Brazil is negotiating a free trade agreement with the EU within the framework of the Mercosur Group. The U.S. trade surplus with Brazil amounted to $US 12.0 billion in 2019, up 46.6 percent ($US 3.8 billion) from 2018. In many cases, these trade agreements are pursued as part of the government`s policy of expanding markets for biofuels (ethanol). The United States has an estimated services trade surplus of $US 18 billion with Brazil in 2019, down 11.6 percent from 2018. In 2011, the United States and Brazil signed the Trade and Economic Cooperation Agreement to enhance trade and investment cooperation between the two major economies of the Western Hemisphere. The agreement expands our direct trade and investment relations by providing a framework for deepening cooperation on a number of issues of mutual interest, including innovation, trade facilitation and technical barriers to trade. Brazil is one of the countries that, according to the European Commission`s latest report, has resorted to a high number of potentially restrictive measures. The EU encourages Brazil to reduce tariff and non-tariff barriers and promote a stable and more open regulatory environment for European investors and traders.
The project will then focus on a study on fair and equitable trade in Brazil and will hold a second forum in December 2018. Brazil is the largest economy in Latin America and its trade with the EU accounted for 30.8% of the EU`s total trade with the Latin American region in 2016. The EU is negotiating a free trade agreement with Brazil as part of the EU`s Association Agreement negotiations with the Mercosur countries (including Argentina, Uruguay and Paraguay). A future Association Agreement BETWEEN the EU and Mercosur should promote trade integration between Mercosur countries and create new opportunities for trade and investment with the EU, eliminating tariff and non-tariff barriers and foreign direct investment. The United States engages with Brazil on trade and investment issues through a series of initiatives. While Brazil was one of the main Latin American architects of the defeat of the SAA, its economic policy has often been positive for the signing of free trade agreements. Given its dominant position in Mercosur and on the continent in general, it has focused its efforts on the establishment of such agreements within the institutional bodies of which it is a member. Revenue from services in Brazil from subsidiaries majority owned by the United States was $40.2 billion in 2017 (latest data available), while revenue from services in the United States by the majority of Brazilian companies was $2.7 billion.
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