Brazil Abhinav

8/3/2019 Brazil Abhinav

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Brazil: Leading BRICs

Group 4:Murali

AbhinavPawanDashmeshNiranjan


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Dilma Rousseff

Elected as president onJan 1,2011

Born in an upper-middle class family

Minister of energy in2002

Promoted by Lula as apresidential candidatein 2010


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Exported gold and lumber in 16th centuryapart from tobacco, sugar and coffee

Declared independent in 1822 andestablished trade relations with northernEurope, USA and Latin America

In 1930 Getulio Vargas overthrew regimeand became a dictator by 1937

ISI to protect domestic producers and keep

currency stable Expanded into oil and mining and created a

bank to provide subsidized loans forinfrastructural projects


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Experienced significant balance-out-payment

crisis, when coffee prices dropped in 1950s In 1964 opened to FDI and introduced

radical measures to control inflation

In 1985 military regime collapsed andtransformed to democracy

In 2010 alone investment of more than $30billion

Goldman Sachs expected BRICs to beamong 5 largest economies by 2030

Contd..


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Lula da Silva

Elected as president twice in2003 and 2007

Lula oversaw stablemacroeconomic policies andpromoted trade

Raised internationalprominence through WTO andUN

Represents the struggle ofunderprivileged

Poor, factory worker, found

workers party


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Trade And Globalization

Brazil had set High Tariff Trades

Dilemma whether to join WTO or not

Joint WTO in 1995 Domestic players became Global

It Became in Top 20 countries forInternational Trade


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Doha Conference

Meetings were biased towards theemerging markets

Disputes over agriculture, investments

Brazil stood out as a leading voice

Led creation of WTO G-21

Cutting down on subsidies in agriculture


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Cotton Dispute

Brazil launched attack post Dohaconference

Subsidies To Agriculture In Brazil weremuch lower than other countries.

Improve yield of crops, soil, farmingtechnology

Yield increased from 200 kg/ha in 1980to 1450 kg/ha in 2009


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Brazils Claims

US cotton subsidies which weresupposed to decline in 1992, increased

Production flexibility contract payments

and normal payments violated WTOprovisions

They protested market loss assistancewhich compensated domestic mills andexporters

Export Credit guarantees, violated theAOA


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USA Response

According to Clause 13 of AOA grantedsignatory countries to phase outdomestic subsidies and export

promotions.

Several production flexibility contractshad expired by the time Brazil initiated

dispute. Other Subsidies were payable under

AOA


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WTO Rulings

US cotton policies had resulted in seriousprejudice to Brazil in the form of Pricesuppression in the world market

None of the US Domestic supportprograms cited in the disputes wereprotected by the peace clause; none were

exempted from the AoA and even theexpired programs were eligible for claimsconcerning distortionary price impacts


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Brazils Victory

$829 Million in Counter measure

$268 Million as retaliation

Cmara de Comercio Exterior (CAMEX)published a list of 102 items importedfrom US that would face higher tariffs.

CAMEX also proposed intellectualproperty retaliation measures Permitting Brazilian firms to use IPwithout the patent holders consent andcreating a special IP tax


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Obama government sought compromise

US would transfer $147.3 Millionannually as technical assistance to thecotton sector

Establishment of The InstitutoBrasileiro do Algodo

Brazil could claim success finally after 8years of WTO adjudication


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Intellectual Property and Health

Care Policies The countrys National Industrial

Property Institute was in charge ofmanaging technology-transfer

agreements, to minimize the currencyoutflow.

Cardoso administration argued that IP

rights would provide incentives to thedomestic firms to invest in productinnovation and scientific research


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The TRIPS negotiations advanced in theUruguay round and Brazil committed toIP reforms

The 1996 IP law made Brazil one of theworlds first nation to align with TRIPS

Under 1988 constitution, Brazils

ministry of health had declared Healthcare is the right of all citizens and a dutyof the state


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The Compulsory Licensing of

Efavirenz Brazil was considered as a high risk as

HIV / AIDS started spreading worldwidein early 1980s

World Bank forecasted that by the endof 1992, 1.2million people would beinfected by the virus

Brazilian government in a two-prongedstrategy was able to efficiently combatthis situation


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Within months of passing the 1996 IPlaw, Brazils congress also approved ahealth law guaranteeing universal

treatment of all the HIV Positive citizensfree

The combination of the prescription

drugs that made up the approach costmore than $15000 per patient annuallyin the US


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The second prong for AIDS strategyinvolved awareness by activists, publichealth professionals and government

officials

Non government organizations wereworking at the areas of risk to educate

them on this regard


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Brazil-Merck Price Negotiations

Governments spending on AIDSvaccination EFAVIRENZ increaseddramatically in 2005

per patients cost to treat AIDS was

$6,240 in 1997

$1336 in 2004

$2500 in 2005


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Brazilian officials adopted a three partargument for price reduction withMERCK (seller of drug name

EFAVIRENZ)

Argument was based on :-

Less cost in developing countries

Brazil offered a single annual purchase thatsaves companies marketing expense andhelp in efficient production planning


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RESULTOFPROPOSAL

This resulted in reduction of price to$570 per patient per year

To protect its IP, the company alsoproposed a multi year staged technologytransfer to BRAZIL national drug

manufacturer.


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MERCK RESPONSE

MERCK wanted the worlds 12th largesteconomy BRAZIL to help technologyinnovation by paying higher prices then

the poorest countries .

They were issued license under TRIPS(compulsory license ) valid for 5 years


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BRAZIL

Initially Brazil used to import drug butafter few years BRAZIL official drugmanufacture company was able to

produce and sell EFAVIRENZ at $210per patient.

This resulted in decrease in spending on

drug from 12%to 4% in budget Government saved up to $75 million per

year


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BRAZILIAN CAPITALISM

Played a central role in nations economy

Owes large enterprises, by serving asprimary source of capital

Its potential gained prominence whengoldman sachs predicted brazil to be in thetop 5 largest economy by 2030


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Poverty reduction

Minimum wage raised from $80 permonth in 2003 to $300 per month in2010

Non contributory pension programmesfor elderly rural citizens and retiredinformal economy workers

12 million families earned between 40$to 120$ depending upon number ofchildren


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Industrial policy

Govt intervened to provide direction andfin ancial support to national champions

Policies included cooperation betweenprivate sector and government

Export growth increased due to chinaspurchases in 2003

Oil production increased Beacme the agricultural powerhouse


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The brazil cost

Despite rapid growth, still brazil was aunderperformer

Though most challenging country to dobusiness but govt development strategywas an obstacle for enterprenuer

Due to poor infrastructre, labor laws,

large informal sector, high real interestrates, created brazil cost


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overcomings

In order to compete with other rapidgrowth countries, they have to improveeducation

speaccialising on the quality ofeducation


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Country of the future

Has real oppurtunity to become adeveloped country

Decide on policies to foster growth

Reinvigorate brazil leadership role inmultilateral negotiations

Try to establish a new rio round of

global talks


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Brazil Abhinav

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