Private Sector Leaders: U.S. and Brazil Must Strengthen Economic Ties

BRASILIA, BRAZIL—United States and Brazilian executives meeting in Brasilia have called on their respective governments to forge stronger economic ties to improve each nation’s prosperity amidst the demands of globalization. The private sector leaders hammered out a set of economic proposals to improve cross-border trade and commerce between Brazil and the United States, and within the Western Hemisphere.

The two-day U.S.-Brazil Innovation Summit was convened by the U.S. Council on Competitiveness and its Brazilian counterpart, Movimento Brasil Competitivo. The meeting was announced by President George W. Bush and Brazilian President Luiz Inácio Lula da Silva following their meeting at Camp David in March. United States Under Secretary of State Nicholas Burns led a contingent of U.S. government officials from the U.S. Departments of Defense, Commerce, Energy and Agriculture.

Public and private sector leaders agree that a stronger relationship with Brazil is critical to U.S. competitiveness in the global economy. Exports to Brazil from the United States totaled more than $19.2 billion in 2006, and Brazil receives almost a quarter of U.S. exports to Latin America and the Caribbean (excluding Mexico). Brazil is a major emerging market for U.S. companies with a 30 percent population increase projected by 2050.

“The world is dramatically more interconnected and competitive,” said Deborah L. Wince-Smith, president of the U.S. Council on Competitiveness. “Brazil and the United States share a strong common ground and potential for mutual economic productivity and prosperity for our citizens.”

Expanding innovative commercial activities was the central theme of the summit. The economic proposals generated during the meeting are geared toward stimulating ground-breaking research, entrepreneurship and commercialization across all sectors of the U.S. and Brazilian economies.

The summit produced an “Innovation Call-to-Action” that highlighted three elements critical to creating vibrant economies: improving education and workforce training to create new knowledge and skills; encouraging investment in new ideas, inventions and services that generate higher returns for companies, workers and economies; and building business environments that support innovation, especially protection of intellectual property.

Participants noted that the United States and Brazil each have a developed and educated middle class, as well as outstanding scientists, engineers and technologists. On the other hand, much more must be done to expand quality education across all socio-economic groups. Teaching U.S. and Brazilian students to see themselves as global citizens and workers is the foundation of innovation and economic growth.

Participants also noted that traditional manufacturing is no longer the basis for strong economies. Innovative research and invention of new products now earn the highest dividends. Participants called for ratcheted up financing of research and development by government, industry and universities, especially in biotechnology, biofuels, nanotechnology, information technology, computer sciences and aerospace.

Developing a fertile environment for innovation was also a significant theme, particularly the need for intellectual property protection. Just two months ago, the government of Brazil broke the patent on an AIDS drug developed and produced by New Jersey-based Merck & Co. The controversial decision sent a chilling signal to U.S. research-oriented companies interested in doing business in Brazil.

The U.S. government has also highlighted intellectual property protection in Brazil as an area of concern. The Bush administration “engaged intensively with the Brazilian government on the issue of copyright protection,” according to the 2007 Trade Policy Agenda and 2006 Annual Report, issued earlier this year by the U.S. Trade Representative.

Participants discussed the paramount importance of protecting intellectual property in a world where technology allows knowledge and information to be so easily transferred around the globe. Strong protection and enforcement of intellectual property by Brazil will create a “win-win” for both countries. Brazil will attract more U.S. investment, while more cutting-edge American companies will benefit from selling products and services in Brazil.

Creating a “win-win” for the United States and Brazil will be the goal for future collaboration between the Council on Competitiveness and Movimento Brazil Competitivo. In 2008, the two groups plan to create a task force to identify regulatory, tax and legal barriers that prevent innovation in either country. The groups will also launch a two-year project to better measure competitiveness in the Americas.

The U.S.-Brazil Innovation Summit was co-hosted by the U.S. Council on Competitiveness, Movimento Brasil Competitivo and Agencia Brasileira de Desenvolvimento Industrial – a Brazilian government entity that promotes economic development. The delegation organized by the U.S. Council on Competitiveness was headed by John Deere Chairman and CEO Robert W. Lane, and included NASDAQ Vice Chairman and former congressman Michael Oxley.

Resources

Council Delegation Participants List (PDF)
Innovation Call to Action (PDF)