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SAO PAULO, BRAZIL-Though Brazil has suffered similar trade declines to other growing economies, the nation’s development bank, the BNDES, approved a new credit line to America Latina Logistica (ALL) to expand the company’s rail capacity. The credit line is worth approximately $1.1 billion.

ALL, South America’s largest independent logistics supplier, will use the loan to purchase 11,000 rail cars and more than 200 new or rebuilt locomotives, as well as to extend some trunk routes. The goal is to increase cargo and container capacity for major agricultural and industrial export supply chains. The company, which offers both rail and truck service, provides intermodal transport, port operation and merchandise movement and storage throughout Brazil and Argentina. It also offers truck service only in other Latin American countries.

Last year Brazil’s trade volume declined by 19.5% from the previous year to $80.28 billion. Imports, which account for $43.5 billion of the total, fell 16.5%, while exports, which accounted for the remaining $36.78 billion, fell 22.8%.

In May Brazil announced that China had become its largest trading partner. Though China’s total trade volume for the first four months of 2009 declined 24.3% to $599.4 billion, trade with Brazil increased dramatically. For March alone, Brazil’s exports to the Asian giant were up 134.6% compared to March ’08 to $1.74 billion. By contrast, Brazil’s March exports to the US totaled only $1.27 billion. As a result of the increased trade with China, Brazil enjoyed its first-ever trade surplus in March. In April, Brazil’s total trade with China reached $3.2 billion, compared to $2.8 billion in trade with the US.

However, while China ranks high for Brazil, the relationship is not reciprocal. South America’s largest nation accounts for a mer 1.8% of China’s total trade. Brazil’s exports to China are led by mineral products, which account for 56.1% of dollar volume. Agricultural products, especially soybeans, rank second at 16.5%. Its imports from China focus heavily on mechanical and electrical appliances, chemical products and textiles, which together accounted for 65.7% of the total.

As a result of the growing trade between them, the two countries are considering using their own currencies rather than the US dollar in trade transactions. The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.

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