U.S. - Brazil CEO Forum 2/7/2022 Recommendations Report

As CEOs representing a wide range of industries and companies invested in the U.S.- Brazil bilateral relationship, we welcome the sponsorship of both the U.S. and Brazilian governments to advance the commercially meaningful recommendations of the U.S. - Brazil CEO Forum.

The U.S -Brazil bilateral trade relationship is the cornerstone to renewing sustainable growth between our two great countries and across the region. U.S. Foreign Direct Investment (FDI) in Brazil (stock) was $81.7 billion in 2019, a 3.4% increase from 2018. U.S. direct investment in Brazil is led by manufacturing, finance and insurance, and mining. Brazil's FDI in the United States (stock) was $4.6 billion in 2019, up 83.7% from 2018. Sales of services in Brazil by majority U.S.-owned affiliates were $40.2 billion in 2017, while sales of services in the United States by majority Brazilian-owned firms were $2.7 billion.

According to the US Census Bureau International Trade Data for 2021 (U.S. International Trade Data - Foreign Trade - US Census Bureau), Brazil is the 9th largest export market for the US, with a two-way total goods trade of over $71B. Most importantly, this vital trade & investment relationship supports workers in both our countries, creating value-add exports and commercial partnerships that contribute to more sustainable and innovative growth.

Based on the existing recommendations of the U.S. - Brazil CEO Forum, our companies have developed a series of updated recommendations to further promote bilateral commercial engagement and economic growth for the citizens, workers, and companies (large and small) in the U.S. and in Brazil. There are meaningful opportunities to partner on an actionable agenda that will ensure a more sustainable recovery, economically, socially, and environmentally.

We thank both governments for their commitment to this process and look forward to working with you closely on the implementation action plan.

Mauro Gregorio -  CEO - Dow Silicones

Marco Stefanini - Global CEO & Founder - Stefanini Group

Trade & Investment:

Finalize Implementation and Recognition of U.S.-Brazil Trade Protocol: The Forum commends the two governments for having negotiated, signed, and approved of the agreement in record time and encourages that bilateral priority be focused on finalizing all measures necessary to operationalize the Protocol as soon as possible in 2022.

Recommendation:

● The Forum recommends that both governments accelerate their cooperation to implement and recognize implementation of the Protocol to the Agreement on Trade and Economic Cooperation between the Government of the United States of America and the Government of the Federative Republic of Brazil Relating to Trade Rules and Transparency – including its provisions on Trade Facilitation, Good Regulatory Practices and Anti-Corruption.

Supply Chain Resiliency: As detailed in the Biden Administration’s Executive Order and Supply Chain Resiliency report, a critical element of advancing secure supply of key materials and products will be to work in close collaboration with trusted trade partner countries. To advance these discussions, we would propose to prioritize two key areas as pilots for cooperation:

a. Medical devices & technology

b. Critical materials & minerals

Recommendations:

● The U.S. and Brazil should work towards formalizing cooperation to increase supply chain agility and resiliency through mutual market access, trade facilitation and regulatory harmonization to remove unnecessary trade, custom and other barriers, or restrictions to build up trade and investment in these key areas between both countries.

● Prioritize work on critical elements of supply chains, including COVID response materials, key raw materials and inputs and others that encourage diversification of supply chains and support efforts to increase production of renewable energy, battery technology and others. With key identified priority materials, both governments should identify and address any trade barriers, restrictions, or investment impediments to more resilient supply chain partnerships.

● U.S. and Brazilian governments should convene a stakeholder discussion with industry to develop collaborative approaches to identify critical energy technology supply chains for ensuring security of supply in the energy transition and prioritize development of resilient value chains critical to increasing production of key materials such as solar panels, EV batteries and semiconductors in the Western Hemisphere.

Trade Facilitation: Trade facilitation is an opportunity to build on lessons learned during the pandemic and ensure streamlined efficient procedures for delivery of goods, sustaining production and supply chains, and restoring employment opportunities. These commitments also represent opportunities to leverage technology solutions to create more streamlined, efficient customs procedures, such as developing procedures to accept digital documentation consistent with best practices under COVID.

Recommendations:

● Conclude the mutual recognition of CTPAT/AEO conditions between the U.S. and Brazil

● Develop workshops aligned with industry to implement key components of the joint workplan and increase efficiency, such as in adoption of digital documentation

● Coordinate an action plan to pilot technology investment projects to further streamline, reduce cost and increase transparency across the supply chain. Establish SMART metrics to achieve best in the world U.S. and Brazilian customs clearance times, starting with a pilot project in a key sector such as medical technology.

Good Regulatory Practices and Sectoral Regulatory Convergence: The Forum recommends that both governments increase their cooperation to both implement foundational, cross-sectoral good regulatory practices as well as to accelerate and deepen sector-specific regulatory convergence efforts.

