December 26, 2008 Building Alliances

Volume 11 | Issue 6

The United States and Brazil: partners for a stronger Western hemisphere.

Brazil and the United States have a strong bond and many common interests. One sign of our thriving relationship is the growing number of bilateral cooperative mechanisms between our two countries – including two that Secretary of Commerce Carlos Gutierrez chairs: the U.S.-Brazil Commercial Dialogue and the U.S.-Brazil CEO Forum. On Oct. 8-10, I traveled to Brazil with the Secretary for meetings of these two entities.

WHY BRAZIL?
Brazil has become a powerful symbol of globalization and growth. Since 2005, Brazil’s real gross domestic product (GDP) has increased by 15 percent; real GDP per capita has grown by 10 percent, and bilateral trade with the United States has increased by nearly 60 percent. During the Bush Administration, the U.S.-Brazil relationship has strengthened and matured. Presidents Bush and Lula met nine times, evidence of the importance both leaders place on this critical relationship. President Bush stated that “Brazil is a very powerful, very important country in our neighborhood.”

With a population of 190 million people, and a GDP of more than $1.3 trillion, Brazil is a key player in the world economy and a leader in the Western Hemisphere. It has one of the most advanced industrial sectors in Latin America and a diverse and sophisticated services industry. Brazil’s growth potential is strong, as is the potential to expand our two countries’ economic ties.

In 2007, merchandise trade between the United States and Brazil totaled more than $50 billion, an increase of 10.2 percent from 2006, and up 14.5 percent from the previous year. And through July of this year, U.S. exports to Brazil are up almost 35 percent. The United States is Brazil’s single largest trading partner, and our two economies are more integrated than ever before. Yet, while the United States is Brazil’s largest single trading partner there are opportunities being left on the table. That is why the United States and Brazil are taking steps to address a wide range of issues, including barriers to trade and investment between our two countries through many cooperative mechanisms.

U.S.-BRAZIL CEO FORUM
The U.S.-Brazil CEO Forum is a public-private partnership led on the U.S. side by U.S. Department of Commerce and the White House. The Forum brings together top executives from both countries to advise United States and Brazilian governments on best practices to enhance trade and commerce, and make recommendations for breaking down existing barriers to investment, job creation and growth. Brazil and India are the only countries in the world that have established a CEO Forum with the United States.

The business community’s involvement and recommendations are absolutely critical. CEOs from both countries have set out a number of recommendations. Both governments have welcomed the recommendations and we have achieved real results.

One of the highlights of the CEO Forum is a new aviation agreement that will increase the number of passenger flights by nearly 50 percent over the next four years. U.S. airlines such as Delta and American Airlines will now be able to bring more tourists and business people to Brazil’s beautiful Northeast. And thousands of Brazilians will now be able to fly direct to the U.S. rather than flying south to Rio de Janeiro or Sao Paulo to connect to a flight in Miami or Atlanta.

Another area of progress has been visas. Travel barriers are more than just a headache for international travelers – they can also stifle business opportunities. The U.S. Embassy has set a goal of reducing wait times for visa processing in Brazil to 30 days. And Brazil has agreed in principle to consider expanding visa validity from five to 10 years. The United States and Brazil are seeking to combine business and tourist visas without additional fees. These are important steps that will encourage more tourism and business travel.

Taxes are always a difficult issue between countries. Thanks largely to pressure from the CEOs, United States and Brazil have had real ongoing negotiations for a U.S.-Brazil bilateral tax treaty for the first time in 40 years. These discussions are making important progress.

Education has been another area of collaboration. The CEOs are leading by example through their commitment to Corporate Social Responsibility. For example, Motorola has provided a $100,000 grant for the “Enter Jovem” program which gives training to disadvantaged youth in Brazil.

This Forum and other mechanisms, such as the Commercial Dialogue, help build lasting relationships that allow for candor in our discussions. While President Lula has been critical of the United States, particularly the financial market turmoil, his larger point that global economies are more interlinked than ever is one that should further encourage dialogue and partnership.

THE U.S.-BRAZIL COMMERCIAL DIALOGUE
The U.S.-Brazil Commercial Dialogue is designed to promote and stimulate trade and investment, within an overall framework focused on developing strategies for improving the competitiveness of both countries. Established in 2006 at the request of Presidents Bush and Lula, the Commercial Dialogue serves as a framework for government officials to address and resolve hurdles to trade between our two countries. The Dialogue addresses business facilitation, export and investment promotion, intellectual property protection and standards issues.

The Dialogue facilitates cooperation between U.S. and Brazilian agencies, with notable successes in the areas of biofuels cooperation, and intellectual property protection. In the area of biofuels standards, the Dialogue has served as a way for U.S. and Brazilian standards organizations to work with Europe to complete an “Internationally Compatible Biofuels Standards” report regarding fuel quality specifications. Since the Dialogue’s inauguration, the U.S. Patent and Trade Office has provided training for over 100 Brazilian intellectual property officials in areas such as trademark examination, copyrights in the digital age, patent and trademark appeals practice and process, and IT/automation tools. Strong cooperation also continues in the areas of franchising, movement of goods and export and investment promotion.

Brazil is one of the great economies of the world. By continuing to work together on multilateral efforts, such as the Doha round of World Trade talks, and bilateral efforts, such as the CEO Forum, I believe we can expand economic opportunities for our citizens, and create lasting prosperity in our two countries. While the U.S. government is on the eve of new leadership, there is one thing that will not change: the importance of the U.S.-Brazil relationship. We are proud of the progress we have made with our partners in strengthening economic opportunities and growth in the Western Hemisphere, and we are proud of our relationship with Brazil.

David Bohigian is Assistant Secretary of Commerce for Market Access and Compliance and served as U.S. chair of the Business Facilitation Working Group of the U.S.-Brazil CEO Forum.

Subscribe to Industry Today