Can Brazilian beef re-enter the U.S. market?

Author

Gustavo Ribeiro
March 11, 2019 • Reading Time: 5 minutes

Good morning! Can Brazilian beef re-enter the U.S. market? Congress returns from holiday. 

Can Brazilian beef re-enter the U.S. market?

Next week, when President Jair Bolsonaro heads to Washington to meet with Donald Trump, he

will be flanked by Agriculture Minister Tereza Cristina. She has the mission of negotiating the re-opening of the U.S. market to Brazilian beef—which has been banned since 2017 due to “signs of systemic failure of [sanitary] inspections.” But U.S. Secretary of Agriculture Sonny Perdue might not even be in Washington when the Brazilian delegation arrives—a sign that lifting the ban will be a hard ordeal.

In 2018, the World Organisation for Animal Health (OIE) declared Brazil free of foot-and-mouth disease with vaccination. However, the U.S. only recognizes 14 states as free of the disease. Brazilian producers claim they have taken every measure demanded by U.S. health authorities to correct sanitary issues. However, Ms. Cristina believes the success of negotiations depends less on beef, rather on whether the U.S. gets to increase its exports of other products to Brazil, namely pork, sugar, corn-based ethanol, and wheat.

Why is the U.S. market so important to Brazil’s producers?

From a financial standpoint, the U.S. market is not that significant for Brazilian producers (accounting for only 3% of exports)—but lifting restrictions would bring a much-needed image boost for Brazilian beef. Since 2007, Brazil’s market share in world exports dropped from 23% to 17%. Sanitary scandals played a part, as investigations showed that many companies bribed auditors to get fraudulent permits. Producers, however, claim they are also held to higher standards due to protectionist strategies.

Congress returns from holiday

After 12 days of inactivity due to Carnival celebrations, the Brazilian Congress goes back to work today. House Speaker Rodrigo Maia expects party leaders to nominate their candidates for the directing board of the Committee of Constitution and Justice (CCJ)—through which every piece of legislation must pass before hitting the floor. If everything goes according to plan, the committee will be elected on Wednesday.

The CCJ is the first step of President Bolsonaro’s pension reform bill. According to Mr. Maia, the reform bill could reach the floor by May—for the first of two roll-call votes that require 60% of support. Many congressmen have shown skepticism with Mr. Maia’s timetable, and believe parties will use the CCJ as a tool to get their demands for cabinet positions and budgetary amendments heard by the administration.

Having the biggest bench in the House, President Bolsonaro’s Social Liberal Party gets to pick the next CCJ president, per the unwritten congressional rules. And the party has chosen Felipe Francischini, a 27-year-old rookie. Mr. Francischini will have to show his political savvy is beyond his age in what promises to be one of the toughest jobs in Congress for this legislature.

What else you need to know today

  • Space. After almost 20 years, Brazil and the U.S. have struck a technological safeguards agreement (TSA). Without such a deal, no U.S. rocket could be launched on Brazilian soil. Brazil hopes to transform the Alcantara launch center, in the northeast, into a cheaper alternative to France’s Guiana space center in Kourou, French Guiana. Closer to the Equator, the Brazilian base demands one-fifth less fuel to launch satellites into orbit. 

  • Lobbying.Governors of northeastern states announced the creation of a formal consortium to represent the region’s interests before the federal government.

  • Lula.Allies of former President Lula, who is serving a 12-year prison sentence since April 7, 2018, are hopeful that he will be transferred to house arrest. His defense team expects Brazil’s Superior Court of Justice (STJ), the second-highest in the judicial system, to reconsider part of his sentence, which would make him eligible for alterations to his sentence.

  • Corruption.After facing accusations of electoral fraud, the president’s Social Liberal Party will reportedly launch a transparency platform—a website that would publish every expense made with public money, also informing which party leader is responsible for it.

Reply

or to participate.