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Jamaica finds it difficult to break into 'protectionist' Brazil market But Ambassador Stone Roofe sees promise in agro-products and tourism

Published:Friday | October 31, 2014 | 10:00 AM
Jamaica's ambassador to Brazil, Alison Stone Roofe. File

McPherse Thompson, Assistant Editor - Business

Although Brazil entered a technical recession in the first half of this year, Jamaica has continued to work intensely to strengthen its economic diplomacy with that country with the objective of tapping into the export market and attracting investments to the island.

Jamaica's ambassador to Brazil, Alison Stone Roofe, believes the South American country, which she said remained the strongest economically in the region, will stabilise and bounce back.

In an interview with the Financial Gleaner just ahead of the October 26 presidential run-off elections, Stone Roofe said "Whomever the new president is supposed to be comes forward with an agenda for the next five years, I think we will see a return to a stronger economy."

Dilma Rousseff narrowly won the poll by a narrow margin for a second term as president.

The International Monetary Fund attributed Brazil's technical recession to the result of weakened private-sector confidence, with growth now projected at 0.3 per cent for 2014 and 1.4 per cent for 2015.

Jamaica does not enjoy vibrant trade with Brazil. Within the last decade, exports to the market of 200 million people peaked at US$9.4 million in 2012, eclipsing the previous high of US$5.9 million in 2005.

Since 2000, however, exports to Brazil have generally ranged between zero and US$1.3 million annually.

Stone Roofe has been "working hard" to improve and open up trade relations between both countries since she was appointed ambassador just over two years ago.

In an interview in Kingston this week, Stone Roofe said the high point of the efforts was the signing of a number of agreements earlier this year, including a tax information-exchange pact, an air-service agreement and a memorandum of understanding towards visa abolition. And last year, a Jamaica-Brazil Chamber of Commerce was established in São Paulo.

But Jamaica has its sight set on more - notably export, investment and trade agreements.

"For us, the trade and investment arm is critical," said the ambassador, even while noting that the Brazilian market is not easy to penetrate.

On September 20, the embassy staged a cultural festival in the capital, Brasilia, to introduce Jamaican condiments and other products and services to the Brazilian market.

The festival featured top brands such as Grace, Walkerswood, Busha Browne, and Fyahside.

Brazil is "still very protectionist, but we feel that over time, with our product targeting programme, we will be able to get a niche," said Stone Roofe.

"We feel that there is good, solid potential for Jamaican exports to Brazil, recognising, of course, that it's a difficult market; but we have been having meetings and trying to find things to get that opening."

Up to 2011, ethanol was at the centre of trade between Brazil and Jamaica, due to the Caribbean Basin Initiative under which Brazilian ethanol accessed the United States market duty-free.

Subsequent changes in US policy has given Brazil access without additional duty. It no longer needed Jamaica.

The Ministry of Foreign Affairs and Foreign Trade said that otherwise, Jamaica exports a narrow range of products to Brazil - alumina, coffee, beer and rum. Peak exports in 2012 was as a result of alumina sales of US$7.7m that year, as well as a small quantity of ethanol.

That same year, the trade deficit with Brazil was valued at US$230 million, down from US$322 million in 2011.

Imports from Brazil peaked in 2011 at US$323.1 million. Jamaica mainly buys chemicals, ethanol feedstock, manufactured goods and food from the South American country.

In its quest to deepen trade, Jamaica is thinking 'big'.

Ambassador Stone Roofe said that, while not discounting smaller exporters, they were first targeting the bigger companies in Jamaica that are more likely to deliver the volumes of agro-industrial products required of a market as large as Brazil.

The ambassador is also actively promoting Jamaica as a tourism destination for Brazilians. In August, some of the larger tour companies were brought to Jamaica to experience the tourism product, with " good feedback from the hotels and travel agents that were represented," Stone Roofe said.

The ratification of the air-services agreement by Brazilian lawmakers will facilitate more direct air links to Jamaica and should give fillip to the efforts to promote Jamaica as a travel destination.

mcpherse.thompson@gleanerjm.com