program 2017 of work 2018 - brazil · in 2016, brazil embarked on a fundamental transformation ......

PROGRAMOF WORK

20172018

MEMBER COMPANIES

2 PROGRAM OF WORK 2017–2018 ƖCassia CarvalhoCassia Carvalho

The business community plays a central role in shaping Brazil-U.S. relations.

“

”

A MESSAGE FROM THE CHAIR

Jane FraserChief Executive Officer,

Latin America, Citigroup

I am honored to serve as the chair of the U.S. Chamber of Commerce's Brazil-U.S. Business Council. There is boundless opportunity to expand relations between the U.S. and Brazil during this critical juncture for both countries. The business community plays a central role in shaping the relationship bilaterally, regionally, and globally.

Citi has operated in Brazil for over 100 years, serving as a trusted financial institution for our clients and enabling progress in the market. At the heart of this activity has been facilitating trade and investment between the U.S. and Brazil.

U.S. companies have long considered the Brazilian market an essential part of their global expansion and footprint. It is a key reason why the U.S.-Brazil commercial relationship is so vigorous. In 2015, U.S. goods and services trade with Brazil totaled nearly US$95.4 billion. U.S. foreign direct investment (FDI) in Brazil was US$65.2 billion, and Brazil’s FDI in the U.S. grew to US$23.7 billion in 2015.

For this reason, the time has come for both governments to make concrete progress in removing barriers to trade and investment and initiate efforts to establish bilateral agreements on tax and trade. These should be based on open, high-standard, and market-based approaches to commerce. In addition to removing barriers, the two countries should seek

to reach new levels of regulatory efficiency, reassurance for international investors, intellectual property rights, labor regulations, and environmental protections.

In 2016, Brazil embarked on a fundamental transformation aimed at restoring economic growth and setting the country on a sustainable path to development. The U.S. investor community supports the Brazilian government and its people in pursuit of this important domestic structural reform agenda and remains confident about Brazil and its future.

The Brazil-U.S. Business Council has remained steadfastly committed to strengthening the bilateral relationship during political transitions and challenging times and has proven itself to be a catalyst for innovative ideas and opportunities. The success of our efforts is reflected in the increased economic relations achieved over the past decades.

It is a privilege to serve as the chair of the Brazil-U.S. Business Council, and I look forward to collaborating with our member companies and partners in the coming years.

3 Ɩ PROGRAM OF WORK 2017–2018

A MESSAGE FROM THE EXECUTIVE DIRECTORThis is a new chapter in the U.S.-Brazil relationship. With changes in governments in both countries, we have the opportunity to reshape the bilateral agenda and pursue ways to strengthen our friendship and economic ties. It is a unique time, one of emerging trends in global thinking. Now, more than ever, both nations need to define a bold, robust strategic agenda and collaborate on global and bilateral issues such as trade, energy, defense, natural resources, infrastructure, and agriculture. The 2017–2018 Program of Work aims to give U.S. and Brazilian policymakers and private sector leaders a clear path forward. Our hope is that the administrations in the U.S. and Brazil will use this policy agenda, outlined with priorities and recommendations put forth by the private sector, as a foundation for their bilateral agendas and the government-to-business dialogues. We urge both governments to consider new possibilities, strategic thinking, and innovative options.

We present a bold vision with pragmatic next steps, pillared on 40 years of solid work by the Brazil-U.S. Business Council.

Cassia M. CarvalhoExecutive Director,

Brazil-U.S. Business Council

If pursued, both nations will reap socioeconomic benefits including sustained growth, employment generation, and prosperity, reaching an unrealized potential.

The U.S. Chamber of Commerce and the National Confederation of Industry (CNI) have a long-standing relationship that fosters joint initiatives and actions under the Brazil-U.S. Business Council. The partnership, together with business communities, has led to a common understanding on what is essential to reduce trade and investment barriers between the two countries. We are confident this proposed framework for economic cooperation will lead to concrete results.

The Council is an essential platform for strategic government-to-business dialogues and a partner in creating a vision and mission for the path ahead.

Both nations need to define a bold, robust

strategic agenda.

“”

CONTENTSTABLE OF

THE VISION FOR A STRATEGIC BRAZIL-U.S. ECONOMIC PARTNERSHIP

The Case for a Stronger Partnership: Realizing the PotentialFive-Year Policy Accomplishments Timeline Current State of Bilateral Trade and Investment Relationship

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BUILDING BLOCKS FOR THE BILATERAL RELATIONSHIP

Enhanced Economic Partnership: A RoadmapEase of Doing BusinessElevated Regulatory Cooperation

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ABOUT US AND WHAT WE DOLEADERSHIP2016 HIGHLIGHTS

LEADERSHIP MEETINGS IN BRASILIA

ADVOCACY MISSION TO BRASILIA

BRAZIL: RECOVERY, REFORM, OPPORTUNITY 18

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POLICY AND SECTOR AGENDAS 304.

TradeInnovationTax & Investment4.3.1. Infrastructure Working

GroupDefense & SecurityHealthcareConsumer Goods & RetailEnergy4.7.1. Oil & Gas Working GroupTourism & Hospitality

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MECHANISMS FOR COORDINATION, COLLABORATION, AND ENGAGEMENT

DialoguesU.S.-Brazil Commercial DialogueEconomic and Financial Dialogue (EFD)The Commission on Economic and Trade Relations under the U.S.-Brazil Agreement on Trade and Economic Cooperation (ATEC)Defense Cooperation Dialogue (DCD)Strategic Energy Dialogue (SED)Consultative Committee on Agriculture (CCA)Infrastructure Development Working GroupCongressional ForumsBrazil Congress: Brazil-U.S. Parliamentary GroupU.S. Congress: Brazil Caucus

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PARTNERS

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CONTENTSTABLE OF


The Case for a Stronger Partnership: Realizing the PotentialFive-Year Policy Accomplishments Timeline Current State of Bilateral Trade and Investment Relationship

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1.1.

1.2.1.3.


Enhanced Economic Partnership: A RoadmapEase of Doing BusinessElevated Regulatory Cooperation

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2.2.2.3.

ABOUT US AND WHAT WE DOLEADERSHIP2016 HIGHLIGHTS



BRAZIL: RECOVERY, REFORM, OPPORTUNITY 18

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PROGRAM OF WORK 2017–2018 Ɩ6

ABOUT US ANDWHAT WE DO

MEMBERSHIP BENEFITS

Level

Benefits

Event accessMembers-only events in the U.S. and Brazil. Discounted participation in partner events and activities.

Business intelligenceMembers-only executive information services.Brazil Investment Monitor.Policy Monitor. Access to Council policy and program stafffor information and guidance.

Advocacy missionsState- and federal-level advocacy missions missions and congressional briefings to advance policy issues and priorities.

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Corporate Board

Corporate level benefits, plus:

Strategic and policy-shaping influencePower to influence the Council’s strategic direction and policy.

Customized advocacyStronger voice in policy concerns and challenges.

Leadership rolesSeat on the board of directors.Opportunity to lead policy task forces and working groups.

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Overview

What we do

Mission

Enhance the government-to-business dialogue and advance the bilateral agenda.

Promote

Serve the interests of major U.S. companies that have trade and investment relations with Brazil.

Represent

Urge the implementation of political and economic measures that benefit U.S. and Brazilian companies engaged in trade relations.

Advocate

Assess the implications of existing and new regulatory frameworks and policy agendas.

Analyze

The Brazil-U.S. Business Council is the premier business advocacy organization for U.S. companies conducting business in Brazil. The Council represents a variety of industries, including consumer goods, defense, energy, healthcare, infrastructure, logistics, security, technology, travel and tourism. The U.S. Section of the Council represents the major U.S. companies invested in Brazil and operates under the administrative aegis of the U.S. Chamber of Commerce, maintaining independent policy formulation and membership.

Protect and advance trade and investment between the U.S. and Brazil through free trade, free markets, and free enterprise.

The Brazil Section is managed by the National Confederation of Industry (CNI), composed of the 27 Brazilian state-level federations of industry.

Ɩ PROGRAM OF WORK 2017–2018 7

LEADERSHIP

Chairman of the Board

Vice Chairman

Chair Emeritus

U.S. Chamber of Commerce

Board of Directors

CitigroupJane FraserChief Executive Officer, Latin America

DuPont Timothy P. GlennPresident, DuPont Crop Protection

Cargill Greg PageExecutive Chairman of the Board

McLarty AssociatesThomas F. “Mack” McLarty IIIChairman and Co-Founder

U.S. Chamber of CommerceMyron BrilliantExecutive Vice President and Head of International Affairs

U.S. Chamber of CommerceStan Harrell Senior Vice President, CFO and CIO

Brazil-U.S. Business CouncilCassia CarvalhoExecutive Director

Albright Stonebridge Group Ambassador Anthony HarringtonChair of the Managing Board and Head of the Brazil and Latin America Practice

Apple Susan Schmidt Senior Manager, Government Affairs Latin America

The Coca-Cola Company Michael Goltzman Vice President, International Government Relations and Public Affairs

AES Scarlett Alvarez Vice President, Chief Stakeholder Relations and Sustainability Officer

Eli Lilly and Company Alfonso Zulueta President, Lilly International

Baker McKenzie LLP Eduardo C. Leite Chair Emeritus of the Executive Committee and Senior Partner

FedEx Express Marilyn Blanco-Reyes Vice President, Legal and Regulatory Affairs Latin America and Caribbean Division

Boeing Jefferson Hofgard Vice President, International Operations and Policy

General Electric Ambassador David Nelson Senior Manager, Global Government Affairs and Policy–Americas

Caterpillar Odair Renosto President, Brazil

IBM Christopher A. Padilla Vice President, Governmental Programs

Chevron Clay Neff President of Chevron Africa, Latin America Exploration and Production

International Paper Mark S. Sutton Chairman and Chief Executive Officer

Johnson & Johnson Antonio Ferreira International Vice President, Janssen Latin America

Patri Eduardo Carlos Ricardo Partner and CEO

Lockheed Martin Dave Trulio Regional Vice President and Chief of Operations

PepsiCo Laxman Narasimhan Chief Executive Officer, Latin America Foods

Morgan Stanley Thomas Nides Vice Chairman

Walmart Dan Bryant Senior Vice President for Global Public Policy and Government Affairs

WestRock Jairo Andreis Lorenzatto President, WestRock Brazil

U.S. Chamber of CommerceJodi Hanson BondSenior Vice President, Americas


2016 HIGHLIGHTS

Raul Jungmann, minister, Ministry of Defense, and Liliana Ayalde, then-U.S. ambassador to Brazil, spoke during the inaugural Defense Industry Dialogue in Brasilia. The event gathered more than 150 U.S. and Brazilian defense industry officials and government experts to discuss policies and business issues before the U.S. and Brazilian defense industries, September 30, 2016.

