U.S. and Brazil Sign Trade Cooperation Pact, Formalize Economic "Dialogue," Etc.

Trade Agreement Establishes Commission to Expand Trade, Identify Problems

During the visit, U.S. Trade Representative Ron Kirk and Brazilian Minister of External Relations Antonio de Aguiar Patriota signed the U.S.-Brazil Agreement on Trade and Economic Cooperation.

This agreement, which entered into force on March 19, 2011, requires the establishment a Commission chaired by USTR and Brazilian officials which addresses the following matters:

• facilitation and liberalization of bilateral trade and investment;
• cooperation on shared objectives in the World Trade Organization;
• cooperation in the U.S. -- Brazil Consultative Committee on Agriculture;
• sanitary and phytosanitary measures;
• technical barriers to trade;
• intellectual property rights;
• regulatory issues affecting trade and investment;
• information and communications technology and e-commerce;
• trade and technical capacity building;
• trade in services; and
• any such matters as the Commission may decide

The Commission will meet annually, encourage private sector participation, and may organize Expert Meetings and establish working groups to meet its objectives.

Formalized Economic Dialogue Puts Brazil Engagement on Par with China, India

The U.S. and Brazil also completed an agreement to formalize a Brazil-U.S. Economic and Financial Dialogue. According to President Obama, it is time for the U.S. to treat its engagement with Brazil on economic issues as seriously as it does with nations like China and India, and this dialogue will help promote economic cooperation, streamline regulations, and enhance international cooperation not only at the G20 but elsewhere.¹

Commercial Talks Focused on Supply Chains and Trade Barriers

According to Commerce Secretary Locke, through the existing U.S.-Brazil Commercial Dialogue which is a partnership between the U.S. Department of Commerce and Brazil’s Ministry of Development Industry and Foreign Trade, the countries have been focusing on promoting sustainable manufacturing supply chains and energy efficiency.

Secretary Locke added that through the Commercial Dialogue and elsewhere, he hopes the Brazilian government will continue its efforts to build a business climate with more transparency and a more consistent regulatory environment. This is because the complexities of Brazil’s business environment still create substantial obstacles for U.S. exporters and investors. For example, U.S. companies face high tariff barriers; a difficult customs system; a heavy and unpredictable tax burden; and a legal system that is overloaded and slow to enforce business law.

Business Group Also Interested in a U.S.-Brazil FTA, Infrastructure Projects

Locke stated that through the U.S.-Brazil CEO Forum, which met during the Presidential visit, the CEOs expressed a strong desire to see a Free Trade Agreement between the two countries. They also ended with some consensus on infrastructure projects, namely that the two governments should: create incentives and guarantees to attract U.S. companies to participate in Brazilian infrastructure projects; examine public bid policies that might discourage foreign investments; and allow the greater movement of architects, engineers and other professionals critical to building infrastructure projects.

Concluded Open Skies Agreement that Would Expand U.S.-Brazil Air Services

The U.S. and Brazil welcomed the conclusion of a new Memorandum of Consultations (“Open Skies”) and applauded the agreement on transitional provisions until the agreement enters into force. According to the White House, Open Skies will allow for significant expansion of air services between the two countries. Brazil is the U.S.’ largest aviation partner in South America, with over three million passengers annually. It adds that establishing Open Skies is an important advance in the bilateral relationship and will strengthen trade and tourism links.

U.S. and Brazil to Hold Clean Energy Roundtable in 2011

The two sides also stated that they will convene a Clean Energy Roundtable later in 2011 at which government and private sector leaders will discuss critical opportunities for, and barriers to, increased collaboration and economic cooperation between the U.S. and Brazil on clean energy development. This event will showcase the opportunities and vehicles that exist for cooperation in the energy sector and support a number of strategic U.S. initiatives, including those under the Binational Energy Working Group, the President’s National Export Initiative, and the related Renewable Energy and Energy Efficiency Export Initiative.

¹The two countries also decided to elevate to the Presidential level the major dialogues between the two countries, including the Global Partnership Dialogue, the Economic and Finance Dialogue, and the Strategic Energy Dialogue. The leaders directed the ministers involved to convene and report to them regularly.

(See ITT’s Online Archives or 03/21/11 news, 11032104, 11032135, 11032103, and 11032145, for previous BP summaries of individual agreements reached during the President’s trip to Brazil.)

White House fact sheets on the U.S.-Brazil visit available here.

Remarks by the President at CEO Business Summit in Brasilia available here.

Joint Statement by President Rousseff and President Obama available here.

USTR press release on the Trade & Economic Cooperation agreement available here.

Sec. of Commerce Locke’s address at the American Chamber of Commerce in Brazil available here.