing

13.216

131.202

407.023

644.493

Shoes

7.644

Straw hat

5.850

6.255

2.982

3.000

Stove

33.313

229.949

290.856

117.957

Freezer

19.906

123.030

150.120

60.022

Sub-total

248.463

290.377

450.803

767.790

1,335,445

1,479,633

Others

3.500

5.634

51.756

100.871

174.523

42.910

TOTAL

251.963

296.011

502.559

868.661

1,509,968

1,522,543

Source: IPLANCE

TABLE 18

STATE OF CEARA

CEARA’S IMPORTS FROM URUGUAY BY PRODUCT

1990-95

PRODUCTS

WORTH

1990

1991

1992

1993

1994

1995

Meat

56.097

429.913

Fish

139.628

Cereals

1,543,701

4,159,030

Milk

2,344,048

297.22

288.504

Cotton

1,457,578

Synthetic fibers

143.251

676.485

Shoes

Sub-Total

2,400,145

1,984,172

7,151,138

Others

9.876

22.414

546.117

534.728

5,594,095

TOTAL

235.739

9.876

22.414

2,946,262

2,518,900

12,745,233

Souce:IPLANCE

TABLE 19

STATE OF CEARÁ

MAIN EXPORT PRODUCTS TO URUGUAY

DISCRIMINATION

January

February

March

April

May

June

Total

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

Vegetal wax

-

-

11,250

0.0

7,940

6.8

-

-

-

-

-

-

7,940

0.8

Textile fiber

74,220

93.8

53,716

0.1

33,288

28.4

68,525

29.2

89,601

44.5

219,221

60.0

484,855

48.6

Clothing

4,920

6.2

2,363

0.0

25,981

22.2

18,580

7.9

39,596

19.7

29,736

8.1

118,813

11.9

Textile

-

-

93,156

0.2

24,698

21.1

16,310

7.0

-

-

55,920

15.3

96,928

9.7

Textile

-

-

100,823

0.2

-

-

22,314

9.5

45,164

22.4

20,616

5.6

88,094

8.8

Shoes

-

-

-

-

-

-

41,147

17.5

22,613

11.2

16,931

4.6

80,691

8.1

Iron cylinder

-

-

-

-

-

-

67,788

28.9

-

-

22,656

6.2

90,444

9.1

Subtotal

79,140

100.0

261,308

0.6

91,907

78.5

234,664

100.0

196,974

97.8

365,080

100.0

967,765

97.0

Others

-

-

######

99.4

25,226

21.5

-

4,415

2.2

-

29,641

3.0

Source: IPLANCE

TABLE 20

STATE OF CEARÁ

MAIN PRODUCTS IMPORTED FROM URUGUAY- 1997

DISCRIMINATION

January

February

March

April

May

June

Total

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

US$ FOB

(%)

Ox meat

111,033

4.9

0

0.0

0

0.0

0

0.0

0

0.0

0

0.0

111,033

1.8

Sheep meat

39,332

1.7

47,998

35.3

29,936

17.1

0

0.0

38,001

100.0

16,052

1.2

171,319

2.8

Fish

0

0.0

9,897

7.3

37,198

21.3

0

0.0

0

0.0

0

0.0

47,095

0.8

Textile fiber

1,943,688

85.1

49,880

36.6

0

0.0

140,523

6.5

0

0.0

1,186,334

86.5

3,320,425

54.0

Textile fiber

115,008

5.0

38,128

28.0

47,995

27.4

0

0.0

0

0.0

0

0.0

201,131

3.3

Wheat

0

0.0

0

0.0

0

0.0

2,005,453

93.5

0

0.0

0

0.0

2,005,453

32.6

Subtotal

2,209,061

96.7

145,903

107.2

115,129

65.8

2,145,976

100.0

38,001

100.0

1,202,386

87.7

5,856,456

95.2

Others

76,211

3.3

(9,781)

-7.2

59,774

34.2

0

0.0

0

0.0

168,832

12.3

295,036

4.8

Total

2,285,272

100.0

136,122

100.0

174,903

100.0

2,145,976

100.0

38,001

100.0

1,371,218

100.0

6,151,492

100.0

Source: IPLANCE

TABLE 21

STATE OF CEARÁ

CEARA’S IMPORTS FROM MERCOSUR’S COUNTRIES

1990-95

( US$ FOB)

MERCOSUR

YEAR

ARGENTINA

PARAGUAY

URUGUAY

TOTAL

SHARE (%)

(A)

(B)

(C)

(D)

A/D

B/D

C/D

1990

24,259,134

1,239,840

235.739

25,734,713

94.27

4.82

0.92

1991

20,089,851

2,444,002

8.976

22,543,729

89.12

10.84

0.04

1992

21,412,997

4,161,976

22.414

25,597,387

83.65

16.26

0.09

1993

55,792,587

2,390,594

2,946,262

61,129,443

91.27

3.91

4.82

1995

104,643,822

6,632,471

12,745,233

124,021,526

84.38

5.36

10.28

Source:

IPLANCE

TABLE 22

STATE OF CEARA

TRADE, CEARÁ X MERCOSUR

1990-95

YEAR

ARGENTINA

PARAGUAY

URUGUAY

EXP.

IMP.

EXP-IMP

EXP+IMP

EXP.

IMP.

EXP-IMP

EXP+IMP

EXP.

IMP.

EXP-IMP

EXP+IMP

1990

1,271,718

24,259,134

22,987,416

25,530,852

2,963,698

1,239,840

1,723,858

4,203,538

251.963

235.739

16.224

487.702

1991

5,761,627

20,089,851

14,328,224

25,851,478

3,350,358

2,444,002

906.356

5,794,360

296.011

9.876

286.135

305.887

1992

9,089,474

21,412,997

12,323,523

30,502,471

2,105,501

4,161,976

2,056,475

6,267,477

502.559

22.414

480.145

524.973

1993

17,542,275

55,792,587

38,250,312

73,334,862

8,656,010

2,390,594

6,265,416

11,046,604

868.661

2,946,262

2,077,601

3,814,923

1994

15,735,763

83,452,195

67,716,432

99,187,958

13,491,425

1,731,109

11,760,316

15,222,534

1,509,968

2,518,900

1,008,932

4,028,868

1995

23,860,775

104,643,822

80,783,047

128,504,597

17,836,072

6,632,471

11,203,601

24,468,543

1,522,543

12,745,233

11,222,690

14,267,776

Source: IPLANCE

Final Considerations

The main conclusion which may be arrived at concerning the "South Cone" Integration is that the commercial aspects of the process are being highly emphasized while the issues of economic development, technical cooperation, social and cultural are being taken at a secondary level.

Considering the present tendencies, Brazil will most benefit from the integration because of the size of its market and the high level of industrialization.

In relation to the State of Ceara, the trade between Mercosur member countries has improved significantly, though nowadays it represents deficit to the State. In 1996, trade it represented only 19,71% of the total achieved with the rest of the world. However, with the association of Chile and Bolivia, trade has conditions to improve even more.

The fact of having complementary products between the Northeast and the Mercosur members and associated countries is one of the main reasons to increase trade and to continue improving.

The State of Ceara is attracting a lot of investments and is one of the States which are growing faster ; and therefore trade through blocs is an important step to growth.

Bibliography

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