Brazil: More than a Beach Destination—A Partner for America's Energy Future
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Once the land of bikinis and exotic cocktails, Brazil has transformed into a global economic and energy powerhouse, as evidenced by real estate prices that exceed even those in New York City. U.S. companies ranging from land-movers like Caterpillar, to service providers like UPS, are finding Brazil to be a lucrative, but not simple, market for global growth potential.
In order to overcome some of the challenges inherent in doing business with Brazil, companies look to our government to help smooth out the wrinkles. I am happy to recognize that they are doing just that, and to enthusiastically applaud their efforts.
One such initiative was launched today by Deputy Secretary of Energy Daniel Poneman in Brazil, the Strategic Energy Dialogue, or the SED, an initiative announced in March by Presidents Obama and Rousseff. In the words of the Obama administration: The SED “will address our mutual interest in the development of safe, secure and affordable energy in an environmentally sound way, including oil, natural gas, biofuels, clean energy and civilian nuclear energy.”
Leading up to the launch, the Brazil-U.S. Business Council (BUSBC) has been working closely with the National Security Council and the Departments of Energy, Commerce, and State, informing them of the challenges faced by companies trying to work in Brazil, and proposing measures to improve commercial relations. In particular, the BUSBC urges the two governments to take action in the following areas:
- Ethanol: For the Obama administration to work with the U.S. Congress to eliminate the 54 cent per gallon import tariff on Brazilian ethanol and the 45 cent blenders tax credit subsidy;
- Oil and Gas: For the Rousseff administration to work with the Brazilian Congress to provide more flexibility with regard to exclusivity rights for pre-salt operation and on local content requirements;
- Reinsurance: For the Rousseff administration to rollback or at least suspend implementation of recent rules that discriminate against foreign reinsurance companies, raising the cost of energy and related products for local consumers;
- Nuclear: To pave the way for Obama and Rousseff to sign a Civil Nuclear Agreement during their next meeting;
- Aviation: Sign a U.S.-Brazil Joint Aviation Program including an aviation biofuels component;
- SmartGrid: Continue progress on creating internationally compatible SmartGrid technical regulations, voluntary standards, and conformity assessment mechanisms; and
- Visas: Create a working group to deal with visas for highly-skilled energy professionals.
The BUSBC commends the administration for their engagement with the private sector, and for their efforts to advance the bilateral commercial relationship. Let us hope that the discussions not only produce substantive results on these issues above, but also serve as a platform for long-term engagement.