Brazil holds significant export potential for US companies, but some barriers must be addressed first
However, to maximize this full potential both countries must tread with care, warns Clay Hamilton, who is the agricultural minister counselor at the US embassy in Brazil. He explained at USDA’s Agricultural Outlook Forum in Washington, DC, late last month that Brazil must overcome significant challenges, and the US must carefully balance the benefits of a partnership with Brazil with the competitive threat it poses.
“Brazil and the US have a long history of cooperation in agriculture,” including international affairs, trade, the use of biotechnology, open markets and operating 400 joint science projects at any one time looking at issues such as common pests, growth conditions and other shared concerns, Hamilton told FoodNavigator-USA.
“However,” he added, “they are one of our biggest competitors and we don’t ever forget that. We compete against them in soy beans, corn, meat, wheat, cotton – almost all of the major products we export, Brazil also exports, and so we keep a close eye on what Brazil is doing.”
That said, Brazil and the US could be well served to work together, rather than fight each other, when it comes to opening new markets in the European Union and Asia, where there are mounting concerns about the approval of new biotechnology, food quality and labeling restrictions, Hamilton said.
“The US and Brazil think a lot alike as far as the way we produce foods, the regulations that we use and where you see countries in Europe and others becoming more strict about how they view food … we can work with Brazil to try and push back, to do consumer education,” and ideally build new markets, he said.
Overcoming challenges to seize potential
While Brazil has several advantages over the US, it faces significant challenges, including outdated infrastructure, political instability and linger effects from the recession.
“Brazil has a lot of advantages .. .but their infrastructure is lagging significantly from where we are in the US. They don’t have a very good road system, their ports and rivers are not nearly as well distributed as what we have in the US. They are just now starting to catch up on trying to expand that – so that is one of the major issues,” Hamilton said.
He also noted that the country has grappled with political instability and has another election coming up next year, which means the government has not had much bandwidth to focus on agricultural issues.
In addition, the country is coming out of one of the worst recessions it has had in more than 100 years, he said. And while the private sector is picking up part of the slack, there still is substantial work to do.
Despite these challenges, Brazil holds a lot potential for the US, Hamilton stressed.
“There are 200 million hungry consumers in Brazil. They have among the highest per capita income of anywhere in Latin America. There are more restaurants in San Paulo than the entire Central America combined. But, they are so far down … as an export market for the US,” that the US is not fully capitalizing on this potential, Hamilton said.
“We really want to explore, you know, high value products, inputs they use to add to other products, working in Brazil – we do about a million visas a year for Brazilians to come to the US, so they know our products, they know what it is. We just need to break the door down, get the US companies interested in exporting to Brazil, so that we can expand US access,” he explained, adding, “That is one of the big growth areas that I see.”