Trump promises to ‘work on a free trade agreement with Brazil’

President Donald Trump on Tuesday said he will pursue a United States trade agreement with Brazil. The move suggests a friendly relationship with President Jair Bolsonaro could help lower trade barriers between the two biggest economies in the Americas.

“We’re going to work on a free trade agreement with Brazil,” Trump told reporters at the White House, without giving details.

Trump raised the possibility of a trade deal as US Secretary of Commerce Wilbur Ross addressed business leaders in Sao Paulo ahead of a Wednesday meeting with Bolsonaro in Brasilia.

The US and Brazil have drawn closer since Bolsonaro took office in January after the far-right former army captain’s election campaign, which was modeled after that of Trump. The two countries exchanged more than $100bn in goods and services last year.

“Brazil is a big trading partner. They charge us a lot of tariffs, but other than that, we love the relationship,” Trump told reporters, citing what he called his great relationship with Brazil and praising Bolsonaro.

Marcos Troyjo, Brazil’s deputy economy minister for foreign trade, told Reuters his country has “ambitious” goals to facilitate trade and boost investment between the two countries, especially in infrastructure.

But Troyjo said any talks on tariffs would have to include Brazil’s partners in the South American customs union Mercosur, which includes neighbours Argentina, Uruguay, and Paraguay.

Ross said a trade deal between Mercosur and the European Union, reached in principle last month, should avoid “poison pills” that would obstruct a possible US accord.

“It’s important not to put roadblocks in the way of a US-Brazil free trade agreement that inadvertently might be brought up in the transaction between Mercosur and the EU,” Ross told journalists in Sao Paulo. “We have issues about standards in autos, pharma, chemical, food and a whole bunch of areas.”

The powerhouse farm sectors in Brazil and the US have occasionally found themselves at odds, including a dispute over cotton subsidies resolved at the World Trade Organization in 2014.

The US threatened steel and aluminum tariffs on Brazil and a number of other countries last year as part of Trump’s “America First” agenda, before granting a permanent exemption to Brazil.

This year, Brazilians have pushed for greater access to the US sugar market while negotiating a potential extension of its restrictions on US ethanol imports.

Brazil has also pushed US authorities to lift a 2017 ban on fresh Brazilian beef imports.