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U.S. DEPARTMENT OF STATE
BRAZIL: 1994 COUNTRY REPORT ON ECONOMIC POLICY AND TRADE PRACTICES
BUREAU OF ECONOMIC AND BUSINESS AFFAIRS





                              BRAZIL

                     Key Economic Indicators
        (Millions of U.S. dollars unless otherwise noted)


                                     1992      1993      1994 1/

Income, Production and Employment:

Real GDP (1985 prices) 2/         332,000   349,000   352,000
Real GDP Growth (pct.)               -0.8       4.1       4.0
GDP (at current prices) 2/        425,000   456,000   474,000
By Sector: (pct.)
  Agriculture                        11.1      12.5       N/A
  Industry                           35.4      38.2       N/A
    Mining                            1.6       1.8       N/A
    Manufacturing                    22.9      24.9       N/A
    Construction                      7.3       7.4       N/A
    Public Utilities                  3.6       4.2       N/A
  Services                           62.4      59.4       N/A
    Commerce                          6.8       7.6       N/A
    Transport                         4.2       4.5       N/A
    Communications                    1.5       1.7       N/A
    Financial Services                9.0       9.7       N/A
    Government                       10.2      11.0       N/A
    Rents                            16.5       6.9       N/A
    Other Services                   14.3      18.0       N/A
Subtotal                            108.9     110.1       N/A
Less: Financial Intermediation        8.9      10.1       N/A
GDP at Factor Cost                  100.0     100.0       N/A
Real Per Capita GDP
  (USD in 1985 prices)              2,226     2,993     2,273
Labor Force (000s)                 64,400    65,600    66,900
Unemployment Rate (pct.)              4.5       4.4       5.5

Money and Prices:  (annual percentage growth)

Money Supply (M2)                   1,721     2,596      20.9
Interest Rate for Financing
  Working Capital 3/                 30.7      41.2       3.9
Personal Saving Rate 3/              24.6      38.2       2.9
Retail Inflation                    1,149     2,489        23
Wholesale Inflation                 1,154     2,639      24.5
Exchange Rate 4/
  Official/Commercial               12.39    326.11     0.839
  Parallel                          14.60    325.00     0.870

Balance of Payments and Trade:

Total Exports (FOB) 5/             35,793    38,783    41,400
  Exports to U.S. (FOB) 5/          7,120     8,028     8,300
Total Imports (FOB) 5/             20,554    25,711    28,400
  Imports from U.S. (FOB) 5/        4,949     6,028     6,800
Aid from U.S.                        14.6      24.9      14.6
Aid from Other Countries              N/A       N/A       N/A
External Public Debt 6/            95,555    94,018    91,197
Debt Service Payments
  (paid annually)                   7,253     8,453     9,975
Gold and Foreign Exch. Reserves 
  (International Liquidity Concept)23,754    32,211    48,000
Trade Balance                      14,844    13,072    13,000
  Trade Balance with U.S.           2,171     2,000     1,500


N/A--Not available.

1/ 1994 figures are estimates based on available monthly data
in October 1994.
2/ GDP at market prices.
3/ Figures are actual monthly nominal rates, not changes in
them.
4/ Cruzeiro reals/usd, end of year, for 1992, 1993; reals/usd,
as of October 10 for 1994.
5/ Total trade.  Figures for merchandise trade only not
available.  CIF prices for imports are not available.
6/ Nonfinancial public sector.  Excludes Petrobras and Vale do
Rio Doce (CVRD).



1.  General Policy Framework

    On July 1, 1994, Brazil introduced a new national currency,
the "real" (the fifth in seven years), replacing the "cruzeiro
real" at the rate of 2,750 cruzeiro reals to 1.00 real.  The
new currency is the centerpiece of the government's economic
stabilization plan, the "Plano Real," designed to curb chronic,
rampant inflation, which had reached an annual level of nearly
5,000 percent by the end of 1993.  Other key elements of the
stabilization plan include balancing the federal government
budget, privatization of state-run industries, and strict
monetary controls.  Following the introduction of the new
currency, nominal monthly rates of inflation fell from 50
percent in June (measured in the old currency) to 1.5 percent
in September (measured in the new currency).  The real rate of
inflation (as measured by the IPC-r, the Plano Real's index, in
reals) is higher than in 1993:  15.87 percent for the first
nine months of 1994 vs. 13.38 percent for all of 1993.

