Following Vice President Biden's trip to Brazil in May 2013, U.S.-Brazilian trade relations were discussed at a Ways and Means Trade Subcommittee hearing on June 12, 2013. At that hearing, Chairman Devin Nunes declared his intention to draft a bill to elevate and streamline various existing U.S.-Brazilian bilateral dialogues into one overarching Strategic Economic Dialogue. According to Chairman Nunes, the vast number of bilateral dialogues between the United States and Brazil currently in existence (approx. 30) "lack common branding and a common schedule which undermines visibility," in addition to simply being "a little confusing." Going forward, Chairman Nunes also anticipates closer involvement with Michael Froman, the recently appointed United States Trade Representative ("USTR"), sworn in on June 21, 2013.
Chairman Nunes' current legislative initiative follows his unsuccessful 2012 effort with a similar draft U.S.-Brazil Joint Commission on Commerce and Trade Act. That bill would have established a U.S.-Brazil Joint Commission on Commerce and Trade, which sought the removal of trade barriers between the U.S. and Brazil. In Chairman Nunes opening speech, he promoted the proposed bill as one that "will seize opportunities and resolve trade irritants by pursuing a constructive mutually beneficial bilateral trade agenda." If successful, the prize would be opening the Brazilian market of 200 million people to U.S. manufacturers – a point addressed by Charles Rangel in his opening remarks.
In oral testimony to the Subcommittee, Thomas McLarty (former special envoy for the Americas) described the hearing as aptly timed to re-evaluate U.S.-Brazilian trade relations, sandwiched between Biden's trip to Brazil and the upcoming October state visit to the United States of Brazilian President Dilma Rousseff -- the first such visit in 18 years.
The testimony of Dr. Andres Gluski (CEO of AES Corp), Congressman Ron Kind (D-WI), and Robert Marques (Company Group Chairman of Johnson & Johnson) highlighted particular issues, including the reduction or elimination of double taxation with the goal of stimulating cross border investments. Brazil is the United States' 8th largest trading partner, but does not have a bilateral investment treaty with the United States.
Cong. Ron Kind addressed the ongoing cotton dispute with Brazil. He was critical of a compromise reached with Brazil, in which Washington agreed to create a $147 million fund to finance technical assistance to Brazilian cotton farmers, on the condition that Brazil refrain from requesting WTO authorization to impose $830 million in annual sanctions against the United States. Cong. Kind labeled the cotton payments "crazy" and noted that he would seek a halt to payments via an amendment to the farm bill.
A common point of contention at the hearing was the Brazilian domestic content requirements, which create barriers to access to the Brazilian market for U.S. goods and services. Other testimony focused on the need for U.S.-Brazil cooperation in ensuring China's adherence to international trade rules and a stable international monetary system.
Despite the general consensus on the outlines of an agreement with Brazil, the failure of last-year's attempt at a joint commission, highlights the difficulty that lawmakers face when attempting to open the Brazilian market to U.S. manufacturers.
By Joseph Doherty and Bonnie Byers