The Brazilian Invasion: Good for the Nation, Good for America
Para traduzir este artigo use a ferramenta de tradução (à direita).
Published in the Boca Raton Tribune
April 1, 2013
By Carlo Barbieri
Part 1 of 2
Brazil has “invaded” the United States. Not in a military way, but in an economic manner. The symbiotic relationship that has developed, one which focuses on the exchange of products, services and tourism, among other things, is good for both nations.
Interestingly, and perhaps most importantly, this “invasion” does not take jobs away from American shores. Instead, it generates increased employment within the U.S.—a critical component for America’s recovery from economic stagnation. There is also a spin-off of job creation in Brazil as American firms reach out with goods and services.
The “invasion” touches many areas. We will explore some in this week’s column and others in the next. Such is the vast extent of this Brazilian-American cooperative.
The United States engages with Brazil on trade and investment through a series of initiatives. On March 19, 2011, U.S. President Barack Obama and Brazil’s President Dilma Rousseff signed the Agreement on Trade and Economic Cooperation to strengthen trade and investment efforts between the two largest economies in the Western Hemisphere. The agreement was created to expand Brazil’s commercial relationship and direct investment by providing a framework to deepen cooperation on a range of issues of mutual interest, including innovation, trade facilitation and technical barriers to trade. The agreement represents a shared commitment to broad economic growth and is intended to become a foundation for cooperation in other trades.
During President Rousseff’s visit to Washington, D.C. on April 9th, 2012, The Economist reports, President Obama confirmed that the U.S. government will recognize cachaça, a sugar cane spirit used to make a Brazilian alcoholic drink, as a distinct product—no longer calling it “Brazilian rum” and applying tariffs intended to shield the Caribbean kind from competition.
The two leaders also found common ground on weightier matters. Security co-operation will increase. The countries’ defense ministers will meet regularly. And Brazilians—who spend so much on visits to the United States that the U.S. Travel Association describes them as “walking stimulus packages”— can now look forward to easier travel planning.
Encouraging Brazilian tourists to visit the U.S. is one of the most visible signs of the “hands-across-the-ocean” scenario created by Presidents Obama and Rousseff. The “gold rush” of Brazilian tourists willing to spend considerable amounts of money during their travels to the U.S. has been featured in many newspapers.
One of the largest outlet malls in South Florida reports that 68 percent of its sales are to Brazilians. About two million people from Brazil are expected to visit Florida this year, generating about 350,000 jobs in the tourism trade.
Traditionally, Brazilians love to visit cities like Miami, Orlando and New York – and have also found Boca Raton during their journeys. Tourism combines with family bonding as Brazilians not only hit the tourist spots, but also visit relatives in the area of West Boca Raton and Pompano Beach – a region many Brazilians call home.
From a business standpoint, other key factors have linked Brazil and the U.S. economically. We are not just talking about the fact that 27 percent of properties purchased in Miami last year were by the Brazilians. We’re talking about real participation in corporate America.
Today, a Brazilian company owns a portion of fast-food giant Burger King. Also, more than 50 percent of the orange juice consumed in Florida is produced by Brazilian companies located in the Sunshine State.
Gerdau, Brazil’s largest steelmaker, has more units and volume production in the U.S. than in Brazil. Likewise, in the manufacture of weaponry, Brazil’s Taurus has a larger production in the U.S. than in its country of origin.
A couple of traditionally American consumables how have a connection to Brazil. Anheuser-Busch, manufacturer of Budweiser beer, became a wholly owned subsidiary of InBev, a Brazilian corporation. The beer maker is now known as Anheuser-Busch InBev in the North American market.
Also, when billionaire Warren Buffet acquired ketchup-maker H. J. Heinz, he did so in partnership with Brazilian capital.
Recently, South Florida’s Barry University, through its Andreas Business School, has partnered with a Brazilian company to make continuing education courses available. The school offers courses at the undergraduate and graduate levels.
Here is a rundown of U.S.-Brazil investments:
- U.S. foreign direct investment (FDI) in Brazil (stock) was $ 71.1 billion in 2011, an increase of 10.8 percent from 2010.
- U.S. direct investment in Brazil is led by the manufacturing and finance/insurance industry.
- Brazil’s FDI in the United States (stock) was $5 billion in 2011, up 266 percent from 2010.
- Brazil’s direct investment in the U.S. is led by the wholesale trade sector.
- Sales of services in Brazil by majority U.S.-owned businesses were $29.9 billion in 2010 (latest data available) while sales of services in the United States by majority Brazil-owned firms were $1.3 billion.
Next installment: A look at imports and exports