Trade Agreements With Brazil

The U.S. trade surplus with Brazil was $12.0 billion in 2019, an increase of 46.6% ($3.8 billion) over 2018. The EU is negotiating a free trade agreement with Brazil as part of the EU negotiations on the association agreement with Mercosur countries (including Argentina, Uruguay and Paraguay). Brazil negotiates a free trade agreement with the EU under the Mercosur Group. The Brazilian market is heavily protected with an applied tariff of 13.5%. The United States recorded a service surplus of $18 billion with Brazil in 2019, down 11.6% from 2018. In March 2011, Brazil signed a Trade and Economic Cooperation Agreement (ATEC) that many analysts see as a first step towards a free trade agreement. Since 2010, Brazil has also insisted on a free trade agreement with Mexico. At the same time, Brazil is negotiating with India and South Africa, with which it is the largest economic bloc of the southern countries within the IBSA, creating tensions within Mercosur. While Brazil was one of the main Latin American architects of the defeat of the free trade agreement, its economic policy has, in many cases, been in favour of signing free trade agreements. Given its dominant position in Mercosur and on the continent in general, it has focused its efforts on securing such agreements in the institutional for a of which it is a member. Mercosur, in particular, is actively involved in the search for negotiations with India, Central America, the Southern African Customs Union and Algeria. The EU encourages Brazil to remove tariff and non-tariff barriers and promote a stable and more open regulatory environment for European investors and traders.

Brazil is one of the countries that, according to the latest European Commission report, has resorted to a large number of potentially restrictive measures. In many cases, these trade agreements are being pursued as part of the administration`s policy to expand agrofuel (ethanol) markets. A future association agreement between the EU and Mercosur should promote the integration of trade between Mercosur countries and create new trade and investment opportunities with the EU, eliminating direct investment and non-tariff and non-tariff direct investment. Brazil is Latin America`s largest economy and its trade with the EU accounts for 30.8% of the EU`s total trade with Latin America in 2016. In 2011, the United States and Brazil signed the Trade and Economic Cooperation Agreement to improve trade and investment cooperation between the two largest economies in the Western Hemisphere.

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