    The stabilization plan under which the real was introduced
established quantitative targets on the expansion of the
monetary base.  Monetary policy is also constrained by the need
to maintain positive real interest rates in order to roll over
the domestic government debt and to prevent capital outflow. 
High interest rates, however, aggravate the fiscal deficit. 
Brazil has suffered structural deficits for many years. 
Provisions of the 1988 Constitution which mandate substantial
revenue transfers to states and municipalities, as well as
mandatory federal expenditures, leave the government with
discretionary control of only about 10 percent of revenues
collected.

    Long-term stabilization will require structural reforms and
revision of Brazil's 1988 Constitution.  The constitutional
review process which began in late 1993 expired in May 1994
with virtually no reforms adopted.  Among the reforms
considered by the Constitutional Review Congress were fiscal 
reforms, including a redistribution of federal, state and
municipal government responsibilities, simplification of the
tax system, privatization of the state-owned telecommunications
and petroleum monopolies, elimination of the distinction
between foreign and national capital, and permitting foreign
investment in mining.  Broad consensus exists on the need for
constitutional reform to rectify the economic distortions of
the current constitution, but there are significant differences
regarding the specific reforms needed.  Now that the
constitutional review process is over, approval of
constitutional reforms will require two votes each by the upper
and lower chambers of the Brazilian Congress; a 60 percent
majority is required for all four votes.

    The process of economic and trade liberalization begun in
1990 slowed during 1993 and 1994, but has nevertheless produced
significant changes in Brazil's trade regime, resulting in a
more open and competitive economy.  Imports are increasing in
response to lower tariffs and reduced non-tariff barriers, as
well as the strength of the real relative to the dollar, and
are now composed of a wide-range of industrial, agricultural
and consumer goods.  Access to Brazilian markets in most
sectors is generally good, and most markets are characterized
by competition and participation by foreign firms through
imports, local production and joint ventures.  Some sectors of
the economy, such as the telecommunications, petroleum and
electrical energy sectors, are still dominated by the
government, and opportunities for trade and investment are
severely limited.

    Brazil and its Southern Common Market (Mercosul) partners
Argentina, Uruguay and Paraguay concluded negotiations in
August 1994 for a common external tariff (CET) which went into
effect on January 1, 1995.  The CET levels for most products
range between zero and 20 percent.  The Brazilian government
unilaterally lowered tariffs on some 6,000 items to the CET
levels in September of 1994, as part of its anti-inflationary
effort.  With the exception of tariffs on informatics products
and some capital goods, the maximum Brazilian tariff level is
now 20 percent;  the most commonly applied tariff is 14
percent.  When the CET enters into force in the four Mercosul
countries in January 1995, all revisions to the tariff schedule
will have to be negotiated among the four partners.

    The Government of Brazil ratified the Uruguay Round
Agreements in 1994 and became a founding member of the World
Trade Organization on January 1, 1995.


2.  Exchange Rate Policy

    Brazil has three exchange rates:  a commercial rate, a
tourist rate and a semi-official parallel rate.  The commercial
rate is used for import-export transactions registered at the
Central Bank and financial transactions linked to external
debt.  The tourist, or floating rate, is used for individual
transactions such as unilateral transfers, travel, tourism, and
transactions involving education and training abroad.  The
parallel rate is also used for individual transactions, but
they are not recorded.  All three rates fluctuate;  the spread
between them has diminished since the introduction of the new
currency.

    The measure introducing the real established parity with
the dollar.  However, a surplus of dollars, caused by financial
activities of exporters and foreign investors, resulted in the
steady appreciation of the real relative to the dollar.  The
Central Bank did not intervene until September, when the real
reached 0.85 to one dollar.  Subsequent Central Bank
interventions indicate that this level is the Bank's floor.


3.  Structural Policies

    Although some administrative improvements have been made in
recent years, the Brazilian legal and regulatory system is far
from transparent.  The government has historically exercised
considerable control over private business through extensive
and frequently changing regulations.  To implement economic
policies rapidly, the government has resorted to issuing
decrees rather than securing congressional approval of
legislation.  These decrees are frequently challenged in the
courts and a number have been declared unconstitutional.  The
regulatory instability makes planning difficult.  In June 1994
a new antitrust law was passed to prevent "abusive pricing." 
The law will likely face a legal challenge.  

    The tax system in Brazil is extremely complex, with a wide
range of income and consumption taxes levied at the federal,
state and municipal levels.  Both payment and collection of
taxes is burdensome.  An effort to streamline the tax system
was begun in 1991; considerable progress has been made to
improve collections.  Significant further reforms will require
constitutional revision.

