Brazil's sinking trade with the rest of Latin America

Its absence at the recent CELAC summit, which began Sept. 18 in Mexico City, is glaring in that regard. By far the region's largest country, Brazil was the only one not represented at the event. This was a summit, furthermore, that was meant to renew multilateral presidential diplomacy, which was faltering before the pandemic.

The absence contrasts sharply with the leadership role Brazil, under then president Luis Inacio Lula da Silva (2003-2011), displayed in 2008 when, for the first time in history, the heads of 33 Latin American and the Caribbean States met without the presence of the United States, Canada or another outside power.

Ten years on, Brazil is in self-isolation

That summit took place in the Brazilian city of Bahía and established a common agenda for integration and development. Two years later, through a fusion with the Rio Group, that same alignment of regional governments became the CELAC. And at the time of the 2011 CELAC summit, a communiqué issued by the then government of Dilma Rousseff, president from 2011 to 2016, noted that Brazil had embassies in all states represented at the summit and that its regional trade had quadrupled between 2002 and 2010 to reach $78 billion.

Ten years on, Brazil is in self-isolation, and this will have both political and economic costs — for the region as a whole. The absence of multilateral agreements has made Latin America more polarized and fragmented politically, and more disintegrated commercially. And by not participating in integrative efforts, Brazil is giving up its political leadership and facing economic losses.

Its trade with Latin America has plummeted, dropping from $70 billion in 2017 to $52 billion in late 2020. That included a sharp drop in the trade balance in its favor. Brazil's total trade with the region's 32 countries was 33% less in 2020 than in 2010, at the height of its regional political leadership.

Is the Bolsonaro government right?

In January 2020, Brazil suspended its participation in CELAC, stating that the conditions weren't right for the group's "activity in the current context of regional crisis." More specifically, the rightist Bolsonaro government was dissatisfied with the prospect of attending any gathering with the communist regimes of Cuba and Venezuela. Its response was simply to withdraw.

Unlike most Latin American countries, Brazil has kept its embassy and consulates closed in Venezuela since April 2020. The following month, it closed five embassies in the Caribbean. Not surprisingly, its exports to all those countries fell in 2020. The average year-on-year fall was 13%, and in the case of the Dominican Republic, exports dropped 38%.

Is the Bolsonaro government right? Is CELAC just a leftist association?

Unlike other regional groupings like MERCOSUR or UNASUR, it does not even have a charter approved by regional parliaments or its administration. And yet, CELAC summits worked fairly well between 2008 and 2016. Agreements were reached despite ideological differences, and the region managed to speak as a block to the EU and China.

It wouldn't be sensible to hold such summits with either power merely through the Organization of American States (OAS) and without the backing of a regional grouping.

CELAC's diversity is shown in the fact that in the last decade, its rotating presidents have had different political backgrounds. In 2013 it was Chile's Sebastián Piñera, a conservative. The next year the centrist Laura Chinchilla of Costa Rica was in charge, and in 2016, the presidency went to the leftist Rafael Correa of Ecuador.

The Trump effect on Latin America

The group's gatherings had never attracted fewer than 20 leaders, at least not until January 2017, when only four leaders attended the Punta Cana summit, in the Dominican Republic. Donald Trump had just become president of the United States, and talks of détente with Cuba, dating from the Obama administration, were at a standstill.

Critics took the line that CELAC and UNASUR were "Bolivarian" clubs to back Cuba and Venezuela's Nicolás Maduro. And yet, Argentina's then president, the conservative Mauricio Macri (2015-2019), had become the rotating president of UNASUR that year and presented a candidate for its secretary-general while defending the group's original ideas.

All of that led, in August 2017, to the formation of the Lima Group, involving 12 American states including Canada. In its first declaration — in a bid to isolate Venezuela — the group urged the suspension of the next CELAC-EU summit scheduled for October 2017.

In January 2019, the Lima Group recognized Juan Guaidó as Venezuela's acting president. It was a move to strip Maduro of legitimacy. But Mexico then withdrew from the Lima Group, followed by Argentina and now Peru. It seems now that the 12 member states had more impact on the Venezuelan crisis before the Lima Group was formed. Their last declaration was from January 2021, days before the end of the Trump presidency.

A mirror and some light

In the meantime, Mexico, under the socialist President Andrés Manuel López Obrador, has successfully filled the vacuum left by Brazil. The summit of 16 presidents recently held in Mexico City, with the presence of three center-right presidents from Ecuador, Paraguay and Uruguay, crowns its diplomacy and shows that the policy of isolating Venezuela is exhausted.

Mexico has also been hosting talks between the Venezuelan opposition and government, with Norwegian mediation, and committed itself to different CELAC activities in the past year. The agenda includes plans to create a Latin American space agency and to donate vaccines to countries like Belize, Bolivia and Paraguay.

By sticking, in contrast, to the position of not speaking to Cuba or Venezuela, Brazil has shown its inability to present regional states with a positive agenda. It's now isolated, as a result, on its own continent. The Latin American country that benefited most from integration is now suffering the most from isolation.

What Brazil needs more than anything, perhaps, is a mirror and some light — to give it some clarity on both its past and on where it might go from here.

*Pedro Silva Barros (PhD, University of Sao Paulo) is an economist and researcher at the Applied Economics Research Institute in Brasilia.