Trade Analysis between Brazil and the USA Term Paper

Trade Analysis between Brazil and the USA - Term Paper Example creation of Southern Common Market and participated in the formation of the G-20 as a coalition to represent developing countries in the World trade organization negotiations. Brazil works bi-laterally with the U.S due to her influence in the trade groups. She also co-chairs the Free Trade Area of the Americas (FTAA) negotiations as with the U.S. Indeed for the two countries, closer ties serve advantageously both economically and politically. There is mutual benefit when there are good trade relations and the partners have stable political governance. Political stability of any country greatly determines the economic performance of the country. This is evident from the economic recession experienced by the two countries during the Word War II. Economic ties in the U.S and Brazil are much dependent on the two-way trade that is far much empowered by the World Trade Organization. Additional resources and economic growth are the direct benefits realized by the countries in relation to ex port-import trade relations (Schott, 2003, p 2). US recorded the highest imports from and exports to Brazil in the year 1997. However, a sharp decline was noted in 2002 due to the financial crisis experienced in Brazil. A contrast was sited as US imports from Brazil rose in 2002 than in 1997. Bilateral trade between U.S and Brazil has grown rapidly since 1992. The US had commendable trade surplus with Brazil between 1990’s and 2002 when she recorded a drastic merchandise trade deficit with Brazil. United States’ basic exports comprise of industrial manufactured goods such as electric machinery, air crafts and computers. On the other hand, she relies on imports from Brazil that comprise of steel, iron, footwear and mineral fuels. Approximately about 70% of United States’ exports to... In Brazil and the United States, closer ties majorly brought about by the trade relations serve both for economic and political reasons. The two countries have common objectives in trade. Opening markets is beneficial to both boosting innovation and competition. They both have a role to play in order to deepen their trade relations especially bilateral. The success of trade negotiation in WTO and in the hemisphere largely depends on them. An increment in trade and investment in both countries will lead to boosted employment and income. This would also lead to greater cooperation politically, culturally and economically in the hemisphere. Brazil and the U.S both share a role to play in order to deepen their bilateral relations. They have a challenge to ensure better results for their citizen and entire trading block partners (Schott, 2003, p22- 23). Free trade is an essential emerging aspect in these countries’ trade. However, Brazil is still a way off to understanding the benefits associated to the trade and thus is yet to open up her boundaries for the trade. Countries adopt trade policies at will and this explains the difference in trade liberalization between the United States and Brazil. Bilateral and regional trade agreements have put the United States at an advantage in trade relation to Brazil. Prospects are good over future trade relations going with the current signing of trade agreements to enhance mutual trade. It is also crucial that these two countries maintains and develops the already established trade partnership for the well being of the two economies.