    The privatization program initiated in 1990 to reduce the
size of the government and improve fiscal performance slowed to
a near halt during 1994.  The planned privatization of part of
the electricity sector was abandoned entirely, while a number
of planned auctions of financially troubled or non-competitive
state-owned companies were delayed in response to lukewarm
investor interest and low price offers.  The pace of
privatizations is expected to increase significantly during
1995, under the administration of President-elect Fernando
Henrique Cardoso, who took office on January 1, 1995.


4.  Debt Management Policies

    Brazil's external debt totaled approximately $146 billion
at the end of 1993.  Of this total, about $34 billion is
medium-term commercial bank debt owed by the government. 
Foreign private bank debt is $63 billion, of which the U.S.
share is $24 billion.  In 1993, Brazil's debt service payments
represented 4 percent of its gross domestic product, and 42
percent of its export earnings.

    In April 1994, the government concluded a debt
renegotiation agreement with foreign commercial banks.  The
agreement included exchanging $35 billion in medium-term
commercial bank debt for new instruments.  The agreement also
included rescheduling outstanding arrears.  Unlike past Brady
Plan debt exchanges, the Brazilian deal was closed without the
support of the official international financial community since
the Brazilian government was unable to reach an agreement with
the IMF for a standby program.

    Brazil did not reach an agreement with the Paris Club
during 1994 to reschedule official debt.  Under Brazil's 1992
agreement with the Paris Club, further debt rescheduling is
contingent upon the government concluding a standby agreement
with the IMF.


5.  Significant Barriers to U.S. Exports

    Import Licenses:  Although Brazil requires import licenses
for virtually all products, import licensing generally does not
pose a barrier to U.S. exports.  Import licenses, which until
1990 were a significant barrier to imports, are now used
primarily for statistical purposes and generally are issued
automatically within five days.  However, obtaining an import
license can occasionally still be difficult.  For example, the
Brazilian government has refused to grant an import license for
lithium for nearly two years.  In January 1992, a standard
import license fee of approximately $100 was instituted,
replacing a 1.8 percent ad valorem fee.

    The Secretariat of Foreign Trade's computerized trade
documentation system (SISCOMEX), scheduled to be fully
operational in January 1995, will further streamline filing and
processing of import documentation.

    Services Barriers:  Restrictive investment laws, lack of
administrative transparency, legal and administrative
restrictions on remittances, and arbitrary application of
regulations and laws limit U.S. service exports to Brazil.  In
some areas, such as construction engineering, foreign companies
are prevented from providing technical services unless
Brazilian firms are unable to perform them.

    Many service trade possibilities are restricted by
limitations on foreign capital under the 1988 Constitution.  In
particular, services in the telecommunications, oil field, and
mining industries are severely restricted.  Foreign financial
institutions are restricted from entering Brazil or expanding
pre-1988 operations.  Restrictions exist on the use of
foreign-produced advertising materials.

    Foreign legal, accounting, tax preparation, management
consulting, architectural, engineering, and construction
industries are hindered by various barriers.  These include
forced local partnerships, limits on foreign directorships and
non-transparent registration procedures.

    Foreign participation in the insurance industry is impeded
by limitations on foreign investment, market reserves for
Brazilian firms in areas such as import insurance, and the
requirement that parastatals purchase insurance only from
Brazilian-owned firms.  Further, the lucrative reinsurance
market is reserved for the state monopoly, the Reinsurance
Institute of Brazil (IRB).

    Other legal and administrative obstacles to foreign
services suppliers are being eased.  In January 1992, the
government announced rules which allow foreign remittances of
trademark license fees and technology transfer payments covered
by franchising agreements.  The change effectively ended a
20-year ban on international franchising in Brazil.

    Investment Barriers:  In addition to the restrictions on
the services-related investments mentioned above, foreign
investment faces various prohibitions in petroleum production
and refining, internal transportation, public utilities, media,
real estate, shipping, and various other "strategic
industries."  In other sectors, such as the auto industry,
Brazil limits foreign equity participation and imposes
local-content requirements.  Foreign ownership of land in rural
areas and adjacent to international borders is prohibited.

    Foreign investors are denied national treatment pursuant to
the constitutional distinction between national and foreign
capital.

