Brussels, 08/10/2013 (Agence Europe) - The EU and Brazil want to increase their business opportunities. European Commissioner for Industry and Entrepreneurship Antonio Tajani will chair a joint working group.
In line with the desires expressed by the leaders of the EU and Brazil at the sixth bilateral summit last January (see EUROPE 10772), a joint high level working group will be set up this week to assess new opportunities for trade and investment. It is for this reason that Tajani, who is co-chairing the group on the European side and who is in close contact with European Commissioner for Trade Karel De Gucht and European Commissioner for Research and Innovation Maire Geoghegan-Quinn, is visiting Brazil on 10-11 October, accompanied by a delegation of businesses and industrial associations. While there, Tajani will meet Brazil's Minister for Foreign Affairs Luiz Alberto Figueiredo, Minister for Industry and Trade Fernando Pimentel and Minister for Education Aloizio Mercadante.
The objective of the high level group is to explore opportunities for industrial cooperation between the EU and Brazil on high technology, industrial innovation and R&D, the internationalisation of SMEs and the normalisation of standards (technical and regulatory specifications, and certification) so as to facilitate trade. The partners also want to stimulate the sharing of R&D information, particularly in the energy sector (oil, gas and renewable energy). In addition, the working groups aim to strengthen contact between business circles so as to promote a better climate for investment. Alongside the group, the European associations BuinessEurope and Eurochambres, and their Brazilian counterpart CNI, will launch a mixed working group in order to help the bilateral agenda make progress.
As the EU's top trading partner in South America (37% of total EU trade with the region, and 43% of all EU investment in Latin America), Brazil is a key market for European businesses. Participating in 20% of the country's trade, the EU is, for its part, Brazil's top supplier (20% of its imports) and an important outlet (18% of its exports). In 2012, the EU exported goods there for €39.5 billion (including 90% of manufactured products - cars, planes, chemical products and machinery) and imported for €37 billion (including 70% of agro-food products and primary resources - soy beans, oilcake, iron ore, coffee and crude oil). The EU also recorded a surplus of €5.7 billion for trade in services (€12.7 billion of services exported to Brazil, €7 billion imported). Lastly, the EU is the top foreign investor in Brazil, with over 40% of the country's FDI stock. In 2011, FDI flows to Brazil reached €27.5 billion, while those of Brazil to Europe were just €3 billion.
Beyond the prospects that this already important relationship offers, the EU is faced with the challenge of a Brazilian market that is relatively well protected, with an average 12% customs tariff that is applied, and that is aided by a government whose use of trade restrictions is clearly on the increase. In particular, the EU is targeting a tax regime based on demands for local content. Yet it is not only this. Of all the countries studied in its latest report on restrictions to trade in third countries, Brazil accounts for more than a third of restrictions linked to public procurement. These restrictions can force the use of national products, and the relocation of companies. Furthermore, Brazil strongly protects certain sectors of its industry from foreign competition (see EUROPE 10912). (EH/transl.fl)