Brazil and US Close Unprecedented Deal for Defense Industry

RIO DE JANEIRO, BRAZIL – The Brazilian defense industry may have access to the North American market, the largest in the world. The announcement was published by the newspaper Folha de São Paulo.

One of the main features of this agreement is that all defense products to be developed in Brazil will have to adopt the NATO standards. This is one of the obstacles for Brazilian companies to sell to the North American market and to the Pentagon’s allies, and it should cease to exist.

A further barrier is that the United States currently only purchases weaponry from companies that are physically present in the country. Under the new agreement this requirement will no longer affect Brazilian industries.

Classified by the acronym RDT&E (Research, Development, Testing and Evaluation), the agreement provides that companies from both countries may be selected and commissioned for both Brazilian and American projects.

The only requirement is that the projects be agreed by either or both governments. There must also be counterparts, such as the qualification of the national industry.

The agreement also provides for Brazilian companies to have access to US laboratories and industries, when it is convenient for companies on both ends. Joint projects will also enjoy shared intellectual property.

The financing of the projects is public – which does not exclude the possibility of private risk investments.

On the American side, the financial pot is virtually unlimited in the country that concentrates 39 percent of global military spending. The main American defense fund amounted to US$96 billion (R$ 432 billion) last year.