Strengthening trade ties in Brazil and beyond

With its internationally acclaimed beaches, rainforests, and Carnival celebrations, Brazil is famous for its attractions. However, I recently witnessed the immense potential of this emerging economy of 200 million people charting its own course toward economic prosperity.

In April, I traveled with several of my House Republican colleagues on a fact-finding trip sponsored by the government of Brazil designed to highlight the United States’ trade and energy relations with this developing nation. The trip spanned major commercial centers such as Recife, one of the largest port cities on the Atlantic coast; the nation’s capital, Brasilia; and finally, the largest city in the Western Hemisphere, Sao Paulo, where we met with government officials and key business leaders.

{mosads}In a rapidly expanding global supply chain, American businesses face challenges as they enter markets of rising economic powers, like Brazil, to increase and promote trade. Possessing a $3 trillion economy, the world’s sixth largest, Brazil’s second-largest trading partner is the U.S. While this mutually beneficial partnership totaled $70 billion in two-way trade and supports approximately 300,000 American jobs, these numbers have the potential to be much higher.

According to the U.S. Chamber of Commerce, Brazil ranks 137th when measuring ease of business for American companies in foreign countries. Our nations share too many similarities for this ranking not to improve. 

During our trip to Brazil, we visited the Suape Port Industrial Complex in Recife, one of the largest on the Atlantic coast of Brazil and home to roughly 100 individual companies. This port alone supports 30,000 jobs in industrial production, receipt and distribution of cargo, and construction. Brazil understands a key component of any international trade relationship is a large, well-maintained network of ports and harbors. Yet, infrastructure development remains a challenge for Brazil.

In the last decade, Brazil made a name for itself as a large commodity-producing economy. However, a key takeaway from this trip was Brazil’s potential to provide the world with one of its most sought-after commodities: energy. Brazil possesses huge, untapped deepwater pre-salt reserves of oil with a network of ports to export goods all over the world. Still, Brazil lacks the technical expertise to maximize the potential of these reserves.

As an American energy leader, my home state of Louisiana has taken the initiative to develop a mutually beneficial relationship with the Brazilian energy sector. Louisiana is the fifth largest exporter of manufactured goods to Brazil, including roughly $700 million in annual exports of refined petroleum and coal products. This constitutes 41 percent of Louisiana’s total exports. However, improvements in trade facilitation and services could allow American energy and maritime companies to provide much-needed expertise in the energy sector.

A key step for Brazil to consider would be a commitment to the World Trade Organization’s (WTO) Trade in Services Agreement. This would be a win-win situation for Brazil and the U.S. that would lead to greater integration of our respective energy markets. The result would be a major step in bringing nations in the developing and developed worlds together in the energy sector, helping to match supply with growing demand.

As a member of the House Ways and Means subcommittee on Trade, I have promoted policies allowing American energy companies to grow and invest in the U.S. and abroad. I will continue to push for greater port and harbor maintenance investment here in the U.S. to facilitate our energy production and allow for a thriving export market. Seeking to expand America’s relations with leaders in emerging markets, I look forward to working with the governments of countries, like Brazil, to open these economies as drivers of growth and job creation here in the U.S. and worldwide.

Boustany represents Louisiana’s 3rd congressional district in the House of Representatives, where he has served since 2005. He sits on the Ways and Means Committee.