Otaviano Canuto – Huffington Post, 1/21/2015
Brazil’s is an unusually closed economy as measured by trade penetration, with exports plus imports equal to just 27.6 percent of GDP in 2013. Brazil’s large size is often used to explain its relative lack of openness. But this argument does not stand up to scrutiny: Among the six countries with larger economies than Brazil’s, the average trade-to-GDP ratio is 55 percent. Given the size of its economy, we would expect Brazil’s trade to be equal to 85 percent of GDP, three times its actual size.
Controlling for other dimensions of country size (surface area and population) and structural features often associated with trade openness (urbanization, manufacturing share in GDP) still cannot adequately explain Brazil’s lack of openness.
Lack of trade dynamism at the company level
Brazil’s lack of openness becomes even more apparent if we look at the number and characteristics of exporting companies. Very few Brazilian companies export. Indeed, the absolute number of exporters in Brazil — fewer than 20,000 — is roughly the same as that of Norway, a country of just over 5 million people compared with Brazil’s 200 million. This means that, while in Norway there is one exporting company for about every 250 Norwegians, the ratio in Brazil is one for every 10,000 Brazilians.