Many contend that the deficit is largely a result of U.S. protectionism in many of its key export areas, particularly steel, orange juice, sugar and footwear. I don't dispute that this hasn't been a factor, but 1 think it is time to examine this situation in closer detail. While the U.S. does employ tariffs, quotas and other measures to protect its businesses in many of these areas, it remains the most open market in the world. Brazil's exports are negatively impacted by these protections, but they are not the most significant reason for Brazil's trade deficit with the United States. The disconnect between Brazil's strengths as an exporting nation and the areas of strongest growth in U.S. demand is undoubtedly the most important reason for the trade imbalance.
Brazil also faces stiff competition from other nations in the U.S. market.
The bargain footwear market is a good example of how Brazil's market share in the United States has been eroded, not because new trade barriers were raised, but by a more agile and lower cost competitor, in this case China. Finally, Brazil has yet to create a recognized national brand in the United States, like Colombia has done in the coffee market or the Italians or English have done in the footwear market. I would argue that partnership between Brazilian and U.S. business in both of these areas is essential. The Chambers Brazil-U.S. Business Council has been working to develop links between key players in the Brazilian public and private sectors and businesses in the U.S. states with strongest ties to Brazil. The Brazilian private sector's increased support and involvement in this important initiative would be an ideal way to develop partnerships that would facilitate entry into new markets in the United States.