Energy Commodities: Strengthening USA-Brazil Economic Ties

 On October 21, 2020, in Brasilia: During his two-day trip to Brazil, Robert C. O'Brien, who is the U.S. National Security Adviser, was accompanied by the biggest high-level trade delegation from the U.S. government in decades. At the meetings with top Brazilian government officials and business leaders, we talked about a wide range of bilateral issues, such as stepping up our cooperation to boost economic growth, make it easier for investors to do business, improve security, and keep working to solve problems in the region. The United States and Brazil signed a historic, gold standard Protocol on Transparency and Trade Rules. This opens a new chapter in the economic relationship between the two countries by increasing trade and job growth in both countries. The US also offered more than R$11 billion in loans, letters of interest, and a Memorandum of Understanding with the Government of Brazil to encourage investment in Brazil and strengthen the strong alliance and trading relationship between the two countries, which could lead to the creation of thousands of new jobs.

Michelle Reed, President and Chairman of the Export Import Bank, Michael Nemelka, Deputy U.S. Trade Representative, and Sabrina Teichman, Managing Director for the Western Hemisphere at the Development Finance Corporation, went with Ambassador O'Brien on the trip. In Brasilia, Ambassador O'Brien and his team met with President Jair Bolsonaro, Ernesto Araújo, General Augusto Heleno, Minister of Institutional Security, and Paulo Guedes, Minister of Economy. They talked about a variety of topics, including trade and investment, security, and working together to deal with COVID-19 and other regional and international problems. The U.S.-Brazil 2020 Protocol on Transparency and Trade Rules was signed on October 19 by U.S. Trade Representative Robert Lighthizer in Washington, D.C., and Brazil's Ministers of Foreign Affairs Ernesto Araujo and Paulo Guedes in Brasilia. The three men did this over video call. The Protocol adds three new annexes to the Agreement on Trade and Economic Cooperation, which has been in place since 2011. These will help all areas by making business easier and cheaper by streamlining government processes. Good Regulatory Practices, Anticorruption, and Customs Administration and Trade Facilitation are all spelled out in the deal. 

President and Chairman of the U.S. Export Import Bank (EXIM Bank), Kimberly Reed, signed a R$5.6 billion Memorandum of Understanding with Brazil's Economy Minister Guedes on October 20 in Brasilia. The goal was to strengthen the strong trade and economic relationship between the two countries, with a focus on helping Brazilian companies buy technology, equipment, and other assets from trusted U.S. or other suppliers. This would help protect Brazilian innovation and encourage joint investment. A fact sheet about the EXIM Bank deal can be found here: https://br.usembassy.gov/export-import-bank-of-the-united-states. During the meeting, the National Security Council also invited Brazil to join the Artemis Accords, an international effort based on the Outer Space Treaty of 1967 and led by NASA. The Accords are meant to make the world a safer and more open place so that space travel, science, and business can happen, which is good for everyone.

Please see the fact sheet here for more information about the Artemis accords: https://br.usembassy.gov/fact-sheet-artemis-accords-united-for-peaceful-exploration-of-deep-space. During the delegation’s visit to São Paulo on October 19, the Development Finance Corporation announced a R$ 2.24 billion reais loan to Banco Itaú that will support lending to small and medium-sized enterprises (SMEs) as well as a R$ 140 million reais investment that will enable TechMet Limited to boost the production capacity of a cobalt and nickel mine in Piauí, Brazil, and signed two letters of interest, one for a R$ 1.45 billion reais investment guarantee to Smart Rio, which will modernize, maintain, and retrofit all existing public lighting fixtures as well as the expand current public lighting infrastructure and install cameras, Wifi access points, and smart transit controllers in Rio de Janeiro, and another letter of interest for a R$ 1.68 billion reais direct loan to support the expansion of BTG Pactual’s SME loan portfolio with a portion of loan proceeds focusing on lending to eligible majority women-owned businesses and SMEs located in the economically disadvantaged regions of the North and Northeast of Brazil. 

In Sao Paulo, the delegation met with FIESP President Paulo Skaf and leaders from FIESP and Amcham Brasil. They also took part in a videoconference with Brazilian business leaders to discuss ways to improve relations between the US and Brazil on economic and commercial issues such as making trade easier and increasing investments and trade between the two countries. This would lead to more economic growth for both. In the second option, the U.S. and Brazil will have the chance to change the way they relate to each other to reflect both the new facts of the world and stronger ties between the two countries, despite the ups and downs of the last ten years. To do that, we would also have to see Brazil as a world player whose goals are different from those of the United States. No matter who wins, there will be tension between the U.S. and Brazil, but that doesn't mean they can't find something they agree on. It is really impressive how well the two countries have been able to keep up high-level talks and work ties. A Commercial Dialogue between the United States and Brazil, an Energy Forum, a Critical Minerals Working Group, the U.S.-Brazil CEO Forum, and a Defense Industry Dialogue are some of the groups that meet.