Robert Schroder, senior vice president, International Strategy and Operations, U.S. Chamber of Commerce (right), and Marcos Pereira, minister, Ministry of Development, Industry and Foreign Trade, greeted each other during the Annual Plenary, moments before the Council, CNI, and Amcham Brasil delivered the joint report to the Brazilian government, December 7, 2016.

The Council hosted a meeting with Blairo Maggi, minister, Ministry of Agriculture, Livestock, and Food Supply, and a delegation of public officials and private sector representatives at the U.S. Chamber. Cassia Carvalho, executive director, Brazil-U.S. Business Council, and Council members had exclusive access to speak with Minister Maggi about his outlook on Brazil’s agriculture, food security, sustainability, biotechnology, market access, and investment prospects, July 27, 2016.

The Council hosted a roundtable with Dyogo Oliveira, minister, Ministry of Planning, Development, and Budget (left center), and Jorge Arbache, secretary of International Affairs, Ministry of Planning, Development, and Budget (right), to engage the U.S. private sector and showcase the “Crescer” infrastucture program, October 6, 2016.

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The Council led a delegation of more than 20 leadership member companies to Brasilia to meet with the government from June 30 to July 1, 2016. The delegation, led by Kellie Meiman Hock, managing partner, McLarty Associates (then-Council chair), and Priscilla Vansetti, president,

Council delegates met with Ambassador Marcos Abbott Galvão, secretary general, Foreign Affairs, at Itamaraty Palace (Ministry of Foreign Affairs headquarters) to discuss bilateral agenda priorities, June 30, 2016.

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Representatives of the Council’s leadership engaged with Ricardo Barros, minister, Ministry of Health (far right), to reinforce the commitment of the U.S. business community to Brazil, June 30, 2016.

Representatives of the Council’s leadership attended

several meetings in Brasilia, June 30–July 1, 2016.

DuPont Brasil (Council vice chair), met with ministers and executive secretaries from the Ministries of Health; Defense; Planning, Budget, and Management; Trade and Services; Transportation; and Foreign Relations.

Cassia Carvalho, executive director, Brazil-U.S. Business Council, spoke during a meeting with Brazil’s government to present key components of the bilateral relationship and the Council’s policy agenda, July 1, 2016.

Junior Rosa



Our advocacy mission gathered senior executives in Brasilia for meetings with Brazilian government officials from December 5 to 8, 2016. The mission, which focused on the healthcare, innovation, and infrastructure sectors, included strategic engagement with key decision makers from the Brazilian Congress and the Temer administration.

The Council team, led by Robert Schroder, senior vice president, International Strategy and Operations, U.S. Chamber of Commerce (far left), hosted a business delegation of U.S. companies in Brasilia, December 7, 2016.

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Cassia Carvalho, executive director, Brazil-U.S. Business Council, discussed strategic priorities for the bilateral relationship with Deputy Luiz Carlos Hauly, president, Brazil-U.S. Parliamentary Group, during one of the advocacy meetings, December 7, 2016.

Robert Schroder, senior vice president, International Strategy and Operations, U.S. Chamber of Commerce, spoke during the Annual Plenary held with the Council’s partner organization CNI. The Plenary showcased government and private sector leadership while celebrating the Council’s 40th anniversary, December 7, 2016.

The inaugural U.S.-Brazil government-to-business infrastructure meeting joined private sector representatives from both countries to discuss upcoming project opportunities and exchange best practices in infrastructure development, December 8, 2016.

For more than a century, a very special passion has driven the people of Merck. Our goal is to develop medicines, vaccines, and animal health innovations that will improve the lives of millions. Still, we know there is much more to be done. And we’re doing it, with a long-standing commitment to research and development. We’re just as committed to expanding access to healthcare and working with others who share our passion to create a healthier world. Together, we’ll meet that challenge. With all our heart.

MEDICAL BREAKTHROUGHS MAY COME OUT OF THE LAB.BUT THEY BEGIN IN THE HEART.

For more information about getting Merck medicines and vaccines for free, visit merckhelps.com or call 800-727-5400. Copyright © 2016 Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc. All Rights Reserved. CORP-1060080-0100 01/16


1

Dee Wong for STUDIOPRI.COM

The leadership of the Council’s U.S. and Brazil sections met in Washington, D.C., to discuss strategy and priorities, building on momentum to advance

an ambitious Brazil-U.S. business agenda, October 6, 2016.

Ɩ 1. THE VISION FOR A STRATEGIC BRAZIL-U.S. ECONOMIC PARTNERSHIP 13

THE CASE FOR A STRONGER PARTNERSHIP: REALIZING THE POTENTIAL 1.1.

Pedro Carvalho for STUDIOPRI.COM

Brazil has the potential to become one of the most significant trading partners of the U.S. Economic, geopolitical, and cultural factors support this vision. The two countries have always been allies; are natural world leaders strategically located in the Western Hemisphere; have stable democracies and strong institutions; and offer enormous consumer markets and areas for cooperation on global issues. Economic opportunities exist in defense, energy, infrastructure development, and agriculture, among others. In sectors such as health, science, and innovation, cooperation can be expanded to elevate government-to-business collaboration.

Both Brazil and the U.S. have seen increases in two-way trade and investment, and the private sectors in both countries have voiced their desire to further enhance the bilateral relationship. This requires structural and fiscal reforms, as well as strong political will by both governments.

The Council believes that ambitious goals should be set for two-way trade and investment. While there has been progress in Brazil, much more can be done to improve free trade and investors’ confidence, and deeper economic integration. Brazil is an attractive partner for the U.S. The bilateral relationship needs to advance and promote institutionalized frameworks for long-term growth and sustainability.

The Council calls on both nations to establish the following:

• A comprehensive trade agreement with significantly lower tariffs and reduction of non-tariff barriers, supported by regulatory cooperation.

• A bilateral tax treaty that eliminates double taxation and offers mutual gains.

• A bilateral investment treaty (BIT) that promotes economic cooperation and stimulates the flow of capital.

• Free movement of people in each other’s territories.

In the short term, the Council continues to advance a robust policy agenda focused on promoting near-term attainable accomplishments contributing to the bilateral agenda, such as the following:

• Regulatory coherence, convergence, and standards harmonization led by the U.S. Department of Commerce and Brazil’s Ministry of Industries, Foreign Trade, and Services.

• Trade facilitation, including the mutual recognition agreement between the U.S. Customs Trade Partnership Against Terrorism and Brazil’s authorized economic operator initiatives.

• The expansion of the Patent Prosecution Highway agreement signed in 2015.

• Infrastructure development cooperation under the 2016 Memorandum of Cooperation.

• Negotiation of a Technology Safeguards Agreement (TSA) that would open up a window of opportunities for co-partnership and production in the space arena.

• Support the approval and promulgation of the Brazil-U.S. Open Skies Agreement, signed in Brazil in 2011, but not yet in force in Brazil. This agreement will boost tourism and travel between the two countries.

The Council is the preeminent business group for U.S.-Brazil economic, political, and policy issues and the private sector voice for these joint initiatives. Now is the time to advance a bold policy agenda with strategic goals toward long-term success.

Myron Brilliant, executive vice president and head of

International Affairs, U.S. Chamber of Commerce, discussed Brazil’s economic

recovery and U.S. political transition and priorities during

the 2016 Brazil Economic Conference, October 7, 2016.

PROGRAM OF WORK 2017−2018 Ɩ14

FIVE-YEAR POLICY ACCOMPLISHMENTS TIMELINE1.2.

2016

2015

2014

2013

2012

Brazil Council Work and Support for Key Policy Accomplishments in the Brazil-U.S. relationshipAs illustrated in the graphic, there have been significant accomplishments since 2012 in areas such as trade, tax, defense, health, infrastructure, food and agriculture, and patent regulation.

Brazil and U.S. sign an intergovernmental agreement to implement the Foreign Account Tax Compliance Act (FATCA).

Member countries sign WTO Agreement on Trade Facilitation.

Brazil and U.S. sign spirits recognition agreement, resulting in the recognition of cachaça, Tennessee whiskey, and bourbon.

Brazil Council is established as BRAZTAC chair.

U.S. revokes an anti-dumping order on orange juice from Brazil, in compliance with a WTO ruling.

U.S. Chamber and Brazil Council host President Dilma Rousseff for the first time in Washington, D.C.

Brazilian Congress approves Brazil-U.S. Tax Information Exchange Agreement, signed in 2007.

Brazil and U.S. resolve decade-old World Trade Organization (WTO) dispute over cotton subsidies.

Brazil ratifies WTO Trade Facilitation Agreement.

Brazil ratifies Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Brazilian government enacts a law to end the state company monopoly on pre-salt fields in the oil sector.

Brazil implements ATA Carnet system in the Istanbul Convention, signed in 2011.

Brazilian and U.S. governments sign Memorandum of Cooperation on Infrastructure Development.

Brazil and U.S. sign an agreement to allow certain beef and beef products to be traded in both markets.

Brazilian and U.S. governments sign Letter of Intent to solidify bilateral support for continued cooperation between their respective defense industries via the U.S.-Brazil Defense Industry Dialogue.

U.S. Chamber and Brazil Council host President Dilma Rousseff for the second time in Washington, D.C.

Brazil and U.S. sign a Patent Prosecution Highway (PPH) Agreement.

Brazilian Congress approves U.S.-Brazil Defense Cooperation Agreement.

Brazilian Congress approves U.S.-Brazil General Security of Military Information Agreement.

Brazil and U.S. sign Social Security Totalization Agreement to eliminate dual contributions.

Brazil and U.S. sign a Memorandum of Understanding on Health and Medical Sciences to boost cooperation on health issues.

U.S. Department of Commerce and its Brazilian counterpart sign a Memorandum of Understanding to establish an outline for continued best practices exchanges to institutionalize good regulatory practices.

Ɩ 1. THE VISION FOR A STRATEGIC BRAZIL-U.S. ECONOMIC PARTNERSHIP 15

2016

2015

2014

2013

2012

Brazil Council Work and Support for Key Policy Accomplishments in the Brazil-U.S. relationshipAs illustrated in the graphic, there have been significant accomplishments since 2012 in areas such as trade, tax, defense, health, infrastructure, food and agriculture, and patent regulation.

Brazil and U.S. sign an intergovernmental agreement to implement the Foreign Account Tax Compliance Act (FATCA).

Member countries sign WTO Agreement on Trade Facilitation.

Brazil and U.S. sign spirits recognition agreement, resulting in the recognition of cachaça, Tennessee whiskey, and bourbon.

Brazil Council is established as BRAZTAC chair.

U.S. revokes an anti-dumping order on orange juice from Brazil, in compliance with a WTO ruling.

U.S. Chamber and Brazil Council host President Dilma Rousseff for the first time in Washington, D.C.

