April 2011 ITU
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- Brazil and the United States: Working to Advance Their Common Prosperity
- In Colombia, Trade Opportunities and Stiff Competition
- Mastering the Art of Helping U.S. Companies Export
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- Featured Trade Event: World Trade Week 2011
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Brazil and the United States: Working to Advance Their Common Prosperity
Brazilian President Dilma Rousseff (center, left) and President Barack Obama (center, right) met in Brasília, Brazil, on March 19, 2011. Obama was on a two-day visit to Brazil that focused on business and trade issues. (White House photo by Pete Souza)
Brazil, an economic powerhouse of 193 million people, looms as an increasingly important trading partner for the United States. During their visits to Brasília, Rio de Janeiro, and São Paulo last month, President Barack Obama and Secretary of Commerce Gary Locke undertook a number of actions that will help the U.S.–Brazilian commercial relationship prosper during the coming years.
by John Ward
Brazilians will readily acknowledge that their country is, in the words of the musician Jorge Ben Jor, “a tropical country, blessed by God, and beautiful by nature.” But during the past decade, Brazil has become even more: an emerging world economic power. With a gross domestic product of $2 trillion in 2010, Brazil is the world’s seventh-largest economy and, not coincidentally, the United States’ 10th-largest trading partner.
This past March, President Barack Obama and Secretary of Commerce Gary Locke provided ample testimony to the important position Brazil now holds for U.S. business interests. Between them, they visited Brasília, Rio de Janeiro, and São Paulo, where they participated in a series of high-level meetings on trade and commerce. Obama also met with Dilma Rousseff, Brazil’s new president, who took office in January 2011.
Since Rousseff’s election, expectations have been high for improvements in commercial relations between the United States and Brazil. On March 20, Obama spoke to a packed house at the Teatro Municipal in Rio de Janeiro and made his hopes clear, “Together we can advance our common prosperity.… In a global economy, the United States and Brazil should expand trade—expand investment—so that we create new jobs and new opportunities in both of our nations. And that’s why we’re working to break down barriers to doing business. That’s why we’re building closer relationships between our workers and our entrepreneurs.”
Reducing Obstacles to Trade
Brazil at a Glance
According to the Census Bureau’s Foreign Trade Division, Brazil was the eighth-largest export market for U.S. goods in 2010, totaling $35.4 billion and with a trade surplus of $11.4 billion. Major product categories included civilian aircraft ($4.3 billion), computer accessories ($2.0 billion), organic chemicals ($1.9 billion), fuel oil ($1.5 billion), and plastics ($1.5 billion). The exporting trend with Brazil has been positive for the United States during the past decade, with goods exports nearly tripling from $12.4 billion in 2002. But other countries, most notably China, have been aggressively entering the Brazilian market.
Exports of services to Brazil also recorded healthy numbers by growing from $5.1 billion in 2002 to $12.7 billion in 2009. Active sectors included telecommunication services ($1.5 billion) and communication and information services ($350 million). Tourism revenue was also strong. In 2009, nearly 1 million Brazilians visited the United States and spent $4.5 billion.
For more information about exporting prospects in Brazil, visit the U.S. government export portal on the Web, www.export.gov, or contact the Trade Information Center at 1-800-USA-TRAD(E) (1-800-872-8723).
Obama’s reference to trade barriers was telling, for the United States and Brazil have recently faced a number of contentious trade issues, including disputes over agricultural exports, customs and legal procedures, and enforcement of intellectual property rights in Brazil.
One of the venues for discussing several of those issues was the meeting of the U.S.–Brazil Chief Executive Officer Forum in Brasília on March 18–19, 2011. The forum, established in 2007, brings together senior representatives from U.S. and Brazilian companies to discuss bilateral business and trade issues. Locke and Fernando Pimentel, Brazil’s minister of development, industry, and foreign trade, cochaired the meeting.
