Welcome everyone, to our hearing on the U.S.-Brazil trade and investment relationship.
The U.S. trade and investment relationship with Brazil deserves to be recognized as one of our most important. Brazil has been our eighth largest trading partner in recent years, accounting for nearly $60 billion in trade and a U.S. surplus of over $5 billion. Since 2000, Brazilian investment in the United States and U.S. investment in Brazil have both more than doubled. Brazil’s economy is now the sixth largest in the world, roughly a third larger than India’s and Russia’s. And yet the relationship still has a lot of room to grow. Brazil’s trade-to-GDP ratio, for example, is among the world’s lowest.
However, the ratio is increasing fast. As Brazil’s middle class rapidly grows, it consumes more and helps drive increased trade flows. The drive by Brazilian businesses for global competitiveness will have the same effect.
Viewing Brazil simply through the lens of the BRICs sells the country short. It is a strong democracy and a rapidly developing regional power that is unaffected by the chronic misgovernment and social pathologies that plague some other BRIC nations.
Our relationship also faces some challenges. For example, Brazil has ratcheted up its local content requirements, limiting the access of Brazilian businesses to U.S. goods and services that could otherwise help boost Brazil’s global competitiveness. But overall, we have arrived at a promising moment to seize opportunities and resolve trade irritants by pursuing a constructive, mutually beneficial bilateral trade agenda.
Currently, there are around thirty U.S.-Brazil bilateral dialogues. About half focus on trade and economics, with the White House, USTR, Commerce, State, Treasury, Energy, and USDA all leading different dialogues with numerous Brazilian agencies. One of the dialogues – the CEO Forum, on which our witness Mr. Gluski has served – helpfully allows policymakers to tap the expertise of senior business leaders from both countries. But the dialogues lack common branding and a common schedule, which undermines visibility. I am exploring how we can successfully elevate the U.S.-Brazil relationship on the Hill by slotting these dialogues into a new, overarching Strategic Economic Dialogue. Congress could then more effectively provide oversight, incorporate parliamentary-level engagement, and ensure accountability for results. I plan to introduce a bill to advance that goal, and I welcome input from our witnesses.