Brazilian Congress approves Brazil-U.S. Tax Information Exchange Agreement, signed in 2007.

Brazil and U.S. resolve decade-old World Trade Organization (WTO) dispute over cotton subsidies.

Brazil ratifies WTO Trade Facilitation Agreement.

Brazil ratifies Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Brazilian government enacts a law to end the state company monopoly on pre-salt fields in the oil sector.

Brazil implements ATA Carnet system in the Istanbul Convention, signed in 2011.

Brazilian and U.S. governments sign Memorandum of Cooperation on Infrastructure Development.

Brazil and U.S. sign an agreement to allow certain beef and beef products to be traded in both markets.

Brazilian and U.S. governments sign Letter of Intent to solidify bilateral support for continued cooperation between their respective defense industries via the U.S.-Brazil Defense Industry Dialogue.

U.S. Chamber and Brazil Council host President Dilma Rousseff for the second time in Washington, D.C.

Brazil and U.S. sign a Patent Prosecution Highway (PPH) Agreement.

Brazilian Congress approves U.S.-Brazil Defense Cooperation Agreement.

Brazilian Congress approves U.S.-Brazil General Security of Military Information Agreement.

Brazil and U.S. sign Social Security Totalization Agreement to eliminate dual contributions.

Brazil and U.S. sign a Memorandum of Understanding on Health and Medical Sciences to boost cooperation on health issues.

U.S. Department of Commerce and its Brazilian counterpart sign a Memorandum of Understanding to establish an outline for continued best practices exchanges to institutionalize good regulatory practices.

PROGRAM OF WORK 2017−2018 Ɩ16

CURRENT STATE OF BILATERAL TRADE AND INVESTMENT RELATIONSHIP

Robert Schroder, senior vice president, International

Strategy and Operations, U.S. Chamber of Commerce

(right), and Ricardo Barros, minister, Ministry of Health,

discussed the Council’s healthcare policy agenda

during the Advocacy Mission, December 6, 2016.

Junior Rosa

1.3.

The U.S. and Brazil, the two largest democracies and economies in the Western Hemisphere, have a robust bilateral relationship founded on shared values and commitments. Political and economic ties between the two countries have traditionally been strong. The partnership is focused on expanding economic growth and prosperity. The following figures demostrate the depth of the economic relationship.

Source for all information is USTR unless stated otherwise.

* Source: Office of Trade and Economic Analysis, U.S. Department of Commerce** Source: Select USA, U.S. Department of Commerce

Goods and Services Trade

Exports $ 59.5 billion

Imports $ 35.9 billion

Total $ 95.4 billion

U.S. Trade Surplus $ 23.6 billion

Trade in Goods

Good Exports $ 32 billion

Good Imports $ 27 billion

Total $ 59 billion

U.S. goods trade surplus $ 4.3 billion

Trade in Services

Services exports $ 27.8 billion

Services imports $ 8.5 billion

Total $ 36.3 billion

U.S. services trade surplus $ 19.3 billion

Jobs supported by U.S. exports to Brazil (2015)*

Jobs supported by goods exports 165,000

Jobs supported by services exports 182,000

Total 308,000

FDI (2015)**U.S. FDI in Brazil (stock) $ 65.2 billion

Brazil's FDI in the U.S. (stock) $ 23.7 billion

Sales of services (2013)

Sales of services by majority U.S.-owned affiliates in Brazil

$ 39.6 billion

Sales of services in the U.S. by majority Brazil-owned firms

$ 2.0 billion

Ɩ 1. THE VISION FOR A STRATEGIC BRAZIL-U.S. ECONOMIC PARTNERSHIP

One story — Different Languages and Time Zones

Eduardo LeiteChairman Emeritus and Senior Partner

During my last year as global chairman of Baker McKenzie, I was fortunate to become involved with a project that left a lasting impression on me—our work supporting street youth of the world across eight cities in four continents.

The first campaigns involved significant consultations with the kids and was organized in January 2016 in Rio de Janeiro by the Consortium for Street Children, the leading international network of organizations working for street children’s rights, and the U.K. charity Street Child United, with support from Baker McKenzie.

It was brought home to me when Brazilian colleagues told me about the scale of the daily and cruel reality faced by many kids endangered by the lack of basic rights—homes, education, and health. Let me illustrate this with the story I heard from Jose (not his real name). His story touched me deeply, and he was very vocal during the meeting.

Jose shared his unique perspectives of life on the street, such as not beig allowed to go to school because he did not have a birth certificate, or how he felt unsafe during major sports events held in his city in 2016, which he and others like him were very much uninvited.

Jose’s speech directly fed into the new United Nations international guidance on how governments can fulfill their human rights obligations to this group of children. Street-connected children—who may live or work on the street or simply spend much of their time in public spaces—experience severe and ongoing violations of rights and threats. They are constantly exposed to violence, adult abuse, drugs, and crime. They experience extreme stigma and discrimination and are often unable to access food, clean water, shelter, healthcare, and other basic services. Jose does not know what it is to have dreams and aspirations for a better life.

Perceived as a hard-to-reach group, street children are too often ignored by our society and made invisible in policy agendas. It is my hope that we, the responsible business leaders, can continue to do more to promote the voices of this often resilient and resourceful group of young people to be heard at the highest levels.

Taking advantage of Baker McKenzie’s global footprint, we were able to support seven similar consultation events held throughout the first half of last year, all in different markets across the world. For this pro bono initiative, we counted on the support of our local team but also our U.S. attorneys working closely with Brazilian colleagues. It gave us a sense of how many Joses are out there—with different languages and time zones but all facing the same challenges and threats. I hope we can continue to make a difference in improving Jose’s life and future.


BRAZIL:RECOVERY, REFORM, OPPORTUNITY

The Council is working steadily to support and promote the business community within the context of the bilateral relationship between Brazil and the U.S. One of our contributions is the production of a white paper with suggestions for Brazil to restore investor confidence and resume economic growth with a broad economic and regulatory reform agenda. Visit www.brazilcouncil.org/media/publications to access the white paper.

The ongoing political transitions in Brazil and the U.S. have the potential to provide both economies with a fresh start. Brazil is in the midst of internal domestic reforms and is looking to the globe for development partners. The U.S. is reevaluating its trade relations, providing a ripe opportunity to define a path for sustainable economic growth between the two countries.

The Council strongly believes that Brazil must seize the moment and pursue a forward-looking reform agenda based on sound economic policies, business-friendly regulations, modernized infrastructure, and robust international partnerships. Both collectively and individually, these reforms would unleash a new round of growth and renewed openness to foreign investment, anchored in sound economic policies. Leveling the playing field and expanding Brazil’s trade architecture and commercial relationships, both globally and with the U.S., should be higher priorities than ever before.

Sound Economic PoliciesPresident Temer should remain focused on passing key fiscal structural reforms, including Social Security reform, and measures to limit expenditure growth. If his administration succeeds in securing parliamentary approval for these reforms, it would address Brazil’s medium-term fiscal problems, restoring sustainability and halting the rise of the debt-to-GDP ratio. This would help restore confidence and enable the Brazilian Central Bank to sustain the contraction of interest rates. Interest rate reduction would further alleviate the government’s debt burdens, as well as those of the corporate sector and households. This would also lower investment costs, providing a much-needed boost to economic activity.

A Business-Friendly EnvironmentBrazil should remain steadfast in pursuing a broad agenda of microeconomic reforms aimed at addressing the difficulties of doing business in Brazil. The objective of these microeconomic

reforms is to ensure greater transparency and a harmonized rulemaking process to create a more legally secure, predictable regulatory framework for domestic and foreign firms doing business in Brazil. The government also needs to commit to combatting corruption and inefficiency by adhering to high standards of transparency, fairness, and integrity.

Modernized InfrastructureA cornerstone of Temer’s reform agenda is a revamped privatizations concessions strategy for infrastructure. Temer’s administration has been advancing the agenda to attract both foreign and local investor interest. Much of the privatizations concessions program is directed at modernizing Brazil’s infrastructure, currently a challenge to the country’s competitiveness and an obstacle to profitable business opportunities.

Deepened International PartnershipsBrazil should increase its partnerships and expand its trade architecture to take advantage of new global opportunities. In addition, Brazil should pursue full membership in the Organisation for Economic Co-operation and Development (OECD), the World Trade Organization’s (WTO’s) Trade in Services Agreement (TISA), the WTO Information Technology Agreement (ITA), and the WTO Government Procurement Agreement (GPA).

Now is the time for Brazil to look outward to support sustainable growth, and one of the main engines of that growth will be foreign direct investment (FDI). Under the right conditions, U.S. companies and investors, which have long regarded the Brazilian market as an essential part of their global strategies, are prepared to seize opportunities in the country. The Council is convinced that this is the opportune moment to make changes and secure a strong economic future.

In 2017, the Council launched three initiatives aiming at building blocks for a more productive and sustainable bilateral relationship:

• Enhanced economic partnership.• Ease of doing business.• Elevated regulatory cooperation.

(Left to right) Carlos Eduardo Abijaodi, director, Industrial Development, CNI; Cassia Carvalho, executive director, Brazil-U.S. Business Council; Robert Schroder, senior vice president,

International Strategy and Operations, U.S. Chamber of Commerce; Paulo Cesar de Souza e Silva, president and CEO, Embraer S.A., and chair of the Brazil-U.S. Business Council, Brazil Section; Rubens Antonio Barbosa, former Brazilian ambassador to the U.S.; and Nelson Salgado, senior vice president, Strategy and Institutional Relations, Embraer S.A., celebrated the Council’s 40th

anniversary during the Annual Plenary in Brasilia, December 7, 2016.

Junior Rosa


2


AgriculturalProducts

Metal Products

Brazilian business services

Payments for intellectual property rights

Medical

Petroleum

Machinery Transportation Equipment

Travel andTourism related

Transportation

Brazil The 9th largest

The largest economy in Latin America

in the world

75,000+ jobs

2014 trade data show manufacturing sectorCreating jobs in

since

2010

Brazilian exports to U.S. are

75%manufactured and semimanufactured products

U.S. Trade of Goods and Services to Brazil, 2004—2014

Total Exports to Brazil

$18.8 B$59.5 B

15.1%

20042014

AnnualGrowth

$23.0 B$35.9 B

6.6%

Total Imports

from Brazil

$-4.2$23.3

Trade Balance

with Brazil

1.6%2.1%

Brazil’s Share of Total U.S. exports

1.3%1.3%

Brazil’s Share of Total U.S. imports

U.S. Department of Commerce, Bureau of Economic Analysis, “U.S. Trade in Goods and Services by Selected Countries and Areas, 1999—Present,” http://www.bea.gov/international/index.htm#trade

Leading goods

11th largest destination for U.S.

