Strengthening Trade and Investment Ties


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Strengthening Trade and Investment Ties by Kathleen McInerney, Director, Brazil - U.S. Business Council featured at the 2nd International Conference: Brazil: A pathway into the future from the Emerging Markets Institute at Cornell University's Samuel Curtis Johnson Graduate School of Management and Better Brazil

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  • Strengthening Trade and Investment Ties

    1. 1. Strengthening Trade and Investment Ties
    2. 2. About us Premier business advocacy organization in Washington D.C; Forging consensus between the two private sectors and communicating to both governments with a unique bilateral voice. U.S section of the Council;  Operates under the administrative aegis of the U.S. Chamber of Commerce;  Represents major U.S. companies that invest in or have business in Brazil; Brazil section  Managed by the Brazilian National Confederation of Industry.
    3. 3. Our objectives Advocate in Brazil and the United States for members’ interests; Promote substantive interaction between members and leading policy and decision makers in Brazil and the United States; Deliver timely information to members and facilitate member input into policy formulation and program development; Advance members’ policy priorities through task forces, working groups, coalitions, and joint programs with government and private sector stakeholders.
    4. 4. Our leadershipChairman of the Board Chair Emeritus Greg Page Ambassador Anthony S. HarringtonCargill Chairman & CEO Albright Stonebridge Group President & CEO
    5. 5. Our members
    6. 6. Why Brazil?Economic Basics: Population of 200 million people; Land mass slightly larger than the area of the Continental U.S.; Currently the 6th largest economy in the world in terms of GDP; Although growth has slowed in the last two quarters, Brazil weathered the economic crisis better than most world markets and forecasts predict a strong 2013; Culturally diverse with extraordinary geographic variety; Agricultural sector rivals that of the U.S.
    7. 7. Why Brazil?Among the BRICs: Per capita income is twice that of China; Geographic proximity to the U.S.; Historically a key political ally; Culturally and geographically similar to the U.S.; In terms of GDP according to the CIA estimates:  Brazils 2011 GDP was 2.324 trillion,  Russia’s 2.414 trillion (2011 est.),  and India $4.515 trillion (2011 est.).
    8. 8. BRICs ForecastForecasts vary, but sometime in the decade after 2014—Brazil is likelyto become the world’s fifth-largest economy, overtaking Britain andFrance. The five largest economies in the world in 2050, measured in GDP nominal (millions of USD), according to Goldman Sachs.[18]
    9. 9. Brazil & the United States Bilateral Private Sector Brazilian State Capitalism Business Sector Areas of Concern Presidential-level Dialogues Economic and Commercial Bilateral Dialogues
    10. 10. Business Sector ConcernsBrazil Business Concerns with the United States: WTO cases against the U.S. on cotton and OJ; Agricultural Subsidies (cotton, ethanol*, soybeans); Restrictive Tariff Rate Quotas (sugar, OJ, ethanol).U.S. Business Concerns with Brazil: High tariffs & complicated taxes; Enforcement of Intellectual Property Rights; Onerous licensing & Regulatory Requirements; Transparency & bureaucracy.* Ethanol tariff and blenders credit expired December 2011 in the U.S. and tariffs in Brazil have been suspended until 2015.
    11. 11. Doing Business in Brazil Brazil’s Macro Scene Best Prospects World Cup and Olympic Games Best practices to ensure success Resources for doing business in Brazil
    12. 12. Brazil’s macro scenePolitical Economy: Focus on state-led growth (infrastructure and PAC investments); BNDES central role in financing infrastructure; Increasing government involvement through ―national champions‖; New industrial policy that heavily favors domestic production; Potential for improved relations with United States; Upcoming major events including World Cup (2014) and Olympics (2016);.
    13. 13. Brazil’s macro sceneChallenges: High level of red tape; Complex tax system and high rates; Difficult to get copies of laws and regulations in English; Regional affiliations; Inflexible and burdensome labor laws; Volatile regulatory and legal environment.
    14. 14. 2012 Best Prospects Agricultural Equipment  Safety and Security Equipment Aviation/aerospace  Smart Grid/Metering Defense  Sporting Goods Energy  Telecom Environmental technologies  Transportation IT hard/software  Tourism Infrastructure  Water and wastewater Insurance Medical Equipment
    15. 15. 2014 World Cup Will be held in 12 Brazilian cities; Investments budgeted to be: Infrastructure: US$ 51 billion Stadiums: US$2.7 billion Airport renewals: US$3 billion ----------------------------------------- TOTAL: US$56.7 billion This figure does not include the proposed High Speed Train Rio/Sao Paulo, valued at US$20 billion, which likely will not be ready by 2014. As delays mount, the total spending is expected to go beyond the budgeted figures listed above.
    16. 16. 2016 Olympic Games First Olympic Games ever to be held in one city Investments from 2010-2016 may reach US$50 billion in infrastructure, construction, transportation, public security, education and training, among others; Most of the large-scale investments will occur through Public-Private Partnerships (PPPs) under Brazil’s Growth Acceleration Program (PAC); Majority of contracts will be awarded to Brazilian firms, but with opportunities for U.S. partnerships and suppliers; Political alignment on all levels will facilitate the procurement process; Two sets of opportunities, one through government procurement, the other through Olympic Committee procurement.
    17. 17. Tips for Success Complex system—advisable to hire local experts; Requires an intimate knowledge of the local environment, including ―Custo Brasil‖.; Location matters—be sure you investigate all 26 states + Brasilia; Best done for SMEs through a local agent or distributor; Whether your company is a bank, a realtor, an engineering firm or any type of industry or service provider, it is best to secure local partners; Get an interpreter—that speaks Portuguese!; Tax code is complex, accounting practices difficult, best to have a Brazilian firm and a local firm that understands Brazil; Labor market is competitive and labor law favors the employee; be sure you understand how best to structure your presence on the ground.
    18. 18. ResourcesThe U.S. Foreign Commercial ServiceBrasilia: Devin Rambo, Principal Commercial OfficerDevin.Rambo@trade.govPhone: 55-61 -3312-7401 / Fax: 55 –61 3312-7656Belo Horizonte: Ruy Baptista, Commercial SpecialistRuy.Baptista@trade.govPhone: 55/31/3213-1574 / Fax: 55/31/3213-1575Sao Paulo : Brian Brisson, Senior Commercial OfficerBrian.Brisson@trade.govPhone: 55-11 5186-7401 / Fax: 55-11 5186-7445Recife: Adierson Azevedo, Commercial SpecialistAdierson.Azevedo@trade.govPhone: 55-81 3416-3075 / Fax: 55-81 3416-3075Rio de Janeiro : Alan Long, Principal Commercial OfficerAlan.Long@trade.govPhone: 55-21 3823-2417 / Fax 55-21 3823-2424
    19. 19. ResourcesAmerican Chamber of Commerce for Brazil: 13 branches across Brazil Membership organization Trade missions, matchmaking, helping to identify service providersCamila Chamber of Commerce, Rio de Janeiro:Helio Blak, Diretor Superintendentehelioblak@amchamrio.comwww.amchamrio.comInvest Sao PauloSergio NegociosMarcelo Haddade,
    20. 20. Thank you!Kathleen MclnerneyDirector – BUSBC @ BrazilCouncil