Recommendations:

● Implement Annex II of the U.S.-Brazil Trade Protocol on Good Regulatory Practices including but not limited to commitments on Central Regulatory Coordination; Internal Consultation, Coordination and Review; Early Planning; Dedicated Website; Use of Plain Language; Transparent Development of Regulations; Expert Advisory Groups; Regulatory Impact Assessment; Final Publication; Review of Regulations Currently in Effect – reinforcing the U.S. and Brazilian agreement to adopt and implement efficient, less costly, and rational economic and regulatory mechanisms.

● Pilot sectoral discussions that will demonstrate more effective governance and commitment to sound science, risk-based procedures. The regulatory agenda can also focus on forward-looking efforts to streamline and facilitate investment and commercialization of resources, environmental goods, and technologies. Pilots should build on key priority areas including both the harmonization of standards and definitions; and regulatory reform based on the principles of efficiency, sound science and risk management. The U.S.-Brazil Commercial Dialogue may be one mechanism to facilitate this work.

● Ensure strong stakeholder engagement in developing these pilot workshop discussions. The companies of the Forum can identify key areas to pilot workshops to advance meaningful regulatory reform, including in chemicals and medical devices in furtherance of and possibly to extend the work done between the U.S. FDA and ANVISA under their Statement of Cooperation. These pilots will support the Brazilian Governments’ commitment to economic reform, as well as advance on OECD application requirements.

Circular Economy: A critical area of opportunity between the U.S. and Brazil is to build on the momentous commitments made at COP26 to advance circular economies and sustainable growth. As CEO Forum companies, many of our businesses are already working proactively to promote value-chain approaches such as waste management/recycling to retain the value-add of a wide range of key materials, including rare earth and critical minerals, to support innovative manufacturing and approaches to climate.

Recommendations:

U.S. and Brazilian governments should work with industry to develop clear priority opportunities to pilot environmental value-chain solutions, including:

● Waste management approaches to create capacity for recycling of critical materials for advanced manufacturing and supply chain resilience.

● Aligned with infrastructure recommendations, develop priorities, and promote standards for more environmentally friendly construction technologies.

● Work constructively on infrastructure prioritization to build more integrated regional grids leveraging low-carbon energy solutions, such as solar, wind, energy storage and natural gas; to promote more sustainable and resilient manufacturing.

● Review the current process of land acquisition in Brazil to promote effective land ownership, fostering more green and sustainable investments.

● Support the development and improvement of a green economy, which will generate environmental and climate benefits by supporting biodiversity protection, increase of native forests regeneration projects and standing forest compensation mechanisms, as also fostering investments in agroforestry systems and R&D for the sustainable use of biodiversity.

Technology and Infrastructure:

Given current government initiatives to drive economic recovery through infrastructure, the CEO Forum sees opportunities to align and prioritize projects that will support greater resource efficiency including more sustainable materials; prioritization of a balanced fleet of renewable and low carbon energy projects, including energy storage and green hydrogen; prioritization of projects to support and increase supply chain resiliency including ports and export-related projects; and support improved disaster management and resiliency through encouraging adoption of more underground placement of lines and pipes, and a comprehensive approach to the protection of underground utilities.

Infrastructure Recommendations:

● Exchange best practices for sustainable procurement to incentivize action and next steps on lifecycle approaches - Maximizing the value of materials in use requires optimizing performance across the entire system and entire lifecycle; as well as promoting product design and recycling infrastructure to encourage a value-creation approach to waste.

● Promote more resilient infrastructures, from energy to digital, including regional approaches to establish greater connectivity to underserved communities, and to ensure consistent supply of energy, data, and other inputs, particularly to key manufacturing hubs.

● Consider complementary policies and investments in power grid flexibility, stability, and resiliency to adapt to greater renewable energy penetration and new technology offerings and allow for improvements in the overall reliability of the electric systems, including optimization of transmission grid expansion plans and establishing a regulatory framework for energy storage that considers storage in long-term planning processes with specific targets and guidelines.

● Develop a national hydrogen strategy with input from industry to assess potential for production, storage and distribution, and address policies or incentives that will accelerate the development of green hydrogen.

● Promote the regulation of carbon credit markets and consider a carbon credit trading cooperation agreement.

● Promote greater integration of infrastructure and technology for monitoring natural ecosystems, especially natural forests, and support disaster management and response efforts.

● Collaborate on utility and pipeline policy, practices, and technology to enhance protection of existing physical utility infrastructure while building in increased resiliency in new infrastructure projects.

● Sponsor a series of bilateral workshops with a broad group of public and private sector stakeholders to drive towards the goals of increased protection and greater resiliency of systems and infrastructure.

● Establish policies and regulations to minimize costs and accelerate fiber expansion, thereby increasing Internet access throughout the country.

