Latin America Advisor

A Daily Publication of The Dialogue

Are Brazil & the U.S. on a Fast Track to Closer Trade Ties?

U.S. President Donald Trump and Brazilian President Jair Bolsonaro shaking hands. Presidents Donald Trump (L) and Jair Bolsonaro met in Florida last March. // File Photo: Brazilian Government.

Brazil and the United States this month signed a limited pact that is expected to ease trade barriers, strengthen regulatory practices and fight corruption, according to officials from both countries. However, it is unclear to what extent the new deal will actually increase trade between the two nations, given its limited scope. What are the motivations behind the deal, and what does each country stand to gain from it? How will the United States’ offer to finance the deployment of 5G technology in Brazil play out, especially in terms of U.S.-China competition? Is the limited trade pact likely to be expanded in years ahead, and how might the outcome of U.S. presidential and congressional elections next month influence that?

 

Francisco Sánchez, partner at Holland & Knight and former U.S. Under Secretary of Commerce for Trade: “On Oct.19, the United States and Brazil signed a ‘mini’ trade deal that addresses trade facilitation, customs administration, regulatory practices and anti-corruption. The deal did not address the most important question facing U.S.-Brazil economic relations: commodity tariffs. The deal appears to be a diplomatic step to keep the door open for a broader one, even though that is unlikely. Right now, the mini deal is the most that Trump can do without Democratic support in Congress. In Brazil, Bolsonaro is bound by Mercosur, a regional common market deal, which would have to be renegotiated for Brazil to seek a free trade agreement with the United States. The limitations of the deal may prove to be a missed opportunity for the United States as it competes with China to influence the future of Brazil’s IT infrastructure. Through a memorandum of understanding, the United States is…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe click here or for more information, contact Erik Brand, publisher of the Advisor, at ebrand@thedialogue.org.


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Erik Brand

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Gene Kuleta

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