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Embraer is world leader in the 70 to 130-seat segment

Empresa Brasileira de Aeronautica (Embraer) is the world leader in the 70 to 130-seat aircraft segment, accounting for 60% of global deliveries, according to the World Trade Organization (WTO).

In the aeronautics sector, privately owned Embraer is the world’s third largest producer of commercial jet aircraft and has produced more than 8,000 aircraft.

The Brazilian state continues to hold an interest through the ownership of golden shares that give it veto power.

Embraer has always been firmly integrated into global production chains, and imports continue to account for 70% of its value added.

Imports of aircraft (HS headings 8802 and 8803) continue to be subject to a zero duty rate and several parties have recently benefited from the elimination of tariffs.

Embraer is Brazil’s third largest exporter.

Exports have been significantly affected during the Covid-19 pandemic.

Embraer

The aerospace industry contributed approximately 0.5% to Brazil‘s GDP (2020), provided 25,000 jobs (directly), and accounted for $2.6 billion in export revenues (2021).

A strategic partnership signed in July 2018 between Embraer and U.S. aerospace manufacturer Boeing, whereby the latter would assume an 80% stake in Embraer’s commercial aircraft business, while the Brazilian company would keep the remaining 20% stake, as well as its entire military and private jet businesses, fell apart in April 2020.

According to the authorities, on June 14, 2020, the specific tax incentives for the aeronautical industry under the Special Regime for the Brazilian Aerospace Industry (RETAERO) were terminated.

In April 2022, Brazil’s Trade Strategy Council (CEC) approved a mandate to request Brazil’s accession to the WTO Agreement on Trade in Civil Aircraft, arguing that this strengthens the commitment to the multilateral trading system and provides greater predictability and legal certainty to the segment’s productive value chains.

The request for accession was formalized during the Twelfth Ministerial Conference (CM12).

In the last five years, Brazil eliminated import duties on certain aeronautical products and applied several temporary tariff reductions in response to the COVID-19 pandemic.

 

Redacción Opportimes

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