Politics, Business & Culture in the Americas

Biden in Brazil: Let’s Do Business



After a busy two days in Rio de Janeiro, U.S. Vice President Joe Biden departed yesterday afternoon for Brasília, where he meets today with Brazilian President Dilma Rousseff and Vice President Michel Temer. While Biden’s visit partly touched on issues of public security—he toured the Santa Marta favela, the first community in Rio to have an Unidade de Polícia Pacificadora (Police Pacification Unit—UPP) installed—his chief objective was to press for expanded bilateral trade and investment ties.

Biden’s message to Brazil: the world is rapidly liberalizing trade and opening markets, and it’s time to keep up. On Wednesday, he urged Brazilians to “resist the urge in difficult economic times for protectionism.”

U.S. companies complain that Brazil has set up excessive trade barriers, a complicated tax system, local content requirements that give preference to Brazilian industry, and inadequate intellectual property rights. But Brazilians counter that U.S. monetary policy makes Brazilian products more expensive overseas, and that U.S. subsidies to its own farming sector limit competition from Brazil’s strong agricultural economy.

Despite the disagreements, Americans and Brazilians can point to plenty of successful collaborations. Brazilian aerospace conglomerate Embraer won a U.S. Air Force contract for 20 aircraft, officially authorized in March, and is cooperating with U.S.-based Boeing to develop the KC-390 military jet. Boeing, for its part, is a finalist for a 36-aircraft, $4 billion contract by the Brazilian Air Force.

Meanwhile, Brazil’s vast pre-salt reserves, coupled with the United States’ own discovery and extraction of shale gas, make the two energy powerhouses natural partners. Brazil’s auction this month of 142 oil blocks—the first licensing in five years—brought in $1.4 billion from various buyers, including U.S. firms ExxonMobil and Chevron. The Brazilian government is even moving up the first auction date of the pre-salt reserves to October to cope with the demand.On Wednesday, Biden visited the semi-public Brazilian oil and gas corporation Petrobras’ Centro de Pesquisas Leopoldo Américo Miguez de Mello (Leopoldo Américo Miguez de Mello Research Center—CENPES). A sprawling complex of 300,000 square meters (3.23 million square feet), CENPES is developing the technology to extract Brazil’s pre-salt oil finds 7,000 meters (23,000 feet) below the ocean surface. The vice president also sat down with Brazilian commercial leaders at the Rio Technology Park, a campus affiliated with the Universidade Federal do Rio de Janeiro (UFRJ) consisting of over 200 companies such as General Electric and Schlumberger.

Biden’s private discussions complemented a public speech delivered in Rio’s port zone, an area undergoing dramatic infrastructural revitalization ahead of the World Cup, Olympics and Paralympics. That Biden was not introduced by Rio Governor Sérgio Cabral, Rio Mayor Eduardo Paes or U.S. Ambassador to Brazil Thomas Shannon—all three of whom were in attendance—but rather by Roberto Ramos, CEO of Odebrecht Oil & Gas and president of the American Chamber of Commerce in Rio, further underscored the trade and investment themes he sought to highlight.

Throughout his remarks, Biden lauded Brazil’s commitment to democracy and inclusive social programs, the latter made largely possible by the country’s remarkable economic growth over the past decade. Biden pointed out that two-thirds of U.S.-bound exports from Brazil are “high-end, value-added goods” and that the two countries “know there’s a future in biofuels and aviation.” While annual U.S.-Brazilian bilateral trade currently stands upward of $100 billion, he argued that there is “no reason why that cannot be $400 billion to $500 billion a year.”

Biden also praised Brazil’s leadership role in the World Trade Organization (WTO)—Brazil’s candidate, Roberto Azevêdo, was elected director general-designate earlier this month—but also outlined U.S. intentions to engage on global trade outside the WTO and G20 frameworks, arguing that “there’s no period in modern history when there’s been as much activity to expand trade around the world.” Specifically, he pointed to a U.S. trade pact under negotiation with the European Union, pursuit of bilateral investment treaties with China and India, and advanced talks of the Trans-Pacific Partnership that should conclude this year.

While Biden’s speech mostly stuck to the basics, it did break some news—confirming the rumors that Rousseff will travel to Washington on October 23 for an official state visit and dinner—the first this year and the first state visit to Washington for a Brazilian president since 1995. “We have an opportunity to set out an ambitious agenda on things that matter most to our people: to mark 2013 the start of a new era of U.S.-Brazilian relations,” the vice president stated. This is a sign of renewed political and commercial approximation that both Brazilians and Americans will surely embrace.

Read more about Vice President Biden’s trip to Latin America and the Caribbean on our in-depth page.

ABOUT THE AUTHOR

Ryan Berger is a visiting researcher in the Center for International Relations at the Fundação Getulio Vargas in Rio de Janeiro.

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