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AV. DE CORTENBERGH 168 BUSINESSEUROPE a.i.s.b.l. TEL +32(0)2 237 65 11BE-1000 BRUSSELS FAX +32(0)2 231 14 45

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The 6th EU-Brazil Business Summit on 23rd January 2013 in Brasilia was verysuccessful, bringing together more than 170 European and Brazilian participants.Feedback received so far from participants has been very positive.

The event was co-organised by BUSINESSEUROPE, CNI the Brazilian NationalConfederation of Industry and EUROCHAMBRES. A number of high-level CEOs fromEurope (Telecom Italia, Alstom, Philips, Telefnica) and Brazil addressed theparticipants. European Commission Deputy Director General Joo Aguiar Machadoand Brazilian Minister for Development, Industry and Foreign Trade Fernando Pimenteldelivered speeches at the high-level event. The business leaders were also invited todeliver their messages to the official political summit the next day at the presidentialoffice.

State of the Brazilian economyThe EU is Brazil's main trading partner and the largest investor in the country, andBrazilian investments in the EU are expanding, making Brazil the fifth largest investorin Europe. The EU has surplus in trade in services, while Brazil enjoys a goods tradesurplus. 85% of the EU exports consisted of manufactured goods, such as machinery,vehicles and chemicals, while Brazil continued exporting primarily raw materials, foodand drinks. European companies have a growing interest in establishing or expandingtheir presence in Brazil, including through public-private partnerships and, on the otherhand, the Brazilian companies are increasing their competitiveness on the European

market. Brazil has a strong economy that is experiencing at the same time a steadygrowth and a competitive challenge mainly caused by high energy prices andcomparatively high cost of labour. Brazil is trying to adopt programmes that wouldpromote the long-term competitiveness of its enterprises and has heavily invested ininfrastructures. More investments should be made in science and technology, researchand innovation programmes. In addition, major infrastructure investments will be madein anticipation of Brazil hosting the World Cup and Olympic games.

CNI programme on trade and investmentCNI, the Brazilian National Confederation of Industry, stressed the importance thatefforts be geared towards creating a favorable climate for private sector investmentthrough the formulation of sound and stable macroeconomic policies and the

predictability of rules and regulations. In order to enhance investments, the main

Ref.: 29 January 2013Contact: Eleonora Catella

TO: International Relations Committee CC: xxx

FROM: International Relations Department

SUBJECT: Report on the 6th EU-Brazil Business Summit, 23 January 2013

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priorities were identified in the improvement of the Brazilian tax system on servicesimports and the reduction of the tax burden on investments. While important progresswas registered on transfer pricing thanks to the new Brazilian regulation, much effortremains necessary to bring together tax authorities and business representatives tofind common grounds to formulate new proposals that reduce tax burden on theimportation of services and to eliminate double taxation on investments.On trade, the priorities are measures to remove non-tariff barriers, developingtechnology and innovation partnerships and enhancing support for theinternationalization of business, in particular for SMEs. With respect to bilateral tradeliberalization, non-tariff barriers that hinder bilateral trade flows and hit key expandingsectors like agrochemicals should be tackled by sector-specific short term measures.

Joint working groupThe Brazilian business community supports the continuation of EU-MERCOSURnegotiations and is in favour of an ambitious, comprehensive and balanced result,which would foster economic integration, growth and stability in the region. However italso recognizes the importance that bilateral economic relations are boosted throughconcrete long term oriented business projects. To this end, BUSINESSEUROPE, CNIand EUROCHAMBRES launched a joint working group to explore options to advancethe bilateral trade and investment agenda. The joint working group will present a reportat the next EU-Brazil Business Summit that will outline how the EU and Brazil canmove forward bilaterally while respecting Brazils political commitment to MERCOSURintegration.

Strategic partnerships opportunities in BrazilOne of the top priorities of EU and Brazilian companies should be the development ofstrategic partnerships that contribute to investments in innovation, sustainabletechnologies and to the leveraging of Brazilian efforts in R&D. In Brazil the governmenthas been implementing several programs to stimulate private sector investment ininnovation activities and to enhance the domestic research of new technologies.Innovation opportunities exist in many different sectors of the Brazilian economy, butthey are particularly evident in some areas such as the bioeconomy, the oil and gassector, the aircraft industry and in the logistics and infrastructure areas.

The EU-Brazil Political Summit

The EU-Brazil Political Summit was held on 24 January in Brasilia. PresidentsRousseff, Barroso and Van Rompuy stressed the importance of further strengtheningcontacts between Brazilian and EU business communities, with a view to promotingbilateral trade and investment, as well as exchanges in innovation, research anddevelopment.The Leaders reaffirmed their commitment to the successful conclusion of the WorldTrade Organizations Doha Development Round. As a first step towards this objective,Leaders emphasized the importance of achieving a successful conclusion of the 9thWTO Ministerial Conference in December 2013.On the EU-MERCOSUR Association Agreement, the Leaders examined the course ofnegotiations since their re-launch in May 2010, in light of the shared commitment toreach an ambitious, comprehensive and balanced result. They welcomed the progress

already made in the normative part, agreeing that the continued advancement of the

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negotiation process requires, at this point, the discussion of preferential access to theirrespective markets, including the exchange of market access offers.The Leaders hailed the substantial progress made by the Euro area in implementing itscomprehensive crisis response strategy and the measures announced by theEuropean Union deepening economic integration in the region. Further, they stressedthe need for all G-20 members to make additional efforts towards promoting strong,sustainable and balanced economic growth.With regards to the bilateral relations, the Leaders highlighted the possibilities ofexpanding the cooperation in a number of areas, including but not limited to researchand development in renewable energy (to be developed by each party according to itscapabilities and needs), joint initiatives in energy efficiency, as well as theestablishment of an equivalence agreement for biofuels. They committed to promote

the advancement of sectoral dialogues on agriculture and science, technology andinnovation, further strengthening the cooperation in the Sanitary and Phytosanitaryfield.To advance bilateral economic integration, the EU and Brazil set up a commission tostudy how to promote bilateral investment between the two economies. TheCommission will look at regulatory barriers to investment and report at the next summit.

APEX eventsIn April and June in Brussels, APEX - the Brazilian trade and investment promotionagency - will organize a series of events focusing on key sectors of the Brazilianindustry. BUSINESSEUROPE will closely cooperate with APEX in the organization ofseminars and conferences that will offer members an important opportunity toparticipate in high level discussions on strategic sectors that offer significant investmentopportunities for EU companies.From 22 to 26 April, the Brazilian food and bio-energy industry will visit Brussels.On 17-22 June a week of events will be held, including a conference on agri-businessfollowed by a dinner on 18 June and a seminar on new materials and nanotechnologyhosted by the Chairman of the International Trade Committee of the EuropeanParliament professor Vital Moreira on 19 June.

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