The Significance of Agricultural Commodities in USA-Brazil Trade

 Because it is the biggest and most powerful country in Latin America, Brazil has become a leading voice for developing countries when it comes to making regional and international trade policies. In their efforts to promote trade liberalization, the US and Brazil have built a good partnership. In the Doha Round of the World Trade Organization, they have tried to reach an agreement with the European Union and have set up mutual working groups to talk about trade and other issues involved. But they have different ideas about how to handle trade issues, don't agree on how to apply the Free Trade Area of the Americas (FTAA) regionally, and are both worried about some trade policies and practices. In some ways, Brazil's trade strategy is affected by economic factors. The "trade preferences" also show how macroeconomic, industrial, and foreign policy are strongly rooted. The US trade policy focuses on negotiating broad trade agreements across many areas. Brazil, on the other hand, is more concerned with fixing problems with market access, especially since it has the largest economy in South America.

Brazil shows its dedication to this principle in many trade settings, such as by pushing for changes to agricultural policies in the World Trade Organization (WTO), working to improve the Southern Common Market (Mercosul) in South America, and being against the Free Trade Area of the Americas (FTAA) because it seems to favor other countries' interests over Brazilian ones. The economy of Brazil is modern and diverse. Services make up 53% of the country's Gross Domestic Product (GDP), followed by manufacturing and industry at 37% and farmland at 9%. About 30% of Brazil's Gross Domestic Product (GDP) comes from the agribusiness sector, which includes both raw materials and finished things. This is why Brazil gives farm policies a lot of weight when negotiating trade deals. Brazil grows more sugar cane, oranges, and coffee than any other country in the world. It is also the second biggest producer of corn, soybeans, cattle, and chicken. An important part of its business is making steel, aircraft, cars, and auto parts. But it doesn't really matter when it comes to world trade. The United States is Brazil's biggest trade partner when it comes to just one country. Brazil is very against U.S. trade policies, especially the Byrd Amendment, which was overturned but will still be in force until October 1, 2007. Brazil doesn't like this policy because it assigns duties from trade remedy cases to businesses that are affected, manages trade remedy rules in an unfair way, and it thinks the U.S. is unfairly expanding free trade agreements in Latin America.

The group is also against trade hurdles that only affect certain goods, like putting limits on tariff rates on sugar, orange juice, ethanol, and tobacco. It also doesn't like the idea of giving money to cotton, ethanol, and soybeans, as well as keeping antidumping orders in place for steel and orange juice. There are some differences between the two countries, but both think that trade liberalization could bring about big benefits that everyone can agree on. Being a country that is growing, Brazil could see a big increase in both its exports and imports. So, it would be best for it to get rid of barriers to trade with other countries and further open up its economy on its own. Brazil has changed a lot because of a few main things: progress in agricultural research that has led to higher crop yields; more arable land; big investments in production technologies to grow different types of crops and forage; and a rise in the demand for food and animal feed around the world, especially in the last ten years. Brazil is different from other countries that grow grain and potatoes because it can grow two or three crops on the same piece of land in one year. Some other factors are macroeconomic policies that focus on exports, long periods of devaluation for Brazil's currency (the real), crop-specific agricultural policy incentives, stricter health and safety rules, acquiring foreign competitors, and a growing presence of multinational companies and foreign investment in the country.

In 2021, 8% of Brazil's Gross Domestic Product (GDP) came from growing crops and raising animals. The Center for Advanced Studies on Applied Economics at the University of São Paulo says that Brazil's agriculture and food business makes up 29% of the country's GDP, or $1.8 trillion in 2021 dollars. This includes activities like processing and distributing food. The most recent farm census in Brazil says that 15.1 million people work in rural agricultural businesses, which is 15% of the total labor force. When measured in U.S. dollars, Brazil's agriculture, which includes raising crops and animals, grew at an average rate of 8 percent per year from 2000 to 2020. Agricultural output doubled and animal output tripled during this time. Since the middle of the 2000s, Brazil has changed a lot. It used to mostly ship tropical agricultural goods like coffee, sugar, citrus, and cocoa, but now it is a major world supplier of goods like soybeans, cereals, cotton, ethanol, and meats. Soybeans are an important part of Brazil's agricultural business and have helped the country become a major supplier of agricultural goods around the world. Tobacco exports from the United States to Brazil made up 40% of all exports that year. At the moment, Brazil's soybean exports are 20% higher than the U.S.'s. About half of the world's soybean trade goes through Brazil, even though crops are only grown on 17% of the country's fertile land. Brazil's farm exports, which include processed goods, have grown at an average rate of 9.4% per year from 2000 to 2021. These exports make up 37% of all the exports that Brazil makes. At the moment, Brazil sends important agricultural goods and foods to 222 countries and regions. This makes it the third biggest exporter of agricultural goods in the world, after the US and the European Union (EU).