Page last updated at 09:02 GMT, Tuesday, 10 February 2009

Trade woes as the Box arrives in Brazil

By Gary Duffy
BBC News, Sao Paulo, Brazil

The Box
The Box offers a window into the world of global trade

At the busy port of Santos the work of loading and unloading containers continues relentlessly.

Among them is the BBC Box, as it continues its journey around the world.

Reaching the dock where the Box had arrived seems at times to be a triumph of navigation almost equal to the container's 21-day journey from New York.

The port of Santos is not an easy place to get around, and even on a short visit you get some sense of the infrastructure issues that businesses say can hold Brazil back from realising its full potential.

Some of the trucks rumbling past had clearly seen better days, but even so this port is responsible for about a quarter of all Brazil's trade.

Slow trade

As such, the BBC Box has reached the busiest container port in South America, carrying an eclectic mix of items from ink for pens to spearmint flavouring to additives to polyester fibre.

Andres Nasser
Countries that were buying raw materials from Brazil are buying a lot less
Andre Nassar, Institute for International Trade Negotiations

The container arrives here at a challenging time.

A country that was growing at 5-6% last year is feeling the sting of the economic crisis, and so is the port of Santos.

"So far this year we have got something like a 15% decrease," says Luiz Araujo, commercial director for the Tecondi box terminal in Santos.

"But we are hoping that in the second half of this year, with the boom in exports in sugar and soya bean, we will get better figures than today."

Buying less

Many Brazilian commodities, mainly food products, leave from Santos.

Alexandre Costa

For me it is a dream that is over

Alexandre Costa, unemployed

The country is the world's biggest exporter of everything from beef and chicken to orange juice and coffee.

But across Brazil, orders from some of the country's best customers are slowing up, says Andre Nassar of Icone, the Institute for International Trade Negotiations.

"We export a lot of iron to China and exports are going down very fast," says Mr Nassar.

"Because China is exporting less manufactured products, so it is buying less raw material for that.

"It is very clear that countries that were buying raw materials from Brazil are buying a lot less. I think that China and Russia are the two most important examples."

New reality

In the state of Rio de Janeiro they are experiencing at first hand the consequences of falling demand.

Isolationist attitudes and measures may create even bigger problems than the crisis we are experiencing at the moment
President Luiz Inacio Lula da Silva

Like Corus in the UK, the big steel producer CSN is laying off workers, at a time when the number of jobs lost in Brazil in December was the biggest in a decade.

For generations of families in the town of Volta Redonda the success of the company has been vital.

Now workers who thought they had a job for life face a new reality.

Time and time again people describe CSN as the heart of the town.

Alexandre Costa was an employee of the firm for 15 years before losing his job at the end of January.

"This company was a dream for me, because here in the region we prepare ourselves to work there," he says.

"All my training was designed to get me ready to be to be an employee here. I am the third generation of my family working in this company.

"So for me it is a dream that is over."

Heavier burden

Brazil's President Luiz Inacio Lula da Silva says the country is better prepared than ever before for a crisis like this, with $200bn (135bn) in international reserves, a big internal market and a major programme of public works.

CSN factory
Steel producer CSN is laying off staff

He also points to the diversity of the country's trading partners, which means less dependence than before on the United States.

But in an interview with BBC News, President Lula insists he wants industrialised countries to do more to help developing ones.

"If I could give an advice to Obama or to Gordon Brown, I would tell them, 'for the love of God, get your economies in order or the poor countries will suffer'," he says.

"And I am not just worried about Brazil, I am worried about African, Latin American and Caribbean countries, which are dependant on these richer economies and therefore will have the heavier burden."

Isolationist attitudes

President Lula also sounds a warning about protectionist policies.

Ore train
Global demand for raw materials such as ore is down

"During the good years of growth in rich countries they created globalisation, they talked a lot about free trade, talked a lot about the market," he recalls.

"Now they have created a crisis, they can't practice the protectionism that held back the world on other occasions.

"Everyone has to think about the economy of their own country, but we have to think that isolationist attitudes and measures may create even bigger problems than the crisis we are experiencing at the moment."

Shared problems

Brazil may have greater resources to call on these days, but the scale of this crisis is such that even emerging economies have been knocked back.

Brazil containers
Problems as well as trade are global

In a few weeks the BBC Box will leave the port of Santos for Japan, another example of a promising market for South America's biggest country that has now been hit by the crisis.

In the closely related business of global trade, it seems we are sharing our problems more than ever before.

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