Session 4: EU-Brazil: Harvesting business opportunities
Wednesday 18 May 11 - 02:00 pm to 03:15 pm
Type : Interactive sessions
Moderator : Rui Faria da Cunha, Executive Manager - Brazilian Business Affairs, Europe
Speakers : Christian Morales, Vice President of the Sales and Marketing Group and General
Manager - Intel (EMEA) -Geraldine Kutas, UNICA - Luís Florindo, Executive Director - aicep Portugal
Global - Luiz Fernando Fuchs, President for EMEA - Embraer - Marc Vanheukelen, Head of Cabinet
of Trade Commissioner de Gucht
The session took an indepth look at the opportunities and challenges Brazil and the EU hold for each
other. The EU Brazil strategic partnership established in 2007 changed the nature of bilateral relations
in a more formal context. After the 2008 global financial meltdown, businesses on both sides pushed
for acceleration of the EU-Mercosur trade talks which would complement bilateral trade and political
ties as well as cooperation on a region to region basis. The trade aspect of the ongoing EU-
MERCOSUR negotiations would in particular have an impact on the EU-Brazil trade and investment
relationship, Brazil being the largest trading partner of EU in Latin America. EU trade with Brazil has
lately been decreasing with benefit to the US, China and eventually, India. Nonetheless, cooperation
through the trade agreement with Mercosur will be challenged by some sectors in the European
economy especially the agriculture sector. On the Brazilian side a key challenge relates to its
currency overvaluation which makes exports less attractive. In the long term, the EU has a major
challenge to guarantee that Brazil is its major partner in Latin America lest the EU risk losing its share
to the USA, China and India.
Christian Morales, Vice President of the Sales and Marketing Group and General Manager -
Intel (EMEA) EU, Middle East and Africa –
Focussed on the role of ICT in transforming Brazil to a knowledge based economy. Efforts over the
years through targeted investment in communications and an ‘internet economy’ have resulted in
th
Brazil becoming the 4 globally in terms of usage of ICT, more competitive and efficient. He threw
light upto the increasing number of start-ups which are emerging in the huge Brazilian market, which
are simultaneously looking at the Mercosur and Latin American countries, These companies are
beginning to leave a world wide footprint, and there is potential to team up with European enterprises.
Nonetheless, he assured that there is certainly much more to be done as South America has not been
much of a focus for European SME’s but also where co-investment will open good opportunities.
While there is no particular area which is weak, there is a need to improve access to internet.
Geraldine Kutas, Head of International Affairs of Brailian sugarcane assoc, UNICA
Stressed upon the opportunities that Brazil provides as a model and as a source of clean renewable
energies. She highlighted that the Brazilian energy matrix is one of the cleanest in the world where
almost 50% of its energy supply comes from renewable energy sources. Biofuels play a clear role in
Brazil’s energy supply and exports, a sector which has attracted investment from many European
firms. Underscoring that Brazil’s has a positive contribution to make to Europe’s 20/20/20 targets,
without replacing energy sources in Europe, she maintained that it is essential that Europe open its
markets to Brazil with much room and space to replace oil based products. In the same vein a
European tariff of €19 cents on a litre of ethanol is seen as primitive from Brazil’s point of view.
Luiz Fernando Fuchs, President for EMEA – Embraer
Underscored the attractiveness of Europe as a very big market for Brazilian ivestment and in
particular the expansion of his enterprise into Portugal with 2 new firms. Embraer has been growing
steadily in Europe contributing to Brazil-EU trade ties. He mentioned that while their strength comes
from the use of cutting edge technologies, the global meltdown of 2008 did have an impact on their
expansion in Europe.
Luís Florindo, Executive Director - aicep Portugal Global spoke on the role of Portugal in
contributing to relations with Brazil. In this sense, Lisbon not only functions as a business hub of
Europe to Brazil, but has a good understanding of Brazil, where historic ties and language play a key
role. In terms of what precisely Portugal offers, he mentioned the human factor as a key attracting
element, besides focus on infrastructure development, and a competitive location for manufacturing or
services at an attractive cost. That said, the country is affected more by micro economic factors than
macro economic factors and a key challenge lies in convincing those international firms to come to
Portugal who do not already have a presence there.
Touching upon key bilateral trade and investment figures, Marc Vanheukelen, Head of Cabinet of
Trade Commissioner de Gucht underpinned the true strategic value of Brazil to the EU. He
mentioned that there still remained a lot of potential to enhance relations, but certain sectors retain
sensitivities, like agriculture, and in particular beef and poultry for instance. On MERCOSUR, Mr.
Vanheukelen mentioned that this deal would be quite far reaching especially in terms of investment.
He highlighted that signing an investment treaty with Brazil still remains problematic, since Brazil has
never gone down the path of bilateral investment treaties, and does not provide legally binding
investment protection for foreign investors. He also underscored the strong likelihood for the EU-
MERCOSUR agreement to be signed given that the industry in Europe is stoutly in favour of the deal,
and on average the current European Parliament has shown compelling tendencies in favour of free
trade.