Trump says he will seek U.S. trade accord with Brazil

WASHINGTON/BRASILIA/SAO PAULO (Reuters) - President Donald Trump on Tuesday said he will pursue a U.S. trade agreement with Brazil, suggesting a friendly relationship with President Jair Bolsonaro could help lower trade barriers between the two biggest economies in the Americas.

U.S. President Donald Trump talks to reporters as he departs for travel to Williamsburg, Virginia from the South Lawn of the White House in Washington, U.S., July 30, 2019. REUTERS/Leah Millis

“We’re going to work on a free trade agreement with Brazil,” Trump told reporters at the White House, without giving details.

Trump raised the possibility of a trade deal as U.S. Commerce Secretary Wilbur Ross addressed business leaders in Sao Paulo ahead of a Wednesday meeting with Bolsonaro in Brasilia.

The United States and Brazil, which exchanged more than $100 billion in goods and services last year, have drawn closer since Bolsonaro took office in January after the far-right former army captain’s insurgent election campaign modeled after Trump’s.

“Brazil is a big trading partner. They charge us a lot of tariffs, but other than that we love the relationship,” Trump told reporters, citing what he called his great relationship with Brazil and praising Bolsonaro.

Marcos Troyjo, Brazil’s deputy economy minister for foreign trade, told Reuters his country has “ambitious” goals to facilitate trade and boost investment between the two countries, especially in infrastructure.

But Troyjo said any talks on tariffs would have to include Brazil’s partners in the South American customs union Mercosur, which includes neighbors Argentina, Uruguay and Paraguay.

Ross said a trade deal between Mercosur and the European Union, reached in principle last month, should avoid “poison pills” that would obstruct a possible U.S. accord.

“It’s important not to put roadblocks in the way of a U.S.-Brazil free trade agreement that inadvertently might be brought up in the transaction between Mercosur and the EU,” Ross told journalists in Sao Paulo. “We have issues about standards in autos, pharma, chemical, food and a whole bunch of areas.”

The powerhouse farm sectors in Brazil and the United States have occasionally found themselves at odds, including a dispute over cotton subsidies resolved at the World Trade Organization in 2014.

The United States threatened steel and aluminum tariffs on Brazil and a number of other countries last year as part of Trump’s “America First” agenda, before granting a permanent exemption to Brazil.

This year, Brazilians have pushed for greater access to the U.S. sugar market while negotiating a potential extension of its own restrictions on U.S. ethanol imports.

Brazil has also pushed U.S. authorities to lift a 2017 ban on fresh Brazilian beef imports.

Reporting by Alexandra Alper and Makini Brice in Washington, Marcelo Rochabrun in Sao Paulo, Marcela Ayres in Brasilia; Writing by Susan Heavey and Anthony Boadle; Editing by Brad Haynes and Will Dunham