Bureaucracy Obstructs 79% of Brazil’s Exports

The National Confederation of Industry (CNI) says that 83 percent of businesses in Brazil experience problems with exportation.

By Joanna Hansford, Contributing Reporter

RIO DE JANEIRO, BRAZIL – The National Confederation of Industry (CNI) published a report last month that showed that up to twenty-six different types of documents can be requested during the lengthy process of exportation in Brazil. Unsurprisingly, this has led to 83 percent of businesses saying they experience problems with exportation.

The port in Rio de Janeiro, Rio de Janeiro, Brazil News

The port in Rio de Janeiro, photo by Tânia Rêgo/ABr.

Further to this, the report shows 79 percent of businesses claim to have not achieved better sales this year due to problems with customs, cargo transportation and bureaucracy.

Companies that deal with high levels of exportation have been found to be the most unsatisfied with the bureaucracy involved. In fact, up to 88.7 percent of companies selling products overseas have claimed that fifty percent of the cost of exportation is due to bureaucracy. Per shipping container, this can reach up to US$2,200.

Exportation from Brazil is widely considered expensive, partly due to the length of time it takes, which on average, currently takes approximately thirteen days. Carlos Abijaodi, Director of Industrial Development at CNI, estimates that if this period was reduced to eight days, the cost of exportation could be reduced by fourteen percent.

The process in Brazil is so complex, that almost all businesses that work with exports find it necessary to contract despachantes (special services) to deal with customs. Only three percent of export companies manage without such help. Problems in the analysis and processing of documents required for export usually cause delays in the inspection and surveying of exports, affecting almost forty percent of companies, according to the CNI research.

However, the Secretary of Exterior Commerce of the organization for the Development, Industry and Exterior Commerce (MDIC) promises improvements. The federal government is attempting to coordinate the organizations that liberate goods at ports, through which ninety percent of Brazilian exports pass.

These improvements have started with an internet portal using a ‘single window’ concept to facilitate Brazilian imports and exports. “The time and cost involved in foreign commerce procedures will be significantly reduced,” said Neri Geller, Political Agriculture Secretary of the Ministry of Agriculture.

Carlos Eduardo Abijaodi, Rio de Janeiro, Brazil News

Carlos Abijaodi, Director of Industrial Development of the Brazilian National Confederation of Industry (CNI), photo by Flickr Creative Common License/FriendsofEurope.

“The janela única [single window] needs to be launched as soon as possible by President Dilma Rousseff. It will provide a way to de-bureaucratize Brazil’s overseas commerce,” says José Augusto de Castro, president of the Association of Exterior Commerce of Brazil.

At the moment, machinery, IT, electronics, plastics, vehicles and agriculture are the industries most impacted by high exportation costs and lengthy processing.

The chemical industry is also among those who will see improvements in the exportation process. Denise Naranjo, Director of Exterior Commerce of the Brazilian Chemical Industry Association confirmed that “it [janela única] will level the playing field with foreign commerce.”

Humberto Barbato, of the Brazilian Association of the Electronic Industry, explained that his sector is also strongly affected by the value of the real, which is in turn affected by the dollar, exchange rates and additional taxes. He adds, “[these costs] reduce the competitiveness of Brazilian companies.”

The CNI surveyed 693 industrial companies, and all ports in Brazil. Apart from issues with exportation, inefficient infrastructure and logistics systems, high taxes and exchange rates were cited. While in a report by Grant Thornton on the challenges faced by exporters in 2013, language and cultural barriers were cited as key issues in establishing business relationships with Brazil.

7 Responses to "Bureaucracy Obstructs 79% of Brazil’s Exports"

  1. Mike in São Paulo  February 12, 2014 at 2:42 PM

    Import taxes on goods manufactured overseas need to be lowered by at least 50%. When a product is bought on a US website and shipped to Brazil and the import taxes are double what the product originally cost, there is a serious problem that must be addressed.

  2. William Stewart  February 12, 2014 at 4:21 PM

    Bureaucracy obstructs that – if not more – of Brazil’s imports. I should know. I’ve been trying to get import authorization for an all-natural product from the United States for 4 years.

  3. Mike in São Paulo  February 13, 2014 at 12:20 PM

    I’m betting that if you had a private individual send it to you, there’d be no problem.

  4. Frank in Rio  February 14, 2014 at 11:02 AM

    United States has imported so much that now it is not the power house that it was & is paying a huge price for that “Short Term Game Position” …….Brazilians pay very high , maybe a bit too high , but the jobs stay here . I complain as well , but the Brazilians are much smarter than you think !

  5. Mike in São Paulo  February 15, 2014 at 3:57 PM

    Yes, and Walmart is beginning to learn its lesson. They have pledged over $25Billion USD over the next few years to bring manufacturing jobs back to the US. I think part of that is they are hearing a large number of people saying their imports should be taxed so as to level the playing field.

    Import taxes here are far too high. Many of us would spend far more in order to get far more. They’d had the same amount of tax revenues, but Brazilian citizens, and others living in the country, would experience a much higher standard of living.

    Example: I bought a rebuilt Galaxy Tab 2 10.1 from the Walmart US website for less than $300 last year. I had my mother ship it to me. Total cost in taxes was more than double what I paid for it and R$400 more than what I would have paid for the exact same item new at Carrefour. THAT is insane.

  6. Nicholas  February 17, 2014 at 3:29 AM

    “Example: I bought a rebuilt Galaxy Tab 2 10.1 from the Walmart US website for less than $300 last year.”

    Made in CHINA, not in the USA, a nation that continue to lose manufacturing jobs. Not my opinion but a fact. Look at Detroit today what happens when you outsource jobs to cheap labor overseas. Another question, “joe” who just lost his high paying job (retail jobs aka service sector does not pay well, not my opinion, but a fact by talking to the people here in the US) but can buy a Galaxy Tab 2 10 for $300 on his credit card. Good plan right? Those “service jobs’ are a joke and not everybody will work at google, facebook or will become a cookie monster app maker or worse..a politician or lawyer.

    Frank, well typed, because it’s about the jobs. wealth is measured by producing, not by consuming. Brazil has the right to protect itself from lower wage nations such as China. Tariffs are sort of firewalls against those nations..and it works. Even in the so called bible of capitalism “wealth of nations” you shall read the words “protection tarrffs”. Only lower the import taxes on very important components the economy needs for the manufacturing jobs in Brazil and by time those components can be made in Brazil..it’s all about jobs.

  7. Pingback: Brazil to Simplify Importing System for Customs During Global Events | The Rio Times | Brazil News

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