In this Spotlight, we ask: In what five key ways can the United States and Brazil work more effectively together to strengthen bilateral trade and foreign direct investment?

Great expectations surrounded the March 2019 meeting between Presidents Jair Bolsonaro and Donald Trump in Washington. Among the top agenda items: how to inject new momentum into the bilateral commercial relationship. The two leaders did not disappoint. A number of trade-and-investment-related commitments were announced, and have the potential to significantly deepen two-way commerce and capital flows. Now, the next step is implementation of pledges made in Washington. Seizing this historic yearning for greater economic integration between the United States and Brazil would pay historical dividends for two countries that share important democratic values and historical backgrounds, and have prosperous, longstanding and mutually beneficial trade and investment relations.

The launching point for a deepening of commercial ties is significant: two-way trade in goods and services amounted to more than $100 billion in 2018. Brazil is ranked among the top-ten destination markets for US goods worldwide; in Latin America, it’s the United States’ number-two destination. For its part, the United States is Brazil's second-largest overall trading partner, accounting for more than 50 percent of Brazilian exports in services, and is the most important endpoint for Brazilian manufactured products. Bilateral trade is highly complementary and takes place mostly between companies operating in both countries, which reflects a substantial level of reciprocal investment and creates a vast number of jobs.

The stock of mutual foreign direct investment (FDI) in both economies is noteworthy and poised for growth. In 2015, US companies held a total asset value of US$268.3 billion and created more than six hundred and fifty thousand jobs in Brazil. Meanwhile, Brazilian affiliates held US$102.2 billion in assets in the United States, and employed more than seventy-four thousand people there. Capital flows from Brazil to the United States have increased more than tenfold in the last twenty years, making the United States the most relevant destination for Brazilian companies investing abroad.

Although remarkable, the trade and investment relationship between the United States and Brazil is still underperforming. The silver lining—as shown during President Bolsonaro’s state visit—is that there are numerous ways for both countries to strengthen their economic and commercial ties. On the trade front, important inroads were made with potential new opportunities for Brazil-bound US wheat exports and for US-bound Brazilian beef exports. New measures to facilitate travel will make business trips easier, and US support for Brazil’s accession to the Organization for Economic Cooperation and Development (OECD) is a welcome, and important, signal of confidence in Brazil’s economic modernization.

This Spotlight builds on bilateral momentum to explore five key avenues that could generate meaningful results for, and unlock the potential of, the bilateral relationship in terms of trade and investment. These are not silver bullets or miraculous panacea for the complex challenges that exist, but rather flexible, pragmatic, and feet-to-the-ground options available for further exploration.