Brazil and Poland: historical partners - Hadil da Rocha Vianna, Brazilian Ambassador to Poland (Instytut Dyplomacji Gospodarczej, Poland, 6/30/2021)

It would be impossible to approach any topic regarding the relationship between Brazil and Poland without referring – albeit  briefly – to the one hundredth anniversary of the establishment of diplomatic relations between our two countries, celebrated on 27 May last year. On that day in 1920, the first Polish diplomatic representative, Ksawery Orłowski, presented his credentials to the then President of Brazil, Epitácio Pessoa.

We were the first country in Latin America to recognise Poland’s independence, what makes us very proud. The invincible spirit of the nation, the unwavering resistance and the unquestionable striving of the Polish nation for freedom have always been a source of inspiration for Brazilians. Poland is considered by Brazilians a country of achievements, resistance, cultural and scientific excellence, a major contributor to civilization.

It is also crucial to highlight the waves of migration in the 19th and 20th centuries that led a great number of Polish nationals to Brazil, which presently hosts the second largest community of citizens of Polish ascendance abroad.  Nowadays it is Poland that welcomes Brazilians, mostly highly skilled youngsters, who are attracted to the country by the opportunities its current economic prowess offers.

It is in such a context that the relationship between our nations has grown even closer in a vast array of fields, including the one of trade and investments. Brazil is the main trade partner of Poland in Latin America (which encompasses 46 countries, Caribbean islands included). The other way around is also true. From all Latin-American countries, Brazil is the most relevant partner of Poland in the region.

Poland mainly exports to Brazil manufactured products, such as machinery, pharmaceuticals, and automobile parts. Brazil, in its turn, mostly sells commodities to Poland, including copper ore, soybeans and coffee. But not only. Our exports to Poland also include airplanes (from the Brazilian aircraft maker ‘Embraer’) and automobile parts.

In fact, the acquisition of Embraer regional jets by Polish airlines LOT can be surely described as a remarkable case of success of Brazilian economic diplomacy, through which its private sector and the government have combined efforts so as to promote economic and commercial cooperation with Poland. LOT acquired the first Embraer aircraft in 1999. At present, the Brazilian airplanes account for a major part of its fleet. It is estimated that by 2021 LOT will have the largest fleet of Embraer aircrafts in Europe (and one of the largest in the world).

Nonetheless, the role Brazil and Poland play in each other’s total volume of international trade leaves room for more significant figures. In 2019, both countries accounted for around 0.35% of each other’s foreign trade. Brazil lands on 31st place among exporters of goods to Poland, and holds the 48th position as an importer. Given the remarkable size of the Brazilian market and the growing prominence of Poland in the context of the EU, there is much to be done to bring bilateral economic diplomacy to ever higher levels. In spite of the existing challenges – such as the geographical and linguistic ones – Brazil and Poland are both dynamic and vibrant economies that display clear potential to further explore their complementarities.

In that regard, innovation is one field that we believe to critical for bilateral cooperation, with a view to fostering new business exchanges and technological advancement in both countries.  According to the Global Innovation Index 2020, published by Cornell University, INSEAD Business School and the World Intellectual Property Organization (WIPO), the cities of São Paulo and Warsaw host important Science & Technology clusters in their regions, and the innovation performance of both countries are in line with their level of economic development. Brazil and Poland can engage in meaningful exchanges in innovation diplomacy aiming at repositioning their economies in the regional and global supply chains and scales of competitiveness.

In this realm, the Embassy of Brazil in Warsaw has put efforts into bringing closer together agents from the Brazilian and Polish ecosystems of startups in, mainly but not only, the sectors of fintech, healthtec and agritech. Both in Brazil and in Poland startups from the finance industry, which find themselves immersed in well-developed banking environments, are amongst the fastest growing innovative companies. Healthtec will only increase its presence in the forefront of R&D investments, and pharmaceutical products already play an important role in commercial exchanges between our two countries. As for agritech, cooperation in such field has the potential to not only improve trade of agricultural products between Brazil and Poland but also to trim edges related to their market competition in this sector. Brazil and Poland share the common challenge of incorporating innovation into all steps of the agrifood and clear energy supply chains.