Exports to Brazil

goods

Key Takeaways

U.S. employment expands by nearly

100,000 jobs

U.S. gross domestic product expands by about

US$24 billion

Household incomes (i.e., consumer benefits) grow by about

US$30 billion

U.S. exports to Brazil increase

78%

while exports to the world grow

1+%

U.S. imports from Brazil, benefiting U.S. households & manufacturers increase

$7 billion

21%

U.S. exports & imports to the world as a whole increase

GDPReal national incomeExports to BrazilImports from BrazilExports to the worldImports from the worldReal wagesEmployment

0.11%0.13%78.35%21.15%1.25%1.17%0.11%0.05%

GDPReal national incomeExports to Brazil ($)Imports from Brazil ($)Exports to the world ($)Imports from the world ($)Employment (number)

$23.5 B$29.3 B$62.0 B$7.1 B$40.2 B$43.5 B96,029

Per

cent

Cha

nge

Trad

e Pa

rtner

ship

Wor

ldw

ide,

LLC

.

Estimated Economy—Wide Impacts

Total U.S.-Brazil Trade$95.4 billion

Impact of a Trade Agreement on the U.S. by Broad Sector Categories

Agriculture,forestry, fishing

Manufactured goods

Energy products

Private business services

Other services

0.12

-0.10

0.17

-0.04

0.09

0.08

0.10

121.36

43.42

128.04

-0.36

5.26

1.07

15.94

4.5

-0.5

5.1

-0.2

16.2

7.8

8.4

60.6

0.4

60.2

-*

1.6

0.3

1.3

1.70

0.11

2.00

-0.24

-0.31

-0.36

-0.24

40.5

0.3

40.3

-0.1

-0.2

-0.2

0.0

0.07

-0.12

0.14

-0.04

0.05

0.01

0.12

13.8

-0.1

14.5

-0.7

82.3

8.7

73.6

78.35% 1.25% 0.05%

Goods

Services

0.09% $20.7 $62.1 $40.3 96.0

VALUE ADDED

EXPORTS TO BRAZIL

EXPORTS TO WORLD EMPLOYMENT

* Less than $50 million Trade Partnership Worldwide, LLC.

(Percent and billions of 2011 dollars,

thousands of jobs)

Employment growth in every state California

11,165

California

$2.5 B

Texas

8,150New York

6,560Florida

5,550

Texas

$2.2 B New York

$1.7 B Illinois

$1.2 B

Top districts

Texas

$11.9 B Florida

$8.3 BIllinois

$8.3 BCalifornia

$3.2 B

New York12th District 915 additional jobs

New York12th District $301 M in additional GDP

Top districts with job gains New York10th District 705 jobs

California17th District 670 jobs

Georgia5th District 545 jobs

New York10th District $201 M

Texas2nd District $143 M

Texas18th District $140 M

Output gains in every state — In additional GSP

Increased exports to Brazil from every state

Job growth in nearly all — 432 of 435 — congressional districts

Additional output in nearly all — 433 of 435 — congressional districts

Top districts Florida8th District $1.6 B in additional exports

Illinois18th District $1.2 B

Texas14th District $1.1 B


Expanded exports to Brazil from every congressional district

Imports from BrazilService imports(make up 50%)

Leading goods

in 2

01

5

U.S. foreign direct investment (FDI) in Brazil was $65.2 billion in 2015. Brazil's FDI in the United States was $23.7 billion in 2015.

U.S. Department of Commerce and USTR (latest data available)

U.S. exports of goods and services to Brazilsupported an estimated 308,000 jobs in 2015.

U.S. Dept. of Commerce and USTR (latest data available)

IMPACT OF A U.S.-BR AZIL TRADE AGREEMENTEffects on U.S. gross domestic product (GDP), national income, exports, imports, wages, and employment by 2030

The Council urges both governments to open a dialogue on a potential trade agreement. While the U.S.-Brazil trade relationship is significant, it could be expanded further to benefit the U.S. and Brazilian economies through an agreement that reduces tariffs and non-tariff barriers to trade.

To support this policy priority, the Council and its partners, the National Confederation of Industry (CNI) and Amcham Brasil, launched a trade agreement campaign based on two studies and a joint report.

The Council in 2016 conducted a comprehensive study1 in collaboration with Trade Partnership Worldwide, LLC to assess the economic impact of a trade agreement on U.S. industry. The infographic features key takeaways from the Council study on the effect of a U.S.-Brazil trade agreement on the U.S. economy.

The study shows that a U.S.-Brazil trade agreement would have a net positive impact on U.S. GDP ($24 billion growth), national income ($30 billion growth), exports to Brazil ($62 billion), imports from Brazil ($7.1 billion), wages (0.11% increase), and employment (100,000 jobs).

A similar study2 commissioned by Amcham Brasil concludes that a U.S.-Brazil trade agreement would have a net positive impact on Brazil GDP ($38 billion), exports ($25 billion), and imports ($28 billion).

During the 34th Annual Plenary in Brasilia in December 2016, the U.S. Chamber of Commerce, the Council, CNI, and AmCham Brasil released a joint report on the effects of a bilateral trade agreement. The report, A Roadmap to an Enhanced Economic Partnership, recommends measures to reduce trade barriers, especially non-tariff barriers, while moving closer to regulatory convergence.

Alongside CNI and Amcham Brasil, the Council plans to disseminate the joint trade report in both Brazil and the U.S. in 2017 and 2018. The campaign will also reach out to the U.S. and Brazilian governments, including Congress and the executive branch. The Council will engage the Congressional Brazil Caucus of the U.S. Congress and the Brazil-U.S. Parliamentary Group of the Brazilian Congress in unveiling the joint trade report.

The studies and the joint report demonstrate why Brazil should be next on the U.S.’ trade dialogue priority list. With renewed energy on Brazil and U.S. relations, it is time to define a bold bilateral agenda with a roadmap toward the future.

1. Brazil-U.S. Business Council (2016) and Trade Partnership Worldwide, LLC, Impact of a U.S. Trade Agreement on the U.S. Economy.

2. AmCham Brasil and FGV EESP (2016), Alternativas do Brasil, 2016. BUSBC, Impact of A U.S.-Brazil Trade Agreement.

2.1.

ENHANCED ECONOMIC PARTNERSHIP: A ROADMAP

Ɩ 2. BUILDING BLOCKS FOR THE BILATERAL RELATIONSHIP 21

AgriculturalProducts

Metal Products

Brazilian business services

Payments for intellectual property rights

Medical

Petroleum

Machinery Transportation Equipment

Travel andTourism related

Transportation

Brazil The 9th largest

The largest economy in Latin America

in the world

75,000+ jobs

2014 trade data show manufacturing sectorCreating jobs in

since

2010

Brazilian exports to U.S. are

75%manufactured and semimanufactured products

U.S. Trade of Goods and Services to Brazil, 2004—2014

Total Exports to Brazil

$18.8 B$59.5 B

15.1%

20042014

AnnualGrowth

$23.0 B$35.9 B

6.6%

Total Imports

from Brazil

$-4.2$23.3

Trade Balance

with Brazil

1.6%2.1%

Brazil’s Share of Total U.S. exports

1.3%1.3%

Brazil’s Share of Total U.S. imports

U.S. Department of Commerce, Bureau of Economic Analysis, “U.S. Trade in Goods and Services by Selected Countries and Areas, 1999—Present,” http://www.bea.gov/international/index.htm#trade

Leading goods

11th largest destination for U.S.

Exports to Brazil

goods

Key Takeaways

U.S. employment expands by nearly

100,000 jobs

U.S. gross domestic product expands by about

US$24 billion

Household incomes (i.e., consumer benefits) grow by about

US$30 billion

U.S. exports to Brazil increase

78%

while exports to the world grow

1+%

U.S. imports from Brazil, benefiting U.S. households & manufacturers increase

$7 billion

21%

U.S. exports & imports to the world as a whole increase

GDPReal national incomeExports to BrazilImports from BrazilExports to the worldImports from the worldReal wagesEmployment

0.11%0.13%78.35%21.15%1.25%1.17%0.11%0.05%

GDPReal national incomeExports to Brazil ($)Imports from Brazil ($)Exports to the world ($)Imports from the world ($)Employment (number)

$23.5 B$29.3 B$62.0 B$7.1 B$40.2 B$43.5 B96,029

Per

cent

Cha

nge

Trad

e Pa

rtner

ship

Wor

ldw

ide,

LLC

.

Estimated Economy—Wide Impacts

Total U.S.-Brazil Trade$95.4 billion

Impact of a Trade Agreement on the U.S. by Broad Sector Categories

Agriculture,forestry, fishing

Manufactured goods

Energy products

Private business services

Other services

0.12

-0.10

0.17

-0.04

0.09

0.08

0.10

121.36

43.42

128.04

-0.36

5.26

1.07

15.94

4.5

-0.5

5.1

-0.2

16.2

7.8

8.4

60.6

0.4

60.2

-*

1.6

0.3

1.3

1.70

0.11

2.00

-0.24

-0.31

-0.36

-0.24

40.5

0.3

40.3

-0.1

-0.2

-0.2

0.0

0.07

-0.12

0.14

-0.04

0.05

0.01

0.12

13.8

-0.1

14.5

-0.7

82.3

8.7

73.6

78.35% 1.25% 0.05%

Goods

Services

0.09% $20.7 $62.1 $40.3 96.0

VALUE ADDED

EXPORTS TO BRAZIL

EXPORTS TO WORLD EMPLOYMENT

* Less than $50 million Trade Partnership Worldwide, LLC.

(Percent and billions of 2011 dollars,

thousands of jobs)

Employment growth in every state California

11,165

California

$2.5 B

Texas

8,150New York

6,560Florida

5,550

Texas

$2.2 B New York

$1.7 B Illinois

$1.2 B

Top districts

Texas

$11.9 B Florida

$8.3 BIllinois

$8.3 BCalifornia

$3.2 B

New York12th District 915 additional jobs

New York12th District $301 M in additional GDP

Top districts with job gains New York10th District 705 jobs

California17th District 670 jobs

Georgia5th District 545 jobs

New York10th District $201 M

Texas2nd District $143 M

Texas18th District $140 M

Output gains in every state — In additional GSP

Increased exports to Brazil from every state

Job growth in nearly all — 432 of 435 — congressional districts

Additional output in nearly all — 433 of 435 — congressional districts

Top districts Florida8th District $1.6 B in additional exports


Texas14th District $1.1 B


Expanded exports to Brazil from every congressional district

Imports from BrazilService imports(make up 50%)

Leading goods

in 2

01

5

U.S. foreign direct investment (FDI) in Brazil was $65.2 billion in 2015. Brazil's FDI in the United States was $23.7 billion in 2015.

U.S. Department of Commerce and USTR (latest data available)

U.S. exports of goods and services to Brazilsupported an estimated 308,000 jobs in 2015.

