Two years ago, to much fanfare, China and Brazil entered into a bilateral trade partnership, hoping to propel both populous, ambitious nations to the top of the development heap. With increased exports to China, Brazil made modest economic advances since entering the trade agreement. But in the same period, the world’s textile quotas expired, leaving many world economies vulnerable to China’s rock-bottom prices for manufactured goods. Now, as a glut of cheap Chinese imports floods Brazilian markets and the promised investments in Brazil have not materialized, the nation’s leaders are reconsidering the alliance. Hampered by internal corruption and conflicting domestic business interests, Brazil’s government wants to renegotiate the terms of their trade agreement with China. Unfortunately, having failed to elicit a voluntary restriction of Chinese exports, and having recognized its partner as a market economy, Brazil will have difficulty imposing antidumping penalties. Despite the emerging trade problems with the Asian giant, reports The Wall Street Journal, a long-term trade partnership may still shake out in Brazil’s favor. – YaleGlobal
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