Introduction

The United States has enjoyed accelerated economic and political relations with Brazil over the years. Brazil is the fifth most populous country and the 9th largest economy in the world. The US, on the other hand, is the largest and the most diversified economy in the world (Brazil-U.S. Business Council report, 2016). Trading is an important element of the US economy, with the value of imports and exports accounting for 28 percent of the U.S GDP.  The U.S recognizes Brazil as a major global player and an indispensable partner on issues of trade and international development issues. The two nations continue to share common values and goals which have led to thriving business between the two nations (Shrestha & Heisler, 2011). Brazil is an important market for US agricultural equipment, while it is itself a major producer and exporter of agricultural products.

This mutual relationship has led to the signing of several bilateral trade agreements that have made possible for the US to import from and export to Brazil and vice versa. These agreements have also enhanced the growth and productivity of the two nations. The U.S-Brazil trade agreement boosts a two-way trading and investment which has enabled the two nations to benefit from enormous incentives for better realization of deeper and strategic partnership (Brazil-U.S. Business Council report, 2016). Therefore, the relationship between the two nations is symbiotic as each relies on the other for its products and services. This paper explores in details the main import and exports for Brazil and the United States and how each nation depends on the other in terms trade.

 

The United States population and demography

The United States is the third most populous country in the world (Shrestha & Heisler, 2011).  Currently, it is estimated that the US population is at 326 million people, which places it in the third position among the most populous nations in the world. 51 percent or approximately 166 million are women while 49 percent are men. The country has a birth rate of 12.5/1000 population and a death rate of 8.2/1000 population.  Out of the total population, approximately 80 percent reside in cities and suburbs. According to the CIA World Fact Book (2017), New York is the most populous city in the US. The US is made up of the whites, the Hispanics, and the Latino Americans. The whites constitute the majority of the US population accounting for approximately 77.7 percent of the population. As of 2013, non-Hispanics whites accounted for 62.6 % of the population.

Brazil population and demography

Brazil is the largest nation in South America and Latin America with an estimated population of 209.29 million by 2017. Out of this population, 47.7 percent are whites, 43.1 percent mulatto, 7.6 percent blacks, 1.1 percent Asians and 0.4 percent being the indigenous people.  The 2010 census indicated that Brazil population was 190.7 million. However, this number has increased significantly over the last seven years to the current number of 209.29 million. 62 percent of the total Brazil populations are youths.

The biggest city in Brazil is Sao Paulo with an estimated populace of 21.06 million individuals (CIA World Fact Book, 2017). Most parts of Brazil are sparsely populated with a populace density of around 24.66 people per square kilometer. Brazil’s population growth has been rapid, at 0.75 percent with a birth rate of 14.3 births /1000 population and a death rate of 6.6 deaths/1000 population.  Brazil’s main religion is Christianity; with approximately 64.6 percent being Catholics and 22.2 percent were Protestants.

Brazil has a favorable age structure (youths) which has enabled the country to build up its human capital and reinforce its economic institutions. Public funded pensions and other social programs have played a significant role in wiping out poverty thereby lifting millions of Brazilian into the middle-class level. However, income inequality remains significantly high especially for women, blacks and the indigenous population (CIA World Fact Book, 2017).

US and Brazil imports and exports

Brazil’s trading relationship with the US has been extensive for decades now. Brazil is the ninth largest destination for US goods and the eighth largest for US service export. According to the Brazil-U.S. Business Council report (2016), total US export to Brazil exceeds combined exports to Russia, China, and South Africa.  In 2014, it was estimated that the total US trade, especially on goods with Brazil, reached $ 108.3 billion. The major imports by Brazil from the US include chemicals, printing and graphic art equipment, telecommunication equipment, petroleum, and mining equipment, agricultural equipment, transportation equipment, electrical and nonelectrical equipment.

The US imports certain service to Brazil and they include tourism-related services and transportation services.  However, services imports from Brazil by the US remain quite minimal. Some of the services imported by the US from Brazil encompass Brazilian business services, management consulting and public relations services. Brazil is a large and a diverse agricultural economy with a considerable scope for mechanization. This, therefore, makes Brazil a dynamic market for US agricultural equipment (Hirst, 2005).

US export of agricultural equipment to Brazil has remained steady and rapid in the past few decades, with US export accounting for 53 percent of the Brazilian import market. For instance, in 2014, Brazil was the largest market for US agricultural equipment which stood at $485 million thereby making Brazil an important market for US agricultural equipment. Also, Brazil is a major producer of several minerals, making it the fifth largest mineral producer in the world. This, therefore, raises the demand for mining equipment which is imported from the US (Hirst, 2005).

Brazil is the eleventh-largest manufacturer and exporter of steel and iron in the world. For instance, in 2017, Brazil exported 7.3 million metric tons of steel with the top three markets being the US, Germany, and Argentina (International Trade Administration, 2017).  The US is the largest market for the Brazilian steel accounting for 35 percent of all the steel produced. However, the export of steel to the US continues to face numerous challenges in recent years especially the US imposition of trade barriers and the anti-dumping regulations on Brazilian steel (Hirst, 2005). The US also imports crude oil, aerospace products and agricultural products such as coffee and soya beans from Brazil.

Impact of US-Brazil trade agreements

The Brazil-US Business Council believes that to strengthen the economic partnership between the two nations; there is need to negotiate and implement comprehensive trade agreements that would enhance trade and investments between the two countries.  Both the two nations have for decades now maintained various trade barriers that have had a negative impact on cross-border trade. For instance, Brazil imposes high trade barriers on imported beverages, agricultural products, motor vehicles and leather products. The US, on the other hand, imposes strict barriers on imports of key goods and services from Brazil (Brazil-U.S. Business Council report, 2016). This, therefore, necessitates an urgent US-Brazil trade agreement which would have a net positive impact on the overall trading relationship, gross domestic products and an increase in overall employment rates for the two nations. The removal or reduction of bilateral tariff and nontariff trade barriers and full implementation of trade agreements could go a long way in strengthening the trading relationship between US and Brazil.

 

 

 

 

 

 

 

 

 

 

References

Brazil-U.S. Business Council, (2016). Impact of a US-Brazil Trade agreement. Retrieved on 30th       November 2017 from  https://www.uschamber.com/sites/default/files/documents/files/busbc_trade_agree             ment_initiative_report.pdf

CIA World Fact Book (2017).  The World factbook. Retrieved on 30th November 2017 from  https://www.cia.gov/library/publications/the-world-factbook/geos/print_us.html

Hirst, M. (2005). The United States and Brazil: a long road of unmet expectations. New York:      Routledge.

International trade administration (2017). Global steel trade monitor. Retrieved on 30th     November 2017 from https://www.trade.gov/steel/countries/pdfs/2016/q3/exports-             brazil.pdf

Shrestha, L.B. & Heisler, E.J. (2011). The changing demographic profile of the United States.             CRS report for Congress.

 

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