Where Brazil stands in the race for a vaccine

. Jul 21, 2020
coronavirus vaccine brazil (1) Illustration: Kostasgr/Shutterstock

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We’re covering the international race for a Covid-19 vaccine — and how Brazil fits in. What is happening to Latin American exports amid the pandemic. And new regulations for investors.

Promising Covid-19 vaccines being tested in Brazil

Out of 197 coronavirus vaccine studies being conducted worldwide,

three seem to be head and shoulders ahead, having moved to the third and final stage of trials. Two of these are being tested in Brazil.</p> <ul><li>A vaccine developed by British-Swedish lab AstraZeneca and the University of Oxford has caused an <a href="https://brazilian.report/coronavirus-brazil-live-blog/2020/07/20/vaccine-currently-tested-in-sao-paulo-causes-immune-response/">immune response</a> against Covid-19, according to new research involving roughly 1,000 patients. The vaccine is currently being tested in a group of volunteers in São Paulo, in a trial organized by the Federal University of São Paulo.</li><li>The breakthrough development came on the same day as another potential vaccine developed by Chinese lab Sinovac Biotech <a href="https://brazilian.report/newsletters/brazil-daily/2020/06/12/sao-paulo-chinese-lab-vaccine-tests-shopping-malls-statue-racism/">arrived in São Paulo</a>. Tests will be initially administered to health workers in five states — and then in 9,000 volunteers.</li><li>A vaccine by U.S. biotech firm Moderna is also heading into phase 3 trials.</li></ul> <p><strong>Why it matters.</strong> At this point, lockdowns are out of the question for Brazil. Infections and deaths have plateaued at high levels — meaning a vaccine could be the only way to control the outbreak in the country.</p> <ul><li>Besides taking part in the trials, Brazil sealed a USD 127 million <a href="https://www.nexojornal.com.br/expresso/2020/06/29/Perdas-e-ganhos-o-acordo-do-Brasil-para-a-vacina-da-covid-19" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">deal</a> with AstraZeneca to ensure the production and purchase of 30.4 million doses. If the vaccine gets the go-ahead, Brazil&#8217;s public healthcare system could have up to 70 million doses to distribute by next year.</li></ul> <p><strong>But, but, but … </strong>&nbsp;It remains too soon for celebrations, as reaching phase 3 of trials doesn&#8217;t mean these vaccine projects will effectively prevent Covid-19, <a href="https://twitter.com/TheLancet/status/1285237993234669569?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axiosworld&amp;stream=world" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">says Richard Horton</a>, editor-in-chief of medical journal The Lancet.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/3235803" data-url="https://flo.uri.sh/visualisation/3235803/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Brazilian vaccines.</strong> Researchers at the University of São Paulo&#8217;s Heart Institute (INCOR) are conducting animal testing with a potential Covid-19 vaccine based on virus-like particles (VLPs), which have similar characteristics to viral peptides and proteins —&nbsp;but carry no viral genetic material and are non-infectious.</p> <ul><li>According to Edécio da Cunha, head of INCOR&#8217;s biochemical lab, it is paramount for Brazil to continue with its research, even if it is at a less-advanced stage, for a number of reasons: (1) there is no guarantee that the frontrunning projects will pan out; (2) how distribution will work on a global scale remains unclear —&nbsp;and we could see a cut-throat competition of countries outbidding one another, as we saw with masks and ventilators; (3) it is highly probable that the first vaccine made available will not be 100-percent efficient, especially as research is happening at such a fast pace. &#8220;It is a matter of sovereignty, which could free Brazil from geopolitical disputes,&#8221; he says.</li></ul> <hr class="wp-block-separator"/> <h2>Agricultural exports up, but total exports are down</h2> <p>A new study by the Inter-American Institute for Cooperation on Agriculture (IICA) showed that revenue in USD from agricultural exports in 14 Latin American countries jumped 8.5 percent in April. Preliminary estimates suggest the trend will continue in May. Meanwhile, the surveyed countries observed a drastic decrease in total external sales, which dropped 29.9 percent.</p> <p><strong>Why it matters.</strong> Agriculture is set to be the main engine that will drive economic recovery in Latin America.</p> <p><strong>Extremes.</strong> The countries with the highest increases in agricultural exports were Brazil (28.9%), Costa Rica (8.2%), Argentina (4.95%), Bolivia (4.9%), and Guatemala (4.7%) —&nbsp;<a href="https://blog.iica.int/blog/aumentan-11-mayo-2020-las-importaciones-agroalimentarias-china-principalmente-desde-estados" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">growth</a> that was mainly <a href="https://brazilian.report/business/2020/07/15/brazil-forced-import-soy-china-expands-appetite/">fueled by China</a>. On the flip side, Peru and Uruguay saw massive drops in their agricultural exports: 41.7 and 16.8 percent, respectively.</p> <ul><li>Brazil is the only country which has already released trade data for June, showing a 32.8 percent increase from one year ago.</li></ul> <p><strong>Red flag.</strong> In Brazil, Latin America&#8217;s epicenter of the coronavirus outbreak, infections are rising in rural states and the virus is <a href="https://brazilian.report/business/2020/05/30/role-meat-plants-coronavirus-spread-brazil-countryside/">rapidly spreading within slaughterhouses</a>. Chinese authorities have already banned products from a number of sites due to Covid-19 scares.