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Trade of goods between Brazil and The United States

In its native language, BRASIL, is the largest economy in South America and the third largest economy of the Americas, and yes, indeed, it is a very important player when the subject is trade of goods. However, people tend to know very little about it (Yes, there is more to it than soccer and Carnival!).

In 2021, Brazil’s GDP per capita was at 8,551.21 USD and therefore is still considered a developing country. However, it is good to keep in mind that this country gained its independence in 1822, being a relatively young nation.

Does Brazil have Free Trade Agreements with other countries? Yes! Its main trade agreement is with the MERCOSUR, an economic bloc that was established by Brazil, Argentina, Paraguay and Uruguay. MERCOSUR serves its members by creating a space that generates business and investments between (but not only) member countries.

Are Brazil and the United States trade partners? Yes! The history behind the economic relations of the two countries is vast. Both countries are pro-democracy and looking to expand their trade relations in order to grow. Despite its similarities and common goals, these nations seem to struggle with details when it comes to creating an FTA.

According to the United States Census Bureau, the last decade of trade between the two countries was very lucrative. On average, the export of goods to Brazil from 2011 to 2021 corresponded to 436.2 billion dollars averaging 43.6 billion per year. The import of goods from Brazil in the same time frame corresponded to 321.1 billion, averaging 32.1 billion per year. It is important to note that this data only includes the trade of goods and excludes all other forms of economical interactions, e.g., services and investments.

The United States is Brazil's second largest export market, preceded by China. in 2021, the main U.S. exports to Brazil were Oil, Minerals, Lime, Cement, Chemicals, Plastics, Rubber and Leather products, Machinery and Mechanical Appliances. Brazil’s primary export products to the United States are crude oil, aircraft, iron and steel, and machinery.

Are the two countries working together towards the implementation of a Free Trade Agreement? The newest update on the economic relations between them occurred in 2020, when a Protocol relating to Trade rules and Transparency was signed. The Protocol in question updated the Agreement on Trade and Economic Cooperation (ATEC) signed in 2011. This new agreement focuses on Good Regulatory Practices, Customs Administration and Trade Facilitation, and Anticorruption. One of the many exciting points covered by the Protocol is under Annex II, which aims to provide greater transparency about Brazilian regulatory procedures.

Brazil is known for its closed economy, having a bad reputation when it comes to tariffs and harsh trade regulations. It’s complicated tax system can sometimes double the cost of an imported product, creating a huge trade barrier. That is just one of the many reasons why these two countries should negotiate an FTA. It would certainly put an end to this uncertainty and increase growth for both economies.

Contributor: Josiane Berto DeRouchey


About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.


Resources used: https://tradingeconomics.com/brazil/gdp-per-capita

https://www.census.gov/foreign-trade/balance/c3510.html

https://ustr.gov/countries-regions/americas/brazil 

https://www.census.gov/foreign-trade/balance/c3510.html 

https://ustr.gov/sites/default/files/files/Press/Releases/ATECProtocolUSBREnglish.pdf

https://www.state.gov/u-s-relations-with-brazil/ 

 

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