President Obama's visit to Brazil this weekend, and his speech on Brazil-U.S. economic relations, will be closely watched for hints on the administration's trade agenda. The President has called for increasing exports, yet held back from pushing for action on pending Free Trade Agreements with Colombia and Panama. For its part, Congress has linked action on the Korean FTA to the Colombia and Panama pacts. While this impasse continues, we are losing great opportunities to grow exports -- and create jobs.
The President needs to provide resolute leadership on trade, and Brazil is a great place to start. We fret a lot about the growing economic clout of China and India, but Brazil is a rising economic behemoth in our own hemisphere. It is the world's fifth largest nation in land mass, and its population of more than 190 million is also the world's fifth largest.
Brazil's economy is the world's eighth largest and it is growing at a 7.5 percent clip. In the last 10 years, nearly 30 million Brazilians have moved from poverty into the middle class as the nation upgrades health, education and safety. Brazil is already the world's third largest market for mobile phones, the fifth largest for vehicles and computers, and the eighth largest for higher education.
Because of its rapidly expanding middle class, Brazil is projected to become the fifth largest consumer market in the world by 2030, worth more than $2.5 trillion, ahead of the United Kingdom and France. Brazil boasts vast reserves of basic commodities and agricultural products, and recently has begun development of a vast new oil field off its coast that will make it one of the world's top five crude oil producers.
According to Ernst and Young, Brazil is rapidly increasing investments in transport, housing, sanitation and water supply. The government had allocated $250 billion for investment in infrastructure between 2007 and 2011, and has now committed to spend about $50 billion more to modernize and rebuild a major part of Rio de Janeiro as it prepares to host the World Cup in 2014 and the Olympics two years later.
In sum, Brazil is on a roll and offers a bonanza of economic opportunities for any country wise enough to seize them. Unfortunately, the United States continues to lurch aimlessly along without a clear trade and export policy. While we have been asleep at the switch, China has usurped our traditional role as Brazil's major trading partner.
This trip to Brazil affords President Obama a great opportunity to cut the Gordian Knot that has restricted our trade policy and undermined our economy for far too long. Let us hope he sends a signal to Brazil and to Congress that the U.S. is open for business.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.