Zona Franca

This threat has negative implications not only for Ecuador, but also to Brazil and potentially for the rest of the countries that can be entered in a similar conflict with the country which governs Lula Da Silva. As data from the existing commercial relationship between Ecuador and Brazil in 2007, the commercial exchange between the two totaled US $767,5 million, of which US $36.6 million corresponded to Ecuadorian exports and US $730,9 million remaining corresponded to imports from the Brazil. Trade relations between Brazil and Venezuela, piling up to September $5,500 million and estimates placed in $7,000 to the total volume of this year. Possible deterioration of trade relations between the two countries could generate a significant impact in the Zona Franca of Manaus, in the North of Brazil from which are produced and exported to Venezuela home appliances, electronic materials, rubbers and lately in addition, food and cattle in Brazil. On the side of Venezuela, exports to Brazil they are mainly petroleum products while, of the Guri dam, Venezuela supplies power to northern Brazil border populations. With regard to the business relationship between Brazil and Paraguay trade balance is clearly favourable to the first by more than $1.1 billion annually. On the other hand, the importance of the support of the Brazilian economy for Paraguay is not less.

Paraguay became the fifth largest exporter of soybeans in the world with the support of Brazilian technology. For Bolivia, besides representing an important trading partner, Brazil is the current largest foreign investor in the country, so that a deterioration in relations between the two would imply one damage not less for the Bolivian economy. But this conflict would not only damage trade relations among these countries, but that in addition, it would also alter FDI, although on a smaller scale. The conflict between Ecuador and Brazil has resulted in a series of consequences with a potential negative impact of significance for all countries involved (including Brazil), but the damage in the smaller economies may lead to the point of compromising its macroeconomic health. They will be those countries willing to negotiate an alternative solution that avoids all lost in the conflict?

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