Booming Colombia Makes Inroads in Brazilian Market

One of the results of Colombia’s rapid growth means the Andean country can now expand its economic ties to regional powerhouse Brazil. On August 31, outgoing Finance Minister Juan Carlos Echeverry announced that Colombia surpassed Argentina to become the second largest economy in South America, after Brazil. Given its expanding market, Colombia managed to increase exports to Brazil of construction materials and military technology, along with the potential to send greater numbers of workers.

Colombian trade with Brazil expanded in recent years, while Colombia lowered the trade deficit with its neighbor. Colombian exports to Brazil reached $1.08 billion last year, up from $576 million in 2009. Colombia’s trade deficit with Brazil decreased over the past few years, from $1.54 billion in 2009 to $1.12 billion in 2011.

As Brazil’s surge in construction continues—with everything from apartment buildings to bridges—more of the country’s building materials originate in Colombia. According to a study released August 22 by the Tourism, Foreign Investment, and Exports Promotion of Colombia (Proexport), Colombia’s construction material exports to Brazil skyrocketed. The report says the Andean country exported $15.2 million worth of construction materials to Brazil last year, representing a 223 percent increase from 2010. Brazil also was the country that showed the most growth in Colombian construction imports worldwide.

Beyond nuts and bolts, Brazil aims to see much more complex imports from Colombia: sophisticated military technology designed and refined by Colombian forces. Four patrol boats—known as “war tanks of the water”—are now under construction in Cartagena following a May 2012 defense agreement signed by both countries. Colombia is one of the world leaders in river-based military operations, Rear Admiral Roberto Sáchica told City TV. Tried and tested in combat, the boats developed by the navy are among the most sophisticated fluvial military vehicles in the world. They can navigate in shallow water using a water jet system that prevents the boats from getting stuck in the river. Each boat holds up to 40 crewmembers who never have to go above deck, giving them protection in the bulletproof interior of the vehicle. Brazil is the first country to express interest in the boats, which will be used for patrolling the Amazon River for drug and other contraband smugglers, as well as undocumented immigrants. In addition, the agreement allows for future exports of more of these vehicles. 

Brazil could also see a rise in Colombian immigrants. Historically, Colombians often faced strict visa regulations to travel—even in Latin America. But now, Colombia could increase its human infrastructure in Brazil. In late August, Colombia signed the Southern Common Market and Associated States’ Agreement on Residency. The agreement gives Colombians the right to health, education, and work in signatory countries, which encompass Argentina, Bolivia, Brazil, Chile, Paraguay, Peru, and Uruguay.  “With this agreement, it’s no longer necessary for Colombian nationals to enter Brazil illegally, and those that are here in a situation of irregularity can request temporary residence,” Brazil’s Department of Foreigners Director Izaura Miranda told O Globo. In the past, thousands of Colombians chose Brazil as a refuge from violence, making the dangerous trek through the Amazon to cross the border. Around 8,000 Colombians now live in Brazil who are eligible to apply for residency and to work legally. Brazil’s Labor Ministry awarded over 3,000 work authorizations to Colombians between 2009 and 2011—a number which could increase with the accord in place.

Learn More:

• Read about growing Colombian construction exports to Brazil from Proexport.
• Watch a video about the construction of Colombian patrol boats from El Tiempo.
• See the original text of the Southern Common Market and Associated States’ Agreement on Residency.