Under Secretary of Commerce For International Trade Francisco SÁnchez
“Deeping the Relationship: Prospects for US-Brazil Commercial and Bilateral Ties”
Tuesday, January 15, 2013
As prepared for delivery
Thank you very much, Michael (Shifter), for that very kind introduction. And my thanks to the entire Inter-American Dialogue organization for hosting this important forum today.
I know that last year you celebrated an important milestone: your 30th Anniversary. And at the outset, I want to thank you for the valuable contributions you have made on a wide-variety of issues important to the Western Hemisphere.
They have made a tremendous impact. And I look forward to our discussion today, especially in a program with two distinguished individuals:
- Joao Neves;
- and Peter Hakim.
As some of you may know, the work you do to strengthen the Western Hemisphere is near and dear to my heart. I was born and raised in Florida, an incredible gateway to the Americas. So for as long as I can remember, I have appreciated the economic and cultural bonds that exist in this region of the world.
And I’ve been proud to work in a variety of capacities to deepen these ties: from my years working for former Governor Bob Graham; to my years as an international consultant; to my service as Chief of Staff to Buddy Mackay, when he was President Clinton’s Special Envoy to the Americas; to my current role as President Obama’s Under Secretary for International Trade.
While this work has always been important, in so many ways, it’s more important than ever. Because of changes to technology and the global economy, our futures are more intertwined than ever before. If one country is suffering, it has the potential to hurt us all. If one country is prospering, it has the potential to benefit us all.
So it is in all of our interest to get these partnerships right by solving challenges and seizing opportunities. And as always, major keys to achieving these goals are increased communication and understanding.
I remember a funny story during my time with Buddy. He was participating at a news conference in Chile and speaking through an interpreter. And the first question from a reporter was very tough.
So Buddy responded by saying, “Wow, that one was high and inside”, which of course is a reference to baseball when a pitch comes near a batter’s head.
He was hoping to get a laugh, but the room got very silent. That’s because the interpreter didn’t have any idea what baseball was. Buddy tried to explain, but had little success. Then someone suggested he use a soccer analogy, but Buddy didn’t know one. So there was an awkward moment.
Thankfully, it got much better after that.
And as I look back on it, it serves as a funny reminder about just how important dialogue is in deepening economic ties. That’s why the work of your organization is so important. It’s also why President Obama, and all of us in the Administration, have been so committed to engagement with our partners in the region through vehicles like the Summit of the Americas.
We realize and value the enormous role the Western Hemisphere plays in our economic development here. Our partnerships throughout the region are critical to achieving the goals of President Obama’s National Export Initiative, which has the goal of doubling U.S. exports over a five-year period — ending at the conclusion of 2014.
And our work with Brazil is particularly important in this work. In so many ways, the U.S.-Brazil partnership is a natural one. We represent the two largest democracies in the Western Hemisphere.
And as President Obama pointed out when he visited Rio de Janeiro in 2011, our history is full of shared experiences;
- the United States was the first nation to recognize Brazil's independence;
- the first head of state to visit the United States was the leader of Brazil, Dom Pedro II;
- in the Second World War, our brave men and women fought side by side for freedom; and
- after the war, both of our nations struggled to achieve the full blessings of liberty.
Of course, these full blessings include expanded opportunity and prosperity for both our peoples.
We applaud Brazil’s tremendous progress in recent years and are proud to have played a role in it.
Total bilateral trade in 2011 amounted to more than $75 billion — more than twice the amount of our trade in 2000, which was nearly $30 billion. And although trade between our two countries slowed in 2012, it is clear that we are making great progress in the big picture.
And I’ve been fortunate to see this progress up close by visiting Brazil a number of times, including:
- a trip in 2011 to help foster new partnerships in the lucrative oil and gas sector; and
- a visit last August, when I led the largest ever education trade mission with representatives from 66 U.S. colleges and universities.
So great things are happening between our peoples and our businesses. Yet, I think we all agree that there is potential to do so much more. And all of us from both the U.S. and Brazil. and the public and private sectors, have got to be creative and determined in order to fulfill this promise.
And let me be clear: I know we can do this. Why? Because we’ve accomplished so much together already. To illustrate my point, look no further than the U.S.-Brazil Commercial Dialogue. I’ve been proud to help lead this effort in recent years, with my Brazilian counterpart, Tatiana Prazeres.
And we’ve worked very well to address a number of important issues.
