Why Brazil And The United States Should Be Bigger, Better Partners
Analysis: As Brazilian President Dilma Rousseff prepares to arrive in Washington to meet President Obama, a closer look at the bilateral relations between these Western Hemisphere powerhouses shows vast potential, much of it unfulfilled.
WASHINGTON – How much respect does Brazil get in Washington?
When U.S. President Barack Obama visited his Brazilian counterpart Dilma Rousseff last year, there were plenty of niceties exchanged, but few results achieved. Brazil still doesn't have a permanent place on the United Nations Security Council, and its candidates for the presidency of international organisations repeatedly find themselves cold-shouldered by Washington.
Rousseff's visit to Washington on April 9 won't change anything either. In fact, the United States wants to downgrade the official nature of her visit: "State visits are not organized during election periods," explained the White House, apparently forgetting about British Prime Minister David Cameron's recent reception.
U.S. Secretary of State Hillary Clinton has emphasized that Brazil and the United States are "natural partners' and that they form part of a "new global architecture."
Dan Restrepo, adviser to Obama, has insisted that the two presidents "will progress from conversations to producing concrete results." The Treasury has also spoken of its optimism regarding the meeting between "two powerful economies with shared interests."
Brazil is playing an increasingly important role as a market for U.S. exports (8th most important market globally). But a number of positive gestures from Washington should also be acknowledged: for example, the U.S. has let subsidies on its domestic ethanol production expire, thus opening doors for Brazilian exporters to enter the market.
But despite this positive action from Washington, generosity when it comes to the high-technology industry appears to be another thing entirely. A juicy contract between Embraer and the US Air Force was dropped following "documentation problems during the tendering process." The deal was for 20 Super Tucano airplanes to be sent to Afghanistan, a sale that could have reached the $1.5 billion mark. And yet even before the deal had fallen through, the U.S. Securities and Exchange Commission initiated an investigation into Embraer, the details of which have not come out, but which appears to be linked to the bribery of civil servants in three countries, including Argentina.
In Brasilia, the cynical link the American reversal with the fact that Brazil prefers to buy French Dassault airplanes instead of U.S. Boeing F-18s, a deal worth close to $4 billion.
"We see Brazil as a global player and an important country in Latin American, but Obama has failed to lay the foundations or to understand the importance of Brazil," said Carl Meacham, an advisor on the region to Republican senators.
For Meacham, there is a palpable lack of vision in the current U.S. administration - and repeated wasted opportunities for the U.S. private sector. "We are not present in the Brazilian market," he said.
Power to the BRICS
Alongside the commercial, there are also financial aspects to be considered. Today Brazil is the fourth largest holder of U.S. Treasury bonds with $229 billion. In other words, the South American giant has contributed to the financing of the Northern powerhouse's economic adjustment. All this against the background of what Guido Mantega, president of the Central Bank of Brazil, refers to as "a war of currencies."
Sebastián Brown, economist and emerging market strategist at Barclays, adds that "the currency war is not only relevant for Brazil but also for the main currencies in the region."
In this context, Brazil would be the only country capable of pushing for a new global financial system, including greater leadership in international organizations such as the International Monetary Fund or the World Bank.
The proposals from President Rousseff to the U.S. are gift-wrapped in an attempt to kick-start, as outlined by the Brazilian ambassador Mauro Vieira, "a new stage of the relationship," based on "innovation, science and technology and the joint search for new ways to create investment with an emphasis on knowledge." For example, Rousseff has established 75,000 grants for Brazilians to study at universities in the United States.
Vieira says both Brazil and the United States want real results: "The protocol level of the meeting is not important."
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Photo – Roberto Stuckert Filho