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Remarks at American Chamber of Commerce in Brazil

Monday, March 21, 2011

Commerce Secretary Gary Locke

Remarks at the American Chamber of Commerce in Brazil

See the press release from today's events here

Good afternoon, everyone. Thank you for the kind words.

Thank you to AmCham – especially Gabriel Rico and Eduardo Wanick – for the indispensable role you’ve played both in setting up this event and for all the good work you’ve done to expand trade between Brazil and the United States. 

I’d also like to welcome some U.S. governmental leaders  joining us today:

  • Consul General Thomas Kelly;
  • Ambassador Thomas Shannon; and
  • Export-Import Bank Chairman Fred Hochberg

I’ve just arrived here from Brasilia where I joined President Obama as part of the U.S. delegation meeting with President Rousseff.

This was President Obama's first visit to South America and it’s no coincidence that it began in Brazil, one of our most important partners in the Western hemisphere.

My chief interest here in São Paulo is hearing from U.S. business leaders about the issues and concerns that should be at the top of our trade agenda.

But over the next few minutes, I’d like to talk briefly about how both Brazil and the United States can strengthen each other’s ability to compete in the global economy.

As we discuss our burgeoning trade relationship, it’s important to begin with the fact that trade is only one facet of our critical strategic partnership.

Today, Brazil and the United States are working side-by-side on a range of issues, including:

  • Food security;
  • National security;
  • Climate change; and
  • Development in Latin America and indeed around the world.

Our countries have established deep cultural ties as well. 

Thousands of Americans visit Brazil every year, and nearly a million Brazilians came to the U.S. in 2009 – double what we saw just seven years prior.

And our cooperation in the economic sphere grows more important every day.

These last few decades have seen Brazil’s economic and social development take off unlike any time in its history. 

Millions of Brazilians have joined the middle class … and the poverty rate has been reduced by almost a quarter since 2003.

Brazil is today the seventh largest economy on Earth and home to a growing number of internationally-renowned companies; with Petrobas, Embraer and AmBev just to name a few.

There are very few countries in the world that are home to companies that can be considered truly global … very few countries that have companies truly competing and succeeding in the global marketplace.

Brazil is one of those countries.

As Brazil has grown its economy and increased the prosperity of its people, the United States has been an enthusiastic partner. 

The United States is the largest foreign investor in Brazil and we exported more than $50 billion worth of goods and services here in 2010.  In fact, U.S. exports to Brazil are growing twice as fast as all of our exports overall.  

And Brazilian companies are no stranger to America, investing in sectors including:

  • Steel mills;
  • Aircraft manufacturing; and
  • Construction services.

While no country was immune from the effects of the recent financial crisis, Brazil escaped better than most. Last year, its economy grew by 7.5 percent. 

In short, Brazil is on the rise and the United States welcomes that rise.

While the United States and Brazil will not always agree on everything, we know that our economies are inextricably linked, and we must strive to solve any problems through candid, open dialogue and respect.

Of course, there must be action to back up that dialogue. And the United States has worked to ensure that Brazil receives appropriate respect and recognition in the global economy.

The U.S. has successfully pushed for major emerging economies such as Brazil to play a greater role in global economic affairs, and advocated strongly for the G-20 to become the premier forum for global economic and financial cooperation.

The U.S. has also moved aggressively to enhance the role of critical emerging market countries such as Brazil in the governance of the IMF and World Bank.

This is only the beginning.  As President Obama said when he announced a new Economic and Financial Dialogue with Brazil:

It’s time for the United States to treat our engagement with Brazil on economic issues as seriously as we do with nations like China and India.

Leaders in both Brazil and the United States are quickly realizing the importance of this economic relationship, which is why our governments are working so hard to break down barriers to doing business, from TIFA to the Open Skies agreement

But as far as the U.S.-Brazil relationship has come, I’m convinced that there are opportunities still being left on the table.

There is much more we can do to enhance cooperation and promote economic growth in both our countries. 

That was the key theme of the U.S.-Brazil CEO Forum meeting we held just two days ago in Brasilia.

In 2007, our nations established the U.S.-Brazil CEO Forum to add an important private-sector voice to the discussion on growing our trade and investment.  This weekend, they came up with a variety of useful ideas.

The CEOs reiterated their call for a Bilateral Tax Treaty as the quickest way to encourage more cross-border investment. They also expressed a strong desire to see a Free Trade Agreement between our two countries.

