Among the investors’ community, there was some hope that Jair Bolsonaro’s trip to Washington next week would see the confirmation of a free trade agreement between Brazil and Donald Trump’s U.S. The way things stand, this looks highly unlikely, yet discussions between the two heads of state are set to concern another important deal—one which has been decades in the making.

The two countries have accepted terms of a technology safeguards agreement (TSA), which seeks to facilitate the launching of American satellites on Brazilian soil—in particular, from the Alcântara Launch Center in northeastern Brazil.

</span></p> <p><span style="font-weight: 400;">The deal protects U.S. intellectual property, finally allowing American technology to be used in launches from the Alcântara base. This caused problems in the past as nearly every satellite launch uses some form of equipment or process belonging to the U.S.</span></p> <p><span style="font-weight: 400;">The Brazilian Air Force&#8217;s intention is to open up the Alcântara Launch Center for commercial use, allowing it to &#8220;<a href="https://www.tecmundo.com.br/ciencia/139094-alcantara-base-espacial-aluguel-diz-marcos-pontes-mwc-2019.htm">lease</a>&#8221; spaceports to foreign countries. This could raise an estimated BRL 140 million per year from satellite launch fees alone.</span></p> <h2>A long time coming</h2> <p><span style="font-weight: 400;">The TSA between the two countries has been in the works since the beginning of the millennium. Former President Fernando Henrique Cardoso had negotiated an agreement which granted the U.S. areas of <em>laissez-passer</em> in the Alcântara Launch Center, surrendering Brazil&#8217;s authority over these zones. After Mr. Cardoso left office, his successor Luiz Inácio Lula da Silva tore up the deal, affirming that it harmed the country&#8217;s sovereignty.</span></p> <p><span style="font-weight: 400;">For the next 13 years, with Lula&#8217;s Workers&#8217; Party in government, the prospect of a TSA did not get off the ground. However, after the controversial impeachment of President Dilma Rousseff in 2016, her replacement, Michel Temer, made efforts to resume negotiations with the U.S.</span></p> <p><span style="font-weight: 400;">The Alcântara Launch Center is highly sought after by American rocket companies due to its advantageous location and conditions. Sitting just over 200 kilometers south of the Equator, launching from Alcântara would be the most-efficient option for so-called geosynchronous orbit (GEO) satellites, which orbit the Equator and provide broad coverage for a wide range of services.</span></p> <p><span style="font-weight: 400;">The closer these GEO satellites launch to the Equator, the less fuel they require. Setting off from latitudes in the United States, the satellites require a change of course during their flight, meaning the engines need to be activated multiple times.</span></p> <p><span style="font-weight: 400;">Climactic conditions in Alcântara are also favorable, and being located on the coast means any debris from failed launches would fall in the sea, as opposed to any inhabited land.</span></p> <p><span style="font-weight: 400;">Making inroads into the Alcântara base would be a way for the U.S. to compete with Europe, which currently uses a similarly advantageous spaceport in French Guiana: the French-owned Guiana Space Center, nearby the town of Kourou.</span></p> <p><span style="font-weight: 400;">In actual fact, the Alcântara Launch Center would be even more profitable than its counterpart in French Guiana, as it is slightly closer to the Equator and requires approximately one-fifth less fuel for satellite launches.</span></p> <h2>Getting Alcântara off the ground</h2> <p><span style="font-weight: 400;">The TSA between Brazil and the United States does not mean that the latter will now be launching rockets left, right, and center in South America. Around the talks to open up the Alcântara base for commercial use, it has often been overlooked that no satellite launches have been attempted from the spaceport since 2003—and none of the attempts have been successful.</span></p> <p><span style="font-weight: 400;">In 2003, the third attempt to launch a satellite from the Alcântara Launch Center ended in tragedy. The vehicle did not make it off the ground and exploded, killing 21 Brazilian technicians. The center has confirmed it is preparing the facilities for further attempts, but that this should only take place in 2021, 18 years after the disaster.

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MoneyMar 11, 2019

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