The Impact of US-Brazil Economic Policies on Global Trade

 Being the ninth-largest economy and fifth-largest country in the world, Brazil has a big say in how the world is run. Over the past 20 years, Brazil has worked with other big developing countries to push for changes in multilateral organizations and make sure that global agreements on everything from trade to climate change protect their needs. To help keep the peace and stability in the world, Brazil has done more to work with other countries on development projects, join U.N. peacekeeping efforts, and mediate conflicts in South America and other places. Recent problems in Brazil have made the country focus on its own problems and made it less appealing to other countries, but the United States still sees Brazil as a major player in foreign policy issues. Some experts see Brazil as a "global swing state" that could support or weaken the rules-based order that the US and its allies set up after WWII.61 Because Brazil is so important from a strategic point of view, they say that the US should work to build a stronger relationship with it by engaging it more and giving it more time and resources. 

Brazil and the US could become more aligned if they worked toward a free trade deal

This would strengthen trade between the two countries and make Brazil less dependent on China. A full trade deal might be hard to reach soon, but the new Protocol on Trade Rules and Transparency could build on the progress made between the U.S. and Brazil recently. As was already said, relations between the U.S. and Brazil have improved over the past two years. However, it looks like the two leaders' personal friendship is partly to blame for their greater cooperation. The recently finished Protocol could help strengthen ties by setting up a way to keep working together that will last past the current government. A trade agreement with more scope could affect attempts around the world to support democracy and slow down climate change. Some people who care about environmental issues and human rights have told the US not to make any kind of trade deal with the Bolsonaro Administration.62 They say that a deal would help Bolsonaro publicly, which would be bad for democracy, human rights, and efforts to protect the Amazon Rainforest. Others say that the US doesn't have much power in its relationship with Brazil right now, in part because the two countries don't have a free trade deal.63 They say that the US probably won't be able to get the Brazilian government to protect the environment better or deal with other problems until there are stronger business ties between the two countries. Modern U.S. FTAs have sections on the environment that include legally binding promises and ways for countries to work together to raise standards. There aren't many ways to measure how a possible trade deal between the U.S. and Brazil would affect the U.S. economy, including how it might affect job growth and economic growth. This is partly because it's hard to separate the effects of trade reform on both economies from the effects of other changes in the country and around the world. Lack of data and other theoretical and real issues can make it hard to do economic analyses.

According to most economists, the overall economic benefits of such an agreement would be greater than the costs 

However, it is likely that it would bring both chances and problems to the United States. In each country, there may be import-sensitive areas where some U.S. businesses and workers may benefit (for example, those who can increase their output and get better-paying jobs), while others may suffer (for example, those who lose their jobs because of competition from imports). More competition for goods and services is achieved through more open trade between the two countries. An economic agreement between the United States and Brazil could help push for more economic openness and much-needed economic change. It's possible that a trade agreement between the U.S. and Brazil would cover many policy areas that affect trade across borders. These would include investment, government procurement, e-commerce, agricultural barriers, intellectual property rights (IPR), SOEs, worker rights, and the environment. In this way, it could lead to economic growth and development, which would have a bigger effect on Brazil's economy and the economies of other countries in the area than what would be expected from normal trade models. This might be very important for Brazil as it tries to improve its own standards, change its own economy, and become more integrated into the world and regional economies. Many trade experts, scholars, and policymakers say that an agreement, whether it's closely focused (lower or no tariffs only) or comprehensive (lower or no tariffs and big cuts in NTBs), is likely to be good for U.S. exports, jobs, and growth. At first, it seemed like most of the benefits would come from low or no taxes in Brazil, where they are currently quite high. Also, NTBs can be lowered, but NTBs in Brazil are different and are seen as having a big impact, so getting rid of them completely might not be possible morally or technically.

Estimates of the possible benefits and costs of a free trade deal may help trade policy debates

Even though the effects on the economy can't always be measured or shown in trade models. For example, the Brazil-U.S. Business Council and Trade Partnership Worldwide LLC did a study together in 2016 that said a comprehensive trade deal would be good for the U.S. economy once it was fully put into place.64 The study looked at what might happen if the U.S. and Brazil came to a deal that got rid of all tariffs on goods and services traded between the two countries and cut the number of nontariff measures that could be used to affect trade by half. The findings showed that by 2030, the U.S. GDP would grow by $24 billion (0.11%), jobs could be added by about 100,000 (0.05%), and exports to Brazil would rise by $62 billion (78%).65 In the end, the effects of any possible agreement would rely on what kinds of issues are dealt with and how much the two countries can work together without problems.