March 16 President Barack Obama will visit
Brazil this weekend to strengthen ties with Latin America's
economic powerhouse, where the United States has been displaced
by China as number one trading partner.
Washington and Brasilia have sparred frequently on trade
issues over the past decade, most notably in the Doha round of
world trade talks and the failed effort to forge a Western
Hemisphere trade pact.
The major U.S. exports to Brazil include coal, kerosene,
aircraft parts, diesel and chemicals. Major U.S. imports from
Brazil include oil, steel, coffee, pulp, aircraft and tires.
Here are some current U.S.-Brazil trade issues.
DOHA ROUND - As the 153 members of the World Trade
Organization make a renewed push to finish the nine-year-old
trade talks this year, the United States and Brazil remain at
Brazil, which has pressed in the talks for deep cuts in
rich country farm subsidies and tariffs, is resisting U.S.
pressure on big developing countries go beyond a preliminary
July 2008 deal by doing more to open its manufacturing and
services markets to foreign competition.
Last week, U.S. Trade Representative Ron Kirk highlighted
U.S. desire to see Brazil join the WTO's 1996 Information
Technology Agreement, which has eliminated tariffs among 73
countries that comprise over 97 percent of world trade in
information technology products.
Brazil objects to U.S. insistence that major emerging
economies such as itself, China and India participate in
various industrial "sectoral" agreements as part of a final
Doha pact. It says such decisions should be voluntary.
ETHANOL - Brazil, the world's second largest producer of
ethanol behind the United States, remains frustrated by high
tariffs that block access to the U.S. ethanol market.
The United States allows duty-free access for sugar-based
ethanol from many countries in Latin America and the Caribbean
under various trade preference programs. But ethanol from
Brazil is currently subject to a 54-cent-per-gallon tax, plus a
2.5 percent tariff.
High sugar prices have recently made it more profitable for
Brazilian growers to make sugar, rather than ethanol, from
their sugarcane, reducing some tension on that front.
The United States and Brazil also worked together over the
past several years to promote development of biofuels.
COTTON - Brazil won a landmark case in the World Trade
Organization against U.S. cotton subsidies and as part of a
temporary settlement the United States agreed last year to pay
Brazil $147 million annually to assist Brazilian cotton farmers
with technical assistance, marketing and market research. In
exchange, Brazil suspended $829 million in WTO-sanctioned
retaliation with the intention of reaching a permanent solution
after the U.S. Congress revisits the cotton program in 2012.
INTELLECTUAL PROPERTY RIGHTS - Brazil's willingness to
suspend patent rights to ensure its population has access to
lifesaving drugs developed by U.S. drug companies has caused
strains over the years. Brazil's Ministry of Health has
estimated tough negotiations with pharmaceutical companies have
saved the country $1.1 billion. U.S. trade officials also
complain the triborder region of Paraguay, Argentina and Brazil
is a "hotbed of piracy and counterfeiting."
CURRENCY - Brazilian Finance Minister Guido Mantega late
last year raised alarm about a "currency war" as countries try
to keep their currencies artificially weak to export their way
out of the global crisis.
Some of that ire was directed at the United States, which
has set a goal to double exports by 2014 and has pursued an
expansionary monetary policy that has led to a weaker dollar.
U.S. officials have tried to find common cause with Brazil
against China's exchange rate policies, which they say hurts
both countries by keeping the yuan artificially undervalued.
With a strong currency that has narrowed its trade surplus
and hurt some manufacturers, Brazil has pledged to step up
anti-dumping efforts and warned it could apply non-tariff
barriers on select goods.
Last year, when two-way trade totaled close to $60 billion,
Brazil ran a trade deficit of $11.4 billion with the United
States. That was a sharp reversal from 2005 when it had a $9.4
billion trade surplus with the world's largest economy.
Click on [ID:nN15241631] for an analysis of U.S.-Brazil
relations and on [ID:nN15203248] for issues and deals to be
discussed. For a PDF of stories on Obama's visit, click on
(Reporting by Doug Palmer in Washington with contributions
from Ray Colitt in Brasilia; editing by Anthony Boadle)