US-Brazil Trade: Financial Services Leadership

 As part of the U.S.-Brazil CEO Forum, it is an honor for us to send these suggestions to both the U.S. and Brazilian governments. Our goal is to give you suggestions that you can put into action and that will help both of our businesses grow in the near future.  As investors, manufacturers, tech companies, and service providers, we see a lot of growth possibilities for both the U.S. and Brazil. The economies of the United States and Brazil are a good match for each other. They trade a lot with each other, have highly skilled workers, big land areas with lots of natural resources, and strong industrial bases that support strong supply chains.  Both countries have active business communities that spend a lot of money and come up with new ideas to help with the energy transition, the circular economy, and sustainable production. Negotiating a dedicated bilateral agreement that will improve the resilience of the regional supply chains for our integrated manufacturing value chains by: starting a mapping of priority supply chains that include production and access to key minerals, input materials, essential chemicals, renewable energy technologies, electric vehicles, batteries, lithium, energy storage systems, fertilizers, medical technology, pharmaceutical active pharmaceutical ingredients (APIs), and more;

Boosting trade between the two countries in important materials


Renewing GSP to support trade between the two countries in important inputs needed for manufacturing in key industries, such as the energy transition, and for home economic growth; Providing incentives for U.S. and Brazilian parts through local programs like IRA eligibility and other programs with the right requirements, such as performance standards; Promoting public-private partnerships to boost the ability of the health care system, using the money put into the new CEIS Development Strategy and PAC in Health, Creating trusted trader treatment for important parts of the value chain, such as expedited customs handling;  Use the Mineral Suppliers Partnership talks to get better access to important goods, especially materials for energy transition and high-performance materials made from processed raw materials. Figure out how to get investment help from groups like the Development Finance Corporation (DFC), the US Agency for International Development (USAID), and the Brazilian Development Bank for Economic and Social Development and Sustainability (BNDES) so that investments in important areas are encouraged. Think about ways to make the ATEC pledges bigger, like making rules for digital trade, sustainable development, inclusive trade, regulatory sectorial annexes (with a focus on medical devices), small and medium-sized businesses, and other areas. These trade rules can be put in place without U.S. legislation or Mercosur's help, and they would greatly cut costs that aren't necessary and improve trade and investment between the two countries. Cooperation in Regulations: Building on the positive results of the U.S.-Brazil Commercial Dialogue in November 2023, speed up work on sector-based regulatory harmonization to encourage more investments and make it easier to strengthen supply chains. This includes: Adhere to the rules spelled out in Annex II of the U.S.-Brazil Trade Protocol on Good Regulatory Practices. This includes, but isn't limited to, promises about early planning, a dedicated website, using plain language, expert advisory groups, assessing the effects of regulations, official publication, and reviewing them. Currently in effect: strengthening the agreement between the U.S. and Brazil to accept and use economic and regulatory systems that work well, don't cost too much, and make sense. Commit to improving good science and risk-based management in areas that are important for investment and production, like the regulation of chemicals and the approval of medical devices. Pilot projects in specific sectors, such as harmonizing standards and definitions, and regulatory change based on the ideas of efficiency, good science, and risk management. These should include:

Set up a Chemical Experts Group with representatives from business


Set up a Chemical Experts Group with representatives from business to move forward with the Brazilian draft chemical regulatory management standards that are still being discussed in Congress. Make a Task Force group with members from MDIC and the Ministry of Health to look for opportunities in the Economic and Industrial Policy on Health Care that was just released Allow testing exemptions based on how well the product(s) have worked in the past, and do random audits on goods that are exempt. Start a direct conversation with the Secretary of Economic Reform and then the Ministry of Finance to move forward with ideas like cooperation agreements between regulators (so funds could be listed in more than one jurisdiction), making registration rules easier (more on that below), risk mitigation mechanisms for long-term investments (especially when it comes to foreign exchange risks), and lifting restrictions on cross-border investments by institutional clients in both public and private markets. This would help those groups reach their goals more quickly. It's important to stress how important it is to have more Public Administration entities as part of AEO-Integrated, since they have control over international trade operations. The more entities that have their modules in the Brazilian AEO Program, the more reliable the operations of certified companies will be, leading to easier clearance processes, more flexibility, and lower costs. The program will also become more appealing to Brazilian companies. In line with the supply chain mapping, find the Tier One priority import/export sites that need the most infrastructure investment. This includes investments in technology and making transportation easier. Adopt federal rules that require less red tape for state-level transportation papers, such as digital documents.  As a next step, we should help the Ministry of Transportation set up a working group to make sure that information is integrated efficiently. This group should also include people from the business sector who can provide important technical expertise.

Get rid of out-of-date ways of controlling land shipping prices 


Like the minimum freight rate table. Many Brazilian business groups, including those that ship farm products, agree that getting rid of rules that don't work will make sure that transportation costs are fair and competitive. Use technology for non-intrusive inspection (NII) and other risk management ideas. Work with the business world to find NII deployment possibilities. Give priority to high-volume clearance operations, like those that handle small packages. This will cut down on clearance times and give border management more resources. Use an AEO (authorized economic operator) or other license to get your goods through customs at sea or air before they arrive. Making it easier for foreign investors to get a new tax ID (CNPJ) by letting them apply without having to gather and present a long list of documents, such as a list of beneficial owners, detailed organization charts, notarized translations, and so on. This is especially important since CVM already offers a simplified registration process (cadastro simplificado).

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