U.S. Dept. of Commerce and USTR (latest data available)

U.S. Trade of Goods and Services to Brazil, 2004

Total Total Total Total Total Total Exports Exports Exports Exports to Brazilto Brazilto Brazilto Brazilto Brazilto Brazil

$18.8 B$59.5 B

15.1%

200420142014

AnnualGrowth

$23.0 B$35.9 B

6.6%

Total Total Total Total Total Total ImportsImportsImportsImportsImportsImportsImportsImports

from Brazilfrom Brazilfrom Brazilfrom Brazilfrom Brazilfrom Brazil

$-4.2$23.3

Trade Trade Trade Trade Trade Trade Balance Balance Balance Balance

with Brazilwith Brazilwith Brazilwith Brazil

1.6%2.1%

Brazil’s Brazil’s Brazil’s Brazil’s Share of Total Share of Total Share of Total Share of Total Share of Total Share of Total Share of Total Share of Total Share of Total Share of Total U.S. exportsU.S. exportsU.S. exportsU.S. exportsU.S. exportsU.S. exportsU.S. exportsU.S. exports

1.3%1.3%

Brazil’s Brazil’s Brazil’s Brazil’s Share of Total Share of Total Share of Total Share of Total Share of Total Share of Total Share of Total Share of Total U.S. importsU.S. importsU.S. importsU.S. importsU.S. importsU.S. importsU.S. importsU.S. imports

U.S. Department of Commerce, Bureau of Economic Analysis, “U.S. Trade in Goods and Services by Selected Countries and Areas,1999—Present,” http://www.bea.gov/international/index.htm#trade

IMPACT OF A U.S.-BR AZIL TRADE AGREEMENTEffects on U.S. gross domestic product (GDP), national income, exports, imports, wages, and employment by 2030


EASE OF DOING BUSINESS2.2.

Labor Reform to Generate Jobs

Tax Reform to Advance Path to Growth

Trade Facilitation to Improve Trade Flows

Favorable and Predictable Legal Environment to Attract Investments

Local Content Requirement Reform to Facilitate Investment

Infrastructure Improvements to Reduce Logistics Costs

The Council urges the Brazilian government to adopt and implement the following policy reforms to improve the business climate and drive investment and economic growth in Brazil:

• Secure the effectiveness of the new labor framework, including outsourcing regulation and labor reform.

• Urge outsourcing, allowing entrepreneurs to outsource certain activities based on business models, while protecting outsourced employees’ rights under the law. (Accomplished)

• Support labor reform and outsourcing regulation in the Brazilian Congress. (Accomplished)

• Reduce the complexity and cumulative nature of the federal, state, and municipal tax systems to lower compliance costs for enterprises, improving legal certainty.

• Promote efforts to harmonize Brazil’s VAT tax (ICMS).• Validate ICMS fiscal incentives. (Accomplished)• Endorse the following pieces of legislation and reforms:

o Tax reform. o Tax simplification.o Unification of ICMS.o Validation of fiscal incentives. (Accomplished)o Tax substitution regulation.o Compensation of tax debits with tax and Social

Security credits.o Minimum implementation period for measures that

increase costs to corporations.

• Support the full implementation of the WTO Trade Facilitation Agreement and programs like the Single Window and the Authorized Economic Operator (AEO).

• Work toward achieving a U.S.-Brazil mutual recognition agreement of AEO and the U.S. Customs Trade Partnership against Terrorism (C-TPAT). Promote the economic benefits associated with expediting bank credit card payment settlements.

• Recommend streamlining Brazil’s bureaucratic procedures, while ensuring a stable and predictable legal and regulatory framework for Brazilian and foreign investors by enacting a law to harmonize the rulemaking process.

• Support Brazil’s accession to the Revised Kyoto Convention urging standardization and harmonization of customs procedures.

• Recommend advances on property rights and legal frameworks for regulated markets to ensure legal certainty on foreign investments.

• Recognize the importance of patent protection through both governments’ renewal and expansion of the scope of the Patent Prosecution Highway agreement, signed in 2015, to allow U.S. patent applications before Brazil’s National Institute of Industrial Property (INPI) in all technical fields for an unlimited time period.

• Support personal liability of shareholders and directors as an extraordinary measure to secure creditors’ rights with clear legal criteria, implying covenants of good faith and ensuring full defense and fair hearings.

• Recommend regulating foreign acquisition of lands with reasonable limits on the purchase of land that does not hinder productive operations.

• Promote a revision of the agencies’ control and rulemaking process as an important measure toward transparency and improvement of the business environment.

• Urge more flexible local content requirements to accom-modate rapid innovation and local supply gaps prevalent in infrastructure, high-tech, IT, and oil & gas industries where the requirements do not align with the fast-paced reality of advanced manufacturing.

• Urge revision and unification of rules regarding infrastructure public bidding according to international best practices and dissemination of the new rules to gain investors’ interest. Proactively address these issues:

o Project bidding process prioritization.o Transparent bidding process promotion. o Environmental licensing process streamlined. o Local content requirement flexibility.o Innovative project financing models.

• Support consultations, adjustments, and approvals of these bills:

o Consolidation of Public Procurement Legislation.o Adjustment on Reference Price for Biddings.o Optimization of Environmental Licensing Process.o Credit Payment Settlement.

Ɩ 2. BUILDING BLOCKS FOR THE BILATERAL RELATIONSHIP 23

ELEVATED REGULATORY COOPERATION2.3.

The Council recommends that Brazil implement a whole-of-government regulatory coherence policy, securing all-encompassing legislation that provides regulatory harmonization and transparency in federal government rulemaking.

The Council encourages the use of good regulatory practices in the process of planning, issuing, implementing, and reviewing regulatory measures as a top priority for U.S. companies doing business in Brazil.

The Council closely monitors legislative proposals in the Brazilian Congress regarding management, organization, decision making, and social control of regulatory agencies, as well as requirements for regulatory impact assessments prior to rulemaking.

The Council continues to urge Brazil’s government to provide increased legal certainty to safeguard and promote private investment and pass legislation that advances harmonization and transparency in rulemaking, including provisions on the following:

• Regulatory impact analysis.• Notice of rulemaking.• Meaningful public consultations.• Reasonable period of time for rule implementation.

The Council is the platform for companies to provide input to government authorities on bilateral regulatory cooperation. The U.S.-Brazil Commercial Dialogue is the main forum used by the Council to work on regulatory cooperation with U.S. companies, Brazilian companies, and both governments.

What Is Regulatory Cooperation?

Regulatory cooperation is any interaction between regulators from different countries, resulting in some form of cooperation to gain efficiency while achieving a desired regulatory outcome. Some examples:

Harmonization—When one country changes its regulation to follow that of another, the result is harmonized regulatory requirements, with compliance often remaining at the purview of each jurisdiction.

Regulatory Convergence—When different countries decide to modify their existing or proposed regulatory frameworks to be in closer alignment.

Mutual Recognition/Substitute Compliance—With a focus on compliance, regulators are required to identify common regulatory objectives, followed by assurance that respective regulatory frameworks achieve similar outcomes, resulting in regulatory compliance within one framework.

What Is Regulatory Coherence?

Regulatory coherence refers to the internal coordination and review process under which the whole-of-government works to ensure that rules and regulations are crafted in an open, transparent, and participatory manner and outcomes are risk based and grounded in the best available data.

Through regulatory coherence, government agencies are better coordinated and work together to achieve identified policy objectives, thereby avoiding overlapping and inconsistent rules.

The Council engages year-round with the U.S. Department of Commerce, CNI, and U.S. companies to identify regulatory issues that can be incorporated into the agenda of the Commercial Dialogue. Regulatory cooperation, including coherence, convergence, harmonization, and mutual recognition, is a priority of the Council and U.S. companies.

• The Council leverages the expertise of the Center for Global Regulatory Cooperation (GRC) at the U.S. Chamber to provide resourceful publications to both the U.S. and Brazilian governments on regulatory cooperation. Together with GRC, the Council is releasing a guide on regulatory best practices and two publications on data privacy—one on data privacy authorities and another on consent.

• On mutual recognition of bilateral frameworks, the Council urges Brazil and the United States to sign an agreement where both countries would recognize their respective customs-authorized economic operators’ programs. See http://www.brazilcouncil.org/wp-content/uploads/2017/03/Trade-Policy-Agenda-ENG-3.compressed.pdf.

• The Council urges the Brazilian government to implement a system of advanced customs rulings, which is one of the commitments under the Trade Facilitation Agreement. Advanced customs rulings are a tool of great value to importers and exporters as they interpret and guide the application of customs laws and regulations to a specific, prospective transaction.

MECHANISMS FOR COORDINATION, COLLABORATION, AND ENGAGEMENT

3

A successful U.S-Brazil relationship relies on exchanges at many levels that take place in the context of bilateral government-to-government and government-to-business dialogues, working groups, and fora. The Council is a strong advocate of these engagement opportunities as they promote mutually beneficial agendas and strenghen the relationship.

John Lopes, regional executive, Lockheed Martin International and chair of the Council’s Defense & Security Task Force

(center), represents the U.S. private sector perspective together with Ken Hyatt, acting under secretary, International Trade, U.S.

Department of Commerce (right), and Flavio Basilio, secretary, Defense Products, Ministry of Defense (left), during the inaugural

Defense Industry Dialogue in Brasilia, September 30, 2016.

Tereza Sobreira

Ɩ 3. MECHANISMS FOR COORDINATION, COLLABORATION, AND ENGAGEMENT 25

DIALOGUES

U.S.-Brazil Commercial Dialogue The Commission on Economic and Trade Relations under the U.S.-Brazil Agreement on Trade and Economic Cooperation (ATEC)Established in 2006, the U.S.-Brazil Commercial Dialogue is a

ministerial-level forum led by the U.S. Department of Commerce and Brazil’s Ministry of Industry, Foreign Trade, and Services. The Dialogue maintains five working groups: trade partnership, services, intellectual property, standardization, and industry & investment. Over the past two years, the Commercial Dialogue has served to promote closer bilateral relations between the U.S. and Brazilian governments with a focus on trade facilitation policy issues.

The Commercial Dialogue is a key forum for advancing trade facilitation priorities and has yielded concrete results for both countries in the areas of regulatory engagement, trade statistics, intellectual property, standards & metrology, services, and supply chain (see, e.g., http://trade.gov/press/press-releases/2015/us-brazil-commercial-dialogue-joint-statement-03192015.asp).

Since 2011, the two sections of the Council have been following and contributing to the Dialogue, providing briefings and debriefings prior to government meetings. This important initiative offers Council members the opportunity to engage with the secretaries of Foreign Trade for both Brazil and the U.S. regarding their priorities and recommendations.