● Launch a broad bilateral cooperation project, including the undertaking of a workshop, to promote the exchange of best practices, regulations, and policies to foster the development, production, and usage of Sustainable Aviation Fuels (SAFs), as well as other correlated advanced biofuels, for both Brazil`s and US`s stakeholders, including companies, academia, governments, and research institutes.

Long-term recommendations:

● Promote a “Dig Once” policy. The largest cost for broadband deployment is not the fiber itself, but the process of burying optic fiber cables and conduit underground or attaching it to poles in an aerial build.

● Incentivize the installation of conduits in Brazil and facilitate access to rights-of-way wherever there is an underground improvement or construction in a public right-of-way.

● Organize a Brazilian Federal Government-led coordination process between Federal, State and Municipal levels and utility operators to build a coalition in support of a “Dig Once” policy.

Increase corporate computing infrastructure and data centers in Brazil

Recommendations:

● Encourage efforts to promote tax exemptions and fiscal stimuli to support investment, including potential special energy cost policy to guarantee reliability in energy price/supply, and turn Brazil into an attractive location for data center installations.

● Create demand for the installation of more data centers by adopting initiatives that stimulate the migration of government agencies and systems to the cloud.

● Enact a special energy cost policy aimed at attracting investment and guaranteeing reliability in energy price/supply.

Improve cybersecurity, protection of critical infrastructures, and threat sharing through best practices, collaboration, and intelligent solutions

Recommendations:

● Adopt national “Cybersecurity First” policy, by ensuring that security is a part of the country DNA throughout every organization, by driving heightened awareness, a stronger focus on security in terms of processes and technologies, increased cyberthreat information sharing, and the need for increased cybersecurity measures to address vulnerabilities in products, processes, and people – cybersecurity to be considered in all things, always.

● Support and engage in the CEO Forum-developed series of webinars on cybersecurity, including engagement by key Administration/Brazilian government cyber leaders and government standards bodies, and IT training entities, including SENAC, SENAI, and ANATEL, to discuss key common principles of coordination and engagement.

● Promote the creation of an Information Sharing Analysis Organization (ISAO) in Brazil, including private sector cybersecurity vendors, companies, and governmental organizations, as well as law enforcement, legal prosecutors, CERT.br, NIC.br and other organizations, initially focused on the protection of Critical Infrastructures and Operational Technologies (OT). The objective is to not only share information and threats, but also to collaborate towards improving cyber security postures and resilience of organizations that participate, with a key focus on best practices.

● Coordinate a Public-Private Sector Forum on protecting the critical infrastructures to promote information sharing best practices and collaboration. ● Cultivate the use of artificial intelligence, machine learning, and big data-driven intelligent solutions and R&D across physical and digital environments.

● Promote the digitalization of security agencies’ records and processes, as well as significantly increase training of data security experts within the public sector.

● Align national data privacy regulation, to promote certainty, compliance, and consistency.

Develop an agenda for cooperation in Research and Development (R&D) on Artificial Intelligence (AI)

Recommendations:

● Create a joint vision of the future of work, education, health, and public services using AI. Define how both countries will lead and succeed in a future where AI is critical. Use this vision to leverage investment and cooperation between the U.S. and Brazil.

● Facilitate venture capital investment in AI startups. Create a public/private fund to invest in AI projects developed in both countries with potential to export to each other. Funds could also support internationalization of AI companies, with focus in each other markets, to include a joint pathway for collaboration to include academia, private sector, venture capital investment, technology access, product development and mass-market distribution.

Increase collaboration between Industries and Academia

Recommendations:

● Increase Industry-Academia Collaboration (IAC) and Science, Technology, Engineering and Mathematics (STEM) development programs, to help the government address the increasing skills gap in the country and to further encourage entrepreneurship.

● Encourage more public-private partnerships, involving private companies and universities or government research labs, as well as visits to National Laboratories for project collaboration in specific projects.

● Promote mutual product certification recognition in technology-related areas.

 Promote new ecosystems of IT and Telecom to increase 5G coverage

 Recommendations:

● Provide a fast-track process for installing new antennas and promoting small cells.

● Provide a national regulation framework for installing and operating antennas.

Exchange knowledge and experience between the U.S. and Brazil in Digital Transformation processes and technologies

Recommendations:

● Exchange knowledge and experience in Digital Transformation projects with focus in Internet of Things (IoT) / Industrial Internet of Things (IIoT) / and Operational Technologies (OT), to include systems, applications, analytics, industry 4.0, and blockchain, applied to industry verticals.

Intensify collaboration on strategic and civil space

Recommendations:

● Support ratification in the Brazilian Senate of the Research, Development, Testing & Evaluation (RDT&E) agreement and begin identifying now, in both governments, operational and technological needs that could be addressed in joint strategic projects.

