Navigating Trade Disputes: US-Brazil Regulatory Perspectives

 

Brazil has become a prominent advocate for developing countries

In the establishment of regional and multilateral trade agendas, as it is the largest and most influential country in Latin America. In an effort to advance trade liberalization, the United States and Brazil have established constructive relationships. This includes establishing bilateral working groups on trade (and other) issues and attempting to negotiate a compromise with the European Union in the World Trade Organization (WTO) Doha Round. However, they maintain a distinct perspective on trade policy, are in disagreement regarding the regional implementation of the Free Trade Area of the Americas (FTAA), and have similar apprehensions regarding specific trade policies and practices. Economic incentives can only partially account for Brazil's trade strategy. Additionally, its "trade preferences" are indicative of its profoundly ingrained industrial, foreign, and macroeconomic policies.

Brazil is primarily concerned with market access issues in relation to its economic dominance in South America, whereas the U.S. trade strategy prioritizes the negotiation of comprehensive trade agreements on multiple fronts. In all trade arenas, Brazil exercises this priority, including the expansion of the Southern Common Market (Mercosul) in South America, the pursuit of changes to agricultural policies in the WTO, and the opposition to the FTAA due to its lack of a balance that is favorable to Brazilian interests. Brazil's economy is modern and diversified, with services comprising 53% of GDP, industry and manufacturing at 37%, and agriculture at 9%. Brazil's emphasis on agricultural policies in trade negotiations is a result of the fact that agribusiness (commodity and processed products) accounts for approximately 30% of GDP. Brazil is the world's largest producer of coffee, oranges, and sugar cane, and the second largest producer of soybeans, beef, poultry, and maize. Also, it is a significant producer of steel, aircraft, automobiles, and auto parts; however, it is a relatively minor trader in comparison to global standards. Brazil's main trading partner is the United States.

Brazil is critical of U.S. trade policies

including the Byrd Amendment (repealed, but program in effect until October 1, 2007), which directs duties from trade remedy cases to affected industries, the administration of trade remedy rules, and what it considers to be discriminatory treatment in the U.S. expansion of free trade agreements in Latin America. It also opposes product-specific barriers, including tariff rate quotas on sugar, orange juice, ethanol, and tobacco, subsidies for cotton, ethanol, and soybeans, and protracted antidumping orders on steel and orange juice. The United States is particularly concerned about Brazil's comparatively high tariff structure, particularly in the industrial sector, as well as the common external tariff program of Mercosul and Brazil's failure to address critical issues of importance to the United States, including services trade, intellectual property rights, government procurement, and investment. Nevertheless, both nations acknowledge the potential for substantial benefits to be achieved through mutually acceptable trade liberalization at all levels, despite these distinctions.

Brazil may have the most to gain from addressing both foreign barriers to its trade and unilaterally opening its economy further, as a developing country with the potential for significant growth in both exports and imports. Given the increasing intensity and diversity of the economic relationship between the United States and Brazil, it is imperative that businesses and investors have access to a legal team that is well-versed in the economies, cultures, and legal systems of both countries. Akerman's Brazil practice team provides guidance to clients regarding regulatory issues, disputes, transactions, inbound and outbound investments, and the United States and Brazil. Our team collaborates closely with our Latin America and the Caribbean practice to offer comprehensive coverage throughout the region, in addition to our bilateral experience. Our team, which includes bilingual lawyers who are licensed in both Brazil and the United States, possesses firsthand knowledge of the Brazilian economy, legal system, and culture. We provide our clients with guidance and investigations on regulatory and anti-corruption matters, infrastructure and project finance, capital markets transactions, debt restructurings, and international contract negotiations.

Our services include advisory work on international trade matters

including cross-border trade policies and regulations, customs issues, preferential trade agreements, export controls, and trade policy developments in Brazil and the United States, as well as advising on corporate transactions, including mergers and acquisitions, joint ventures, private equity, venture capital, real estate and construction projects and financings. The Akerman team has a wealth of experience in representing clients from both the United States and Brazil in cross-border litigation and arbitration in arbitral forums worldwide, including the United States and Brazil. Our work encompasses a variety of sectors, such as energy, shipping, oil and gas, food and agriculture, real estate, automotive, retail, finance, media, telecommunications, and technology (including fintechs). Our team consists of attorneys who have been practicing for years in both Brazil and the United States. They have a history of innovation, which includes the execution of the first-ever Rule 144A capital markets transactions for Brazilian issuers.