Search

Since the creation of the WTO, Brazil has signed more than thirty bilateral agreements on sanitary and phytosanitary matters, based on SPS Agreement principles. The main purpose of these agreements is to identify common rules, simplify import controls, harmonize certification requirements, and facilitate bilateral trade and the entry of selected products. The importance of such agreements for Brazilian exporters and their trade partners can be measured by the increase in the bilateral volume of trade exports with more than one hundred countries and the integration of medium and small-sized agricultural producers into the international market in sectors as honeybee, organic products, fresh fruits and flowers. However, the full potential of Brazil's agribusiness has yet to be fully developed, mainly due to the lack of recognition of equivalence agreements by some countries, as recommended by the SPS Agreement.

New Patent Prosecution Highway (PPH) pilot programs are being negotiated. Together with PPH pilot programs, actions on patent priority exams were in place in 2016. The first one consists of transforming the Green Patents pilot program into a definitive service offered by INPI, making it possible to prioritize patent requirements regarding the environment and green technologies. The second action is a pilot project that allows small businesses, the financial resources of which are generally reduced, to have their patent requirements prioritized.

Brazil has one of the world's cleanest energy mixes. 43.8% (2016) of primary energy sources are renewable, compared to a world average of 14.3% and 9.5% in OECD (2015) countries. Renewable sources will continue to account for a large share of supply, mostly due to the use of hydropower and bioenergy, including biofuels. Only 30% of Brazil's hydroelectric potential has been exploited. The potential for increased production of this renewable and affordable energy source is an integral part of the country's long-term strategy for the sector. Widespread access to affordable energy is crucial to achieve the goals of sustainable development, to promote social inclusion and poverty reduction; to advance national integration and the reduction of greenhouse gas emissions; and to improve competitiveness. Brazil is, therefore, investing significant amounts in research and in new technologies to improve the generation and distribution of energy.

Brazil also considers bioenergy, including biofuels, an indispensable tool for the expansion and diversification of the energy matrix. Nowadays, biomass electricity – generated mostly from sugarcane processing plants – accounts for about 8.8% of Brazil's total electricity energy supply. By 2024, biomass, wind and solar generation are expected to supply 20.7% of the country's electricity energy needs. In the transportation sector, the use of ethanol and biodiesel plays a key role in the pursuit of sustainable development, climate change mitigation and energy security. The Brazilian case shows that the long term and large scale sustainable production and use of biofuels are possible, and Brazil continues to work towards the creation of an international market for biofuels.

Brazil will also continue to be committed to MERCOSUR, regional integration – as mandated by its Constitution – and to strengthening and fostering new bilateral and regional trade agreements, with a view to promoting cooperation, sustainable development and mutually beneficial results.

Brazil remains open to and encourages inward FDI, which is prevalent across the economy. There are several sector-specific foreign ownership prohibitions (certain postal services, and nuclear energy) or limitations (e.g. air transport, financial institutions, health services, rural land acquisition, broadcasting and publishing media, fishing, mining, and hydrocarbons exploration). (...)

Brazil, a net exporter of crude oil with one of the greenest energy matrixes in the world, remains nearly self-sufficient in primary energy production. Its state-controlled PETROBRAS has maintained its dominant position both in upstream and downstream hydrocarbons activities. To address fuel sales-related financial losses, in 2016, PETROBRAS, a price setter in the domestic fuels market, implemented a new pricing policy for gasoline and diesel at the refinery gate. Tax incentives for oil and gas exploration and production remain in place. The requirement for a minimum 30% stake of PETROBRAS in pre-salt fields – which together with local content requirements seems to have caused development delays – and PETROBRAS' right to be the sole operator in pre-salt oil reserves were removed in November 2016. Efforts to reform the local content regime in this area are also under way. Biofuel production, an activity subject to cross subsidization elements, continued to be assisted, inter alia, through: support to sugarcane production and fuel flex cars; lending incentives to expand the industrial capacity for sugar and ethanol production; and, increased mandatory blending ratios for both gasoline and diesel. The state owned ELETROBRAS continues to play a major role in the electricity sector and an alternative bidding criterion for concessions of hydropower plants was introduced. Since 2015, a tariff flag system has been applied allowing the monthly pass through of the extra costs of generating thermal energy to consumers. Electricity tariffs, set by the regulator ANEEL, continue to ensure cross-subsidization among different consumer categories; in addition, the tax burden on end-user electricity tariffs remains significant and differs greatly across consumer groups.

Brazil remains open to and encourages inward foreign direct investment (FDI) which is prevalent across the economy despite foreign ownership prohibitions (certain postal services and nuclear energy) or limitations in certain sectors (e.g. air transport, financial institutions, health services, rural land acquisition, broadcasting and publishing media, fishing, mining and hydrocarbons exploration). (...)

(...) Restrictions on foreign investment affect some activities including nuclear power and certain postal services (Table 2.3 and Section 4.4). (...)

Table 2.3 Indicative list of FDI closed and restricted sectors, 2017
Sector/business FDI limitation
A. Closed
(...)
Nuclear energy Wholly closed
(...)