Brazil-US Commercial Relationship: Potential Deliverables in the Near Term U.S. Ambassador to Brazil, Todd Chapman

AmCham Brasil

Good morning to you all. 

It is a distinct pleasure for me to be with all of you today. I thank Luiz Pretti, Deborah Vieitas, Abrão Neto and everyone from the AmCham team for putting this event together.

I have the privilege today to speak with you all about a topic to which I am 100% committed—the continued development of our robust U.S.- Brazil trade and investment relationship – a relationship that has benefited both of our countries for more than 200 years. 

Indeed, as all of you know, AmCham itself celebrated its 100th year anniversary just this past year.

The United States – Brazil trade and investment relationship is indeed a large, enduring relationship. That is pretty obvious. Four hundred of the Fortune 500’s largest U.S. companies have significant operations in Brazil, and many of them were established in Brazil some 100 years ago.  According to the Central Bank of Brazil, the United States is Brazil’s largest source of foreign direct investment stocks by far.  Based on the most recent statistics available, U.S. FDI stocks totaled $118 billion in 2018, accounting for 24% of all FDI stocks in Brazil.   Spain comes in second, with 57 billion dollars, Belgium 35 billion, France 34 billion and China with 21 billion.   And our two-way trade relationship has grown to more than $105 billion per year.

A few weeks ago, I spoke at FGV and outlined 10 partnerships that I see as areas for growth in the U.S.-Brazil relationships. Today, I want to focus on five of them with you: A partnership for prosperity.  A health partnership.  A partnership in innovation and creativity. An environmental partnership.  And a global partnership.

What do I mean by a partnership for prosperity? U.S. companies are long-term participants in Brazil’s economy and have been consistent contributors to Brazil’s development.  U.S. companies build the value-added products that encourage technology transfer and the professional growth of Brazil’s workforce.  Our bilateral trade relationship is characterized by a diversity of products, many research centers here in Brazil, and a considerable amount of intra-company trade which highlights the integration of our productive sectors.

Even so, with $105 billion in trade, I believe we can double our bilateral trade within five years.  And why do I say that?   See examples from other South American countries.   The volume of our bilateral trade with Chile, Peru, and Colombia is equivalent to about 10% of the GDP of these countries.   For example, Peru’s GDP is 222 billion and our bilateral trade is 23 billion.   But with Brazil, with an economy of 2 trillion, our trade is only 5% of GDP.   That means there’s a lot of field to expand.   We are working toward that goal now as we move toward trade agreements.   At the same time, the world seeks to diversify supply chains for the post-pandemic period, to depend less on Communist China, because we see all the danger dominated by them.    This presents a new opportunity for Brazil to be one of the destinations for international companies that want to reduce their presence in Communist China.

The United States and Brazil are currently pursuing a commercial agreement under the ATEC.  Currently, we are dealing with four themes:   facilitate investment, good regulatory practices, anti-corruption measures and digital trade.  Our goal is to announce substantial progress on this package before the end of the year.

Despite the pandemic, many other efforts are underway.   We held the first virtual Commercial Dialogue soon after my arrival.  An important forum to address specific topics.   We have established new mechanisms to address issues related to mining and energy.   And we are talking more and more with American investors interested in the Brazilian sectors that are expanding to private capital.

The United States has already publicly announced its strong support for Brazil’s OECD support.  By achieving the important milestones needed for full membership, Brazil will become a more competitive economy and increase its capacity to attract domestic and foreign investments.    As the largest investors in Brazil, for the United States, competitiveness is extremely important. And I’ve had excellent conversations about it with many Brazilian private sector associations.  

The second most important partnership is health.  Our relationship in public health promotion is longstanding, where we have worked to fight Zika, HIV, dengue, and many other diseases.  Every year, the National Institutes of Health of the United States finance more than 800 million reais in state-of-the-art research with the Brazilian government and academic organizations, from infectious diseases to diabetes and cancer. During the pandemic, I’ve been incredibly proud that the U.S. government and U.S. private companies in Brazil have jointly provided over 400 million reais in assistance to help communities, hospitals, and families respond to the health emergency.   In addition, U.S. pharmaceutical companies test vaccines for COVID-19 in Brazil while maintaining their substantial drug production in the country.

