Brazil opens negotiations on trade agreement with US

According to Reuters, Minister of Economy Paulo Guedes said on Wednesday that Brazil had officially begun negotiating a Brazil-USA trade agreement. According to him, the negotiations are compatible with the recently concluded trade agreement with the European Union.

Speaking in Brasília after meeting with US Secretary of Commerce Wilbur Ross, Guedes said the United States wants closer ties with Brazil, including the chance to sell more ethanol from Latin America.

Special Secretary for Foreign Trade and International Affairs at the Ministry of Economy, Marcos Troyjo, said a US Congressional endorsement of the White House is in place so that the US President can negotiate trade deals involving non-bilateral tariffs. The so-called Trade Promotion Authority (TPA) runs until June 2021.

“The nice thing about having an ambitious goal is that your goal is so big that you can solve supposedly more specific issues [on the way],” said Troyjo.

“Visas for businessmen, double taxation agreements, e-commerce, digital goods trading – all of these can be advanced if you have that bigger goal ahead,” he said in respect to the topics that are on the government’s radar.

In February, before Bolsonaro’s visit to the US, the Trump administration asked Brazil to suspend a 20% tariff on ethanol imports exceeding 150m liters per quarter.

The following DataLiner graph shows the top three export commodities from Brazil to the United States from January 2015 to June 2019:

In contrast, the Brazilian sugar industry has called for the release of import tariffs set by Washington. Brazil only has a small quota of sugar for export to the US at a lower rate.

Amid irregularities in the Brazilian refrigerator sector identified by the Americans, the US suspended imports of fresh meat from the country in 2017.

On President Bolsonaro’s trip to Washington in March, it was hoped that exports of fresh meat from Brazil to the US could resume, which did not happen.

The following DataLiner graph shows the top three import commodities from the United States to Brazil between January 2015 and June 2019:

Brazil is a major non-NATO US ally

President Donald Trump also strengthened Brazil’s status as a US military ally on Wednesday (08/01), making it easier for the Latin American giant to buy more sophisticated weapons. In a statement sent to the State Department, Trump said: “I designate the Federative Republic of Brazil as the main non-NATO ally of the United States,” referring to the powerful North Atlantic Treaty Organization (NATO).

Countries with non-NATO Alliance member status enjoy a higher level of trust with Washington, allowing them priority access to the US arms market and strengthening ties between the military.

Egypt, Israel, New Zealand, and Taiwan are among other US allies already in the group.

Trump had already stated in May that he intended to give Brazil the status.

Sources: Reuters and Mercopress

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