    Informatics:  Under the 1991 Informatics Law, prohibitions
or requirements for government prior review for imports,
investment, or manufacturing by foreign firms in Brazil were
eliminated.  However, import duties remain high (up to 35
percent) on informatics products, and Brazilian firms receive
preferential treatment in government procurement and have
access to certain fiscal benefits, including tax reductions. 
For a foreign-owned firm to gain access to most of these
incentives, it must commit to invest in local research and
development and meet export and local training requirements. 
Rules governing computer software are contained in Law 7646
(the software law) of December 1987.  The software law requires
that all software be "catalogued" by the Informatics
Secretariat of the Ministry of Science and Technology prior to
its commercialization in Brazil, and that in many cases
software must be distributed through a Brazilian firm.  The law
contains provisions to deny cataloguing of foreign software if
the Secretariat determines there is a similar program of
Brazilian origin.  However, this provision is no longer
applied.  A draft law has been introduced into Brazil's
Congress to eliminate the requirement for cataloguing, the test
of similarities, and the requirement that software to be run on
Brazilian-origin hardware must be distributed by a Brazilian
firm.

    Government Procurement:  Given the significant influence of
the state-controlled sector due to its large size,
discriminatory government procurement policies are, in relative
terms in Brazil's market, an important barrier to U.S.
exports.  For example, discriminatory government procurement
practices in the computer, computer software and digital
electronics sector may have significant adverse market access
implications for U.S. firms, particularly firms not established
in Brazil.

    Article 171 of the 1988 Constitution provides for
government discrimination in favor of "Brazilian companies with
national capital."  On June 21, 1993, Brazil adopted
procurement legislation, Law Number 8666, requiring open bids
based upon the lowest price.  However, in late 1993 the
government introduced new regulations which allow consideration
of non-price factors and give preferences to
telecommunications, computer, and digital electronics goods
produced in Brazil, and stipulate local content requirements
for eligibility for fiscal benefits.  In March 1994, the
government issued Decree 1070 regulating the procurement of
informatics and telecommunications goods and services.  The
regulations require federal agencies and parastatal entities to
give preference to locally produced computer products based on
a complicated and non-transparent price/technology matrix.  It
is not possible to estimate the economic impact of these
restrictions upon U.S. exports.  However, free competition
could provide significant market opportunities for U.S. firms.

    Brazil is not a signatory to the GATT Government
Procurement Code.


6.  Export Subsidies Policies

    In general, the Brazilian Government does not provide
direct subsidies to exporters, but does offer a variety of tax
and tariff incentives to encourage export production and to
encourage the use of Brazilian inputs in exported products. 
Several of these programs have been found to be countervailable
under U.S. countervailing duty provisions in the context of
specific subsidy/countervailing duty cases.  Incentives include
tax and tariff exemptions for equipment and materials imported
for the production of goods for export, excise and sales tax
exemptions on exported products, and excise tax rebates on
materials used in the manufacture of export products. 
Exporters also enjoy exemption from withholding tax for
remittances overseas for loan payments and marketing, and from
the financial operations tax for deposit receipts on export
products.  In October 1994, the Brazilian government issued
Decree Law 674, granting exporters a rebate on social
contribution taxes paid on locally acquired production inputs. 

    An export credit program, known as PROEX, was established
in 1991.  PROEX is intended to eliminate the distortions in
foreign currency-linked lending caused by Brazil's high rates
of inflation and currency depreciation.  Under the program, the
government provides interest rate guarantees to commercial
banks which finance export sales, thus ensuring Brazilian
exporters access to financing at rates equivalent to those
available internationally.  Capital goods, automobiles and auto
parts, and consumer goods are eligible for financing under the
PROEX program.


7.  Protection of U.S. Intellectual Property

    Brazil's regime for the protection of intellectual property
rights is inadequate.  Serious gaps exist in current statutes
with regard to patent protection for pharmaceuticals,
chemicals, and biotechnological inventions; trademarks and
trade secrets; and copyrights.  Legislation has been pending
before the Brazilian Congress for several years to address many
of these areas.  The Brazilian government has made a commitment
to bring its intellectual property regime up to the 
international standards specified in the Uruguay Round Trade
Related Aspects of Intellectual Property (TRIPs) Agreement.  As
a result of this commitment, the U.S. government terminated the
Special 301 investigation initiated in May of 1993, and revoked
Brazil's designation as a "priority foreign country."  Brazil
remains under Section 306 monitoring.

    Brazil is a signatory to the GATT Uruguay Round Accords,
including the TRIPs Agreement.  Brazil is a member of the World
Intellectual Property Organization and a signatory to the Berne
Convention on Artistic Property, the Universal Copyright
Convention, the Washington Patent Cooperation Treaty, and the
Paris Convention on Protection of Intellectual Property.  