During the pandemic, we will continue to foster advances in health, revolutionizing the way we prevent and care for illnesses, advance our joint ability to counter diseases, and drive policy that will contribute to better health for Americans, Brazilians, and people around the world.

Which brings me to the third partnership. We want to continue to build a partnership in innovation and creativity.  The future of economic success in Brazil and the United States will depend on the ability of our innovators to capitalize on their ideas.  In December 2019, the USPTO extended for another 5 years a project with the PTO that will benefit innovators and companies for granting longer-lasting patents in both countries.  The crucial role of intellectual property in business is one of the reasons why the United States and 30 other countries are moving forward with the Clean Network program to encourage a telecommunications environment that leading companies can rely on when protecting data and intellectual property.   We no longer want our intellectual property to be stolen by Communist China or anyone else. And investors don’t want to either. 

Under the U.S.-Brazil Energy Forum, U.S. energy companies are deploying cutting edge technology alongside Brazilian partners, collaborating on everything from nuclear power to energy efficiency.     We are seeing many significant advances in this sector.  

 

The U.S.-Brazil Technology Safeguards Agreement allows for the use of U.S. launch technology at Alcantara Space Launch Center and opens the door for commercial collaboration in the space economy.  With its shared conviction on the importance of the responsible use of space, we can now explore together an expanded and innovative partnership. We have already had contact with many American companies that are very interested.  

 

The fourth partnership of great importance is our environmental partnership.  Together we can develop policies and programs that protect the environment — from the Amazon to the urban slums — while also creating incentives for the private sector to participate and provide for sustainable economic growth for all our citizens.  

 

In January 2020, the U.S. Environmental Protection Agency (EPA) and Brazilian Environment Ministry signed a memorandum of understanding to strengthen and coordinate efforts to effectively protect our nations’ environments. We also have the Partnership Platform for the Amazon, a strategic initiative by USAID, which is led by the private sector, identifying and implementing innovative solutions to sustainable development and conservation of biodiversity, forests and natural resources in the Brazilian Amazon. Many American companies are involved in important projects that inspire environmental care. We will soon announce even more actions that we are implementing together with Brazil for the protection of the environment.   

 

Finally, ours is a global partnership.  A partnership where we lift the well-being not only of our citizens but also those of countries around the world by leading reforms at international institutions, advocating for science and data-based public policies.

 

I like to say that the United States and Brazil together feed the world. Our long-standing partnership in agriculture has solidified gains for Brazilian and American farmers.  U.S. agricultural companies — ADM, Bunge, Cargill, Mosaic, John Deere, Caterpillar, Pioneer — are well-integrated in Brazil, and many Brazilian companies are producing food in the United States.  As the two great agricultural superpowers, Brazil and the United States are on the front line advocating for the use of sound science in agricultural production and import policies.  

This not only benefits producers in our two countries, but promotes food security globally. The world is projected to add more than two billion inhabitants in the next 30 years.  Someone must feed them, and I’m betting on the United States and Brazil.   

 

We clearly have a dynamic relationship, in which each of your companies plays an important role. I look forward to further advances and recommendations from the private sector of both countries in our upcoming virtual CEO Forum on Sept. 28.

 

Finally, let me compliment the AmCham on its work to address long-standing inequality and social justice issues. We hope to establish a partnership with AmCham to jointly address some of these crucial issues.  

    

I am proud of the bilateral relationship that we have built together over the years, but we are not going to settle down.  Nothing underpins that relationship more than the robust trade and investment relationship that many of the companies on this call have played a major role in building. The U.S Diplomatic Mission in Brazil and I are dedicated to expanding this strategic trade partnership with Brazil by working with all of you at Amcham across the country. It will be a great pleasure when I can meet all of you in person in the near future throughout the country.   

 

Thank you.