Wed Aug 23 12:49:00 EDT 2017 | Blog BIC US

Interview with the Secretary of Foreign Trade of Brazil Abrão Neto

BIC: What makes Brazil a key trade-and-investment partner of the United States?

Secretary Abrão Neto: Brazil and the United States have a solid, long-standing and mutually beneficial trade-and-investment relationship. The bilateral trade is highly complementary and inter-company, which reflects an important level of reciprocal investment. Two-way goods and services trade totaled approximately US$ 88 billion in 2016 – and is growing in 2017. The US is Brazil's second largest overall trading partner in goods and the main destination for our manufactured products. It is also the most important destination for Brazilian companies investing abroad. On its turn, Brazil is the United States’ second largest trading partner in goods in Latin America, and an important source for inputs to the US industry. It is then clear why Brazil and the United States are strategic partners.

Looking ahead, I see great potential for deepening our trade relations. We have the two largest economies and domestic markets in the Americas, which will benefit from further integration. We share strong democratic values. We also have a number of bilateral governmental mechanisms and an actively engaged private sector. The Brazil-US Commercial Dialogue, for instance, has been supporting our trade relations since 2006, with meaningful results. All this together, shows that there is a favorable prospect for our common future in the area of trade-and-investment.

 

BIC: The U.S. is modernizing NAFTA by adding new trade disciplines, such as digital commerce, labor and environmental rules. Is Brazil prepared to negotiate new generation of trade agreements? 

Secretary Abrão Neto: Brazil has been taking a modern stance on trade issues. We have been including disciplines on regulatory convergence, trade facilitation, SMEs, and electronic commerce in our ongoing negotiations. Brazil and Mexico, for example, are discussing a comprehensive agreement that has a chapter on regulatory coherence. Discussions between Mercosur and the European Union include sustainable development. In fact, Brazil is part of the most important labor and environmental international agreements and has very strict domestic regulations on the matter. Also, not all of these issues are entirely new. Within the ILO, for example, there is a Working Group on the social dimensions of the liberalization of international trade since 1994. 

Brazil is also actively engaged in the regional and global discussions involving these so-called new issues. In the past 2 years, we have concluded Investment Agreements with 14 countries. Last month, the ministers for industry and trade of the Mercosur countries agreed to resume the block's working group on e-commerce. On the multilateral level, Brazil has been a great advocate for investment facilitation and SMEs, just to mention a couple of areas. We have put forward proposals on those and other issues aiming for concrete results at the WTO Ministerial Conference at the end of the year. New trade issues reflect the dynamics of international trade in the 21st century. Brazil supports updated rules that promote a freer, more balanced and more inclusive international trade.

 

BIC: The private sector wants Brazil and the U.S. to negotiate a free-trade agreement. So far, what has been effective in promoting trade and investment flows between both countries? 

Secretary Abrão Neto: The view of the private sector shows that there is great interest and support in strengthening bilateral trade-and-investment relations between Brazil and the United States. The Brazil-US Commercial Dialogue, co-chaired by Brazil’s Ministry of Industry, Foreign Trade and Services (MDIC) and the US Department of Commerce (DoC), has been an important drive for such a goal. The Dialogue is pursuing a pragmatic agenda aimed at reducing barriers to trade and at improving the rapid and secure movement of goods, services and investment across our borders. It includes cooperation on standards and conformity assessment, trade facilitation, services, intellectual property, trade promotion and regulatory coherence. We believe much progress has been made so far, and that there is a substantial list of important deliverables still for this year.

We are reducing costs and time for complying with technical standards in several areas, such as ceramics, machinery, and electronics. On intellectual property, we are advancing on our Patent Prosecution Highway pilot project. On trade facilitation, we are working to assure that bilateral trade in goods is conducted on the most secure, modern and predictable border clearance procedures possible. For instance, our agriculture ministries are engaged in start using electronic phytosanitary certificates (ePhyto), which will ease the requirement of paper certificates and may benefit over US$4 billion a year in the trade of agricultural goods. In addition, Brazil and the United States are sharing best practices regarding single window implementation and its impacts on the business community, including small and medium enterprises. Our customs agencies are participating actively in this process, besides working towards the mutual recognition of their Authorized Economic Operators.

Amongst other avenues for cooperation, the Brazil-US Commercial Dialogue is a concrete example of how our countries can pursue a substantial and pragmatic building block agenda on trade-and-investment issues that strengthens our commercial ties in the short run, but also serves as a platform for even more ambitious ways of integration in the future. 


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