What lies behind Brazil’s record trade surplus in May

For several weeks now, Robin Brooks, the chief economist at the Institute of International Finance (IIF), has been making rather controversial statements on Twitter. He has been saying that Brazil’s growing surpluses are a phenomenon not seen in other emerging nations, showing that the country “is on track to become the Switzerland of Latin America” — and which would eventually “turn Brazil into a current account surplus country.” In Mr. Brooks’ view, the growing trade surpluses are a significant change of scenario that will help offset the country’s historical current account deficits. 

Leaving aside the comparison with Switzerland, which seems a bit of a stretch, Mr. Brooks may well be right about the benefits of such a trend. But domestically, his fellow economists are much more focused on the growth in trading volumes.

In general, higher volumes compensate for lower commodity prices and terms of trade (export prices falling more than import prices). More importantly, they also make up for a slowdown...