May 14, 2019


Brazil and US hit restart button on trade relations (Andres Schipani in Brasília and James Politi in Washington, 5/14/19, Fimnancial Times)

Bilateral trade between Brazil and the US is just $100bn a year. This is just a sixth of Mexico-US trade, even though Brazil's $2tn economy is nearly twice as big as Mexico's. In the Americas, Robert Lighthizer, the US trade representative, has been focused on pushing the revised Nafta deal with Canada and Mexico through Congress. Beyond that, Mr Lighthizer's attention has been dominated by the denouement of trade talks with China, and the possible launch of new ones with Japan and the EU.

Optimism prevailed among US officials and business executives during Mr Bolsonaro's visit, but this was largely because trade relations have been so testy that the bar for improvement was very low. "The Bolsonaro government views the US as a strategic partner and wants to reset the relationship on more positive terms -- and the US government appears to be on board," said Cassia Carvalho, executive director of the Brazil-US business council.

There were some advances. Both countries reached a deal to support US space launches from the Alcântara base in northern Brazil through a series of technological safeguards; Brazil dropped its visa requirements for US citizens; and the US said it would back Brazil's membership of the Organisation for Economic Cooperation and Development, or OECD, in exchange for Brazil abandoning preferential treatment at the World Trade Organization.

"For Brazil it is important to enter the OECD and, in fact, the US was blocking its entrance there, so giving up the preferential treatment was reasonable," said Pedro da Motta Veiga, director of the Brazilian Center for Integration and Development Studies.

Meanwhile, some steps were taken to reduce tensions around access to the agricultural markets in both countries. Brazil showed a willingness to allow more pork from the US into the country alongside tariff-free wheat imports, and the US is exploring options to reopen imports of fresh Brazilian beef.

A big opportunity for the next president in a neoliberal Brazil.

Posted by at May 14, 2019 3:52 AM