1. 16 th Joint Meeting of Brazil-Japan Economic Cooperation Committee Carlos Mariani National Confederation of Industry

2. Bilateral Trade in perspective: balanced numbers - Fast and sustainable growth during the last decade - Decline in 2012, specially due to Brazilian exports prices of basic products - Bilateral trade in 2013: growth in exports (+8%), but imports declining (-15%)

3. Trade composition: What changes can we expect in the short term? Brazilian exports to Japan Brazilian imports from Japan

4. Japanese companies: important investors in Brazil Japanese Foreign Direct Investments in Brazil US$ 4 billions (Acquisition of Schincariol) US$ 1,2 billion (joint venture in Australia) US$ 1 billion (New factory in Goiás) 2011 – 2012 investment announcement US$ 50 millions (expansion of factory in São Paulo) 2011 – 4th largest investor (US$ 7.6 billions) 2012 – 10th largest investor (US$ 1.5 billion)

5. Trade and investment complementarities between both economies remain But, what has advanced and what’s missing to advance more?

6. Some issues on trade and investments have advanced Transfer Price legislation in Brazil: A new law passed in 2012 defining calculation methods for Transfer Price. Japanese companies with investments in Brazil were very active. Pork meat from Santa Catarina: Meat exports started to be shipped this year. Digital TV standard: More countries adopted Brazilian-Japanese digital TV standard.

7. To strengthen and work on a clear bilateral agenda of obstacles and opportunities to increase trade and investment EPA Ways to advance more Advantage: shorten results Disadvantage: limited results Advantage: very broad market access coverage Disadvantage: sensitive issues for both sides

8. Reasons to discuss an EPA Broad scope of trade, investment and cooperation Multiplication of bilateral agreements Need to diversify exports to Japan and intra firm trade Question: Does Brazil and Japan see each other as strategic partners for an Agreement? Japan and the Transpacific Partnership (TPP) Global and regional value chains

9. Brazilian strategy for trade agreements: Is it time to change? Is Japan on the list? - Brazil and Japan: low market-access agreements currently in force - Concerns about Brazil’s economic isolation

10. MERCOSUL – European Union Countries are finalizing their lists of goods to exchange with European Union, probably in the end of the year; Status MERCOSUR shall continue to be the institutional structure for Brazil to negotiate, but the tariff reductions of MERCOSUR’s new agreements can occur in different speeds in order to advance extra- regional negotiations. There are already precedents. Flexibility to negotiate

11. The feasibility of EPA needs a comprehensive evaluation from CNI and KEIDANREN.

12. Tariff issues: sugar, ethanol, metal, wood and furnitures, processed food, fruit and vegetables, fish, processed soybeans Non tariff issues: bovine, poultry, fresh fruit. Biofuels: Ambitious policies in Japan to stimulate the use of biofuels in its energy matrix. Trade facilitation cooperation (single window, for example) Subsidies: avoidance of subsidies in aircraft industry. Issues affecting trade and investment between Brazil and Japan Demands from Brazil

13. Infrastructure: stable and predictable regulation in infrastructure projects; Taxation: Other taxation issues inside Brazil; Biofuels: stable domestic policy for biofuels in Brazil; Visa requirements for business, researchers and students (important issue for both sides). Demands from Japan Issues affecting trade and investment between Brazil and Japan

14. Trade and investment relations are mature. But need to revert the recent fall trend; There is room for more private and public sector engagement to strengthen and work on a systemized business agenda; A serious discussion on a free trade agreement between Mercosul and Japan needs to assess its feasibility. Conclusions: