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REDISCOVERING BRAZIL
A HUGE AND LARGELY UNTAPPED MARKET

New York companies are rediscovering Brazil as its legacy of debt crisis, dictatorship and hyperinflation recedes into history, according to Carlos Aldan De Araujo, director of the World Trade Center in Sao Paulo.

At a series of talks around the state, "the reception has been very positive," Aldan said. "Brazil is, as you say, 'hot' now."

Aldan made the remarks following a meeting with members of the Buffalo Niagara World Trade Center, a sister chapter of Aldan's trade organization.

As the second-largest economy in the Western Hemisphere and home of 170 million people, Brazil represents a huge and largely untapped market. Its economy of $1.1 trillion is 52 percent greater than Canada's, but its trade relationship with the U.S. is less than one-tenth as large.

Until 1991, protectionist barriers virtually shut imports out of South America's largest country. The opening of Brazil's economy is still under way, but import tariffs have fallen from 75 percent to an average of 13 percent of the value of imports, Aldan said.

What's more, as a developing nation with a growing economy, Brazil is a ready market for technology and production equipment.

"We are an undeveloped country that needs to modernize," Aldan said.

Attending the talk were 15 representatives from area companies that were looking to do business in Brazil or to expand existing relationships.

Unifrax Corp.'s plant in Brazil increased sales 20 percent last year, riding one of the economy's periodic upturns, said Emile Peters, head of global sales and marketing. The Niagara Falls-based company supplies ceramic fibers to Brazil's automotive market from a 200-worker plant.

"Their automotive market is very volatile -- you have to ride the ups and downs," Peters said.

Harper International in Lancaster is exploring ways to established itself in the Brazil market, a representative said. The maker of industrial furnaces seeks to repeat exporting successes in China and South Korea.

Seven area companies will make a trade mission to Sao Paulo, Brazil's largest city, in October, the Buffalo Niagara WTC said.

Among the lessons to be learned, Aldan said, is that the U.S. market isn't as open as Washington often claims. The U.S. imposes tariffs of 350 percent on tobacco, 236 percent on unrefined sugar and 44 percent on orange juice, he said, all major products from Brazil's agricultural sector.

The proposed Free Trade Area of the Americas would dismantle such barriers. But Latin American nations are tepid to the trade pact at the moment because the uncertain economy of Argentina weakens their bargaining position, Aldan said.

Political uncertainty has been a constant in Brazil, and will likely resurface when social democrat president Fernando Henrique Cardoso leaves office next year. But the opening of the economy has gone too far to turn back, Aldan said. The Mercosur free trade bloc with Argentina, Uruguay and Paraguay has woven trade relationships deep into Brazil's economy. Even if protectionist parties win election, "it's not like we're going back to the dark days, because you can't," he said.

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