The Forum meeting on Saturday also ended with some consensus on infrastructure projects….namely that the two governments should:

  • Create incentives and guarantees to attract U.S. companies to participate in Brazilian infrastructure projects;
  • Examine public bid policies that might discourage foreign investments; and
  • Allow the greater movement of architects, engineers and other professionals critical to building infrastructure projects.

This cooperation on infrastructure is even more important when you consider that Brazil is gearing up for major construction projects including:

  • Transportation systems;
  • Port and airport security upgrades; and
  • Other major commercial ventures in advance of the 2014 World Cup and the 2016 Olympics.

U.S. companies have the technological and engineering expertise to help with these endeavors, and can also be reliable suppliers for Brazilian companies. 

This infrastructure push also will present Brazilian and U.S. companies with opportunities to supply event project developers with cutting-edge green and smart products, services and technologies.

Our CEO Forum participants suggested removal of tariffs and subsidies on renewable energy products as one way to expand this commercial clean energy cooperation.

There’s also been tangible progress on the intergovernmental front this week as well, with President Obama announcing the U.S.-Brazil Green Economy Partnership. 

A major focus of this effort will be developing a financing mechanism for green investment for the Olympic Games – which should help spur more partnership opportunities for U.S. and Brazilian companies.

Certainly, U.S. companies and the U.S. government have much we can learn from Brazil, which has the highest share of renewable energy generation of any large country in the world.

And I’m happy to note that during this trip the Brazilian and American governments have agreed to expand cooperation between our scientists, researchers, and engineers to spur innovation and advance cooperation on biofuels.

In our discussions at the CEO forum, there was also a recognition that to spur this innovation we all support, we’ll need a renewed emphasis on education in the science, technology, engineering, and math fields by sharing best practices and expanding research partnerships.

And this week, American and Brazilian companies have pledged to help increase student exchanges between our two nations to help build a skilled, educated workforce.

These are all ambitious goals, and I applaud the CEOs for continuing to challenge our governments.

Though I’ve discussed the contributions from the CEO Forum at length, I would be remiss if I did not also mention the important U.S.-Brazil Commercial Dialogue.

As most of you know, the Dialogue is a partnership between the U.S. Department of Commerce and Brazil’s Ministry of Development Industry and Foreign Trade. With this cooperation, we are looking at concrete steps to make both of our nations more competitive in the global economy.

In particular, we've been focused lately on promoting sustainable manufacturing supply chains and energy efficiency, which are emerging areas that allow both Brazil and the United States to tap into their considerable research and industrial-strengths.

On balance, the U.S.-Brazil commercial relationship is undoubtedly defined by our cooperation and our work to reinforce each other's strengths.

But to take his relationship to the next level … and to attract more investment and interest from U.S. companies … we hope the Brazilian government will continue its efforts to build a business climate with more transparency and a more consistent regulatory environment.

The complexities of Brazil’s business environment still create substantial obstacles for U.S. exporters and investors.

For example, U.S. companies face:

  • High tariff barriers;
  • A difficult customs system;
  • A heavy and unpredictable tax burden; and
  • A legal system that is overloaded and slow to enforce business law. 

Companies also continue to have questions about Brazil’s commitment to supporting innovation, particularly when it comes to intellectual property rights protection. 

We are greatly encouraged by recent signs of progress and hope that Brazil will continue to build on the momentum of such reform, because these improvements are very much in the interest of its own people.

The reforms will create more opportunities for trade and investment, not just with the United States but with other countries around the world. 

And there is a critical link between increased trade and economic growth.  Trade liberalization attracts capital, which in turn creates jobs and promotes economic growth …

…Growth that supports public investments in education, health, and infrastructure that are essential to improving the quality of life.

That's ultimately the goal of these meetings:

Improving the quality of life for both the Brazilian and the American people.

The more we cooperate, and the more we open up to one another, the more opportunity we’ll have to move people out of poverty and into a growing global middle class.

The cooperative efforts already underway between our two countries – including the CEO Forum and the Commercial Dialogue – will increase America’s and Brazil’s global competitiveness.

Increasing our competitiveness means creating jobs – good-paying jobs – and helping our economies flourish.

It means giving those struggling in remote areas and inner cities alike that critical chance to better their lives and to share the benefits of being part of the global community.

That’s what this visit is all about. That’s the vision we are determined to achieve. And that’s the vision we can reach by taking solid steps to increase our competitiveness – together.

Thank you.