Kirk Says U.S.-Brazil Accord Will ‘Open the Doors’ of Constrained Market

The trade and economic cooperation deal signed by the U.S. and Brazil will open a constrained market and help reach the administration’s goal of doubling exports by 2015, U.S. Trade Representative Ron Kirk said.

Kirk, the co-chairman of a U.S.-Brazil commission created by the pact to expand trade and remove nontariff barriers, said yesterday that he will meet at least once a year with counterparts from Brazil to “try to deal in a much more direct way with some of the challenges and barriers.” The U.S. has similar accords with other developing nations, Kirk said.

Brazil fell three positions to 127th in a World Bank survey this year that measures the ease of conducting business, trailing emerging economies such as Egypt, Russia, Argentina and Lebanon. Former Brazil President Luiz Inacio Lula da Silva last year set limits on the amount of land foreigners can buy. The U.S. and Brazil also lack a bilateral tax treaty that avoids double taxation for companies.

“We can use this to really open the doors, and frankly, blow the doors open to what’s been a fairly constrained market for us,” Kirk said in an interview in the marbled entrance of the governor’s mansion in Rio de Janeiro. “This can be hugely accretive to what we’re trying to do with the export initiative.”

The deal signed on March 19 during President Barack Obama’s first visit to South America ended a push that began a year ago when Kirk said he met with Celso Amorim, Brazil’s former foreign minister. The agreement is a first step toward a free-trade accord backed by corporate chief executive officers, U.S. Commerce Secretary Gary Locke said today in Sao Paulo.

‘First Step’
“It’s the desire of both the Americans and Brazilian CEOs,” who participated in the weekend U.S.-Brazil CEO Forum, Locke told reporters. “It takes a long time to try to negotiate and complete a free-trade agreement. That’s why the trade and economic cooperation agreement is the first step.”

A Brazil free-trade agreement “should be on the agenda,” said Steven Bipes, executive director of the Brazil-U.S. Business Council, which is affiliated with the Washington-based U.S. Chamber of Commerce, the nation’s largest business lobbying group. “Detailed specific proposals and ideas from the private sector, that work should begin,” he said.

During Obama’s visit, Brazil’s President Dilma Rousseff reiterated complaints about U.S. agricultural measures, including farm subsidies and a 54 cents-a-gallon tariff on Brazilian ethanol that Congress renewed in December.

Exports Surge
U.S. exports to Brazil surged to a record $35.4 billion last year as the Brazilian real’s two-year rally against the dollar made American goods more attractive.

The Obama administration is being pressed to send Congress free-trade agreements with South Korea, Colombia and Panama reached under Obama’s predecessor. Kirk said the White House wants to complete the South Korea accord before July 1, when a Korean accord with the European Union is set to take effect.

U.S. officials are negotiating with Colombia on labor protections and with Panama on tax-law changes before those deals are submitted, he said. Republicans led by Senate Minority Leader Mitch McConnell of Kentucky want the three agreements delivered to Congress at the same time.

“People forget it was only June of last year when the president said, ‘Let’s find a way to move forward with Korea’,” Kirk said. “We effectively got that done in less than six months.”