The Strategic Importance of Commodity Trade in USA-Brazil Relations

 In 2019, the Western Hemisphere was filled with uncertainty as new governments came and went, trade tensions rose, and people took to the streets to share their dissatisfaction with the status quo. The year 2020 will be a turning point for the region. For years, people haven't given enough thought to the chances that could arise from the US and Brazil having a better relationship. There is a lot of possibility for things to go well for both societies. That ability must be used to its fullest. Many companies and governments in the US and Brazil are starting to take advantage of the ways that their economies work well together. However, there are still some problems that need to be fixed before this can become a fully successful business reality.It would be good for both the US and Brazil to have stronger trade and foreign direct investment ties. This would boost growth and prosperity in the short and long run. Getting closer in terms of business would have benefits in other areas as well, leading to more chances for the two countries to work together strategically. This paper acknowledges that the time is now and that 2020 is a key year to make real progress in improving business ties between the two countries.

This paper builds on the progress and successes of the past few years by bringing together the private and public sectors of the US and Brazil, as well as policymakers. It offers a fresh outlook and new energy for boosting trade and foreign direct investment (FDI) between the two countries. It also backs concrete steps toward deepening the business relationship and laying the groundwork for a possible free trade agreement (FTA) between the US and Brazil. As the world faces new problems that could slow growth and as Latin America deals with more uncertainty due to new shocks from outside the region, there are many political and economic reasons for the two countries to strengthen their business ties. In the end, stronger ties will give us more security at this very important time. A free trade agreement (FTA) has been talked about between Brazil and the US for a long time. They could both work toward this as their most lofty and all-encompassing economic and trade goal. It is thought that a free trade agreement (FTA) between the US and Brazil would be good for both countries' national income and gross domestic product (GDP). It would also be good for exports, imports, pay, and jobs.15 An FTA would also set up a long-lasting set of laws that would further connect both economies and affect how they trade and deal with each other in the future. No matter how good an FTA could be, it is a long-term goal. It will take time, resources, and political capital to get results that are good for everyone. The process of discussing an FTA is broken down into several steps. In the United States, Congress needs to be told before trade talks can begin. There must be special pre-initiation assessments and consultations with Congress. These must include an assessment of existing tariff differences on agricultural products and an evaluation by the International Trade Commission of agricultural products that are sensitive to imports. On the Brazilian side, they need to decide if the deal will be a joint venture with the Southern Common Market (Mercosur) or a bilateral venture, which would mean changing the way Mercosur is governed legally. 

Once official talks begin, they go on for many rounds and long hours of hard work to come to an agreement on a wide range of technical issues. This includes many negotiating teams, consultations with the private sector, and political orders. If a deal is made, the US and Brazil would make the last few changes to the laws, sign them, get approval from Congress, and then ratify the deal. To sum up, it will take a long time to get an FTA. So, there are a number of things that can be done to make the way to an agreement easier.The United States and Brazil have had a good relationship since 1824, when the US was one of the first countries to accept Brazil's independence. Their economies are the two biggest in the Western Hemisphere. In the last few decades, Brazil and the US have taken steps to deepen their cooperation in areas that are strategically important to both countries. A lot of different businesses, like aerospace, energy, tourism, defense and security, healthcare, infrastructure, and cars, have been affected.There is a shared goal of growth and prosperity in the relationship, but each country has a different view on the role of the public and private sectors in driving growth. New numbers show that both countries gain from their relationship with each other. Trade in goods and services going both ways was more than $100 billion in 2018. This is expected to stay the same in 2019. The US is an important economic and business partner for Brazil. In 2019, the US was Brazil's second-largest trade partner, after China. However, China had recently passed the US in terms of both goods and services. In terms of both services and goods, the United States is Brazil's most important supplier market. In terms of foreign direct investment (FDI), flows from China have sped up in recent years, especially in the energy and infrastructure sectors. 

However, the US is still the biggest investor in Brazil, five times bigger than China. This shows how broad and deep the relationship between the US and Brazil is. The US's relationship with Brazil is also good for the US. As the biggest democracy and economy in Latin America, Brazil is the fourteenth most important trade partner for the US. It is also the second most important destination for US goods in the region. The Office of the US Trade Representative (USTR) says that the US had a trade surplus of $30.6 billion in goods and services in 2018. This included a $8.5 billion trade advantage for goods alone.3. Brazil mostly buys planes, machinery, oil products, technology, and medical and optical instruments from the United States. The amount of student exchanges between the US and Brazil is another sign of how important the two countries' relationship is. Brazil is the ninth most popular country for sending students to the US.4 The number of Brazilian students learning in the US rose by 13.1% between 2017 and 2018, according to the SEVIS (Student and Exchange Visitor Information System) by the Numbers Report from US Immigration and Customs.5 That number went up by 9.8 percent from 2018 to 2019, which was the second-largest rise in foreign students from any country during that time. There's no doubt that the US and Brazil are important friends and partners. But the ten biggest economies in the world haven't taken down the barriers that need to be down in order to make the most of their current and future trade and business ties.