By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The U.S. President Donald Trump’s pledge to review his country’s trade agreements with other nations has been a cause of concern for many countries around the world. The Brazilian government, however, sees these new measures as new business opportunities for the country.
“When it [U.S. government] leaves the world’s largest trade agreement, we understand that, especially in the area of agribusiness, it opens up a great opportunity for Brazil,” Brazil’s Minister of Industry, Foreign Trade and Services, Marcos Pereira told reporters on Wednesday in Rio de Janeiro.
Earlier this week U.S. President Trump cancelled the U.S.’s involvement in the Trans-Pacific Partnership (TPP) agreement.
Senior economist for FocusEconomics, Angela Bouzanis, says the effects on Brazil are hard to discern at this time. “Looking at the potential upsides, the U.S. withdrawing from key trade agreements and taking a more protectionist stance could open up opportunities for new trade deals or encourage other economies to look more closely at Brazil as a trading partner,” she tells The Rio Times.
According to Minister Pereira, however, it will not only be agribusiness that will possibly benefit from the non-consolidation of the mega-trade agreement of twelve countries in the TPP but other sectors as well. The official said that the Brazilian government would not only look into the void to be left by the U.S.’s retraction on the agreement but also look to further improve its trade relationship with the North American neighbor, since ‘Brazil is not the focus of the U.S. President’.
Minister Pereira cautions, nonetheless, that although there are no signs the U.S. plans to reduce its trade with Brazil, the protectionist U.S. tendency may influence other free trade agreements under negotiations, such are the Mercosur and the European Union and the South American trade bloc with the European Free Trade Association (EFTA) block comprising of Switzerland, Norway, Iceland and Liechtenstein.
“When we, in this new configuration of Mercosur, begin to negotiate a free trade agreement and negotiate with the world, here comes the world’s largest economy closing; That is the concern,” added Pereira, before reiterating that with the latest actions from the U.S. there are commercial opportunities for Brazil abroad, “We understand that we can use these U.S. government protectionism measures as an opportunity. It’s making the lemons a lemonade.”
Ms Bouzanis of FocusEconomics also notes that the U.S. is also a key trade partner for Brazil and a protectionist stance could hurt Brazilian exports destined for the U.S. and ripple throughout the global economy.
“Trump’s effects on the Brazilian economy are likely to felt strongly through other channels as well. Particularly, Brazil’s economy is vulnerable to tighter global financial conditions, which could hurt assets and spark capital outflows,” adds the senior economist.
According to the U.S. Trade Representative, U.S. goods and services trade with Brazil totaled an estimated US$95.4 billion in 2015. Exports were US$59.5 billion; imports were US$35.9 billion. Brazil is currently the twelfth largest goods trading partner to the U.S. with $59 billion in total (two way) goods trade during 2015.