In 1994, the situation of the Brazilian market was dramatically different from today. After years of grinding hyperinflation that led to a huge financial crisis, a new currency—the Brazilian Real—was conceived and prevailed ever since. At the time, center-right Finance Minister Fernando Henrique Cardoso earned the plaudits for the “Real Plan,” being elected president in the same year.
Another important milestone in the recent history of trade deals occurred that year in the U.S., while the Brazilian national football team won its fourth World Cup in Pasadena. In January, the U.S. economy approved the North American Free Trade Agreement (Nafta), which would transform regional relations and put beneficiaries Mexico and Canada on a new global economic footing.
As Latin America’s biggest economy and the second-largest in the Americas as a whole, Brazil had also had a myriad of reasons to prick up its ears to Washington’s decisions. Throughout the 1990s, when the U.S. became the world’s undisputed superpower after the collapse of the Soviet Union, southern countries followed the White House’s lead of liberal economics.
This remained the order of the day in Brazil until 2003, when Luiz Inácio Lula da Silva was elected president, heralding the new center-left Workers’ Party era.
Almost 26 years after the birth of Nafta, Brazil and the U.S. once again share a liberal agenda, no longer following the “Washington Consensus” script. However, since his campaign, President Donald Trump has called for the creation of a “new and improved” Nafta, to be named the U.S.–Mexico–Canada Agreement, or USMCA.
A new settlement is already on its way to completion. After overcoming initial resistance from Canada, the USMCA has now...
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