Trade issues top agenda for Reagan's trip to Brazil
Sao Paulo, Brazil — Airplanes, orange juice, and blue jeans.
These and dozens of other products are on a list of exports Brazil would like to sell in greater quantities to the United States.
But many US manufacturers and producers are protesting. They are calling on the Reagan administration to slap new duties on the Brazilian goods, in effect putting a protectionist barrier around the US.
This issue, perhaps the most important in current US-Brazilian relations, is certain to be a prime topic as President Reagan arrives in Brazil late Tuesday for talks with President Joao Baptista de Oliveira Figueiredo and other Brazilian officials.
Mr. Reagan is bringing a high-level US trade group with him, suggesting the importance he places on the issue of trade between the two nations. Included in his entourage are US trade representative William Brock, Treasury Secretary Donald Regan, and Secretary of State George Shultz.
Both Brazil and the US recognize each other's problems on the trade front. Brazil needs to boost exports while cutting imports in order to pay off a foreign debt of more than $85 billion, much of it owed to US banks. But this is a moment of softened markets around the world for Brazilian goods.
Brazil makes the point that of the $261 billion in merchandise and service imported by the US each year, scarcely 1.5 percent or $4 billion comes from Brazil. It would like to increase that percentage.
The US has its own problems. A weakened economy has left some 10 percent of the US labor force out of work. And imports of less expensive Brazilian goods - those airplanes, blue jeans, and orange juice - threaten to lay even more North American workers off. The irony in all this is that Brazil's thriving export-oriented economy reflects a successful application of US advice in the late '60s and early '70s - that Brazil industrialize and step up exports.
In the past decade, Brazilian exports have risen more than 500 percent. Brazilian goods compete successfully in both the US domestic market and in the third world.
Take the twin-engine Bandeirante aircraft, a 20-seat turboprop made by the Empresa Brasileira de Aeronautica (Embraer), which is selling well on the US commuter market in the Southwest and Florida. At least 50 of the craft were sold in the last 18 months to US firms.
Fairchild Swearingen Corp., manufacturer of the Metro II commuter plane, has been fighting a losing battle to get the Commerce Department to impose countervailing duties on imports of the Bandeirante, claiming it was unfairly subsidized by the Brazilian government.
As for orange juice, Florida growers want a high duty on frozen Brazilian concentrate imports. The Floridians claim the Brazil product undercut their markets in the US because the Brazilian concentrate, despite transportation costs, is cheaper than the US product.
But the US consumer benefits from these cheaper Brazilian products - particularly if they are good, as most of the Brazilian goods are.
Brazilians understand the protectionist issue, however, for they have imposed stiff protectionist barriers around many of their own products to protect their own industries and jobs. There is some evidence that in preliminary talks before the Reagan visit - which will stretch from Nov. 30 to Dec. 3 - this whole issue was explored carefully, but it is unclear whether there are many concrete solutions.