Under this Commission, authorized by ATEC in 2011, both countries can explore greater cooperation on a variety of issues including investment, intellectual property rights and innovation, cross-border trade in services, and small businesses. The U.S. Trade Representative and Brazil’s Ministry of External Relations are the government agencies in charge of leading this joint Commission.

As provided for in the ATEC, the Council recommends that private sector input be incorporated into Commission meetings and is at the Commission’s disposal to organize briefings and debriefings before and after meetings. Considering the Commission’s scope of work, the Council recognizes it as the primary forum to initiate formal negotiations for a bilateral trade agreement.

The Council supports the Brazil-U.S. Commercial Dialogue to continue its work and schedule regular meetings with private sector paricipation.

The Council recommends the launch of a scoping exercise on the economic benefits of a trade agreement.

Defense Cooperation Dialogue (DCD)

The U.S.-Brazil DCD is co-chaired by the U.S. Department of Defense and Brazil’s Ministry of Defense. Its first meeting took place April 24, 2012, in Brasilia where the respective secretaries met. The DCD agenda focuses on seven priority areas–communications; cooperation to support African nations; cybersecurity; humanitarian assistance and disaster response; logistics; science, innovation, and technology transfer; and support to civil authorities in organizing international events.

The Council supports the confirmation of the DCD’s annual meeting schedule in 2017 and 2018, bringing new perspectives and opportunities for alignment with the recently formed government-to-business Defense Industry Dialogue launched in September 2016, further aligning bilateral priorities and highlighting partnership opportunities.

Economic and Financial Dialogue (EFD)

The U.S. Department of Treasury leads the EFD, which first met in 2011 to promote shared global economic policy positions. The EFD is the main vehicle for discussions with Brazil’s Finance Ministry and Central Bank.

Under this dialogue, the Council supports the continuation of discussions on a bilateral tax treaty (BTT) that would streamline tax preparation, strip away legal uncertainties, and increase competitiveness between U.S. and Brazilian companies in bilateral trade. A BTT would also end most forms of double taxation for companies and individuals doing business in the two countries.

Under this dialogue, the Council supports the relaunch of discussions on a bilateral tax treaty (BTT).

3.1.


DIALOGUES3.1.

Strategic Energy Dialogue (SED) Infrastructure Development Working Group (IDWG)

The U.S.-Brazil SED is a presidential-level partnership that provides an overarching framework for deepening cooperation between the two nations’ energy sectors. The SED was announced by former Presidents Obama and Rousseff during President Obama’s visit to Brazil in March 2011 as a way for the two countries to work together to develop safe, sustainable, affordable, and secure energy resources.

At the November 2015 SED meeting, the two governments updated their priority areas to include oil and natural gas, civil nuclear energy, renewables, energy efficiency, biofuels, and smart grids. The SED announced that new topics for discussion will include carbon capture and storage, the energy-water nexus, and biofuels.

The IDWG was established March 30, 2016, via the signed U.S.-Brazil Memorandum of Cooperation (MOC) on Infrastructure Development to complement and strengthen engagement under the U.S.-Brazil Transportation Partnership, Aviation Partnership and Strategic Energy Dialogue. The Group is co-chaired by the U.S. Department of Commerce; U.S. Trade and Development Agency; Brazil’s Ministry of Planning, Budget, and Management; and Brazil’s Ministry of External Relations, with support from various other agencies.

With the objective of increasing infrastructure investments between the two countries and improving the overall business climate, the Group showcases private sector expertise in sharing best practices on topics such as financing mechanisms, project preparation, procurement, and successful public-private partnerships.The Council recommends scheduling

SED meetings in 2017 and 2018, urges private sector participation, and reinforces the need to focus on energy efficiency initiatives.

The Council supports furthering the government-to-business collaboration as a platform to advance private sector expertise in critical investment areas, including financing and project preparation.

Other dialogues that are also part of the government agenda include the Global Partnership Dialogue (GPD), the Economic Partnership Dialogue (EPD), and the U.S.-Brazil Internet and Information and Communications Technologies (ICT) Working Group. The timing is appropriate for reengaging these dialogues with new administrations in both the U.S. and Brazil.

Consultative Committee on Agriculture (CCA)

The U.S.-Brazil CCA was established by a 2003 Memorandum of Understanding. It was signed at the U.S.-Brazil Presidential Summit between former Presidents George W. Bush and Luiz Inácio Lula da Silva. The CCA provides an opportunity to coordinate policy in a number of areas including market access, food safety, research, technical assistance, and standards setting. It provides a forum for the two countries to address bilateral trade issues as they arise, develop recommendations, share ideas, and better coordinate policies to benefit farmers, businesses, and consumers.

The Council endorses the CCA and suggests an agenda with private sector participation and a focus on agricultural technology, research and development, agricultural competitiveness, financing, export assistance, and a regulatory framework.

Ɩ 3. MECHANISMS FOR COORDINATION, COLLABORATION, AND ENGAGEMENT 27

CONGRESSIONAL FORUMS

Brazil Congress: Brazil-U.S. Parliamentary Group

U.S. Congress: Brazil Caucus

Juni

or R

osa

Rep. Patrick Meehan (R-PA) spoke to Council members, U.S. and Brazilian governments, and multilateral organizations during the Brazil on the Hill Series, June 1, 2015.

Bra

zil I

ndus

trie

s C

oalit

ion

Pho

togr

aphy

3.2.

The Council, recognizing Parliament’s importance in formulating the public policies that comprise its bilateral agenda, understands that deputies’ and senators’ work must be supported by a legitimate platform, which is the Brazil-U.S. Parliamentary Group. Through this Group, the Council has endorsed structural reforms in the areas of pension, labor, tax, and fiscal initiatives to spur growth, urge recovery, and foster Brazil’s insertion in global value chains.

The Council’s activities with the Brazilian Congress are primarily with the Parliamentary Group with a focus on keeping it up to date on the relevance of the legislative agenda for the bilateral relationship. The Council also contributes its private sector expertise to better shape legislative proposals on key issues, such as trade, civil law, research and development, healthcare, and the environment, that indirectly affect U.S. companies doing business in Brazil. In addition, the Council supports inviting Brazilian members of Congress to visit the U.S. Capitol and share best practices and perspectives with the Brazil Caucus. These interactions enable proposed and implemented Brazilian public policies to have broad and ever-increasing global awareness, especially regarding trade and investment between Brazil and the U.S.

The Brazil-U.S. Business Council continues its outreach and engagement with the U.S. Congress. The Council has had a long-standing relationship with the Brazil Caucus on Capitol Hill and will continue its briefings for Caucus members and staff. The Council also works closely with committees of jurisdiction in Congress, including the House Foreign Affairs and Senate Foreign Relations committees (with particular focus on Western Hemisphere subcommittee members); the House Ways and Means Committee; the Senate Finance Committee; and House and Senate leadership offices. Moreover, the Council coordinates with the U.S. Embassy and Amcham Brasil to facilitate congressional delegation visits to Brazil so that it can provide briefings, materials, and messaging for those congressional offices.

Deputy Luiz Carlos Hauly, president, Brazil-U.S. Parliamentary Group (left), and Robert Schroder, senior vice president, International Strategy and Operations, U.S. Chamber of Commerce, discussed tax and fiscal reforms under way in the Brazilian Congress during the Advocacy Mission to Brasilia, December 6, 2016.

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But it is a land of great opportunity

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Brazil, by its sheer size, population, geopolitical relevance, lack of sectarian internal divisions, and traditionally peaceful relations with neighbors, has always been a natural destination for foreign investment. The country is the ninth largest economy in the world and has 206 million inhabitants, with an expanding middle class and consumer market.

Although doing business in Brazil is generally understood to be costly and difficult, especially now when its economy recovers from an unprecedented three-year recession, it is still attractive.

Effectively managing public affairs has become critical for most businesses in Brazil since the end of the 21-year military regime in 1985. PATRI’s creation coincides with the drafting of the 1988 Constitution, the progression of democracy, and the rule of law in Brazil. At that time, the professional services of advocacy, government relations, lobbying, and public affairs were scarce.

Culturally, these services were associated with conducting shady deals through closed doors and via third parties with good relations with public officials. However, over the past three decades, the institutionalization of Brazilian democracy created a favorable environment for the exercise of public policy and public affairs activities.

Fast track influence peddling has gradually given room to the legitimate defense of corporate interests, and the exercise of managing public affairs has been gaining legitimacy and market recognition.

With PATRI’s knowledge of Brazil’s utterly complex business environment and policymaking process, we sought best practices and know-how of public affairs in the U.S., Europe, and Canada, avoiding those that often may lead to mistakes.

We assist companies in building and maintaining long-term relationships with relevant stakeholders through a strong monitoring and tracking system of the Brazilian government at the federal, state, and local levels, as well as movements and trends of civil society.

With our team of highly qualified in-house trained young professionals, we have designed over the years our own process of work and kept ourselves updated with the constant changes of this business in an ever-growing interconnected world.

We offer our clients quick, accurate, and valuable information in an environment where the multiplication of opinions, decision makers, and public policy proposals grows vertiginously. Our unstained 30-year ethical record reassures our clients that they can rely on such information.

Because we understand the policymaking flow of the Brazilian public policies formulation, we can help our clients be prepared, anticipate risks, and seize opportunities. We believe that the companies doing business in Brazil must be active players in the policymaking process. To make sure they are, we offer them the necessary support so that our clients are heard, understood, and can reach their objectives.

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The 2017–2018 Program of Work emphasizes the Council’s priorities to strengthening the economic and commercial partnership between Brazil and the U.S.

For this edition, the Council redefined its strategic priorities to focus on the three initiatives mentioned earlier: enhanced economic partnership, ease of doing business, and elevated regulatory cooperation. It also defined policy agendas and priorities with the input from the business community for the work ahead.

The Council will strategically engage with key decision makers in the U.S. and Brazilian governments to provide policy recommendations and advocate for changes needed to enhance the economic and commercial relationship between the two countries.

Each policy agenda is staffed and chaired by member companies that shape advocacy efforts in both Brazil and the U.S. Council members are eligible to lead and join multiple task forces and working groups where they can discuss horizontal and sector-specific policy priorities, and, most importantly, help shape the agenda moving forward.

Ɩ 4. POLICY AND SECTOR AGENDAS 31

TRADE

The Trade Task Force proposes a number of actions to prioritize and drive economic growth in Brazil:

Support a whole-of-government regulatory coherence approach in Brazil to ensure that rules and regulations are crafted in a transparent and collaborative process with the private sector and that the rulemaking process is consistent across the entire government. Encourage approval of legislation on rulemaking with provisions regarding the following:• Regulatory impact analysis.• Adequate notice on rulemaking.• Meaningful public consultations. • Reasonable period of time for rule implementation.

