CNI: US Trade Barriers Cause Brazil to Lose US$676 Million Export Revenue Yearly

RIO DE JANEIRO, BRAZIL – The strategic alliance of the Bolsonaro administration with Washington has yet to result in trade gains for Brazil, which has failed to export US$676.5 million (R$3.72 billion) per year due to trade barriers enforced by the United States.

This amount exceeds by nearly US$40 million the sales of aircraft and equipment to the American market last year, for instance, and is US$10 million higher than what was exported by processing industries to the USA.

The figure is also 2.5 times higher than the volume of American exports affected annually by restrictive measures implemented by the Brazilian government, of US$266 million.

The figures are based on a survey conducted by the National Confederation of Industry (CNI). Currently, there are 14 Brazilian measures in force against the United States – one is suspended and two are under review. On the other hand, there are 12 from the United States applied against the Brazilian market.

Brazil’s measures focus on 19 products, while the US measures affect a total of 162. Virtually half of them were enforced in 2016, before President Donald Trump took office. Others were removed or renewed during the Trump government, with terms that run until 2025.

According to the survey, the Brazilian measures are focused on antidumping, which aim to prevent domestic producers from being undermined by imports made at prices below production cost. The USA uses both antidumping and countervailing measures – in other words, they aim to offset subsidies granted by the Brazilian government.

The USA employs both these measures on four Brazilian products: castings for construction, cold rolled steel, hot rolled steel and alloys. Other Brazilian goods affected are uncoated paper, welding tube accessories, rubbers and steel cables for reinforced concrete.

“The Brazilian government should assist Brazilian exporters considered targets of trade defense investigations abroad, clearly and objectively. This includes disclosing information on these measures and conducting high-level management to assess the consistency of such measures with international rules. Trade defense is everyone’s right, as long as they follow WTO (World Trade Organization) commitments,” said CNI’s Industrial Development Director, Carlos Eduardo Abijaodi.

Overall, from January to September this year, sales to the US dropped by 31.5 percent compared to the same period in 2019. Brazil recorded a US$3.124 billion deficit, according to the Ministry of Economy.

According to experts, regardless of who will win the U.S. November presidential elections, whether Trump or Biden, the Americans will remain protectionist.

“Regardless of Trump’s rhetoric, US relations with Brazil are guided by pragmatism that places domestic interests above all else. Moreover, the closeness between the two Presidents has been no more than a few visits and praise exchanges in occasional situations, particularly on the American side. Contrary to Bolsonaro’s wishes, we are not the main partners of the USA. All there is, is affinity between leadership styles and political agendas,” notes Carolina Pavese, professor of international relations at the São Paulo School of Advertising and Marketing.

Professor Pavese warns, however, that some things can change: “Unlike Trump, Biden does not share Bolsonaro’s leadership style and has a government program that includes guidelines that the Brazilian government has ignored: human rights and environment are the main ones. These differences suggest that we should not expect from Biden the same exchange of affection with Brazil that we have witnessed with Trump. There should be a greater distance.”

Former Brazilian Ambassador to Washington Roberto Abdenur recalls that Brazil has been affected for a long time by different barriers, as the Americans compete with Brazilian exporters of agricultural products, also in China.

“In a preliminary and temporary agreement in the context of the trade war unleashed by Trump, China agreed to increase the purchase of products such as soybeans, sugar and meat from the US, to the detriment of Brazil. It is clear at this point that under Trump, Brazil “delivered” much more than it received. And the worst is that Biden is also a protectionist. And he will hold a very tough stance towards Brazil on issues that are today essential to the international community, such as climate change, preservation of the Amazon, and human rights,” says Abdenur.

Source: O Globo