    Patents:  Brazil does not provide either product or process
patent protection for pharmaceutical substances, processed
foods, metallurgical alloys, chemicals, or biotechnological
inventions.  The Industrial Property Bill passed in 1993 by the
Chamber of Deputies and currently pending before the Senate
would recognize the first four of these categories and extend
the term for product patents from 15 to 20 years.  The
Brazilian government announced in early 1994 that it would
support amendments to the bill which would bring its provisions
into conformity with TRIPs provisions, including those on
compulsory licensing, domestic working requirements and
parallel imports.

    Trade Secrets:  Brazil lacks explicit legal protection for
trade secrets, although a criminal statute against unfair trade
practices can, in theory, be applied to prosecute the
disclosure of privileged trade information.  The Industrial
Property Bill pending in Congress includes civil penalties and
injunctive relief for trade secret infringement.

    Trademarks:  All trademarks, as well as licensing and
technical assistance agreements (including franchising), must
be registered with the National Institute of Industrial
Property (INPI).  Without such registration, a trademark is
subject to cancellation for non-use.  The pending Industrial
Property Bill includes significant trademark revisions which
will improve trademark protection.  

    Copyrights:  While Brazil's copyright law generally
conforms to international standards, the 25-year term of
protection for computer software falls considerably short of
the Berne Convention standard of the life of the author plus 50
years.  Enforcement of copyright laws has been lax.  Current
fines do not constitute an adequate deterrent to infringement. 
The U.S. private sector estimates that piracy of video
cassettes, sound recordings and musical compositions, books and
computer software continues at substantial levels.  In the last
two years, enforcement of laws against video and software
piracy has improved, and foreign firms have had some success in
using the Brazilian legal system to protect their copyrights. 
The government has also initiated action to reduce the
importation of pirated sound recordings and videocassettes.

    Semiconductor Chip Lay-out Design:  A bill introduced in
1992, and still pending before the Congress, will protect the
lay-out designs of integrated circuits.  Amendments to the 
draft law are expected to bring its provisions into conformity
with the TRIPs text.

    Impact on U.S. Trade:  In early 1994, the U.S.
pharmaceuticals industry estimated losses of $500 million due
to inadequate intellectual property protection.  The U.S.
software industry claims losses of $268 million, and estimates
that less than 50 percent of the software in use in Brazil was
legally obtained.  The Motion Picture Export Association of
America estimates its annual losses due to motion picture
piracy in Brazil at $39 million.


8.  Worker Rights

    a.  The Right of Association

    Brazil's Labor Code provides for union representation of
all Brazilian workers (excepting military, military police and
firemen), but imposes a hierarchical, unitary system, funded by
a mandatory "union tax" on workers and employers.  Under a
restriction known as "unicidade" (one per city), the code
prohibits multiple unions of the same professional category in
a given geographical area.  It also stipulates that no union's
geographic base can be smaller than a municipality.  The 1988
Constitution retains many provisions of the 1943 Labor Code. 
The retention of "unicidade" and of the union tax continues to
draw criticism both from elements of Brazil's labor movement
and from the International Confederation of Free Trade Unions
(ICFTU).

    In practice, however, "unicidade" has proven less
restrictive in recent years, as more liberal interpretations of
its restrictions have permitted new unions to form and, in many
cases, compete with unions and federations that had already
enjoyed official recognition.  The sole bureaucratic
requirement for new unions is to register with the Ministry of
Labor which, by judicial decision, is bound to receive and
record their registration.  The primary source of continuing
restriction is the system of labor courts, which retain the
right to review the registration of new unions, and adjudicate
conflicts over their formation.  Otherwise, unions are
independent of the government and of political parties. 
Approximately 20 to 30 percent of the Brazilian workforce is
organized, with just over half of this number affiliated with
an independent labor central.  (Mandatory labor organization
under the Labor Code encompasses a larger percentage of the
workforce.  However, many workers are believed to have minimal
if any contact with these unions.)  Intimidation of rural labor
organizers by landowners and their agents continues to be a
problem.