Brazil’s full insertion into world trade with membership in the following:• The Organisation for Economic Co-operation and

Development (OECD).• WTO Trade Services.• WTO Information Technology.• WTO Government Procurement Agreements.

A U.S. government “scoping exercise” with private sector contribution for a potential U.S.-Brazil trade agreement and the reopening of formal bilateral tax treaty negotiations.

Support easing bureaucratic bottlenecks in the seed export process through the review and simplification of MAPA’s (Ministry of Agriculture, Livestock, and Supply) normative instructions: • For Normative Instruction No. 50/2006, eliminate

the compulsory export authorization in exchange for requiring the private sector to abide by standard agreements and treaties governing international trade, as well as incorporating clear rules for exports in kilograms.

• For Normative Instruction No. 57/2013, allow seed producers’ laboratories to become accredited.

Endorse the U.S.-Brazil Consultative Committee on Agriculture (CCA) with private sector participation, aiming at boosting bilateral cooperation along the entire agribusiness activity chain:• Agricultural technology.• Research and development.• Agricultural competitiveness. • Financing.• Export assistance. • Regulatory framework.

Encourage bilateral discussions on these topics:• Food security.• Farmer access to new technology.• Biotechnology.• U.S.-Brazil cooperation with third countries for

market access.

Chair Vice Chair

4.1.

Trade facilitation to improve trade flows:• Support the full implementation of the WTO Trade

Facilitation Agreement and programs like the Single Window and the Authorized Economic Operator (AEO).

• Work toward achieving a U.S.-Brazil mutual recognition agreement of AEO and the U.S. Customs Trade Partnership against Terrorism (C-TPAT).

• Promote the economic benefits associated with expediting bank credit card payment settlements.

• Recommend streamlining Brazil’s bureaucratic procedures, while assuring a stable and predictable legal and regulatory framework for Brazilian and foreign investors, with the enactment of a law to harmonize the rulemaking process.

• Support Brazil’s accession to the Revised Kyoto Convention to encourage standardization and harmonization of customs procedures.

Requests the Brazilian Federal Revenue to amend Normative Instruction No. 1639/2016, which provides for the temporary admission of goods, to allow ATA carnets from countries that ratified either the Istanbul Convention of 1990 or the ATA Carnet Convention of 1961. The current norm requires that a valid ATA carnet be issued by the contracting country of the Istanbul Convention, a convention for which the U.S. is not a party.

Support the adoption of legislation in Brazil that promotes a science- and risk-based approach to chemical regulation to ensure appropriate health and environmental protections, prevent the imposition of regulatory barriers to trade, reduce costs, and create other efficiencies for governments and industry.

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Oxitec’s self-limiting technology along with Intrexon’s biological engineering solutions are also being applied to agricultural pest management to improve marketable crop yield and quality through targeted reduction of insect populations without off-target environmental effects.

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The Innovation Task Force recognizes that as participation in international investment and technology transfer becomes more competitive around the world, it is critical that both industry and government collaborate to ensure that Brazil becomes a global technology leader. To that end, the Council puts forth the following agenda:

Encourage the adoption of regulations furthering data privacy in Brazil, while promoting trade and growth and striking a balance between public and private interests.

Urge the implementation of the Inter-American Telecommunication Commission’s (CITEL’s) Mutual Recognition Agreement (MRA) regarding the U.S.; provide mutual recognition of conformity assessment bodies and acceptance of testing results and certification procedures for telecommunications equipment.

Urge the withdrawal of local content requirements to accommodate rapid innovation prevalent in high-tech and IT industries in Brazil, with special attention to instances where basic production process requirements do not align with the fast-paced reality of advanced manufacturing, software, and other advanced technology industries.

Support legislation in Brazil that would consider e-books and e-readers to be similar to printed books; approval of such legislation would widen access to affordable e-books and foster social inclusion for millions of Brazilians.

Promote initiatives that reduce regulatory burdens, facilitate business, and increase accessibility by reducing internet and mobile broadband costs in Brazil, especially considering the importance of the new application (app) industry in creating jobs, supporting small business, and generating wealth.

Support data protection interoperability initiatives in Brazil, as well as privacy regimes and frameworks that are technology neutral, ensure accountable cross-border flows of information, protect consumers, reflect today’s global business models, and allow benefits of e-commerce and cloud computing.

Promote internet regulations in Brazil that accommodate transborder information flows and their decentralized nature, enabling consumers to benefit from secure data use and privacy.

Support increased measures to ensure adequate and effective enforcement of all forms of IP rights in Brazil. Advocate for adherence of Brazil to the Madrid Protocol for the International Registration of Marks to expedite trademark applications and approvals.

Chair Vice Chair

Recognize the importance of patent protection through both governments’ renewal and expansion of the scope of the Patent Prosecution Highway agreement, signed in 2015, to allow U.S. patent applications before Brazil’s National Institute of Industrial Property (INPI) in all technical fields for an unlimited time period.

INNOVATION4.2.

Support the adoption of regulations in Brazil that promote a flexible, innovation-based approach to cybersecurity and public-private discussions on cyber best practices and threat of information sharing.

Brazil is a country of continental proportions whose development is largely concentrated across its major urban centers.

This scenario started to change – at least in the Três Lagoas region, state ofMato Grosso do Sul – after the arrival of Fibria, a global leader in the pulp market.

Citi and Fibria teamed up and helped the city to grow sustainably, reaching the statusof third largest city of Mato Grosso do Sul, after generating more than 10,000 direct and indirect jobs.

The pulp currently produced in Três Lagoas is exported to the entire world and the region keeps on growing bigger and better.

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The Tax & Investment Task Force aims to enhance bilateral investment between Brazil and the U.S. by facilitating cross-border investment and reducing the cost of doing business for foreign companies. To that end, the Council is working on the following agenda:

Recommend terminating the uncertainty of the so-called tax war among Brazilian states with new legislation that ensures predictability, protects past benefits already granted for the industry, and provides clarity on the concession of benefits.

Endorse resuming formal negotiations between Brazil and the U.S. on a bilateral tax treaty that would eliminate double taxation and/or taxes on royalties, interest, and dividends.

Support Brazil’s adoption of the Organisation for Economic Co-operation and Development (OECD) investment principles.

Support congressional action to loosen restrictions on rural land ownership as a means to economic growth in Brazil.

Support tax simplification reforms in Brazil to reduce the complexity and cumulative nature of federal, state, and municipal tax systems to reduce costs for enterprises and improve legal certainty.

Support reform of the current PIS/COFINS legislation in Brazil, reiterating the importance of ensuring tax neutrality for tax payers.

Promote efforts to harmonize the value-added tax (VAT), known in Brazil as the Tax on Operations Related to the Circulation of Goods and Services of Inter-Municipal Interstate Transportation and Communication (Imposto Sobre Operações Relativas à Circulação de Mercadorias e Serviços de Transporte Interestadual de Intermunicipal e de Comunicações–ICMS).

Chair Vice Chair

TAX & INVESTMENT4.3.

Recommend that the Brazil and U.S. governments move forward with discussions on a Bilateral Investment Treaty (BIT), soliciting feedback from the private sector.

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Ɩ 4. POLICY AND SECTOR AGENDAS

Brazilian Tax System: Searching for Solutions

Glaucia M. Lauletta FrascinoPartnerMattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados

We have been discussing the need for tax reform in Brazil for a long time. The advantages of eventual reform are obvious and already known by many people: rationalization of taxes, simplification of compliance with accessory obligations, attraction of nonspeculative foreign capital, reduction of informality, and elimination of conflict among states. However, there are challenges to making actual tax reform a reality.

The distribution of tax revenues among the Federal Union, states, and cities is one of the main instruments of independence among them. So it is difficult to imagine tax reform not preceded by political reform, which would certainly demand time and effort. In view of this, the question is: What can be done in the short term to maximize benefits, remediate conflicts, and overcome difficulties? Surely, the answer to this question requires dealing with certain obstacles and specific matters.

Let us start with the Contribution to the PIS (Social Integration Program) and the Contribution for Financing the Social Security (COFINS), both of which are federal taxes. These are taxes on revenue, representing almost 10% of companies’ revenues (precisely 9.25%). These taxes are extremely onerous and must be simplified and gathered into a single value-added tax, becoming more coherent and facilitating Brazil’s business environment.

At the state level, the major issue still pending is a solution to the so-called tax war. The federal government has signaled a possible solution, which would validate past benefits granted and prohibit granting new unilateral benefits in the future. The creation of a compensatory fund is being discussed to compensate for the losses of some states by others. However, the matter has not advanced to a permanent solution.

Last, it is impossible to discuss taxation in Brazil without mentioning the excessive burden on payrolls, which obviously discourages the formal hiring of workers and does not contribute to the diminishing high unemployment rates.

Rationalization, simplification, and transparency are terms often used when debating the main tax issues in Brazil. If we cannot solve all the issues in the short term, let us at least face some of them. Reviving the economy, resuming growth, and generating opportunities for future generations depend on it.

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DuPont Agriculture Division recognizes and thanks the Brazil - U.S. Business Council for its efforts to grow a solid bilateral relationship between Brazil and the United States.

A Divisão Agrícola da DuPont reconhece e agradece os esforços do Conselho Empresarial Brasil - Estados Unidos de cultivar uma sólida relação bilateral entre os dois países.

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The Infrastructure Working Group is aligned with the drive to modernize Brazil’s infrastructure as key toward the country’s global competitiveness. Intent on attracting more foreign direct investment (FDI), the Temer administration has proposed a reform agenda centered on privatization and revamped concession processes relating to much-needed large-scale infrastructure upgrades. The Council, which serves as a U.S. private sector partner, focuses on representing industry priorities:

Establish mechanisms to guarantee transparency and accountability in Brazil: • Ensure contributions from the private sector for

the following:o Innovative financing models.o Risk assessment and mitigation.o Procurement best practices.o Regulatory uncertainty.o Transparency in decision making.o Project planning and prioritization.

• Endorse the modernization of Public Procurement Law 8666 and the consolidation of its correlative rules.

• Approve measures that promote a flexible approach to local content requirements in the oil & gas, IT, and defense industries to better accommodate rapid innovation, gaps in local supply chains, and the development of a robust talent pipeline.

Urge the Brazilian and U.S. governments to embrace private sector expertise via the Memorandum of Cooperation on Infrastructure Development, signed in March 2016.

Mobilize private capital and increase efficiency of public resources by leveraging measures adopted through Brazil’s Investment Partnerships Program (PPI).

INFRASTRUCTURE WORKING GROUP4.3.1.

Ensure that potential changes in tax legislation do not increase the cost of transportation.


