Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Brazil continues to be an excellent market for experienced U.S. exporters across a wide range of sectors, despite the economy experiencing a slow down as a result of the pandemic. The aggressive response by the Brazilian government to pump money into the economy and offer generous unemployment benefits has economists forecasting a return to positive GDP growth for 2021.
U.S. exporters and those firms willing to become knowledgeable of regulatory and country-specific challenges can do well in Brazil. In 2019, Brazil was the United States’ ninth largest export market and our fourteenth-largest trading partner (U.S. Census). The United States exported $67.3 billion in goods and services to Brazil, while the United States imported $37.6 billion in Brazilian goods and services, representing a $29.7 billion U.S. trade surplus (Bureau of Economic Analysis). Brazilian President Jair Bolsonaro has made efforts to strengthen the Brazil-U.S. trade relationship, and he has expressed a desire for the United States to supplant China in becoming Brazil’s number one trading partner.
After the United States, Brazil is the Western Hemisphere’s second largest population and economy. In reaction to the global viral pandemic, the Government of Brazil (GoB) has made efforts to encourage private sector participation in economic recovery and revitalization. July 2020 Brazilian sanitation legislation aims to universalize water, wastewater, and solid waste management for all Brazilians and requires that public bids be open to private players. U.S.-Brazil trade facilitation cooperation and a substantial slate of transportation and logistics infrastructure projects promise to help further reduce the “Custo Brasil,” which is the traditional notion that doing business in Brazil can be costly.
The largest healthcare market in Latin America spends 9.1% of its GDP in healthcare and 70% of the approximately 6,500 hospitals are private. Imported medical devices correspond to 80% of the market in Brazil and the United States represents 29% of this share. Brazil ranks among the top seven markets in size for drugs and pharmaceuticals, with market growth of 10.74% in 2019. Despite the strong dollar, U.S. drug exports to Brazil are expected to continue an upward trend.
Brazil is Latin America´s top oil producer and owns the largest recoverable ultra-deep oil reserves in the world, with 94% of Brazil’s oil production produced offshore. Brazil is also the largest electricity market in Latin America and the 7th largest globally in electricity generation capacity. Renewable energy makes up a large percentage of the energy mix at 45%, and both current and future installed capacity represent an opportunity for U.S. firms to provide much needed solutions within energy storage, transmission & distribution, and efficiency.
In December 2019, the Brazilian Congress ratified the Technology Safeguards Agreement (TSA), which unlocked the use of U.S. technology in suborbital and orbital space launch operations from the Alcantara Space Launch Center. Aviation has been hit hard globally, but Brazil remains one of only six countries in the world that manufactures commercial jets, and has been one of the top 10 export destinations of U.S. aerospace products over many years.
- Brazil also remains the largest Latin American source of Foreign Direct Investment (FDI) in the United States according to SelectUSA, the USG’s investment promotion program. In 2019, the United States received $45.7 billion in job creating FDI from Brazil, according to the Bureau of Economic Analysis.