Politics put to one side in sign of closer ties between Brazil and the US
By Joe Leahy
When the Brazilian diplomat Roberto Azevêdo clinched the biggest job in global tradelast week – as director-general of the World Trade Organisation – he received a relatively warm response from Washington.
The US could not have been expected to do anything other than vote for Mr Azevêdo’s rival, Herminio Blanco, the former trade minister of Mexico.
The growing sense of bonhomie between the two countries makes sense. For the US, Brazil is looking more than ever like a friendly face in an increasingly multipolar world, one that is tilting slowly towards east Asia. For Brazil, the US, with its technology, quality higher education and capital markets, is an ever more important partner in the effort to become more internationally competitive and escape the middle income trap in which it has languished for decades.But Washington’s decision to “join the consensus” when Mr Azevêdo was selected by the WTO and back the Brazilian candidate showed both respect for the man and for the emerging power he represents.
Perhaps for this reason, Barack Obama, the US president, is expected later this year to roll out the red carpet and offer Dilma Rousseff, his Brazilian counterpart, the first state visit for a leader of her country since 1995.
“It’s an important time between the US and Brazil,” says Eric Farnsworth, vice-president of the Council of Americas and Americas Society.
“Everything I see indicates that Washington views Brazil’s rise as a favourable development.”
Brazilian and US relations date back to 1824 when Washington became the first state to recognise the independence of the Latin American power to the south. Brazil was also the only South American country to send troops to fight on the allied side in the second world war.
Although the relationship has usually been cordial, it has been characterised by periods of indifference. Like two good enough neighbours, relations remain reasonably good as long as the conversation does not stray too much towards politics, a subject on which Brazil, with its social democratic leanings, mostly sits to the left of Washington.
In spite of this, Brazilian presidents in recent decades have got on well with their US counterparts. Fernando Henrique Cardoso, president during the 1990s and early 2000s, was very close to US president Bill Clinton. Former Brazilian president, Luiz Inácio Lula da Silva, though once a trade union firebrand, got on famously with his US counterpart, George W. Bush.
Ms Rousseff and Mr Obama are not seen to have the same rapport and both have been more preoccupied with domestic politics. But relations between them are warming.
On the policy side, things have not always been smooth. Mr Lula da Silva prompted US suspicion in 2010 when he tried to intervene alongside Turkey in the dispute over Iran’s nuclear programme. Mr Lula da Silva and Ms Rousseff’s ruling Workers party has been a traditional friend of regimes considered unpalatable by the US, such as Cuba and Venezuela under the recently deceased Hugo Chávez.
Brazil’s independent stance, not only on these countries but in seeking to establish alternative power blocs, has grated on Washington. Ms Rousseff’s first overseas trip, for instance, was to Beijing rather than to its western trading partners. “There is a certain frustration in Washington,” says Mr Farnsworth. “Brazil seems to be as interested in developing a relationship with China as they are with the US. I don’t think most people would suggest the Chinese and US models are compatible.”
Throughout it all, trade in goods has continued to grow. It increased from as little as $28bn in 2002 to nearly $77bn last year, with a $11.6bn surplus in favour of the US, according to the US Census Bureau.
Brazil is the kind of trading partner the US needs, and it supports about 300,000 jobs in its northerly neighbour. It also buys the types of products the US wants to sell more of – aircraft parts, machinery and plastics. US services exports to Brazil have also increased, more than tripling between 2002 and 2011 to nearly $20bn.
For Brazil, the US, with its transparent business practices and focus on innovation and intellectual property, is the kind of trading partner it prefers. After an initial honeymoon with Beijing in the first decade of this century, when China became its biggest trading partner, Brazil is growing frustrated with aspects of the business relationship.
An old developing world ally, China is importing Brazil’s iron ore and soyabeans but in return swamps the Latin American country with cheap imports. “We are a rare example of a country that holds a sizeable trade surplus with China – $11bn in 2011 – but it’s not the quality of trade that we would like to see sometimes,” says Antônio Patriota, foreign minister.
Mindful that US universities are one means of improving its competitiveness, Brazil is sending a large number of students under its R$3bn ($1.5bn) science without borders scholarship programme to colleges in the US.
Brazilian companies, meanwhile, are tapping the strengthened capital markets of the US for private sector investment.
Defence co-operation is improving, with the US maintaining an order for a group of Brazilian light attack aircraft, the country’s first such contract with the US military. Embraer, the Brazilian builder of the aircraft, has signed a co-operation agreement with Boeing to develop a jet-engined military transport aircraft. This has strengthened aspirations in Washington that the US might eventually win a contract to supply the Brazilian air force with fighters.
The growing relationship is leading to hopes that thorny technical issues may one day be worked out. These include visa-free access for Brazilians to the US and a tax treaty that would simplify business dealings between the two.
The two countries which are competitors on global soya, orange juice and other commodities markets, are occasionally at odds on trade.
The US sometimes accuses Brazil of protectionism while Brazil has attacked US agricultural subsidies. Brazil is concerned that it is being left out of US efforts to build a web of bilateral agreements, such as with the EU, which it fears will undermine the global trading system.
US officials counter that Brazil is too wedded to the slow-moving South American trading bloc, Mercosur.
In the long run, the US seems willing to embrace the rise of a Brazil that pursues an independent foreign policy and insists on friendly relations with most countries in the world, no matter how distasteful Washington might find some of them. Brazil seems happy to expand its influence with a sense of responsibility to all.
“Brazil sees itself as a country that has a role in the global space, as an actor that will contribute and benefit from more integration with the international system,” says Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Center for Scholars.
In a 2011 report, the think-tank Council on Foreign Relations went further: “Brazil is on the short list of countries that will most shape the 21st century. US and Brazilian foreign policy must adjust accordingly.”
Copyright The Financial Times Limited 2013. You may share using our article tools. |
