In March 2020, President Trump and President Bolsonaro reaffirmed the strategic alliance between the
United States and Brazil, instructing trade officials to deepen discussions for a bilateral trade package.
Officials stated that political will in both countries could lead to a trade deal this year. It remains to be
seen if and how the impact of the COVID-19 global pandemic will affect this timeline.
Throughout 2020, Brazil and the United States have the chance to focus on key aspects that could pave
the way toward a comprehensive long-term free trade agreement. For one, Brazilian officials have already
informed the U.S. side that the USMCA model is acceptable. According to a report by the Atlantic Council
and Apex Brazil, recommendations include a multi-chapter trade enhancement agreement that would
cover bilateral rules on customs administration and trade facilitation, good regulatory practices, technical
barriers to trade, digital trade, anti-corruption, among others. The study shows that the agreement could
make U.S. exports more competitive by reducing the importation costs of U.S. goods to the Brazilian
consumer. The deal could also contribute to an increase in Brazilian exports of several goods such as
machinery, apparel and clothing, footwear, steel products, stones, wood flooring and furniture, aircrafts,
and auto parts.
A potential challenge for the conclusion of this agreement is the current MERCOSUR legal framework –
specifically, CMC Decision 32/00 - that requires its members to negotiate free trade deals as a bloc.
However, Brazilian officials have stated that Brazil is willing to pursue this agreement even if it comes up
to adjust MERCOSUR rules to allow the bilateral deal.
Another challenge for the bilateral negotiations is the COVID-19 pandemic. While there is no broad rule
that federal workers must work from home, agencies are implementing their own rules regarding remote
working. Even if USTR workers are working remotely and not experiencing productivity disruptions, their
efforts might have shifted to COVID-19 related issues such as the Section 301 additional exclusion requests
on Chinese-origin products to address the COVID-19 pandemic, addressing immediate supply chain
disruptions and export controls on medical items, PPE, and food products around the world. It is not clear
when negotiators would be able to meet in person and how effective remote meetings will be.
In addition to the worrying effects on human life, the novel strain of COVID-19 has the potential to
significantly slowdown the global economy. The trade and economic effects of the pandemic can be
followed through international organizations which have dedicated platforms with daily updates, such as:
WTO (COVID-19 and world trade), OECD COVID-19, UNCTAD COVID-19, IMF COVID-19, World Bank COVID-
19.
See also: • G20 leaders committed to enhance global cooperation to fight the COVID-19 pandemic, pledging to ensure any “emergency” trade measures are targeted, proportionate, transparent, and temporary. See statement here. • President Trump reiterated the U.S. support for Brazil beginning the accession process to the OECD, urging OECD partners to work towards this goal in order to help grow Brazil’s economy and competitiveness. • Brazil establishes exceptional and temporary criteria to facilitate trade for medicines and biological products due to the international public health emergency of the COVID-19. It was the first WTO member to notify a TBT measure related to COVID-19.
ABCI Board Aluisio de Lima-Campos, Renata Amaral, Barbara Medrado, Lucas Queiroz Pires, Marcia Pulcherio