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Deepening and Institutionalizing U.S. – Brazil IT and Defense Trade

October 6, 2016

Ken Hyatt is the Acting Under Secretary of International Trade Administration

It makes perfect sense that the Department of Commerce’s third annual Health IT Trade Mission took place in Sao Paulo, the business and financial capital of Brazil. Through my participation in this trade mission, I have had productive discussions with leaders of several key organizations actively engaged in our bilateral commercial relationship, including the Brazil-U.S. Business Council (BUSBC), the American Chamber of Commerce in Brazil (AmCham), and the Federation of Industries of the State of São Paulo (FIESP).

Discussion during the Health IT trade mission to Brazil in São Paulo.

Discussion during the Health IT trade mission to Brazil in São Paulo.

A constant theme in all of my meetings was the advancements in the digital economy, the increasing use of e-commerce, and the opportunities that these sectors present for the Brazilian economy. The digital economy is already critical to both the United States and Brazil, making up 5.4 percent and 2.4 percent of GDP, respectively. There has been remarkable growth of e-commerce in Brazil recently, growing by more than 20 percent over the past few years. In fact, the digital health sector alone is expected to exceed $40 billion by 2020.

This is precisely why ITA’s Foreign Commercial Service presence in Brazil includes a digital trade officer to help U.S. firms participate and reap the benefits of the digital economy; the core service we provide through our Digital Attache program.

That said, there are many barriers to U.S.-Brazil digital trade. That is why our countries are working together to exchange best practices related to developing, measuring, regulating, and fostering the digital economy to help ensure that this sector becomes a major growth driver for our two countries. To that end, our public and private sectors must promote three major points: the benefits of a free and open Internet, flexible regulatory regimes, and open innovation ecosystems.

Other priority topics we discussed included infrastructure, healthcare, energy, and services, as well as cross-cutting issues like trade facilitation (e.g., single-window), regulatory coherence, and standards. Outside of this current trade mission, our two countries have been working on addressing these issues over the past few years via two high-profile, dynamic cooperative mechanisms: the U.S.-Brazil CEO Forum and the U.S.-Brazil Commercial Dialogue. These two vehicles have been critical in the advancement of key priorities and issues affecting both American and Brazilian companies.

The other priority topic during my time in Brazil was our defense partnership. I am proud to have led our interagency delegation that included the Departments of Commerce, Defense, and State, to launch the first ever Defense Industry Dialogue (DID). The DID integrates industry into the bilateral defense relationship with Brazil, and creates a platform for discussing concrete commercial issues such as supply chain integration, technology transfer and export compliance, as well as manufacturing standards.

During the DID, U.S. Ambassador to Brazil Liliana Ayalde highlighted the defense industry as a key driver of economic growth in both countries, and called on all participants to seize the moment to focus on a concrete agenda in pursuit of tangible results. And with the participation of more than 180 participants from 70 defense firms, senior government officials, and military leaders from both countries, the commitment to pursuing that concrete agenda was more than evident. That is why I signed a four-way Letter of Intent to institutionalize government support for the dialogue moving forward. The DID marks an important milestone for U.S.-Brazil relations and I am thrilled to be a part of it.

Whether we are talking about digital, defense, or any other sector, it should be absolutely clear that the United States is committed to a strong and dynamic relationship with Brazil, and I am committed to continue strengthening this relationship through greater trade and investment.

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