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Where do Relations Between the U.S. and Brazil Stand Today?

By Peter Hakim, Roberto Teixeira da Costa, Paulo Sotero, Mark S. Langevin
Latin America Advisor, June 10, 2013

Q: During a recent three-day visit to Brazil, U.S. Vice President Joe Biden called for stronger ties between the two countries in areas such as education, technology, science and trade and said that 2013 will usher in a new era in bilateral relations between the countries. Where do U.S.-Brazil relations stand today? What's been holding back stronger trade and economic ties to date, and what makes the vice president say 2013 will be much different? What are the most sensitive aspects of the bilateral relationship today that could derail closer ties in the future?

A: Peter Hakim, member of the Advisor board and president emeritus of the Inter-American Dialogue: "The United States is making important diplomatic gestures, but no critical shifts in policy direction toward Brazil are visible so far. Brazilian leaders know that no serious country or group of countries will sign a significant free-trade agreement with Mercosur or any trading bloc that includes Venezuela and Argentina. Brazil could negotiate bilateral economic agreements without calling them FTAs. Last year, Brazil and Mexico appeared close to such a special economic arrangement. My guess is that Brazil will eventually find a way to build stronger links with Mexico, the United States, and the European Union. But so far, neither these nations nor Brazil have shown much willingness to negotiate seriously and make needed concessions. The sense in Washington is that whatever the United States does, the U.S.-Brazil relationship will not change much. It will remain amiable and civil without major conflict, but a close, productive partnership is not in the cards. Bilateral relations have improved under Dilma. She is far less flamboyant than Lula and less interested in asserting Brazil's global and regional influence. She cares about global stature but is more interested in how international relations will contribute to Brazil's internal development. Economic logic may eventually persuade her to upgrade the relationship with United States--but she has done little to accomplish that so far. She has, however, softened the Brazilian public position on issues of primary concern to the United States--like Iran and Venezuela. Today, the U.S.-Brazil relationship is like vanilla ice cream--sweet, but rather bland--with few new opportunities, but no significant tensions or conflicts. The state visit in October might bring about change, but it seems more likely to end up being a substitute for agreement on substantive issues."

A: Roberto Teixeira da Costa, board member of SulAmérica in São Paulo: "In the present scenario, I don't see substantial changes in U.S.-Brazil relations, but if compared with the situation under President Lula, one notices an improved dialogue and less antagonistic positions. Different from her predecessor, President Dilma Rousseff has been forced to dedicate more time in the 28 months of her government to domestic issues, such as political alliances, economic issues, inflationary pressures, adjustments in the administrative apparatus and more recently, dealing with Indian reservations and funding for infrastructure projects. The World Cup in 2014 is also forcing the government to prioritize infrastructure in order to host an event that is seen as successful in the eyes of the world. More than ever, Mercosur is on the top of the agenda. Brazil's relationship with Argentina is passing through a very turbulent phase and there is a growing feeling that Mercosur should revert to being a free-trade agreement instead of an imperfect customs union. Many observers show concern that the Pacific Alliance is going to impose new constraints on the Brazilian external trade of manufactured goods, and it will add pressure for Brazil to look for new trade agreements out of Mercosur, which limits any member's ability to pursue individual agreements. Thus, while it makes great sense for Vice President Biden to ask for more ties between the two countries in education, technology and science, my sense is that domestic issues will prevail, particularly keeping in mind that there will be a presidential election in 2014, and the campaign has already, prematurely, begun. When Biden states that 2013 will be different, he is perhaps referring to the official visit of President Rousseff to the United States, which will hopefully have a very positive impact."

A: Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Center for Scholars: "After derailing in the wake of Brazil and Turkey's failed mediation efforts on the Iranian nuclear program in 2010, Brazil-U.S. relations were put on a constructive path by Presidents Dilma Rousseff and Barack Obama. It has produced a few presidential meetings, policy framework initiatives and a tax information exchange agreement. The door is open for more. Vice President Biden's statement reflects the optimistic view generated by the improved relationship, which is also illustrated by Obama's invitation to Dilma Rousseff to make a state visit to Washington in late October, the first by a Brazilian president in more than 18 years. Obviously, the visit could generate exaggerated expectations, which carry their own risks. Whether Biden's view will materialize depends on the presidential leadership of both countries to move the relationship beyond process and symbolism towards concrete and consequential decisions in key areas. As Brazil's underperforming economy pressures the government to adopt an investment-driven economic growth agenda, there is a clear need and ample opportunities to further Brazil-U.S. bilateral cooperation with consequential agreements in science, technology, space, education, energy, defense, tax, investment and trade. A deal that would include the purchase of Boeing jet fighters by Brazil, mentioned as a possibility in press reports after Biden's visit, is an example of a potential positive development in strategic engagement that would strengthen ties in a key high-value supply chain where Embraer is already present. In any case, the notion underlining the question, that bilateral Brazil-U.S. bilateral relations are headed to a new derailment, is obviously misplaced."

A: Mark S. Langevin, director of BrazilWorks in Washington:  "Biden's visit to Brasília comes just as the Obama administration moves into a second term with a focus on foreign policy initiatives, including more engagement with Latin American governments and apparently a starring role for Brazil. Obama and Biden have a lot to offer Brasília, both symbolically and substantively. The list includes easing visa requirements, commercial cooperation to build a regional biofuels market, eliminating double taxation, new avenues for trade and investment, joining forces to move the Doha round of the WTO forward, and framing a sensible reform of the United Nations Security Council that includes a permanent role for Brazil. Just don't hold your breath. There is still the WTO cotton dispute that is tightly woven throughout bilateral relations and vividly illustrates Washington's inability to terminate commercial conflicts with Brazil efficiently and definitively. The cotton dispute reminds Brasília of the asymmetrical nature of the relationship and the unwillingness or inability of successive U.S. governments to walk the talk on trade matters. Yet, this lingering conflict also provides a pivotal opportunity for the Obama administration to demonstrate its recognition of Brazil's importance, build confidence between the two governments, and ultimately resolve the dispute in a way that deepens cooperation between the people and governments of the two nations. If President Obama, working with congressional leaders, can bring an end to this dispute, then we can all expect a new era in bilateral relations that is commensurate with the increasingly dense social and organizational ties that bring Brazilians and U.S. citizens together more than ever before."