Stockwell Day signs long-awaited S&T framework agreement with Brazil

Canada has finally signed a formal S&T agreement with Brazil that could pave the way for a significant boost in high-tech and other trade between the two nations. The agreement is the third Canada has signed recently with an emerging economy following last year's collaborative pacts with India and China and comes at a time of increased Brazilian interest in investing in Canada.

The agreement was signed last month in Sao Paulo and is the fifth R&D collaboration to be managed by International Science and Technology Partnerships Canada (ISTPCanada), which is tasked with delivering $20 million over five years to support formal bilateral S&T projects.

"Brazil is the tenth largest economy in the world and it recently made a $26-billion long-term investment in science and technology. We want to be able to make sure that Canadian entrepreneurs and enterprises can tap into that," says Stockwell Day, minister of International Trade. "They're our third largest trading partner in the Americas and we want to build and lever those interests. We have an S&T fund for that."

How effective the International Science and Technology Partnerships Program (ISTPP) will be in stimulating Canada-Brazil R&D projects remains to be seen. The program's $20-million fund was launched in 2005 with the bulk of the money allocated towards India, China and Israel. That leaves just $1.5 million over two years for Brazilian projects — funds that would presumably be matched by Brazilian sources. Details of the agreement are not being made public until it is tabled in Parliament for ratification, likely at the end of January/09.

Day notes that ISTPP's funding has a 7.5:1 leverage factor but acknowledges that more funding would be preferable. "I will push hard for its continuance and if possible to expand it," he says. "We also need to get liquidity into the system at a time of tight credit."

Day's trip to Sao Paulo included the signing of a side agreement in Campinas between Canadian Light Source Inc and the Brazilian Association of Synchrotron Light Technology, operator of the Brazilian Synchrotron Light Laboratory. The deal will facilitate project collaboration, the development of common specialized knowledge and personnel exchange. The two synchrotrons already collaborate on the design and construction of components to be used for X-ray diffraction equipment planned for both facilities.

Negotiations leading to the S&T agreement began in earnest in early 2007 with two official trade visits that year. One visit included then national science advisor Dr Arthur Carty and Dr Ted Hewitt, VP research and the Univ of Western Ontario (R$, August 13/07).

Renewed interest by both nations helped to revive earlier efforts to strike an S&T agreement that was postponed in 2003. It is also helping to erase any lingering bad blood that was generated by a nasty six-year feud over aerospace subsidies for Bombardier and Brazil's Embraer. Arbitration by the World Trade Organization ultimately ended in Brazil's favour (R$, January 20/03).

Brazil is South America's largest R&D performer and is aiming to increase its R&D outlays as a percentage of gross domestic product from 1% to 2% by 2010 — the end of president Lula da Silva's second term of office. (de Silva was originally set to sign the S&T agreement in Ottawa last fall. The trip was cancelled due to scheduling conflicts).

Day says Canada is ideally poised to benefit from its S&T agreement with Brazil, given that country's increased interest in Canada's resources and high-tech assets, as well as the stability of the Canadian banking system.

"This message has resonated clearly around the trade table. In Lima (where Day attended an Asia Pacific Economic Cooperation Ministerial Meeting) it was the talk of the town," he says. "The S&T agreement fits in with the tool box of items that we are applying to counterweight this fiscal situation."

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