US President Donald Trump said the United States will pursue a trade deal with Latin America’s largest nation, one of the least open economies in the world, highlighting his close personal relationship with his Brazilian counterpart.
“We’re going to work on a free-trade agreement with Brazil,” Trump told reporters in Washington, in response to a question about the possibility. “Brazil is a big trading partner. They charge us a lot of tariffs but, other than that, we love the relationship.”
China overtook the US as Brazil’s top trading partner around a decade ago, but President Jair Bolsonaro has repeatedly spoken of his desire to expand trade relations with the US, currently worth around US$62 billion a year. In a recent visit to Washington he told business leaders that Brazil would be willing to forgo some benefits at the World Trade Organisation (WTO) in return for a deal with the United States.
A press release from the US-Brazil Chamber of Commerce on Tuesday also proposed a free-trade agreement between the two countries, starting with negotiations over non-tariff barriers.
Trump did not specify whether a future deal with Brazil would include the other nations in its Mercosur trade bloc, which recently inked a free-trade deal with the European Union. That deal still has to be ratified by member states’ governments and the European Parliament.
Brazil’s only discernible global value chain link at present is with neighbouring Argentina, according to a report last year from the Organisation for Economic Cooperation and Development (OECD). The OECD estimated Brazil’s real GDP could increase 8% by lowering trade barriers. The economy grew just 1.1 percent in 2017 and 2018, and is expected to grow 0.8 percent this year.
Trump also told reporters that Brazil’s president is “a great gentleman” and “wonderful man,” with whom he has a “fantastic relationship.”