The Defense & Security Task Force promotes a robust agenda aimed at enhancing commercial partnerships and opportunities for the private sector. To foster progress in the bilateral relationship, the task force has outlined a list of actionable, results-oriented policy recommendations for both countries:

Leverage the Defense Industry Dialogue as a platform to advance private sector priorities and business opportunities in these areas: • Commercial and industrial partnership.• Technology transfer, export control, and

compliance.• Mutual recognition of military production

certification.• Regulatory and industrial policy.

Support advancing discussions on a Technology Safeguards Agreement (TSA) as a preliminary step toward a robust bilateral space cooperation agenda.

Promote easing U.S. export control measures for military and dual-use products, services, and technologies being exported to Brazil.

Applaud the Brazilian and U.S. governments for committing to advancing the Aviation Partnership and efforts to align private sector expertise with investment opportunities.

Support the resumption of the Defense Cooperation Dialogue, which serves as a platform for both governments to increase their engagement on defense and security issues at the highest political level.

Support revision of Law 12.598/2012, specifically the definition of a strategic defense company, to allow U.S. companies to better participate in public bids for the purchase and/or development of defense products and systems.

Support the Brazilian National Congress’ approval of PDC 424/2016, the Air Transport Agreement (ASA or Open Skies).

Chair

DEFENSE & SECURITY4.4.

Vice Chair

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The Healthcare Task Force promotes policies and programs that drive smart investments in health, leading to economic growth, job creation, wellness, and increased productivity in Brazil while strengthening the commercial ties between Brazil and the U.S. To that end, the Council recommends the agenda below:

Support efforts by ANVISA to address the bottlenecks through a combination of these measures:• Implementation of increased risk assessment

evaluation for low-risk (class I and II) medical devices.• Modification of the ANVISA personnel rules allowing

relocation and assignment of PAF (ports, airports, and borders) staff and resources to critically delayed ports.

• Implementation of an integrated and dynamic digital electronic system, eliminating all paper documents and allowing remote inspection of port documentation.

• Usage of increased emergency PAF funding and staffing to reduce backlog of inspection procedures.

Recognize the importance of patent protection through both governments’ renewal and expansion of the scope of the Patent Prosecution Highway agreement, signed in 2015, to allow U.S. patent applications before Brazil’s National Institute of Industrial Property (INPI) in all technical fields for an unlimited time period.

Support initiatives that foster innovation and technology aimed at enhancing the following:• Life expectancy.• Quality of life.• Diagnostic and treatment options.• Efficiency and cost effectiveness of the healthcare

system.

Chair

Further discussion of the economic impact caused by certain diseases in Brazil regarding the following:• Public healthcare costs.• Worker productivity decline.• Preventable mortality and morbidity.• Economic output.

Promote cooperation between the U.S. and Brazilian governments with contributions from the private sector, through these actions:• ANVISA and Food and Drug Administration (FDA)

dialogue.• Brazil-U.S. Commercial Dialogue.• Memorandum of Understanding between the

U.S. and Brazil on Health and Medical Sciences.

Support for a technical dialogue between the FDA and ANVISA to discuss the FDA’s experience in dealing with sensitive products (e.g., biologicals, vaccines, perishable supplies, emergency supplies, samples) in the U.S. Encourage the government of Brazil to create a specific norm for express delivery of such sensitive products.

HEALTHCARE4.5.

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The Consumer Goods & Retail Task Force comprises member companies that support policy changes to enable job growth and improve the economy in Brazil. Toward that goal, the Council promotes these positions:

Endorse the approval of the labor law reform to promote job creation, facilitate collective bargaining solutions, and allow part-time employment and flexible work hours, all of which will lead to effective regulation and a more competitive business environment. (Accomplished)

Support regulations to align labeling requirements with international standards.

Support the Brazilian government’s efforts to better regulate counterfeit consumer products sold through informal markets in Brazil to address lost tax revenue, lack of quality, and inventory control.

Support measures to develop transportation infrastructure to reduce logistics costs.

Promote the economic benefits associated with expediting bank credit card payment settlements, such as e-commerce growth opportunities.

Advance private sector collaboration to promote best practices in recycling via Brazil’s National Waste Policy as a path to economic sustainability.

Promote efforts to harmonize the value-added tax (VAT), known in Brazil as the Tax on Operations Related to the Circulation of Goods and Services of Inter-Municipal Interstate Transportation and Communication (Imposto Sobre Operações Relativas à Circulação de Mercadorias e Serviços de Transporte Interestadual de Intermunicipal e de Comunicações – ICMS).

Chair Vice Chair

CONSUMER GOODS & RETAIL4.6.


The Energy Task Force recognizes energy as a high-potential sector for trade and investment between Brazil and the U.S. To that end, the Council endorses a number of actions to drive economic growth and advance the U.S-Brazil relationship:

Urge the Brazilian and U.S. governments to hold regular annual meetings of the Strategic Energy Dialogue with a collaborative agenda and allow robust private sector participation.

Support studies on the impact of renewable energy and cogeneration on the energy matrix as a whole, with cooperation from the private sector and academia.

Urge the Brazilian and U.S. governments to sign a joint declaration concerning industrial and commercial cooperation in the nuclear energy sector to boost bilateral business opportunities, with a focus on research and development, supply chain support, and other nuclear applications (e.g., medicine, oil and gas, and security).

Call for the Brazilian and U.S. governments to establish a U.S.-Brazil work plan to create a global biofuels market, outlining joint efforts at the bilateral, trilateral, regional, and multilateral levels.

Recommend that the Brazilian and U.S. governments launch technical workshops on wind and solar energy generation and transmission.

Urge Brazilian federal, state, and municipal governments to streamline the environmental licensing process, adopting clear criteria to avoid unnecessary risk, significant delays, and investment uncertainty. Support collaboration between the Brazilian and U.S. governments on environmental licensing (e.g., technical exchanges, staff training and development, and best practices).

Support continued dialogue and collaboration between the Brazilian and U.S. governments with private sector participation to promote energy efficiency technologies. Work with the Brazilian government to establish a proactive and constructive agenda in renewable energy generation and energy efficiency, which encourages generation and does not create inefficiencies and further costs on the market.

Chair

ENERGY4.7.

Vice Chair

Ensure that potential changes in tax legislation do not increase the cost of electricity.


The Oil & Gas Working Group recognizes the importance of the oil and gas sector for trade and investment between Brazil and the U.S. To drive economic growth and advance the bilateral relationship, the Council recommends numerous actions:

Encourage the Brazilian federal, state, and municipal governments to streamline the environmental licensing process, adopting clear criteria to avoid unnecessary risks, significant delays, and uncertainty for investors.

Support the Brazilian government’s Gas to Grow initiative to adapt the natural gas sector’s activities to the new market and promote the opening of the market to foreign and national private investors. Focus on these areas:• Adoption of good international practices.• Investment attraction.• Increased competition.• Diversity of agents.• Access to information.• Active participation of sector agents in the

regulatory process.

Support more discretion for companies with respect to the Brazil’s National Petroleum Agency’s (ANP’s) requirement that they invest in Research, Development, and Innovation (PD&I) with accredited universities or national research and development institutions.

Promote the most effective way to develop the Brazilian Pre-Salt reserves is to allow private investors of any origin to operate projects with up to 100% participation in the investment.

Support renewal of the Special Customs Regime for exportation and importation of oil and gas products (REPETRO) in Brazil, enabling the reduction of the tax burden for a more cost-effective exploration and production of oil and gas. (Accomplished)

Urge the adoption of a more flexible approach to local content requirements in Brazil to better accommodate rapid innovation and gaps in the local supply.

Object to two initiatives of the state of Rio de Janeiro, which create an environmental monitoring tax (Taxa de Controle, Monitoramento e Fiscalização Ambiental das Atividades de Pesquisa, Lavra, Exploração e Produção de Petróleo e Gás – TFPG) and a value-added tax (Imposto sobre Circulação de Mercadorias e Serviços -ICMS) on the oil and natural gas sectors.

Support efforts to improve clarity on the norms regarding unitization in Brazil via the National Council of Energy Policy (CNPE) Resolution.

Recommend that the Brazilian government continues its practice of organizing regular oil bidding rounds to secure domestic and foreign investment as well as a continuous stream of royalties.

Chair Vice Chair

OIL & GAS WORKING GROUP4.7.1.


Below are the priority areas for member companies in the tourism & hospitality industry:

Visa-Free EnvironmentThe Brazil-U.S. Visa Free Coalition was created to increase economic and cultural gains from tourism and business travel and strengthen the Brazil-U.S. bilateral relationship. The coalition is composed of participating member companies and stakeholder associations in the two countries. The short-term goal is Brazil’s inclusion in the U.S. Global Entry program, and the long-term goal is to include Brazil in the U.S. Visa Waiver Program (VWP), with reciprocal treatment by the Brazilian government.

Legalized Outsourcing Activities and Specialized Services ContractsSupport bills that make outsourcing viable in Brazil so that entrepreneurs can choose which activities to outsource based on their business models and protect outsourced employees’ rights under the law.

Open Skies (Air Transport Agreement) Support congressional passage of policies to alleviate Brazil’s barriers to foreign airlines. Of the 100+ nations that have signed open skies agreements with the U.S., Brazil is one of only a handful that has not put it into effect. Approval of the agreement would significantly liberalize U.S.-Brazil air services for airlines, travelers, and shippers, and the U.S. and Brazilian economies would benefit from competitive pricing and more convenient service.

Flexible WorkdaySupport congressional passage of the pending bill to establish a flexible workday. Brazil’s labor laws make it difficult to hire part-time employees, which results in lost opportunities to expand employment and hampers the sector’s ability to provide maximum customer service during peak demand. (Accomplished)

Tax SimplificationSupport Brazilian and U.S. governments’ pursuit of their 2007 presidential commitment toward an agreement addressing the issue of double taxation.

InfrastructurePromote a policy agenda designed for foreign investors, including the U.S. as a strategic partner under the U.S.-Brazil Memorandum of Cooperation for Infrastructure Development. The Council supports Brazil’s Investment Partnership Program to strengthen cooperation between state and private sectors through agreements on public infrastructure projects and privatization. Key infrastructure issues include project prioritization and promotion of transparent bidding processes and environmental licensing process simplification.Regulatory Framework for Casinos in Brazil

Promote the approval of bills authorizing gambling in Brazil with provisions to encourage the gaming industry to notify the public of responsible gaming resources, while incorporating responsible gaming into business operations.

TOURISM &HOSPITALITY4.8.


CASSIA M. CARVALHO

Executive Director

[email protected]

RENATA VASCONCELLOS

Senior Policy Director

[email protected]

BRUNO SCHWARTZ

Director of Programsand Member Services

[email protected]

MONICA DE BOLLE

Senior Advisor

[email protected]

JOÃO BARROSO

Resident Senior Advisor

[email protected]

BILL MORLEY

Senior Advisor forCongressional Affairs

[email protected]

MEETTHE TEAM

MACON FIELD

Policy Director

[email protected]

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