Latin America Advisor

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How Will the Brazil-U.S. Relationship Change Under Lula?

Photo of Jake Sullivan and Luiz Inácio Lula da Silva U.S. National Security Advisor Jake Sullivan earlier this month invited Brazilian President-elect Luiz Inácio Lula da Silva (L-R) to meet with U.S. President Joe Biden in Washington. // File Photo: Facebook Page of Luiz Inácio Lula da Silva.

The administration of U.S. President Joe Biden earlier this month invited Brazilian President-elect Luiz Inácio Lula da Silva to the White House. Lula expressed excitement about meeting with Biden and said he wanted to “deepen the relationship between our countries.” What will be the most important items on the agenda for when Biden and Lula meet? What are the most promising areas for closer cooperation between the United States and Brazil, and what challenges exist in the bilateral relationship? What’s at stake for the economic sectors and businesses in the two countries?

Gabrielle Trebat, managing director for Brazil and the Southern Cone at McLarty Associates: “The U.S.-Brazil relationship appears poised for a new era of cooperation on issues of the environment, climate change, democratic governance and human rights on the eve of the inauguration of President-elect Lula. Certainly, the issue of climate and deforestation shows to be a promising area of closer bilateral cooperation. Lula has made clear he will seek to reaffirm Brazil’s global leadership on climate action and environmental protection, choosing to attend COP27 in Egypt as his first international trip as president-elect. His appointment of a seasoned diplomat and former ambassador to Washington, Mauro Vieira, as minister of foreign relations signals that Lula will likely pursue a foreign policy strategy that promotes south-south cooperation, closer regional integration and a calibrated approach to engagement with the United States, China, Russia and Europe. Given China’s status as Brazil’s most important trading partner, the United States should expect Brazil to avoid stepping into political tensions between the United States and China. Likewise, Brazil’s reliance on fertilizer trade with Russia will limit Brazil’s ability to engage more robustly on the war in the Ukraine. Last week’s long-awaited U.S. Senate approval of the U.S. nominee to serve as ambassador to Brazil, Elizabeth Bagley, also provides Washington with critical diplomatic representation. Addressing regional issues such as the crisis in Haiti and migration from Venezuela also present opportunities for strengthening the U.S.-Brazil relationship. What is unlikely to advance is more meaningful trade cooperation given the lack of focus in Washington as well as Brasília on pursuing a bilateral trade deal in addition to Brazil’s steadfast commitment to Mercosur. OECD accession is also unlikely to be an early priority for the Lula administration, which could limit further cooperation with the United States on modernizing Brazil’s investment policies. Despite the limitations for further economic cooperation between the two countries, for the private sector, Brazil continues to be a bright spot in the region with regard to the positive economic outlook and investment opportunities, especially in areas such as renewable energy, infrastructure and fintech.”

Rubens Barbosa, former ambassador of Brazil to the United States: “With President Lula, the Brazil-U.S. relationship will return to being anchored on institutions and not on personal affinities. At this moment, the most important item on the two countries’ agenda is the strengthening of democracy and defense of human rights given the existing political circumstances in Brazil and in the United States. There are several promising areas for closer cooperation between the two countries. However, the environment and climate change will be at the center of bilateral attention, not only to cover the international agenda but also to enhance cooperation to preserve the Amazon rain forest with U.S. support as well. Lula’s visit to Washington and to Beijing early next year will show that Brazil’s new foreign policy will try to cooperate with both the United States and China without geopolitical or ideological alignment, always trying to put Brazil’s interest first. In other areas, there is a convergence of interests that may be examined, and a fruitful cooperation may emerge. In this context, Venezuela and Haiti will be at the top of the agenda. Trade and investment will continue to bring opportunities for companies in both countries. Digital transformation and artificial intelligence may also open new opportunities for cooperation. Growth, inflation and industrial policies are at stake for the economic sector and business in the two countries. How to do it in a global environment in the middle of a war and rising tensions between the United States and China, the two largest economies in the world, is the challenge for all.”

Amanda Mattingly, managing director at ACM Global Intelligence: “A meeting between U.S. President Biden and Brazilian President-elect Lula cannot come soon enough for the environment. Former President Trump and President Jair Bolsonaro wasted precious time with their climate denialism. Now, the United States and Brazil have a real opportunity to work together on climate policy, which should include decarbonization and preventing deforestation in the Amazon. Fortunately, Biden and Lula appear poised to cooperate on this main issue. Competing for first place on the agenda is support for democracy. Biden and Lula need to throw their full support behind democratic institutions and governance in Latin America, where economic woes and a lack of upward mobility are leading people to question the promise of democracy to deliver growth and prosperity. Recent developments in Peru stand as an example. Further, Biden and Lula need to address the humanitarian crisis in Venezuela and the outflow of Venezuelan migrants. According to the United Nations, more than seven million Venezuelans have left their country. Biden and Lula must be united in their pressure on the Venezuelan government to negotiate with the opposition for a peaceful, democratic resolution. Trade and economic integration will also be on the agenda, given that Brazil and the United States are two of the three largest economies in the Western Hemisphere and, according to the U.S. State Department, two-way trade topped $98.4 billion in 2021. This is where we might see tension, however, as Biden urges Lula to reduce trade barriers for U.S. exporters.” 

Cecília Godoy, analyst at FrontierView: “Lula’s unprecedented third term offers a renewed opportunity for Brazil and the United States to reset bilateral relations. If nothing else, the latest visit by U.S. National Security Advisor Jake Sullivan signaled the White House’s eagerness to improve U.S.-Brazil relations. Looking at potential areas of closer cooperation, Lula and Biden have expressed concerns over the crisis in Venezuela and global threats to democracy. Most notably, Lula’s victory will lead, among other things, to a substantial change in Brazil’s environmental agenda – a great source of international concern under the Jair Bolsonaro administration. Recently, the American Chamber of Commerce (Amcham Brasil) submitted a document with 25 proposals to be considered during the new government’s first 100 days, many of which center around positioning public action more efficiently to ensure environmental preservation. As such, the environmental agenda may become the backbone of bilateral cooperation between the two governments while simultaneously allowing Brazil to make headway in securing greater international inclusion in trade initiatives. While a Biden-Lula axis shares many of the same goals, U.S.-Brazil bilateral relations will not be without challenges. Mauro Viera’s appointment as Brazil’s foreign minister signals relative continuity of Lula’s previous foreign policy vision–in practice, a path that has historically prioritized regional integration and greater cooperation among the Global South, with China and Russia at the forefront. In a world where the United States is looking to re-assert its presence in the region amid growing Chinese influence, maintaining an equidistant diplomacy between the United States and China could prove challenging and taxing in U.S.-Brazil relations.”

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