● Identify areas of mutual interest for potential joint civil space projects, particularly in climate-related areas such as studying the impact of space weather on Earth's climate; monitoring of water levels and saturation of soil; and detecting and tracking forest fires.

● Organize a webinar on NASA´s international partnerships in the Artemis Project that also includes presentations by Brazil´s space industry and academic community on technologies and research that may be relevant. This seminar would have as its objective helping to clarify options and speed definition of the action plan for the AEB/NASA July 2021 commitment to engage on the Artemis Project.

Assess the Feasibility of the Following Initiatives:

● US/Brazil Tactically Responsive Space (TRS) Initiative – Developing the physical infrastructure and regulatory framework to enable on-demand launch can benefit our countries by dramatically improving mission performance, responsiveness, and cost.

● Collaboration on the Development of the Alcântara Space Center (CEA) – Exploring how the US government and space launch companies can contribute to the CEA project in areas such as improving education, roads, ports, communications, energy, healthcare, and its most important dimension: Bringing prosperity, opportunity, and social justice to the people of the region.

● Improvement of the Environment for Space Investment – Study and define a space investment strategy for Brazil involving such aspects as grants for companies investing in space infrastructure; tax exemptions; legal and regulatory measures; and aligning federal space budgets more in line with Brazil´s rank as one of the largest economies in the world.

Education:

Both the U.S. and Brazil have prioritized development of high-skilled, high value workforce, which will be a critical component of post-COVID economic recovery.

Sectors that are heavily reliant on technology to drive product efficiency and quality, such as healthcare and IT, consistently require high skilled end-users and maintenance providers. By aligning educational and workforce curricula with Brazil’s future economic growth opportunities, including healthcare, ICT, science, and engineering (STEM) fields, there is a potential to close the skills gap, increase economic development and facilitate more bilateral trade between the U.S. and Brazil.

The Forum recognizes strong workforce development across the private sector in Brazil and fragmented workforce partnerships with the education sector to improve and identify workforce development or recruitment. The recommendations below reflect the need for both education and workforce training sectors to improve collaboration between and within both countries to invest in human capital and train the workforce of the future.

Companies of the CEO Forum have made significant efforts to promote greater education and skills development, including in Brazil and particularly on STEM and Information & Communications Technologies (ICT) Cybersecurity education. Greater alignment and coordination of programs, including those sponsored by both the Brazilian Government and the U.S. Embassy, would allow greater sharing of best practices and ability to scale resources to increase outreach.

Private Sector Education Efforts:

Recommendations:

● Pilot workshop on alignment of projects between private sector and U.S. Embassy/USAID support to maximize impact especially on skills development.

● Set in motion a public-private sector information-sharing dialogue on ICT cybersecurity training and awareness programs, including reviewing already existing programs, to propel workforce development in this area further.

Public-Private Academic Partnerships:

Recommendations:

● Increase student exchange and enhance educational opportunities between both countries by embedding private sector members of the CEO forum in existing Brazilian and U.S. educational partnerships, such as the Youth Ambassadors Program and 100,000 Strong in the Americas Initiative. Utilizing both programs can introduce language, mentoring, and job skills training as early as high school and reinforce Brazil as a regional training hub.

● Host digital workforce events through existing training programs between the U.S. and Brazilian Governments, such as USTDA, to train current and future employees in new job models and the use and applications of digital infrastructure.

Regional Skills Development:

Recommendations:

● The Forum recommends that the Ministry of Economy create a workforce manufacturing map that cross references U.S. binational center sites with private sector job training programs. Linking the two will provide graduates and job seekers with potential employers and employers with future workers, as well as serving as a resource for professional language enrichment. This resource could also be beneficial for military veterans transitioning to the private sector.

● The U.S. should consider flexible student visa requirements that encourages the transfer of knowledge and education between both countries, with the overall goal of facilitating apprenticeships and extending the time needed for job searches or training for recent Brazil graduates in the U.S.

Strengthen K-12 education for jobs of the future:

Recommendations:

● Create MOU between both governments to exchange best practices and identify teaching or curriculum gaps in early childhood literacy and STEM education in Brazil. The government of Brazil should utilize existing, private sector support programs for K-12 schools, such as All for Education, to implement best practices and improve public elementary, middle, and high school academic performance.

● Leverage existing U.S. and Brazil education and labor programs to host a “Girls in STEM” event in Brazil with forum companies to develop and highlight education, mentoring and jobs of the future. Utilizing existing programs brings together appropriate workforce mentors, teachers, and interested elementary students to generate interest in the fields and application of STEM education.

● Develop recommendations of educational policies focused on the jobs of the future, including aspects of education, training, skills on the use of technology and AI impact and regulation aspects of employment in the future (e.g., Sharing Economy).