GEOPOLITICAL ANALYSIS. Companies only have their eyes on the midterm elections in the USA, the energy crisis in Europe or the war in Ukraine. However, you should pay more attention to Brazil, as this important trading partner of Canada could soon plunge into a serious political crisis.

On October 2nd takes place in the emerging country of 217 million inhabitants, member of the famous BRICS club (Brazil, Russia, India, China, South Africa), in addition to being the 8th world economy.

However, far-right outgoing President Jair Bolsonaro is moving in the polls in favor of left-wing ex-president Liuz Inácio Lula da Silva (2003 to 2011), is already threatening not to recognize the results.

The “Trump of the Tropics” – as he is known internationally – who has been in office since January 2019, even hints that his defeat in the first ballot would mean massive electoral fraud.

In short, he has roughly speaking the same stance as former US President Donald Trump in the United States since the November 3, 2020 presidential election.

Donald Trump’s position is of course wrong.

US authorities have never found evidence that there was massive voter fraud. However, several elected Republicans continue to spread this lie and conspiracy theory.

Canada’s third largest trading partner

The potential political crisis looming on the Brazilian horizon is a major concern for many Canadian companies.

The South American giant is Canada’s third largest trading partner in the Americas after the United States and Mexico.

In 2021, trade in goods between Canada and Brazil totaled $9.8 billion Canadian government data. However, we have a sizeable trade deficit with this country of $5.2 billion.

The main shipments by Canadian companies to Brazil include fertilizers (45.4%), machinery and parts (11.8%), oils and mineral fuels (7.1%) and aircraft and parts (5.9%).

On the import side, Canada mainly imports inorganic chemicals (27.1%), precious stones and metals (23.5%), machinery (7.7%) and iron and steel (4.7%).

In 2020, bilateral trade in services was US$984 million.

The situation in Brazil is particularly worrying because democracy there (despite its imperfections) is not as well established as in the United States.

The country lived under a military dictatorship from 1964 to 1985. The army still exerts some influence there. Jair Bolsonaro, a former soldier during the dictatorship, has appointed several soldiers to key positions in his government.

The role of the army will also be crucial for the future of things in Brazil, several analysts point out.

In the magazine foreign policy, a Brazilian politics specialist points out that several generals have criticized the incumbent president and that a classic coup (with tanks) is unlikely even with more than 6,000 members of the Brazilian armed forces working in the Bolsonaro government.

On the other hand, he believes Jair Bolsonaro could rely on his supporters in the security forces to demand a new vote or even to declare a state of emergency. A situation that would also lead to a political crisis.

How will politicians and citizens react?

in one podcast However, Radio France Culture’s Brazil specialist believes that Jair Bolsonaro is unlikely to succeed on this path, as the October 2 election is not only intended to elect a new president.

It also allows for the election of governors (Brazil is a federal state like Canada or the United States), senators and representatives at both the federal and state levels.

However, these politicians will want to take office or continue their current mandate.

It is impossible to predict how the first round of the presidential elections in Brazil on October 2 will go.

Will Jair Bolsonaro try to stay in power if he loses it?

Can he succeed in this attempt?

How will the army react? Will she be loyal to the President-elect and the Republic?

One thing is for sure, it will be a great test for the young Brazilian democracy.

A test that could also affect trade relations between Canada and Brazil.