The U.S.-Brazil Trade Agreement is Imminent
Co-Authored by Sharath Patil
On October 5, 2020, Brazil’s Assistant Deputy Minister for Foreign Trade and International Affairs, Yana Dumaresq, stated during an Atlantic Council online panel discussion that a U.S.-Brazil trade agreement that covers trade facilitation, good regulatory practices, and anti-corruption is in legal scrub and the text should be finalized by mid-October. “We hope to have them signed this month,” Dumaresq said. The U.S. Commerce Department’s lead negotiator on this agreement, Joseph Semsar, said that “this is a unique opportunity to get things done that seemed unattainable.” These latest developments are a result of months of negotiations between the two major economies. Trade facilitation Back in April 2020, the U.S. Trade Representative (“USTR”) released a statement describing meetings between Brazilian President Jair Bolsonaro and President Donald Trump and ambitious plans to strengthen trade and economies ties.
Trade facilitation is one of the key focus areas of the U.S.-Brazil trade agreement. According to the World Trade Organization, trade facilitation refers to the “simplification, modernization, and harmonization of export and import processes.” Good regulatory practices – the second focus area – refers to building a regulatory coherence system in both countries in which government agencies are coordinated and working together to achieve a specific policy goal, thereby avoiding overlapping and inconsistent rules. Finally, as the name implies, the anti-corruption focus area refers to rules and measures which make the trade more transparent and predictable.
Although the agreement being negotiated will strengthen U.S.-Brazilian economic ties, the agreement is considered a narrow, issue-specific agreement that is a far cry from a full-fledged free trade agreement – a possibility both countries have explored for decades. According to trade policy analysts, a proper U.S.-Brazil trade agreement is unlikely in coming years because (1) the U.S. and Brazil compete in a number of key industries (especially agriculture) rather than serve as complementary economies, and (2) trade liberalization is largely unpopular both in the Trump and Biden administrations. Furthermore, many U.S. members of Congress have taken issue with the President Bolsonaro for not doing enough to protect the Amazon rainforest. The Bolsonaro administration has been widely criticized for failing to effectively combat illegal logging, ranching, and mining in the Amazon rainforest. There are many barriers to stronger U.S.-Brazil economies ties. Proponents of increased U.S.-Brazil trade liberalization argue that such endeavors are necessary to counter China’s growing influence in South America, and that Washington must seek to counter Beijing’s strengthening ties with Brasilia.
U.S. & Florida Trade with Brazil
The U.S. and Brazil are massive global economies, ranking as the first and ninth largest economies by gross domestic product (GDP), respectively. In 2019, U.S. goods and services exports to Brazil were valued at $68.3 billion and U.S. goods and services imports from Brazil were valued at $38.2 billion. The U.S. enjoys a $30.1 billion trade surplus in goods and services with Brazil. Brazil is particularly important to the Florida economy. In 2019, Floridians exported $4.57 billion worth of goods to Brazil. For additional information on Florida-Brazil trade, be sure to check out our article on Florida’s Top 3 Export Markets.
Trade with Brazil is an important dimension of Florida’s economy, and opportunities abound for Floridian manufacturers and service-providers. However, it’s critical that your supply chain adhere to U.S. export compliance requirements. To ensure that you are adhering to relevant U.S. laws and optimizing your operations, be sure to follow the following tips:
- Follow the top 10 import/export compliance steps
- Ensure you have a formal written compliance program
- If you receive a notice of detention or seizure notice from CBP, be proactive
For more information, check out our Top 10 Tips When Importing/Exporting to Ensure Compliance. If you have any questions or need any assistance with export compliance or other trade and customs matters, be sure to contact us at firstname.lastname@example.org
Trade data is sourced from the U.S. Census Bureau’s USA Trade Online database and the U.S. Bureau of Economic Analysis. All data is adjusted for inflation to base month August 2020.