BR-USA – Defense Industry Day

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The Editor

A meeting to find ways to improve the commercial ties between Brazil and the United States was held in Brasília on Friday September 30. The immediate purpose of the meeting was to set an agenda of mutual interests and to discuss possible new business relationships between the defense industries of the two countries. The meeting, titled “A Dialogue between the Defense Industries of Brazil and the United States,” was held at the Ministry of Foreign Affairs, in the Itamaraty Palace, in Brasilia.

Opening the meeting, Brazil’s Minister of Defence, Raul Jungmann, spoke of the importance of this first step in significantly strengthening the relations between the defence industries of the two countries. “We can design a common strategy of trade promotion that will increase our joint overall access to the international market,” he said.

The event, sponsored jointly by Brazil’s Ministries of Defense, Foreign Affairs (MRE), Industry, Foreign Affairs and Trade Services (MICS) and the Embassy of the United States, resulted in a Letter of Intent (LoI), signed by representative of the two countries to help intensify the dialogue among their respective defence companies.

In addition to signing a document that sets up regular meetings between the defence industries of the two countries, several panel discussions were presented during the meeting describing the reality faced by the defence industry of each country, as well as the major challenges and strategic projects they face in the near future.

Liliana Ayalde, the US ambassador to Brazil, spoke of the importance of having the representative of the business sectors of the two countries meet face to face. “The most important event of the day is that the various parties needed to create truly bi-national projects are sitting here together. This is not just for today, it is a process that is being institutionalized to define the future,” she said.

The Under Secretary of Commerce, Ken Hyatt, made it clear that partnerships with Brazil in the defence area are growing. “This dialogue is a very important step. It opens a new avenue of business cooperation and reflects the requests by the private sectors that we receive, both in Brazil and the United States,” he said.

Among the topics that were discussed was the issue of export compliance, which deals with the instruments of control that each country uses to monitor the sales of defence equipment. Both Brazil and the United States have adopted a set of rules and regulations to prevent the illegal trade in arms. On another panel, product certification conditions in each country were addressed to try to design a mutually recognised format that would facilitate trade in defence equipment between the two countries.

When dealing with changes in legal framework required for the industry in Brazil, the Secretary for Defense Products, Flávio Basílio, pointed out that this is one of the ways to improve business intelligence in the industry. “This is an significant step forward that will permit greater security and make business relations more attractive so that we can move forward in creating strategic partnerships,” he said.

The Brazilian Armed Forces presented some of its strategic projects so that US companies can learn how they can participate in the bidding processes and leverage their businesses. The representatives from the US companies revealed some of their major plans in the defence area in the medium term to their Brazilian counterparts, showing the Brazilian defence industry some of their options for participation in the US global supply chain as a supplier of component products for the segment.

There were also discussions of the future strategic priorities of the two countries. Each country discussed the possible risks and threats that it faces that could require the production of certain types of equipment so that the industries could be alert to these new demands.

The president of the ABIMDE (Brazilian Association of Defence and Security Materials Industries), Frederico Aguiar, pointed out that there are still many points that remain to be discussed, especially with regard to the US laws and legal requirements. Still, he considered the meeting positive and said that it will certainly open doors and new opportunities. “I leave here very optimistic because the US accounts for nearly 52% of the global market, and the entry of Brazil in this market is important because of our geopolitical position with regard to target markets that are sometimes difficult even for them” he said

Summary of DID Letter of Intent (LOI):

The Defense Industry Dialogue is intended to stimulate bilateral defense trade and investment, within an overall framework focused on developing mutual understanding and strategies to improve the competitiveness of each country.

Through regular meetings, the Dialogue will facilitate the exchange of information and encourage public-to-private, public-to-public, as well as private-to-private discussions that address how the United States and Brazilian Government agencies and private sectors can promote defense trade and investment as a means toward economic growth; improve competitiveness through innovation and entrepreneurship; and share best practices, promote knowledge exchanges, and provide assistance in key areas.

Signatories:

– Acting Under Secretary of International Trade, US Dept of Commerce, Ken Hyatt;
– Principal Director for Western Hemisphere Affairs, Office of the Secretary of Defense for Policy, US Dept of Defense, John Kruel;
– Secretary of Defense Products, Ministry of Defense of Brazil, Flavio Basilio;
– Deputy Secretary of Foreign Trade, Ministry of Industry, Foreign Trade and Services of Brazil, Abrao Neto.