Prime Minister Harper strengthens Economic Ties with Brazil - Agreements to facilitate Trade, Tourism and Investment

August 08, 2011

BRASÍLIA, BRAZIL – Prime Minister Stephen Harper, with Brazilian President Dilma Rousseff, today witnessed the signing of a bilateral Air Transport Agreement and a Social Security Agreement. The two leaders further committed to work together on common areas of interest with a Memoranda of Understanding on Olympic Games Cooperation and on International Development Aid Effectiveness.

“Brazil is a major global economic player and a key priority market for Canada,” said Prime Minister Harper.  “These agreements will benefit both countries by promoting greater two-way flow of people, goods and services, enhancing our competitiveness and further strengthening our partnership in key areas of shared interest.” 

The Air Transport Agreement is expected to benefit Canadian travellers and businesses in various sectors, including the tourism industry, by providing them with greater choices in airline services, destinations as well as lower prices.  Both countries have agreed to make the new air rights available to airlines immediately, pending the formal ratification of the agreement. 

The Prime Minister witnessed the signing of three additional agreements: 

The Agreement on Social Security between Canada and Brazil will bring immediate benefits to Canadians and Brazilians by coordinating pension benefits between both countries.  It includes a number of key measures that will improve access to benefits for Canadians and result in savings for Canadian companies operating in Brazil.
The Memorandum of Understanding on Olympic Games Cooperation with Brazil will involve sharing Canada’s recent experience in hosting and organizing the 2010 Winter Olympic and Paralympic Games.  Brazil will host the Summer Olympic and Paralympic Games in 2016 in Rio de Janeiro. 
The Memorandum of Understanding on International Development Aid Effectiveness with Brazil advances the partnership between both countries on providing tangible and measurable development assistance to nations in need.

Brazil is a major economic player, not just in South America, but also globally as our 10th largest trading partner. Brazil is Canada’s largest merchandise trading partner in the Latin America and Caribbean region (excluding Mexico), and Canada-Brazil commercial relations are growing across the board.

Prime Minister Harper, along with President Rousseff, also took the opportunity today to announce the Canada-Brazil Strategic Partnership Dialogue, a new initiative that will serve as a forum between Canadian and Brazilian Ministers of Foreign Affairs. The Dialogue will ensure both countries deepen relations and develop new partnerships on key bilateral, regional and global issues.




Backgrounder

Prime Minister Stephen Harper and Brazilian President Dilma Rousseff witnessed multiple signings: an Air Transport Agreement between Canada and Brazil, an Agreement on Social Security, a Memoranda of Understanding on Olympic Games Cooperation and on International Development Aid Effectiveness. The leaders also initiated the Canada-Brazil Strategic Partnership Dialogue.

Canada-Brazil Air Transport Agreement

Canada and Brazil signed an Air Transport Agreement on August 8, 2011, which is expected to benefit Canadian travellers and businesses in various sectors, including the tourism industry, by providing them with greater choices in airline services, destinations as well as lower prices.

The new agreement builds on the Canada-Brazil bilateral Air Transport Agreement – which came into full force in 1990 – by providing airlines with significant additional flexibility for route selection, frequency of service and pricing. In addition to existing rights that allow a Canadian and Brazilian airline to offer an air service using the flight of another Canadian or Brazilian airline, airlines are now also able to offer such services using the flights of third country airlines. This common marketing practice (known as code-sharing) allows airlines to expand their services and network in a flexible way, thereby providing more convenience and choice to travellers and shippers.

More specifically, the agreement:

Provides new opportunities for Canadian airlines to grow and compete;
Increases international trade opportunities and encourages the growth of the air transportation industry in Canada;
Contains strong provisions to ensure aviation safety and security, which are vital to both countries; and
Advances the Government of Canada’s Engagement in the Americas strategy, focussed on promoting and enhancing security, prosperity and democratic governance across the region.

The agreement is also part of the Government’s Blue Sky Policy, which aims to create opportunities and jobs in various sectors of the economy – including trade and tourism – through expanded air service at home and abroad.

Both countries have agreed to make the new air rights available to airlines immediately, pending the formal ratification of the agreement. 


