Message of Swiss Ambassador to Brazil

Wilhelm Meier

Annual Report 2011; pag. 23

With Europe tangled up in the sovereign debt crisis, the United States' economy still only slowly recovering, and China retreating into single digit growth figures, Brazil's performance in 2011 within the global economic landscape is remarkable. The government was able to stay its course and balance economic growth, inflation and poverty reduction. Even though Brazil's GDP did not increase as much as in the previous year and industrial growth has been sluggish, the country today ranks as the world's sixth largest economy. Therefore, for any global player it is just natural to build up comprehensive partnerships with Brazil.

Brazil these days sports a solid national economy with sustained growth rates, public finance under control, abundant credit supply, and record-low unemployment. The future looks bright as well: The 2014 FIFA World Cup and the 2016 Olympic Games drawing the world's attention are going to contribute to the build-up of the country, especially welcome for the infrastructure. Rio+20, the United Nations Conference on Sustainable Development in June this year, will be the next major event catching our attention. There are indeed plenty of opportunities for entrepreneurs, and due to their experience and long-standing presence in the market Swiss companies are certainly well-positioned to contribute to Brazil's success stories.

We cannot leave it unnoticed, however, that on the economic road ahead, both Brazil and Switzerland face an important obstacle: Our highly overvalued currencies are weighing down the competitiveness in the world market. Reasonable currency appreciation can, we know from experience, put healthy pressure on companies and thus contribute to their fitness. However, if a currency surges or fluctuates too suddenly and beyond measure, the stress gets intolerable. This has been the conclusion of the Swiss-Brazilian panel discussion last October at FIESP led by Swiss Federal Councilor and Minister of Economy, Johann Schneider-Ammann.

The Swiss franc is revaluating steadily and strongly since June 2010 also against the Brazilian real. Therefore it comes as no surprise that Swiss exports to Brazil decreased by 3.8% in 2011, to reach a total value of CHF 2226 million. On the other hand, Switzerland proved to be an attractive market for Brazilian products, with imports amounting to CHF 916 million (+8.2%), according to Swiss statistics. Overall, Brazil accounts for 1.1% of Swiss exports and 0.4% of Swiss imports. This is not commensurate with Brazil's weight of approximately 3.3% in the world economy. There is obviously potential for expanding and deepening our bilateral relationship.

Switzerland, along with its partners in the European Free Trade Association (EFTA), is actively developing its network of free trade agreements with emerging countries, including China, India, and many Latin American states. In 2000 EFTA signed a Declaration of Cooperation with Mercosul. During the EFTA-Mercosul Joint Committee in September 2011 the two parties agreed that the possibilities of enhancing the conditions for increasing trade, investment, economic exchange and cooperation should be jointly examined without delay.

The Swiss contribution in strengthening economic relations with Brazil was underscored in October 2011 by the official visit to Brazil of Federal Councilor Johann Schneider-Ammann. The Head of the Federal Department of Economic Affairs was accompanied by a high-level delegation of business executives and leaders of industry associations, and they were all delighted to meet the Swiss business community in Brazil during a special event organized by Swisscam in Sao Paulo.

During the official part of his visit, the Swiss Federal Councilor entertained fruitful talks with his Brazilian counterpart, Minister Fernando Pimentel, with Foreign Minister Antonio Patriota, and with then Minister of Education Fernando Haddad, as well as with Minister Aloizio Mercadante, at that time in charge of the Ministry of Science and Technology. The Brazilian interlocutors expressed great interest in Swiss industrial and technological innovations. New opportunities of cooperation will be explored in this field. And thanks to the bilateral Agreement for the Exchange of Trainees, signed by the Ministers Johann Schneider-Ammann and Antonio Patriota, young professionals from Switzerland and Brazil will get a chance to learn how business is done in their respective countries.

High level contacts in politics and economics between Switzerland and Brazil have further been developed this year during the WEF in Davos, when the Federal Councilors Didier Burkhalter, Minister of Foreign Affairs, and Johann Schneider-Ammann met with the Brazilian Foreign Minister Antonio Patriota.

Finally, as we are all well aware, it is through relationships at different levels that bilateral relations grow and bear fruits. I would like to emphasize that Swisscam is a corner stone of the "Economic Network Switzerland" that joins forces in promoting successful Swiss economic endeavors in Brazil and always efficiently assists Swiss enterprises and institutions in their activities. With Swisscam's support and cooperation, ambitious goals in the Swiss-Brazilian partnerships will be easier to attain.