Trade And Business

With large and well-developed agricultural, mining, oil and gas, manufacturing and service sectors, Brazil is expanding in world markets. China now equals the US as Brazil's largest trading partner. Brazil is second to Australia as the world's largest iron ore exporter. Brazil is the largest, or second-largest, exporter of beef, soybeans, orange juice, sugar and chicken. It is the world's second-largest ethanol producer and largest exporter.

The Southern Cone Common Market (Mercosur) is the most important economic grouping for Brazil. Mercosul was formed in 1991 by Brazil, Argentina, Paraguay and Uruguay; Venezuela formally joined Mercosul in 2012. Under the Mercosul treaty, tariffs between members are lowered gradually on most products and common external tariffs are applied to non-members. Mercosul represents a market of almost 250 million people with a combined GDP in 2011 of more than US$3 trillion.

The income tax rate is 27.5 percent. The standard corporate tax rate is only 15 percent, but a financial transactions tax, 10 percent surtax, and 9 percent social contribution on net profits bring the effective rate to 34 percent. The overall tax burden amounts to 32.5 percent of GDP. Public spending is over one-third of GDP, and attempts at fiscal stimulus have added to a history of chronic public deficits. Public debt, however, has been relatively stable.


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