Opportunity for Brazilian entrepreneurs: new trade agreement between Brazil and the United States
In October 2020, an important trade agreement was signed between Brazil and the United States within the scope of ATEC (in its English acronym, "Agreement on Economic and Trade Cooperation"). The bilateral cooperation protocol was created in 2011, but was activated in 2019 and, after 22 months of negotiation, it was finally signed, and the practical measures of the same should start to be implemented soon.
The treaty covers three areas, namely: bilateral trade facilitation and customs administration, good regulatory practices between the two countries and, finally, measures against acts of corruption that may affect international trade and investments . According to estimates by Amcham Brasil and FGV, the impact of the protocol on the Brazilian GDP could reach an increase of 1.3% and, according to Abrão Neto, vice president of Amcham Brasil, because it is an agreement between the two largest economies on the American continent, the space for growth in trade between them is expressive.
Among the implications of the first annex of the agreement, regarding trade facilitation, we highlight the streamlining of transit procedures for goods and the facilitation of customs procedures by technological means, including the acceptance of documents and electronic payments, among other measures. In the second area of the agreement, on good regulatory practices, measures of greater transparency will be implemented, with the two countries and their traders, regarding the required regulations. In the field of the third annex of the agreement, referring to anti-corruption measures, stricter standards of conduct will be imposed on public servants who work directly with the international transit of goods, in order to avoid problems that could affect trade between countries.
Although the protocol only covers the scope of non-tariff barriers, it is already a great benefit to Brazilian importers and exporters who wish to expand their markets to the United States. Furthermore, according to the OECD (Organization for Economic Cooperation and Development), reforms in this area can reduce up to 14% of the costs of trade operations. The agreement, therefore, represents an increase in opportunities for Brazilian businessmen to enter the vast US market. Furthermore, the work of a specialized international consultancy, with a detailed survey of the regulations and tariffs necessary for this process, and with an in-depth analysis of the US market, will make internationalization even more efficient and profitable.
By Giovanna Relva on 11/18/2020
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