Brazil and Global Value Chains

Much has been said recently about integrating Brazil into global value chains as a solution for the country’s economic development.

The diagnosis of the Brazilian “patient” indicates that it remains distant and outside global value chains. In this context, distance does not necessarily refer to geography, but also to the business environment and prevailing corporate culture.

Brazil still tends to think in national rather than international terms, both at the institutional and business levels. This is reflected, among other things, in how Brazil communicates its interests internationally and how Brazilian companies position themselves in global markets and value chains.

Brazil’s integration into global value chains depends on its acceptance as a player within them. This acceptance, in turn, depends on how Brazil is perceived globally. Currently, Brazil lacks a clear international policy, communication channels, and well-defined interests. What is perceived internationally is a disorganized cacophony, which negatively affects Brazil’s image and reputation.

Global value chains are not abstract structures—they are built on business relationships and the acceptance of products by consumer groups.

For example, in the textile industry value chain, companies in Southeast Asia had to improve working conditions after widespread protests and boycott threats from consumers in the European Union.

Major brands operating in global value chains are increasingly held accountable by consumers who are more aware of production processes. The image and context of production directly affect brand acceptance and value in different markets. One of the key issues is environmental impact, particularly sustainability, traceability, and production effects on the environment.

An example of this is the recent rejection of certain major Brazilian citrus juice brands by a large supermarket chain in Germany, following protests by local consumers regarding environmental concerns.

In this context, Brazil’s integration into global value chains is intrinsically linked to how it addresses environmental issues.

Recent signals from Brazil’s political environment have significantly harmed this process, as they damage the country’s perception as a reliable player in the international arena and, consequently, the acceptance of the “Brazil brand” in global production chains and consumer markets.

Integration into global value chains also requires a local presence of Brazilian companies abroad. However, the culture and low level of internationalization of Brazilian companies remain major obstacles. In a globalized world, companies must be present in markets and proactively engage with clients and consumers.

This, however, is still not happening satisfactorily. The low degree of internationalization of Brazilian companies does not align with the ambitions of a global player.

In other words: you need to be global in order to play globally.

There is still a long way to go before Brazil is perceived as a true global business player.

Brazil’s integration into global value chains will occur through the integration of Brazilian companies into these chains.

Supplying commodities to global value chains does not mean true integration—it merely perpetuates an extractive role, handing over value creation to others without adding value domestically.os produtos brasileiros.

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Paulo Henrique Boelter – IBREI International Representative in Berlin