The Food Industry in Brazil and the United States: The Effects of the FTAA on Trade and Investment

Abstract

Brazil and the United States are key players in world agricultural and food markets. The agri-food system in both countries is very large in absolute and relative terms. Both are net exporters of agricultural and food products and major recipients of foreign direct investment (FDI) in the food industry. In addition, US food processors hold substantial investment positions abroad. In the 1990s, both countries were actively involved in the formation of regional trade blocs. The United States is a member of the North American Free Trade Agreement (NAFTA), while Brazil is a member of the Southern Common Market (MERCOSUR). More recently, both countries have been engaged in multilateral negotiations that might eventually create a free trade area from Alaska to Patagonia -the Free Trade Area of the Americas (FTAA)-. The aim of this study is to analyze the potential effects of the FTAA on trade and FDI in the Brazilian and US food industries.