Also in the field of innovation and creative industries, the Embassy has been running a project aimed at increasing cooperation and trade between developers and publishers of digital games from Brazil and Poland. Both countries display well developed markets in such area and could thus profit from a closer and deeper exchange of expertise, technologies and business deals. In 2021, Polish and Brazilian entrepreneurs chaired a panel on the Polish market for games during BIG Festival, the largest event of such industry in Latin America, which takes place in São Paulo annually. Polish and Brazilian businesses also took part in B2B meetings during the event. The Embassy of Brazil in Warsaw carries out this project in partnership with the Brazilian Association of Digital Games Developers (Abragames) and the Brazilian Trade and Investment Promotion Agency (Apex-Brasil).

Still regarding the Brazilian agribusiness, a major player in the economic and technological development of our country, I should mention the different activities carried out with a view to promoting its products in the Polish market. Jointly with Apex-Brasil, the Embassy has organized online business meetings where Brazilian exporters meet Polish importers from a variety of sectors, such as wood products, wine, organic food, nuts and specialty coffees. Particularly, the team in charge of trade promotion at the Embassy bets on the interest of Polish consumers in different and high-quality products offering exquisite flavour and matching a healthy lifestyle.

The Brazilian government has also promoted the sustainability of its agriculture and livestock production by organizing several events throughout Europe to present to local market agents policies that have for long been in place in Brazil – accompanied by the corresponding empirical data – regarding the sustainable practices of its agribusiness. We have thus been able to demystify mistaken and/or inaccurate information related to crop harvest and cattle raising in Brazil. While committed to continuously improving the high standards of its agribusiness, the Brazilian government saves no efforts when demonstrating how its solid existing legislation on the matter allows the increase of food production to go hand in hand with strong environmental and social sustainability. Brazil’s agribusiness is a showcase of success, efficiency, productivity, quality, competitiviness and high environmental standards – feeding more than 1 billion people around the globe.

In addition, it is from the debate on sustainability topics that one of the main challenges facing us in the coming years derives from. That relates to the political process aimed at obtaining parliamentary approval of the MERCOSUR-EU Association Agreement amongst European Union member states. The agreement will significantly reduce or eliminate trade barriers across the board allowing trade flows between the two regions (and so between Brazil and Poland) to significantly increase.

When in place, the agreement will conform one of the three biggest free trade areas in the world, where Mercosur will liberalize 94% of its tariffs and 96% of its trade volume with the European Union, whereas the EU will liberalize 77% of tariffs and 82% of commerce volume. Such level of liberalisation will yet foster increase productivity and competitiveness on the solid grounds of high patterns of sustainability. 

Many fear the competitiveness of the products from the Mercosur agribusiness, but EU imports of Mercosur commodities, such as soybeans and coffee, are already tariff free. Moreover, according to the European Comission, Mercosur quotas represent only 1.2% of the EU consumption of meat and poultry, 1% of sugar, and 1% of ethanol. What is more important, Mercorsur liberalisation will include items of high interest to the EU, such as olive oil, whisky, cheese and wine, and also relevant sectors for its  economy, inter alia automobile, machinery, chemical and pharmaceutical. Will create remarkable opportunities for the expansion of the export base of both regions, with special opportunities for SMEs with a good understanding of each other’s common preferences.

In the meantime, while the process of parliamentary approval of the said agreement evolves, the Embassy of Brazil has been promoting online business events (given the present COVID restrictions) while also working to reduce the awareness gap amongst Polish and Brazilian entrepreneurs related to each other’s business environment. With that purpose, the embassy edits newsletters with information on dynamic sectors of the economy of Brazil and Poland, as well as regarding business events taking place in those two countries. To subscribe to our newsletter about the Brazilian economy, please refer to our Facebook page (facebook.com/brasil.varsovia).

The post-COVID world and the adoption of the aforementioned MERCOSUR-EU Association Agreement, besides the growing importance of Poland and Brazil’s economies in the regional and global context – coupled with the challenges posed by the new worldwide digital revolution – make it imperative for our countries to know more about each other, and to take better advantage of existing opportunities and deeper economic, trade, investment and innovation partnerships, with a view to bringing our historic bilateral relationship to a new stage of dynamism and excellence.