31st May 2023 – Analysis of trade data from global financial services firm Ebury reveals that UK-Brazil trade has experienced rapid growth in the last five years following significant government efforts to push for improved bilateral trade relations and a reduction in red tape.
The statistics1 reveal that Brazilian imports to the UK have more than doubled in the past half-decade, with imports in Q1 2023 standing at £773m, 52% higher than total imports for the same quarter in 2018 (£510m).
Similarly, the UK has seen a notable 46% uptick in exports to Brazil, with the latest data showing a £204m increase from £458m in Q1 2018 to £662m in the same period of 2023.
The peak in trade reflects growing efforts from the UK government to strengthen ties with non-EU countries following Brexit. Most recently, the UK signed a significant bilateral trade deal with Brazil in November 2022 – the Double Taxation Agreement –reducing costly barriers to trade, investment and cross-border work, a significant milestone in the countries’ economic relationship.
Currently, the most imported Brazilian goods are largely mechanical power generators, and food produce like meat, vegetables, fruit and oil-seed, of which have seen increases of up to 205% in the last five years2.
Likewise, the most exported UK goods include beverages, medicinal and pharmaceutical products, chemicals, and mechanical power generators, which have experienced a significant influx in demand of up to 173% since 2017.
In a report3 on the agreement, the government noted that they “anticipate that the Brazilian market will become a more attractive place to invest for the British business community and will also facilitate Brazilian investment in the United Kingdom contributing to job creation, innovation and prosperity.”
Jack Sirett, Partner at global financial services firm Ebury, commented: “Recent years have seen swelling trade volumes between the UK and Brazil which this latest agreement should only strengthen. Exploratory dialogues have been ongoing since 2017 as the UK looks to establish stronger trading relationships with countries outside of the EU following Brexit.
“The Double Taxation Agreement will further intensify trade by reducing the complexity and cost of doing business which should drive long-term investment between both countries. Brazil is a G20 member and both Latin America’s largest economy and most populous nation, so easing frictions offers businesses in the UK a significant opportunity to open up new trading channels.”
Eduardo Moutinho, Market Analyst at Ebury’s Brazil office, said, “The UK’s move towards LatAm markets has faced considerable barriers, for instance, strict regulation and China’s status as South America’s largest trading partner.”
“It’s very encouraging to see the UK’s progress in overcoming these hurdles, the Double Taxation Agreement and Rishi Sunak’s recent £80 million pledge to Brazil’s Amazon Fund show real promise for this trading relationship.”
Footnotes
- ONS, Trade in goods: All countries May 2023, current prices, seasonally adjusted: Trade in goods: all countries, seasonally adjusted – Office for National Statistics (ons.gov.uk)
- UK trade: March 2023, UK trade – Office for National Statistics (ons.gov.uk)
- DTA agreement, United Kingdom and Brazil sign agreement to avoid double taxation – GOV.UK (www.gov.uk)
