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Brazilian President Rousseff Removed from Office; New President Expected to Favour More Pro-Trade Policies

Brazil has faced a difficult and unstable political environment during the first eight months of this year. Two-thirds of the lower house of the Brazilian Congress approved a motion in mid-April to impeach President Rousseff on the grounds of misrepresenting Brazil’s fiscal performance prior to the presidential election in 2015 in order to boost the image of her government. The Brazilian Senate on May 12 voted 55-22 to allow the impeachment charges to proceed to a trial, which resulted in the automatic suspension of Ms. Rousseff’s presidential powers for a period of 180 days.

Ms. Rousseff was replaced as acting president by Vice President Michel Temer, who heads the Brazilian Democratic Movement Party (PMDB) and has himself faced allegations of wrongdoing. The Senate then held an impeachment trial (overseen by the chief justice of the Supreme Federal Tribunal) and on August 31 voted 61-20 to issue a guilty verdict, which resulted in Ms. Rousseff’s permanent removal from office. However, in a separate vote the Senate voted 42-36 not to bar Ms. Rousseff from public office for eight years, which would ostensibly allow her to run again for office in the future. As a result of these developments, Mr. Temer will serve as president for the remainder of Ms. Rousseff’s term through the end of 2018.

President Temer is expected to pursue a more fiscally conservative and pro-business and pro-trade agenda during his term in office that may potentially include the negotiation of various trade agreements, although it is uncertain whether he will be able to garner enough political and popular support to implement effective reforms. A recent effort on the trade arena is the revamped version of the National Plan for an Exporting Culture (PNCE) that was launched by Brazilian Minister of Industry, Trade and Services Marcos Pereira on 4 August. The objective of this programme is to increase the number of Brazilian companies involved in international trade in an effort to boost exports. Prior to the launch of the PNCE, the Ministry of Industry, Trade and Services (MDIC) identified more than 3,000 companies from different sectors of the economy that could benefit from the plan. Those companies will receive training, consulting services and marketing advice for the proper identification of markets.

The PNCE was originally created in 2012. However, the new process significantly modifies the programme by decentralising the decision-making process and allowing for greater input from the private sector on the projects of greatest interest, in addition to speeding up the process for the government to approve these projects. The revamped programme specifically outlines five stages for business development: awareness, market intelligence, improvement of products and processes, trade promotion, and distribution. In addition, the programme can provide consulting in the areas of financing, qualification and management.

In conjunction with the PNCE, Minister Pereira announced a regional industry strengthening programme for the region of Espírito Santo in Brazil. This region is responsible for 40.5 percent of Brazil’s gross domestic product and its exports represent 35.3 percent of regional GDP. The regional programme will focus on the metallurgy, food and beverage industries. Its main objective is to provide companies in the region with support from different state and government agencies in order to improve their productivity. Similar programmes for different industries of small and medium size in other regions of Brazil are being launched under the “More Productive Brazil” initiative, which represents a partnership between MDIC, the National Service for Industrial Learning (Senai) and the National Confederation of Industry (CNI).

Content provided by Picture: HKTDC Research
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