In many cases, these trade agreements are being pursued as part of the administration`s policy to expand agrofuel (ethanol) markets. The U.S. trade surplus with Brazil was $12.0 billion in 2019, an increase of 46.6% ($3.8 billion) over 2018. Brazil is Latin America`s largest economy and its trade with the EU accounts for 30.8% of the EU`s total trade with Latin America in 2016. Brazil negotiates a free trade agreement with the EU under the Mercosur Group. Miguel Braun is a Senior Advisor (non-resident) for the Americas program at the Center for Strategic and International Studies in Washington, D.C. The United States recorded a service surplus of $18 billion with Brazil in 2019, down 11.6% from 2018. Mercosur, in particular, is actively involved in the search for negotiations with India, Central America, the Southern African Customs Union and Algeria. The project will then focus on a study on fair and fair trade in Brazil and will hold a second forum in December 2018.
The Brazilian market is heavily protected with an applied tariff of 13.5%. The United States engages with Brazil on trade and investment issues through a series of initiatives. Both of these situations would be a disaster for the Argentine economy. One of the cornerstones of industrial production that is still inefficient is the ability to sell to Brazil at zero tariffs, while competitors have to pay for THE ECTs. If Brazil signs many trade agreements, Argentine companies will be subject to stiff global competition in the Brazilian market, without having the advantage of accessing new markets opened by trade agreements for Brazilian companies. In 2011, the United States and Brazil signed the Trade and Economic Cooperation Agreement to improve trade and investment cooperation between the two largest economies in 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. At the same time, Brazil is negotiating with India and South Africa, with which it is the largest economic bloc of the southern countries within the IBSA, creating tensions within Mercosur. In March 2011, Brazil signed a Trade and Economic Cooperation Agreement (ATEC) that many analysts see as a first step towards a free trade agreement. Since 2010, Brazil has also insisted on a free trade agreement with Mexico.
A future association agreement between the EU and Mercosur should promote the integration of trade between Mercosur countries and create new trade and investment opportunities with the EU, eliminating direct investment and non-tariff and non-tariff direct investment. While Brazil was one of the main Latin American architects of the defeat of the free trade agreement, its economic policy has, in many cases, been in favour of signing free trade agreements. Given its dominant position in Mercosur and on the continent in general, it has focused its efforts on securing such agreements in the institutional for a of which it is a member. At the end of April, Argentina announced to its Mercosur partners, Brazil, Paraguay and Uruguay, that they would withdraw from trade negotiations already concluded with the European Union and the European Free Trade Association. This unilateral decision caused shockwaves on the part of Mercosur, as it implied a possible dissolution of the trading bloc. However, Argentina`s decision was later overturned and Mercosur`s partners are now considering how they can make progress despite each country`s competing priorities.