After decades of micturating in each other’s breakfast cereal (figuratively, regarding trade issues) the United States and Brazil are finally moving to negotiate a free-trade agreement – and that’s good news for more than one reason. In a new op-ed for The Hill, Christine McDaniel, a senior research fellow with the Mercatus Center, points out that despite past differences – including a high-profile WTO case successfully brought by Brazil against the U.S. regarding cotton subsidies – the two countries share growing common interests and could form a powerful axis centered on trade, democracy and development.
- With 210 million people, Brazil is far and away South America’s biggest market and had two-way trade of $103.5 billion with the U.S. in 2018. It’s our ninth-biggest trade partner, and – crucially for Trump, obsessed with trade deficits – the U.S. enjoys a trade surplus with Brazil.
- A trade deal would kick this relationship into high gear by addressing numerous barriers to trade on the Brazilian side. Simply adopting provisions from other trade deals, like the pending USMCA, would align the countries in key areas like digital trade, intellectual property and state-owned enterprises.
- However it won’t be smooth sailing: Brazil’s populist president, Jair Bolsonaro, has found it rough going on domestic economic reforms (and cannot afford to appear weak in trade negotiations with the U.S., still not exactly a favorite with ordinary Brazilians – ed.). The U.S. should do everything it can to help Bolsonaro drum up domestic support for a trade deal and reforms in general.