Brazil: Leading the Brics

Brazil: Leading the BRICs

Brazil had sustained an average annual GDP growth of 4% since 2000.Between 2002 and 2009, inequality and poverty had declined significantly and more than 30 million Brazilians had advanced from lower income strata to the middle class.

Goldman Sachs expected the BRICs to be among the five largest economies in the world by 2030, forecasting a growth rate of more than 5% per year for Brazil.

Brazil in the world Economy

In 1930,a former republican official, Getulio Vargas, overthrew the regime and by 1937gave himself dictatorial powers.

Juscelino Kubitschek, elected in 1955, continued policies of state-run industrialization, with extensive government spending on infrastructure ,

including building the new capital ,Brasilia. Inflation jumped from 25% in 1960 to more than 100% in 1964.

In 1964 Brazil was opened to foreign direct investment an expansion in manufacturing and services generated GDP growth averaging more than 10%annually.

Trade and Globalization

After Brazil joined the WTO, over time, the number of Brazilian firms on a list of the world’s 2,000 largest public companies grew from 13 in 2003 to 33 in 2010.

By 2008,Brazil was in the top 20 countries ranked by international trade.

WTO Cotton Dispute

Beyond the Doha round of trade negotiations, the Brazilian government had opened another line of attack on agricultural policies in developed countries through the WTO dispute process. After consultations with the United States in 2002 regarding cotton subsidies failed to reach a compromise,the Brazilian government initiated a formal dispute.

Programs designed to improve the soil in the vast cerrado (savannah), to develop better crops, and to support farming technology underpinned a 365% increase in the value of Brazil,s agricultural exports between 1996 and 2006.

Cotton farmers improved yields from below 200kg/ha in the 1980s to 1450kg/ha by 2009.

Brazil’s Claim

In 2003, a consortium of four African cotton-producing countries-Benin, Burkina Faso, Chad and Mali-proposed a global agreement to end all production-related support for cotton growers

WTO rulings The WTO’s dispute settlement body issued an initial ruling in September 2004, finding that U.S cotton policies had result in serious prejudice to Brazil’s interests in the form of price suppression in the world market.

 In 2005, the WTO appellate body held that price contingent subsidies all acted to suppress international prices and that domestic support measures, including production flexibility contracts and direct payments, violated the AoA.

Despite several U.S policy changes in 2005 and 2006, notably elimination of step 2 payments, Brazil requested evaluation by a WTO compliance panel. According to Brazil’s analysis, the United States continued to provide subsidies to cotton producers worth $3 billion annually. The compliance panel ruled in December 2007 that the United States had acted inconsistently to phase out prohibited subsidies and countervailing measures.

Brazil’s Victory

Another round of appeals, WTO arbitrators ruled in August 2009 that Brazil could impose a total of $829 million in countermeasures, reduced from Brazil’s $3 billion claim.

On March 15, 2010, CAMEX also proposed IP retaliation measures: shortening patent and copyright terms on movies, software, and pharmaceuticals and other chemicals; permitting Brazilian firms to use IP without the patent holder’s consent; suspending laws prohibiting importation of infringing products; and creating a special IP registration tax.

In June 2010, the office of the United States Trade Representation signed an agreement under which the United States Trade Representative signed an agreement under which the United States would transfer $147.3 million annually as technical assistance to Brazil’s cotton sector while pledging to avoid any trade-distorting cotton subsidies in the 2012 farm bill,which would be discussed in quarterly meetings of agriculture and trade officials from both countries.  

Intellectual Property and Health Care Policies in Brazil

Brazil’s 1809patent law made it the fourth country in the world to establish intellectual property (IP) rights, Under 1946 constitution, however, Brazil banned product patents for pharmaceuticals, other chemicals, and foodstuffs. In 1970s,Brazil had become notorious for failing to enforce IP rights.

A 1999 law established a prior*consent mechanism under which patents for pharmaceuticals and biomedical products also had to be authorizes by public health officials at the National Sanitary Supervision Agency(ANVISA).

AIDS and Public Health

When HIV/AIDS began spreading worldwide in the early 1980s,Brazil was considered at high risk from factors including lifestyle,tourism, and weak public health infrastructure

In 1992,the world Bank forecast that the AIDSepidemic in Brazil would rank among the world,s most severe, with more than1.2 million peope infected with HIV by 2000

Brazil-Merck price negotiations

Brazilian officials intensified negotiation with Merck after they received discounts from the company in 2005.Over the course of 16 official meetings, Merck lowered its price again to $570 per patient per year. Brazilian health and trade officials demanded better citing generic suppliers ready to provide the drug $240 per patient per year.