Portugal and Brazil have “priority relationship”

Trade between Brazil and Portugal has doubled over the past decade with a balance of trade surplus in Brazil’s favour according to the Brazilian ambassador to Portugal Raimundo Carreiro.
Nevertheless, on closer examination of the trade statistics, Portugal’s exports to Brazil are a drop in the ocean at not even €1Bn

Speaking at a lunch organised by the International Club of Portugal (ICPT) on Wednesday (May 31) at Lisbon’s Sheraton Hotel & Spa, Ambassador Raimundo Carreiro pointed out that investment flows had increased significantly, while the Brazilian community in Portugal had more than trippled” (+233,000)
In his opinion it was this last aspect that had “decisively marked bilateral relations”.
“President Lula’s last five-day State visit rebooted bi-lateral relations to a new level, closing a hiatus for a decade since the last official visit of a Brazilian resident to Portugal”, said the diplomat.
The ambassador said that Brazilian students, researchers, investors, artists and workers had had an impact on society, the economy and even Portuguese domestic policy”.
And continued: “By choosing Portugal as his first visit to Europe and doing so with such a strong committee, President Lula clearly showed that Brazil has given a level of priority that has perhaps not been seen in 198 years of bi-lateral relations with the Portuguese”.
Pointing to another reason that justified the high priority shown by Brazil to Portugal, he said that there was a “new dynamic that placed Brazil at the top of those countries that most received Portuguese investment”.
In the other direction, he said: “Brazil today is the second largest foreign direct investor in Portugal outside the European Union.” (The first is the US with €5.3Bn in goods and services and €9Bn including FDI)
The State visit by President Lula da Silva to Portugal took place between April 21 and 25 and at the summit 16 agreements were signed — “a particularly impressive number when taking into account that the new government (in Brasilia) had only taken power a few months previously”, the ambassador added.
During the State visit the Prime Minister of Portugal highlighted the importance of economic relations between Portugal and Brazil.
“These relations have now been strengthened by the fact that optic fibre cable stations linking the whole of South America to Europe will be fixed between Sines (Portugal’s largest maritime port) and Fortaleza in Brazil – “a dynamic factor for the entire economy based on data traffic” and which can and should be stimulated on both sides of the Atlantic.
Then there are the cooperation agreements between Portugal’s overseas trade agency AICEP and Brazil’s Agency for Overseas Trade. “These are both very important to encourage partnerships between Portuguese and Brazilian companies, as well as the agreement signed between Portugal’s tourism bureau Turismo de Portugal and Brazil’s tourism board Embratur.
But agreements were also signed in the areas of geology and energy, with the latter being an area in which Portugal has heavily invested in Brazil. “EDP and Galp will invest €5.7Bn in developing energy projects in Brazil,” said António Costa during the State visit.
According to figures from the International Business Observatory for 2022, between January Brazilian export sales to Portugal doubled in 2022 to €4.5Bn, oil being the product most exported, responsible for €2.7Bn.
But the balance is negative for Portugal which exports far less goods and services to its giant Portuguese-speaking cousin, leaving a balance of payments deficit of €3.6Bn. Last year Portugal exported almost €918 million worth of goods, a lot of it wine, fats, mineral and vegetable oils (31.9%), livestock and animal derived products (12.1%), almost reaching the record amount achieved in 2017 (€943 million) but still a drop in the ocean considering the sheer size of the Brazilian market and its potential.
To provide some context, Portuguese exports of goods and services to the US – her fifth largest market — stood at US$5.3Bn according to the United Nations COMTRADE database.