Locke: Treat Brazil æseriouslyÆ on trade
U.S. Commerce Secretary Gary Locke said it's time for the United States to 'treat our engagement with Brazil on economic issues as seriously as we do with nations like China and India.'
Locke made his remarks during a speech on Monday to the American Chamber of Commerce in Brazil.
'Brazil is on the rise and the United States welcomes that rise,' he said. 'While the United States and Brazil will not always agree on everything, we know that our economies are inextricably linked, and we must strive to solve any problems through candid, open dialogue and respect.'
The United States is the largest foreign investor in Brazil and exported more than $50 billion worth of goods and services to the South American country in 2010. U.S. exports to Brazil are growing twice as fast as all of U.S. exports overall, according to the Commerce Department.
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The United States has successfully pushed for major emerging economies such as Brazil to play a bigger role in global economic affairs, and advocated strongly for the G-20 to become the main forum for global economic and financial cooperation.
In addition, the United States has moved aggressively to enhance the role of critical emerging market countries such as Brazil in the governance of the International Monetary Fund and World Bank.
However, Locke warned there is much more both countries can do to improve cooperation and promote mutual economic growth.
On Saturday in Brasilia, members of U.S.-Brazil CEO Forum reiterated their call for a Bilateral Tax Treaty as the quickest way to encourage more cross-border investment. They also expressed a strong interest in a free trade agreement between our two countries.
In 2007, the United States and Brazil established the forum to add a private-sector voice to the discussion on growing mutual trade and investment.
The forum concluded the need to:
' Create incentives and guarantees to attract U.S. companies to participate in Brazilian infrastructure projects.
' Examine public bid policies that might discourage foreign investments.
' Allow the greater movement of architects, engineers and other professionals critical to building infrastructure projects.
'This cooperation on infrastructure is even more important when you consider that Brazil is gearing up for major construction projects,' Locke said, citing transportation systems, port and airport security upgrades, and commercial ventures in advance of the 2014 World Cup and the 2016 Olympics.
Also on Saturday, the U.S. Export-Import Bank authorized $1 billion in export credit for infrastructure projects in the Brazilian state of Rio de Janiero. Brazil is expected to spend $200 billion in additional infrastructure across the country.
'U.S. companies have the technological and engineering expertise to help with these endeavors, and can also be reliable suppliers for Brazilian companies,' Locke said.
The CEO Forum participants suggested removal of tariffs and subsidies on renewable energy products as a way to expand the commercial clean energy cooperation.
Locke specifically noted that complexities of Brazil's business environment still create significant obstacles for U.S. exporters and investors. For example, he said U.S. companies shipping and investing in Brazil face:
' High tariff barriers.
' A difficult customs system.
' A heavy and unpredictable tax burden.
' A legal system that is overloaded and slow to enforce business law.
'Companies also continue to have questions about Brazil's commitment to supporting innovation, particularly when it comes to intellectual property rights protection,' he said.
'We are greatly encouraged by recent signs of progress and hope that Brazil will continue to build on the momentum of such reform, because these improvements are very much in the interest of its own people,' Locke said. 'The reforms will create more opportunities for trade and investment, not just with the United States but with other countries around the world.'