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/3242871" data-url="https://flo.uri.sh/visualisation/3242871/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <hr class="wp-block-separator"/> <h2>Securities and tax authorities team up for more efficient regulation&nbsp;</h2> <p>Brazil&#8217;s Securities Commission (CVM) and the Federal Revenue Service have signed an agreement for cooperation and information sharing. The deal includes the unification of registration processes for investment funds and non-resident investors into the database of corporate taxpayer IDs. </p> <p><strong>What changes.</strong> Currently, investment funds must apply for a taxpayer number and only then may they register on the CVM database. Now, this will become a single process. For non-resident investors, registration processes will go from lasting a few hours to just a few minutes.</p> <p><strong>Why it matters.</strong> “Processes will be more efficient and dynamic,” Daniel Maeda, who heads the Office of Institutional Investor Supervision, tells <strong>The Brazilian Report</strong>. He adds that the change will make life simpler for compliance investigators. &#8220;Sometimes you look into a problem only to discover that it was just a mistake in the register. We won’t stumble into false-positives anymore.&#8221;</p> <p><strong>When changes come into effect.</strong> IT studies for the integration of the system have just begun, so there is no established deadline for the new system to be operational, says Mr. Maeda. But the expectation is to conclude the project next year.&nbsp;</p> <p><em>— with Natália Scalzaretto</em></p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Tax reform 1.</strong> Economy Minister Paulo Guedes is expected to submit the first phase of his <a href="https://brazilian.report/newsletters/brazil-daily/2020/07/17/brazil-tax-reform-coronavirus-trump/">tax reform proposal</a> to Congress today. In this first draft, the government will propose the merger of social security contributions PIS and Cofins into a single 12-percent levy on goods and services, in the molds of a value-added tax. Mr. Guedes also wants to tax the basic basket of goods — saying he will use the money to boost Renda Brasil, the administration&#8217;s project to replace the Bolsa Família cash-transfer program.</li><li><strong>Tax reform 2.</strong> The controversial proposal to tax financial transactions was left out for the time being. This tax — which is more onerous on long production chains and on the poor —&nbsp;was once called &#8220;evil&#8221; by President Jair Bolsonaro. In 2015, the idea of creating such a levy <a href="https://www.poder360.com.br/opiniao/economia/o-imposto-de-guedes-por-thomas-traumann/">helped sink</a> the Dilma Rousseff administration.</li><li><strong>Markets.</strong> On Monday morning, retail giant Via Varejo published three tweets gloating about four-digit sales spikes. While the company deleted the tweets shortly after, it boosted its stocks, which closed the day up 7.4 percent. As Monday was the maturity date for exchange-traded options, many investors saw the tweets as attempts to manipulate the market. The company&#8217;s aggressive communication strategy also fueled that perception. According to newspaper Valor, Brazil&#8217;s Securities Commission has opened two investigations into Via Varejo for disclosing information that affected share prices and were made outside of official channels.</li><li><strong>Infrastructure.</strong> Brazil joined the International Transport Forum at the OECD. Its mission is to &#8220;foster a deeper understanding of the role of transport in economic growth, environmental sustainability, and social inclusion.&#8221; For Brazil, the move means &#8220;rapprochement between the country and [the OECD],&#8221; according to Ambassador Carlos Marcio Cozendey, an organization that has become the <a href="https://brazilian.report/business/2018/03/01/joining-oecd-mean-brazil/">holy grail for Brazil&#8217;s diplomacy</a> over the past four years.&nbsp;</li><li><strong>Spending.</strong> With the relationship between the Bolsonaro administration and Congress souring once again, Secretary of Government Luiz Eduardo Ramos promised to clear over BRL 1 billion in federal funds for anti-coronavirus projects in municipalities picked by lawmakers. With the money, the government hopes to avoid losses on matters such as the <a href="https://brazilian.report/newsletters/brazil-daily/2020/07/15/brazil-inferior-education-system-bad-business-pensions-coronavirus/">extension of the National Basic Education Development Fund</a> and the analysis of several presidential vetoes that could be struck down.</li><li><strong>Plagues.</strong> Since late in June, authorities have monitored a <a href="https://brazilian.report/newsletters/brazil-daily/2020/06/25/brazils-central-bank-sets-out-rules-for-buying-corporate-bonds/">locust swarm</a> crossing Argentina which had put Brazil&#8217;s two southernmost states on red alert. The Agriculture Ministry now says the swarm is rather heading towards Uruguay as winds in the region are blowing towards the south. The National Institute of Meteorology says it would take an unlikely combination of climate abnormalities (temperature, humidity, and wind speed) to push the swarm into Brazil. The government says, however, that another swarm is <a href="https://www.argentina.gob.ar/noticias/corrientes-se-detecto-parte-de-la-manga-de-langostas-en-sitios-de-monte-sin-acceso">forming in Paraguay</a>.

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