If you have flown on a regional jet lately, you know something about US economic ties with Brazil. Many US airlines use Embraer planes, made in San Jose dos Campos, Brazil, for short hauls among US cities. In fact, the US is the second largest destination for Brazilian exports, after China. In addition to aircraft, we buy oil, iron ore and steel, soybeans, and, of course, coffee from Brazil. The value of all goods imported from Brazil exceeded $27 billion in 2013 and the value of imported services reached almost $7 billion in 2012, the last year for which data are available, with business and professional services, royalties and license fees, and tourism leading the way. Of course Brazil is also an important buyer of goods and services produced in the US. Brazil ranks 7th as a destination for US exports, with Brazilians buying some $70 billion worth of goods and services from US producers.
Brazil is also host to a large number of US multinationals. From Bank of America and Cargill to Time Warner, Yahoo and Westinghouse, US investment in Brazil is substantial. Last year alone, some $64 billion dollars of foreign direct investment went to Brazil and about 14 percent of that came from the US. Brazil offers an attractive market for the sale of many manufactured goods and provides access to a wealth of natural resources. Petrobras, the Brazilian national oil company, made the largest oil discovery in the Western Hemisphere some 30 years when it located oil deep in the ocean floor off the Brazilian coast in 2006. This discovery of oil at a depth of some 7,000 meters below sea level has led to a wave of technological innovation and significant interest from US investors. Increasingly, Brazilian firms are investing in the US, too. Gerdau, a leading Brazilian steel maker, has plants in the Midwest. Odebrecht not only builds stadiums for the 2014 World Cup in Brazil but arenas, airports, and transportation systems in the US. And Brazilian buyers have become significant players in New York and Florida real estate markets. Trade and investment between Brazil and the US has grown considerably over the last decade, despite the financial crisis and sluggish global economic conditions. With the World Cup on our screens, one can only assume these trends will continue while increasing travel and tourism builds more personal connections.
–Dr. Melissa Birch is an associate professor in the School of Business at the University of Kansas. She focuses on business in Latin America.