We’ve worked to eliminate the unnecessary red tape and bureaucracy when trading across our two borders. In the 21st century economy, delays cost businesses time and money. And I’m pleased that there has been increased engagement between U.S. and Brazilian customs agencies.
Most recently, in October, Secretary Napolitano signed a joint statement with a Brazilian counterpart to utilize technology to expedite trade and enhance supply chain connectivity. And we continue to see great progress towards finally implementing a trusted cargo program between our two countries.
We also continue to see movement forward in areas like:
- promoting standards cooperation throughout the Hemisphere;
- technical regulations so that businesses don’t have to operate by two sets of rules;
- quality standards — as was the case with biofuels — which now have to be of the same quality in both countries;
- intellectual property protection and enforcement so that entrepreneurs are encouraged to innovate; and
- education initiatives, like Brazil’s Science Without Borders and 100,000 Strong in the Americas so that future generations have both the technical skills and the appreciation of each other’s cultures to cement strong economic bonds for years to come.
So great work has been done. Yet, there is more to do. And I look forward to working with my friends in the Brazilian government to build on the progress we’ve made thus far. In addition, I look forward to continuing to work with my friends in the private sector, through efforts like the U.S.-Brazil CEO Forum.
At the Commerce Department, we proactively seek the advice of businesses. We value their contributions. Their perspectives and ideas often shape our work. They are critical to our success. And when they speak we listen.
Since it was founded in 2007, the U.S.-Brazil CEO Forum has made a number of joint recommendations to our governments that have helped guide our activities.
During its first meeting, the Forum urged us to make visa reform a top priority. We have. Both the U.S. and Brazilian governments extended the visa validity for business and tourist visas from 5 to 10 years. The U.S. government has also made great strides to reduce the visa backlog. As a result, travel between our two countries has improved.
That means more people to people exchanges and tourist dollars. It means more opportunities for businesses to meet, explore markets and do deals. In short, it means more economic activity.
That’s also the case when it comes to energy. The CEO Forum urged our two governments to enhance cooperation when it comes to energy. It’s no secret that this is an area with potential for tremendous growth, particularly for Brazil. That’s in part because of the significant offshore oil deposits discovered in the last five years.
U.S. companies have the knowledge and expertise to help Brazil make the most of this potential. That is why I traveled to Brazil in 2011 for the Offshore Technologies Conference in Rio de Janeiro. I was proud to open the U.S. pavilion, featuring 80 American businesses. And a lot of contacts and partnerships were made during that time.
This success builds upon the Strategic Energy Dialogue that was launched in 2011 between our two countries, with the goals of enhancing regional and global energy security, and building a clean energy future that impacts both the health and wealth of our peoples.
So a lot of good things are happening because of the CEO Forum, the Commercial Dialogue and other efforts. However, there is much more work to be done. From our vantage point in the U.S., there are still too many obstacles to doing business in Brazil, ranging from tariffs and taxes to local content requirements.
In addition, there are factors that are limiting Brazil’s ability to compete, which ultimately hurt our partnership.
These factors include:
- customs uncertainties;
- an overburdened and unpredictable legal system;
- a shortage of skilled workers;
- inadequate infrastructure; and
- the high costs of entering goods at the border.
I mention these challenges not to cast blame. I mention them to ask one simple question: how can we in the U.S. government help? What can we do to take our economic partnership to the next level? How can we work together to create an environment more conducive for business success?
My hope today is that we’ll all leave here considering newer and greater possibilities. That’s my hope because the U.S. is committed to this partnership for the long run. That’s why the President traveled to Brazil, and has been so engaged in our partnership.
That’s why I — and many of my colleagues from the Commerce Department — have led trade missions to Brazil. That’s why we are so committed to vehicles like the CEO Forum and the Commercial Dialogue.
That’s why we are working to make trade between our two countries more efficient. That’s why we’ve sought reforms to technical regulations and quality standards. That’s why we are focused on educational exchanges to equip future generations with the skills and experiences they need to succeed.
That’s why we’re focused on prosperous industries like the energy sector. And that’s why I’m here today: to reiterate that the U.S. values our relationship with Brazil. We see this partnership as a key to the entire Western Hemisphere’s success in the future. If this partnership succeeds, then there is a good chance the entire region succeeds.
So let me know how we can help make our shared future worthy of our greatest hopes and ideals. Together, we can build a bigger, stronger and more prosperous United States, Brazil and Western Hemisphere.Once again, my thanks to the Inter-American Dialogue for inviting me to participate. I’d be happy to take any questions.
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