    The Constitution provides for the right to strike
(excepting, again, military, police and firemen, but including
other civil servants).  Enabling legislation passed in 1989
stipulates that essential services remain in operation during a
strike and that workers notify employers at least 48 hours
before beginning a walkout.  The Constitution prohibits
government interference in labor unions but provides that
"abuse" of the right to strike (such as not maintaining 
essential services, or failure to end a strike after a labor
court decision) is punishable by law.

    b.  The Right to Organize and Bargain Collectively

    The right to organize is provided by the Constitution, and
unions are legally mandated to represent workers.  With some
government assistance, businesses and unions are working to
expand and improve mechanisms of collective bargaining.  Under
current Brazilian law, however, the scope of issues subject to
collective bargaining is narrow and the labor court system
exercises normative powers with regard to the settlement of
labor disputes, thereby discouraging direct negotiation. 
Existing law charges these same courts, as well as the Labor
Ministry, with mediation responsibility in the preliminary
stages of dispute settlement.  Wages are set by free
negotiation in many cases, and in others by labor court
decision.  There is a movement for extensive revisions in the
Labor Code which would broaden the scope of collective
bargaining and restrict the role of the labor courts, but such
changes appear unlikely in the near future.

    The Constitution incorporates a provision from the Labor
Code which prohibits the dismissal of employees who are
candidates for or holders of union leadership positions. 
Nonetheless, dismissals take place, with those dismissed
required to resort to a usually lengthy court process for
relief.  In general, enforcement of laws protecting union
members from discrimination lacks effectiveness.

    Labor law applies uniformly throughout Brazil, including
the free trade zones.  However, unions in the Manaus free trade
zone, rural unions and many unions in smaller cities are
relatively weaker vis-a-vis industry compared to unions in the
major industrial cities of the southeast.

    c.  Prohibition of Forced or Compulsory Labor

    Although the Constitution prohibits forced labor, there
have been credible citations of cases of forced labor in
Brazil.  The federal government asserts that it is taking steps
to halt the practice and prosecute perpetrators, but admits
that existing enforcement resources are inadequate.  The
largest number of reports of forced labor originate in rural
areas.  A provision in the agricultural reform law passed in
1993 provides for the confiscation of property in cases of
forced labor.  The law by itself is unlikely to have
significant impact without extensive improvements in
enforcement activity.

    d.  Minimum Age of Employment of Children

    The minimum working age under the Constitution is 14,
except for apprentices, and legal restrictions are also set in
the Constitution to protect working minors under age 18.  There
are credible reports indicating problems with enforcement. 
Further, judges can authorize employment for children under 14
when they believe it appropriate.  (The ILO noted in 1992 that
the constitutional provision for apprenticeships under age 14
is not in accordance with ILO Convention No. 5 on minimum age
in industry.)  By law, the permission of the parents or 
guardians is required for minors to work, and provision must be
made for them to attend school through the primary grades.  All
minors are barred from night work and from work that
constitutes a physical strain.  Minors are also prohibited from
employment in unhealthful, dangerous, or morally harmful
conditions.

    Despite these legal restrictions, however, official figures
indicate that nearly three million children 10 to 14 years of
age are employed.  Of these, 46 percent work eight hours or
more per day, with most earning no more than one minimum salary
($70 to $100 per month).

    e.  Acceptable Conditions of Work

    Unsafe working conditions are prevalent throughout Brazil. 
Enforcement of the occupational health and safety standards
established by the Ministry of Labor is weak due to
insufficient resources for inspection.  There are credible
allegations of corruption within the enforcement system. 
Workers, or their union, can file a claim with the regional
labor court if a workplace safety or health problem is not
resolved directly with the employer, although in practice this
is frequently a cumbersome, protracted process.

    f.  Rights in Sectors with U.S. Investment

    U.S. investment is concentrated heavily in the
transportation equipment, food, chemicals, petroleum
distribution and electric/electronic equipment industries. 
Labor conditions in industries owned by foreign investors
generally meet or exceed the minimum legal standards
established under Brazil's Labor Code.



  Extent of U.S. Investment in Selected Industries.--U.S. Direct
Investment Position Abroad on an Historical Cost Basis--1993

                    (Millions of U.S. dollars)
                                                                
              Category                          Amount          

Petroleum                                                738
Total Manufacturing                                   12,574
  Food & Kindred Products                   1,596
  Chemicals and Allied Products             2,144
  Metals, Primary & Fabricated                673
  Machinery, except Electrical              1,668
  Electric & Electronic Equipment             715
  Transportation Equipment                  2,265
  Other Manufacturing                       3,514
Wholesale Trade                                           96
Banking                                                1,139
Finance/Insurance/Real Estate                          1,946
Services                                                  80
Other Industries                                         334
TOTAL ALL INDUSTRIES                                  16,908   

Source: U.S. Department of Commerce, Bureau of Economic
Analysis

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