Brazil is currently our 14th largest trading partner with a total (bilateral) merchandise in 2019 of $73.7 billion. Merchandise exports totaled $42.9 billion; Imports of goods amounted to $30.8 billion. The U.S. trade surplus with Brazil amounted to $US 12.0 billion in 2019. Unlike a free trade agreement (FTA), small trade agreements do not require congressional approval, which can be a lengthy process that involves no certainty of authorization. By describing the agreement as a contract between the parties, the government avoids the participation of Congress. The announcement follows a series of other small trade deals announced by the Trump administration, including with Japan, China and the European Union. Unlike a comprehensive free trade agreement, these smaller agreements do not require congressional approval, which can stop or sink an agreement for many months. The Trump administration has also sought a limited trade deal with India, but has yet to reach an agreement.
The pact, the latest in a series of “mini” trade deals struck by the Trump administration, follows seven months of negotiations between the United States and Brazil and comes to a goal that President Trump is striving to make trade gains before the Nov. 3 election. However, it is unclear to what extent the new agreement will boost trade between countries, given its limited scope. The United States has an estimated services trade surplus of $US 18 billion with Brazil in 2019, down 11.6 percent from 2018. At the summit, Mr. Pompeo also stressed the need for the United States and Brazil to reduce their dependence on Chinese imports for their own safety. “To the extent that we can find ways to increase trade between our two countries, we can. reduce the dependence of each of our two nations on critical objects from China,” he said, as reuters reported. Two weeks before the U.S. election, the U.S. and Brazil agreed on a “mini” bilateral trade deal to facilitate trade, strengthen regulatory practices and fight corruption, but the finer details of the deal have yet to be disclosed. ATEC provides an enabled commitment to a wide range of trade and investment issues.
As the United States and Brazil implement today`s protocol, they will continue to look for ways to increase trade in goods and services and encourage new investment. Myron Brilliant, executive vice president and head of international affairs at the U.S. Chamber of Commerce, said there is even more to be done when it comes to key priorities, including digital commerce and the provision of express shipping. “We call on both governments to return to the negotiating table as soon as possible.” The roadmap or report is entitled “Us-Brazil trade and FDI: Enhancing the bilateral economic relationship,” written by former U.S. and Brazilian politicians as well as private sector leaders. As I said, Brazilian President Jair Bolsonaro comments on the agreement: “This triple package will be able to reduce bureaucracy and further increase the growth of our bilateral trade, which will also have a positive impact on investment flows.” The new pact is expected to reduce barriers to trade, strengthen regulation and fight corruption.