Social Security Agreement between Canada and Brazil

The Agreement on Social Security between Canada and Brazil will coordinate pension benefits between the two countries, and will provide retirement, disability and survivor benefits to eligible Canadians and Brazilians who have lived or worked in the other country, or to their surviving spouse, common-law partner or children.

Specifically, the Agreement will:

• Reduce restrictions that may prevent Canadians from receiving pension benefits from Brazil;
• Reduce restrictions on the payment of Canadian benefits to people residing in Brazil;
• Permit continuity of social security coverage when Canadians are sent to work temporarily in Brazil; and
• Make it easier for citizens of either country to become eligible for benefits by adding together periods of social security coverage in both countries.

The Agreement will also result in savings and enhanced competitiveness for Canadian companies operating in Brazil, because, while they will continue to make Canada Pension Plan contributions for their Canadian employees sent to work in Brazil, they will now be exempt from making Brazilian social security contributions. The same is true for Brazilian companies operating in Canada.

The Agreement between Canada and Brazil will enter into force once both countries have completed their legal procedures. With the signing of this Agreement, Canada has concluded 54 international social security agreements, 51 of which are already in force. Agreements have also been signed with Macedonia and Romania but are not yet in force.


Memorandum of Understanding on Olympic Games Cooperation with Brazil

The Government of Canada was a major and proud partner in delivering the successful XXI Olympic Winter Games and X Paralympic Winter Games in Vancouver and Whistler, and it is committed to ensuring its investments result in lasting legacies for all Canadians.

In order to help build the best possible future for the Americas, Prime Minister Stephen Harper witnessed the signing of the Memorandum of Understanding (MOU) on Olympic Games Cooperation with Brazil, which makes Canada’s considerable expertise available to the Brazilian Olympics committee, and promotes business and investment opportunities for companies operating in both countries.

The MOU on Olympic Games Cooperation focuses on sharing expertise on the governance structures required to deliver Olympic Games successfully, as well as on environmental sustainability, social benefits, and on information on the laws and regulations surrounding the hosting of Olympic Games. The MOU also includes clauses on trade and investment, and security planning for major events.

Brazil will host the Summer Olympic and Paralympic Games in 2016 in Rio de Janeiro.


Memorandum of Understanding on International Development Cooperation Effectiveness with Brazil
In line with Canada’s Engagement in the Americas and Global Commerce strategies, the Government is committed to improve the effectiveness and efficiency of both countries’ assistance initiatives for developing nations. To help achieve this goal, the Canadian International Development Agency (CIDA) is transforming its relationship with Brazil to a more strategic model of cooperation on development assistance.

The Memorandum of Understanding on International Development Cooperation Effectiveness will advance the joint partnership between the two countries on development assistance principally through:

Expanding dialogue on development policy;

• Increasing policy research initiatives on issues of common interest;
• Enhancing institutional relationships; and,
• Increasing potential cooperation activities in third countries.

Brazilian development programs are growing in Latin America and Africa, including countries and regions where Canada focuses its aid, including Ghana, Mozambique, Bolivia, the Caribbean, Haiti, and Peru.


Canada-Brazil Strategic Partnership Dialogue

The Canada-Brazil Strategic Partnership Dialogue will serve as a forum between Ministers of Foreign Affairs to discuss current regional and global trends, as well as developments affecting both countries. It will also serve as a medium to identify common interests and approaches to such developments with a view to explore new and creative ideas for bilateral collaboration.

The initiative will take place once a year and the location will alternate yearly from one nation’s capital to the other. Issues for discussion will be selected in advance of each meeting and agreed on by both parties. The topics of discussion will be selected based on regional and global events affecting countries, multilateral issues of high priority, and key bilateral issues.

This bilateral dialogue complements existing mechanisms of dialogue between Canada and Brazil, such as the Joint Economic and Trade Council, the Annual Bilateral Political Consultations, and the Consultative Committee on Agriculture.

Brazil is an increasingly important player on the world stage.  Canada and Brazil work closely to advance shared priorities in the G-20, United Nations and the Organization of American States.