The forum’s members called for a number of long- and short-term measures that could improve U.S.–Brazilian trade, including the following:
- A bilateral tax treaty to encourage cross-border investment
- Removal of tariffs and subsidies on renewable energy products
- An agreement on trade and economic cooperation (subsequently signed during the visit; see below)
- A start to discussions on a free trade agreement between the United States and Brazil
- Participation of the United States in major Brazilian infrastructure projects through incentives and guarantees, improved bidding policies on public projects, and the freer movement of service providers—such as architects and engineers—between the two countries
Locke emphasized the significance of infrastructure opportunities in a speech he gave March 21 to the American Chamber of Commerce in São Paulo, noting that “cooperation on infrastructure is even more important when you consider that Brazil is gearing up for major construction projects, including … the 2014 World Cup and the 2016 Olympics.”
Furthering Cooperation
A number of agreements and initiatives were announced during the Obama and Locke visits. They include an announcement by Obama about the launch of the U.S.–Brazil Joint Initiative on Urban Sustainability, which will promote sustainable and green infrastructure investments for the 2014 World Cup and 2016 Olympics in Rio de Janeiro.
Other outcomes of the trip included an agreement by U.S. and Brazilian companies to increase student exchanges between the two countries, a memorandum of understanding on sporting events, an open skies agreement on flights between Brazil and the United States, and the signing of a trade and economic cooperation agreement that will facilitate ongoing dialogue on technical issues related to trade.
Goal of Mutual Prosperity
On March 20, 2011, during a three-day visit to Brazil, Secretary of Commerce Gary Locke (right) visited an Embraer facility near São Paulo, Brazil. The Brazilian manufacturer has imported more than $6 billion in goods from the United States during the past five years and has 660 employees at five U.S. facilities. (U.S. Department of Commerce photo)
President Obama established the National Export Initiative to achieve his goal of doubling U.S. exports and creating millions of new jobs by 2015. Building trade with growing markets such as Brazil is an important strategy for the United States to pursue if the ambitious goals are to be met. During the coming months, activities by the International Trade Administration in Brazil—including a medical device mission in April and a meeting of the U.S.–Brazil Commercial Dialogue in early summer—will take additional steps in this direction and will build on the actions that Obama and Locke undertook in March.
The ultimate goal is the economic well-being of both countries. As Locke noted in São Paulo, “The cooperative efforts already under way between our two countries will increase America’s and Brazil’s global competitiveness. Increasing our competitiveness means creating jobs—good-paying jobs—and helping our economies flourish.”
John Ward is a writer in the International Trade Administration’s Office of Public Affairs. Lorrie Fussell of the International Trade Administration’s Market Access and Compliance unit assisted with this report.
Brazil and the United States: Defining the Future
Francisco J. Sánchez (second from right), under secretary of commerce for international trade, at a ribbon-cutting ceremony for a new Embraer facility in Melbourne, Florida, on February 21, 2011. Embraer expects to fill 200 skilled positions at the plant. (photo courtesy of Embraer)
On February 21, 2011, the Brazilian aircraft manufacturer Embraer opened an assembly facility in Melbourne, Florida, for its line of executive jets. Francisco Sánchez, under secretary of commerce for international trade, spoke at the ribbon-cutting ceremony. Here is an excerpt from his remarks:
“Today’s ceremony here at Embraer embodies what I believe in about the future. Around us is the physical manifestation of the rule that is being ordained by the growth of the global marketplace in our recent lifetimes: that exports create jobs, that the key to the future of the American economy is international trade, and that economic integration among the nations of the hemisphere is how all of us remain competitive in the face of rising global competition. In many ways, the future is here—both in time and place.
“The future that has arrived inaugurates a new era that requires us to understand that for the American economy to grow, exports must grow.
“The aircraft assembled here symbolizes the growth of the hemispheric market and represents how international trade brings the economies of the hemisphere closer to each other to create a competitive economy as other nations in other parts of the world grow and expand their own manufacturing sectors.… Brazil and the United States understand that hundreds of millions of new consumers are giving birth to a new global market that will demand quantity as well as quality.”
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