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MIL OSI Translation. Region: Portuguese / Latin America –

Source: Republic of Brazil

Brazil and the United States (USA) signed this Monday, October 19, Protocol to the bilateral Trade and Economic Cooperation Agreement. It is an ambitious and modern trade package, aimed at promoting bilateral trade and investment flows.

The Trade and Economic Cooperation Agreement, whose acronym is ATEC – “Agreement on Trade and Economic Cooperation”, is a bilateral mechanism, created in 2011, but only activated in March 2019, when Presidents Trump and Bolsonaro launched the “Partnership for Prosperity ”during President Jair Bolsonaro’s visit to Washington. At the Mar-A-Lago meeting, in March of this year, the leaders of the two governments gave more concrete outlines to this partnership, by instructing their negotiating teams to close the text of the trade package now signed.

The signing of the commercial package is part of a broader context of Brazilian foreign trade policy, whose main objective has been to create an economic environment favorable to business and Brazil’s competitive reintegration into the international economy. The package is intended to form the basis of a broad trade agreement to be negotiated in the future between the two largest economies on the American continent. The commitments assumed are in line with historical demands from the private sectors of both countries.

The text of the Protocol contains, in addition to general provisions regarding the entry into force and the consultation mechanism on the obligations adopted by the Parties, three Annexes that deal, respectively, with I) Trade Facilitation and Customs Cooperation; II) Good Regulatory Practices; and III) Anti-corruption.

Trade Facilitation

Annex I, on Trade Facilitation, concerns bureaucratic procedures (administrative and customs) related to export, import and customs transit of goods. The commitments assumed aim to reduce the bureaucracy of foreign trade, reducing the term and cost of operations carried out by private agents. According to an estimate by the Organization for Economic Cooperation and Development (OECD), deep reforms in trade facilitation can reduce the costs of a trade operation in Brazil by up to 14.5%.

The trade facilitation disciplines agreed with the United States are comprehensive, with commitments that reach not only customs authorities, but various government agencies involved in foreign trade. There are important commitments for the use of technologies in the processing of exports and imports in order to reduce times and costs of operations. These are measures related to the use of electronic documents, electronic payments, interoperability between unique foreign trade windows and automation in risk management, including the use of “machine learning” and artificial intelligence. There is also a section for the treatment to be given to agricultural products, of special interest to Brazil and the United States, which are major exporters in this sector.

The document also foresees that the countries will work together to conclude a Mutual Recognition Agreement for their Programs of Authorized Economic Operators (OAS).

The text is the most advanced in the area negotiated by Brazil and one of the most ambitious chapters on trade facilitation ever negotiated globally, going beyond the commitments entered into under the WTO Agreement on Trade Facilitation.

Good Regulatory Practices

In turn, Annex II, on good regulatory practices, meets recent internal measures adopted by Brazil. “Good regulatory practices” – or “good regulatory practices”, in Portuguese – are internationally recognized processes, systems, tools and methods for improving the quality of regulation, that is, the State’s intervention in economic activity.

The Protocol of Good Regulatory Practices negotiated with the United States is an important step in the recent evolution of the development and incorporation of instruments of good regulatory practices in Brazil and is in line with the efforts of the Federal Government to make the business environment in Brazil more transparent, predictable and open to competition, ensuring that State intervention occurs only when necessary and is not too burdensome for society, as established by Law No. 13,874, of 2019 (“Economic Freedom Act”). Regulatory inefficiency is estimated to generate an approximate cost of R $ 200 billion annually for Brazilian society. It is a modern text with binding commitments on the subject, in addition to providing a guarantee for the adoption of similar practices in one of the main markets for Brazilian exports and investments.


Annex III, which deals with Anti-Corruption efforts, bilaterally reaffirms the hard core of the legislative obligations to which Brazil and the United States are linked multilaterally, especially within the scope of the United Nations Convention against Corruption (2003), of the Inter-American Convention against Corruption (1996) and the OECD Convention on the Corruption of Foreign Public Officials in International Business Transactions (1997).

The scope of the said Annex, in line with recent initiatives by Brazil, expands, beyond the strictly criminal sphere, domestic action and international anti-corruption cooperation, by also encompassing the civil and administrative spheres. It is a relevant evolution in the tasks of combating, through asset recovery, the central axis of organized criminal chains: their financial flows. The text therefore reinforces the joint commitment to fight corruption.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure is not perfect.

MIL Translation OSI