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

1. Strengthening Trade and Investment Ties

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. 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. Our leadership
Chairman of the Board Chair Emeritus
Greg Page Ambassador Anthony S. Harrington
Cargill Chairman & CEO Albright Stonebridge Group President & CEO

5. Our members

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. 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:
 Brazil's 2011 GDP was 2.324 trillion,
 Russia’s 2.414 trillion (2011 est.),
 and India $4.515 trillion (2011 est.).

8. BRICs Forecast
Forecasts vary, but sometime in the decade after 2014—Brazil is likely
to become the world’s fifth-largest economy, overtaking Britain and
France.
The five largest economies in the world in 2050, measured in GDP
nominal (millions of USD), according to Goldman Sachs.[18]

9. Brazil & the United States
 Bilateral Private Sector
 Brazilian State Capitalism
 Business Sector Areas of Concern
 Presidential-level Dialogues
 Economic and Commercial Bilateral Dialogues

12. Business Sector Concerns
Brazil 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.

15. 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

16. Brazil’s macro scene
Political 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);
.

17. Brazil’s macro scene
Challenges:
 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.

18. 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

19. 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.

20. 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.

21. 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.

22. Resources
The U.S. Foreign Commercial Service
Brasilia: Devin Rambo, Principal Commercial Officer
Devin.Rambo@trade.gov
Phone: 55-61 -3312-7401 / Fax: 55 –61 3312-7656
Belo Horizonte: Ruy Baptista, Commercial Specialist
Ruy.Baptista@trade.gov
Phone: 55/31/3213-1574 / Fax: 55/31/3213-1575
Sao Paulo : Brian Brisson, Senior Commercial Officer
Brian.Brisson@trade.gov
Phone: 55-11 5186-7401 / Fax: 55-11 5186-7445
Recife: Adierson Azevedo, Commercial Specialist
Adierson.Azevedo@trade.gov
Phone: 55-81 3416-3075 / Fax: 55-81 3416-3075
Rio de Janeiro : Alan Long, Principal Commercial Officer
Alan.Long@trade.gov
Phone: 55-21 3823-2417 / Fax 55-21 3823-2424

23. Resources
American Chamber of Commerce for Brazil:
 13 branches across Brazil
 Membership organization
 Trade missions, matchmaking, helping to identify service providers
Camila Moura
Camila.moura@amchambrasil.com.br
www.amcham.com.br
American Chamber of Commerce, Rio de Janeiro:
Helio Blak, Diretor Superintendente
helioblak@amchamrio.com
www.amchamrio.com
Invest Sao Paulo
Sergio Costa
sergiocosta@investesp.org.br
Rio Negocios
Marcelo Haddade, Director
www.rio-negocios.com/en/
info@rio-negocios.com

24. Thank you!
Kathleen Mclnerney
Director – BUSBC @ BUSBC
kmcinerney@uschamber.com
BrazilCouncil