Commodity Exports Lead at Port of Santos, While EPZs Offer Potential Shift

Commodity exports dominate activity at the Port of Santos, with 53% of exports and 39% of total cargo throughput—imports and exports combined—made up of commodities like soybeans and other agricultural products, according to the Santos Port Authority (APS). While these numbers highlight the port’s significance, they also underscore a missed opportunity: the low added value of these goods limits their potential to drive deeper economic growth. Introducing Export Processing Zones (EPZs) could be a game-changing strategy to address this gap.

EPZs are free trade zones located near ports that focus on manufacturing goods for export and offering export-oriented services. In Santos, the Continental Area is being considered as a prime location for such a zone due to its proximity to the port and ample room for expansion.

Journalist and public finance expert Rodolfo Amaral emphasizes the need to identify products currently exported through Santos that could benefit from value-added industrialization. “The possibilities are vast, ranging from steel and footwear to ceramics, granite, seafood, fruit, soybeans, corn, and coffee,” Amaral says. “Engaging with the private sector to uncover investment opportunities is critical.”

Port consultant Luís Claudio Montenegro views EPZs as a cornerstone for economic transformation. He contrasts Brazil’s focus on domestic market-driven industrialization with the export-driven strategies of Asian nations like South Korea and China, which have capitalized on economies of scale to fuel growth.

Montenegro points to South Korea’s success as measured by the Economic Complexity Index. By prioritizing high-tech exports—such as electronic systems, precision chemicals, and machinery—South Korea has secured a 2.7% share of global trade. Brazil, with its reliance on commodity exports, holds just 1.2%. “We need to emulate South Korea’s emphasis on efficiency and innovation,” Montenegro argues.

South Korea: A Blueprint for Efficiency

Elias Júnior, Santos’ Secretary of Port Affairs and Employment, highlights South Korea’s integrated logistics as a model for Santos. Referring to a recent visit by the Porto & Mar Brasil – South Korea 2024 delegation to Hyundai’s industrial park, he notes, “Sixty-five percent of the park’s production is destined for export, seamlessly integrated with the port. This is the kind of efficiency we should strive for in Santos.”

China’s SEZ Success Story

China offers another compelling example, says Célia Ribeiro, coordinator of the Economics program at UniSantos. With over 7,500 Special Economic Zones (SEZs) globally, China hosts 33% of them, leveraging tax incentives and flexible regulations to stimulate industrial growth. “These zones have been instrumental in fostering industries and driving economic and technological development,” Ribeiro explains.

The implementation of EPZs in Brazil could diversify its export portfolio, elevate the value of its products, and align its industrial practices with global standards. By doing so, Brazil could unlock significant industrial and economic potential, transforming its role in the global market.

Source: A Tribuna

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