Brazil and the United States have unveiled a roadmap for dismantling the barriers hindering their bilateral trade, with the ultimate goal of reaching a free trade agreement.
The roadmap or report is titled “US-Brazil trade and FDI: Enhancing the bilateral economic relationship,” and is authored by US and Brazilian former policymakers and private-sector leaders.
The new trade agreement may not look like the United States-Mexico- Canada Agreement (USMCA), but it will indeed boost trade between the two countries, say analysts.
The two countries are trying to expand trade partnerships, especially in the areas of services, agribusiness, and digital trade, according to Sergio Segovia, President of Apex-Brasil, Brazil’s investment promotion agency.
The US is Brazil’s second-largest export market and trading partner, with the two countries exchanging more than US$100 billion in goods and services in 2018. The relationship has improved considerably in the past few years, mainly after Bolsonaro took over as President.
The US has now designated Brazil as a major non-NATO ally, in addition to promising that it would back Brazil’s attempt to become a member of the OECD.
Besides, the Donald Trump administration has lifted the 2017 ban on beef imports from Brazil and has refrained from imposing new tariffs on metal imports.
But there are some barriers too. The US is opposing Brazil’s interest in involving Huawei Technologies, a Chinese behemoth, in building 5G networks. Moreover, Trump has removed Brazil from the list of nations considered to be developing, a designation that gives the South American country certain trade privileges.
Analysts say it will not be easy for Brazil to remove tariffs on US goods without convincing its partners at Mercosur, the South American trade bloc, also composed of Argentina, Uruguay, and Paraguay.