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Tech Opportunities Abound In Brazil
by William New
The Commerce Department this week released a report on opportunities in Brazil for U.S. information technology, telecommunications and e-commerce companies.
Brazil is the top IT market in Latin America, accounting for one of every two dollars spent on IT products and services in the region. The report highlights optimism that Brazil's economy will grow in 2002, citing expectations of a 2 percent to 2.5 percent growth rate.
Spending on IT services in Brazil is expected to overtake investment in computer equipment in 2003. While demand for computer hardware should decline somewhat, the report predicted, networking equipment should recover, packaged software purchases should exceed 2001 levels, and the IT services market is "expected to have the most pronounced turnaround of any IT spending category."
U.S. software companies dominate the Brazilian market in Internet and e-commerce-related software and services, operating systems for server and computer platforms, database-management software, and applications development tools, the report said. But firms face a high rate of software piracy, uncertainty about tariffs, and various federal, state and local taxes.
In hardware, the "best prospects" are in scanners, printers, disk drives and digital videodisc players, the report said. High-end data-storage devices may become more attractive in light of increased concern about data security and disaster recovery.
Internet access continues to rise rapidly in Brazil, with the demand for high-speed connections expected to increase. Business-to-business e-commerce is the driver of that transition, and e-commerce initiatives have emerged in some industry areas. Brazil also leads Latin America in online retailing, accounting for more than half of Internet sales.
Brazilian law currently does not specifically regulate e-commerce, though existing laws have been applied to some disputes. The Brazilian Congress is considering bills on the legal aspects of e-commerce, but much of the action has focused on digital security.
The U.S. Commerce Department published reports on the tech markets in Argentina, Central Europe and Mexico in May. Similar reports on France, Germany and Japan are due "in the near future," and a report on China is due by year's end, the department said in a release.
Europe Seeks Views On Cyber Squatting
The European Commission is gathering views on cyber squatting in its effort to prevent the practice on the future European domain-name suffix .eu. The commission's Internal Market directorate-general is collecting views through a questionnaire on its "Your voice in Europe" Web site.
The site highlights potential problems such as a person registering a domain name in good faith but then receiving a threatening accusation that he is a cyber squatter or, on the other hand, trying to register a name and being told by the current owner that it is only available for an extortionate sum. The deadline for responses is Oct. 31.
In other news, the commission this week established a radio-spectrum policy group and a European regulators group to help the commission develop the European market for electronic communications networks and services. Radio spectrum allows for the transmission of mobile and fixed wireless communications.
"With the founding of the radio-spectrum policy group, the European Union finally has a platform on which the member states, the commission and stakeholders can coordinate the use of radio spectrum," European Information Society Commissioner Erkki Liikanen said in a statement. "With the European regulators group, we will have a means of ensuring consistent application of the recently adopted rules for electronic communications services throughout the EU."
The radio-spectrum group will involve high-level representatives from the 15 EU nations, the commission and observers, and will consult with stakeholders. Both groups will complement the European Parliament and council decision on radio-spectrum policy and the directives for e-communications, which took effect April 24.
The Intersect Between Technology And U.S. Taxes
Deputy Treasury Secretary Kenneth Dam said Tuesday that the United States' dependence on the information economy means that it should be able to have different tax rules.
"There are many reasons to believe that the principles that guided the U.S. international tax policy in the past should be reconsidered in today's highly competitive, knowledge-driven economy," Dam told the Senate Finance Committee. "In this regard, it is significant that the U.S. tax system differs in fundamental ways from those of our major trading partners."
To that end, the U.S. laws should not generate a bias against U.S. firms' ability to compete with foreign-based companies, he said. Dam was speaking on the subject of the United States' need to reform its international tax law to meet the terms of a World Trade Organization case it lost.
Dam stressed the importance of the high-tech industry at length in his prepared remarks. "Today, America's strength is its ability to innovate: to create new technologies and to react faster and smarter to the commercialization of these technologies," he said. "America's pre-eminent resource is its knowledge base."
Microsoft's Pressure Diplomacy In Peru
Microsoft appears to have received U.S. government support in opposing legislation in Peru that would decree the use of "open source" software across government systems, Wired News reports.
U.S. Ambassador John Hamilton sent a letter in June to the president of the Peruvian Congress that said by excluding companies like Microsoft, the South American nation would harm an industry that "has the potential to create 15,000 jobs in the local economy."
In addition, Microsoft chief Bill Gates recently visited Peru, where the company's investment is estimated at $50 million, and gave $550,000 to President Alejandro Toledo for the national school system.
Trade Group Analyzes Relations In North America
The International Trade Commission has published two articles -- one on "North American Trade Growth Since the North American Free Trade Agreement" (NAFTA) and the other on "Closer Integration between Canada and the United States" -- in its most recent International Economic Review.
The NAFTA article compares the nature of U.S. trade growth with Canada and Mexico to that with non-NAFTA partners. It gives insights into whether the composition of goods is changing. The other article emphasizes the increased interdependence of Canada and the United States since the Sept. 11 terrorist attacks focused attention on border security.
In other trade news, WTO Director-General Mike Moore on Tuesday announced the appointment of a veteran U.S. trade lawyer as director of the body's legal affairs division. Bruce Wilson, an attorney at Akin Gump in Washington, served over the past two decades at the Office of the U.S. Trade Representative and the House Ways and Means Trade Subcommittee.
Moore said in a statement that he consulted with incoming Director-General Supachai Panitchpakdi before making the decision. Wilson, who also has served as president of the Washington International Trade Association the past four years, begins WTO duties Sept. 16.
France Hosts Digital Economy Conference
The digital economy task force of the French Ministry of Economy, Finance and Industry will hold an international conference in Paris on Oct. 24-25. The conference will focus on the role public authorities should play in developing the digital economy.
The event is expected to include senior officials from across Europe, the United States, Japan, Canada, Malaysia and Australia. They will discuss issues such as confidence and security in public e-services, online payments and public procurement.
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