April 1, 2012 6:54 pm
Brazil-US relations near turning point
The case of cachaça, the stiff sugar cane spirit used in Brazil’s national cocktail, the caipirinha, is probably not the first thing on the mind of US President Barack Obama as he prepares for a visit from his Brazilian counterpart, Dilma Rousseff, next week.
But reversing a longstanding US refusal to recognise the Brazilian drink as distinctive from Caribbean rum – thereby subjecting it to adverse tax treatment on rum imports designed to protect producers in the US Virgin Islands and Puerto Rico – is one of several relatively easy “deliverables” that Mr Obama could offer Ms Rousseff when she arrives on April 9.
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Stubborn trade disputes and differences in approach to geopolitics have traditionally clouded what is otherwise a mature if somewhat standoffish friendship between the dominant powers of the Americas. Brazil wants recognition from the US for its growing geopolitical clout, most importantly its bid for a permanent seat on the United Nations Security Council, but without sacrificing its neutrality in the process. Washington, meanwhile, wants a better idea of what Brazil, known for its pragmatism on foreign relations, actually stands for.
“Relations between Brazil and the US have historically been very broad but also relatively shallow,” said Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Centre for Scholars in Washington.
Once tempted to treat Brazil as just another, if slightly more important, Latin American country, the US is increasingly being challenged to acknowledge its growing role as an international player on the back of its fast economic growth.
A surging middle class in Brazil has created new markets for US multinationals, ranging from McDonald’s and Pepsi to General Motors. But even as the total volume of trade has grown, the relative importance of the US to Brazil’s economy has declined. China has overtaken the US as Brazil’s biggest trading partner and new investor.
At the same time, Brazil has become increasingly concerned about what it sees as “unbalanced” trade with China, which imports Brazilian commodities but few of its manufactured goods. The US by contrast is one of the biggest markets for Brazilian aircraft maker Embraer, one of Latin America’s flagship industrial companies.
Relations between leaders of the US and Brazil have traditionally been warm – Mr Obama once called former Brazilian president Luiz Inácio Lula da Silva “the man”. But in practice, Brazil’s independent stance on foreign affairs – it regularly abstains in votes on sanctions against oppressive regimes in the Middle East and on other issues – has grated with the US. In particular, Mr Lula da Silva upset Washington when he led an attempt to forge an independent civilian nuclear deal with US arch-enemy Iran in 2010.
Yet while Mr Lula da Silva’s Iran adventure was politically costly in terms of relations with Washington, it was a sign of Brazil’s diplomatic coming of age, the Council on Foreign Relations think-tank said in a report last year. “Brazil’s participation alerted the major powers to its presence on global security issues and served notice that Brazil would remain a significant international actor,” the report, Global Brazil and US-Brazil Relations, said.
With the election of Ms Rousseff in late 2010, Mr Obama set out to repair the relationship. He visited Brasília three months after she took office, describing Brazil as an “equal” partner and acknowledging though not openly supporting Brazil’s aspiration for a permanent seat on the Security Council.
The challenge for both sides is where to take the relationship now. The US has already lifted a tariff on Brazilian ethanol imports – an important breakthrough. It could restart a US Air Force contract for 20 Embraer attack aircraft that it abruptly cancelled earlier this year. It is also making it easier for Brazilians to get visas. And it could also, of course, recognise cachaça as something distinctly Brazilian, rather than lumping it in with other Latin American rum.
Most significant, however, would be for the US to offer formal support for Brazil’s aspirations to join the Security Council. Proponents argue this would put the ball in Brazil’s court, forcing it to become a more responsible contributor to the world order. Indeed, some argue that this sort of acknowledgment as an equal partner is all that Brazil has ever really wanted from Washington.
“Brazil doesn’t want a trade deal from the US, it doesn’t want military co-operation,” says João Augusto de Castro Neves, political analyst at Eurasia Group. “It just wants recognition and that only costs a few words.”
Copyright The Financial Times Limited 2012. You may share using our article tools.
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