Abstract

"Negotiating Industrial Decline: Embraer's Push into US Markets and the Politics of Commercial Diplomacy, 1972-1983"

Spencer Tompkins, Fordham University (jtompkins8@fordham.edu)

When Congress convened to discuss the Airline Deregulation Act of 1978, Representative Glenn Anderson expressed confusion over conflicting industry testimony. Some US aircraft manufacturers sold to Brazil, while others were excluded from the Brazilian market. Brazil’s state-owned aircraft producer, Embraer, had also begun disrupting the US market. These contradictions reveal a dilemma: in seeking to preserve US hegemony amid industrial decline, policymakers struggled to balance commitments to export expansion, monetary stability, international development, free trade, and deregulation. Examining Embraer's US market entry, I show how Brazil exacerbated this dilemma by navigating US opposition. I explore three moments: Embraer's partnership with US manufacturer Piper Aircraft (1972), Brazil’s aircraft tariff and push for FAA certification (1975), and Embraer’s success in the US market following deregulation (1978). My analysis reveals how Brazil fragmented US industry by partnering with some firms while excluding others; emphasized Washington's policy contradictions in supporting national industry while critiquing Brazilian protectionism; pitted industrial nations against each other by threatening to shift to European suppliers; and thrived in the US’s deregulated airline market with inexpensive planes and state subsidized credit amid the Volcker shock. Brazil became the only developing country to export commercial aircraft. The US responded with "commercial diplomacy,” which resisted national industry calls for protection while promoting strategic sectors in foreign markets without jeopardizing monetary stability. They conceded to Brazilian demands, tolerating protection of its aircraft industry, while opening US markets to Brazilian exports. Commercial diplomacy emerged alongside neoliberalism from tenuous compromises responding to Global South pressure, revealing how free trade, fiscal discipline, and market rule unfolded in relation to developmental states’ export ambitions and US efforts to preserve foreign markets. Drawing on US and Brazilian archives, I analyze congressional hearings, trade negotiations, embassy correspondence, and Embraer publications.