Inside Story America

Brazil and the US: A relationship of equals?

As Brazil’s leader visits Washington, we examine the relationship between the two most dominant powers in the Americas.

Brazil’s importance on the world stage is such that Barack Obama, the US president, hailed it an “equal partner”. But as Dilma Rouseff, the Brazilian president, makes her first official visit to Washington, we ask if the US is giving the emerging power the recognition it is seeking.

On Monday, Rouseff, who represents the world’s sixth-largest economy and an emerging global power, met with Obama at the White House. But the Brazilian leader is not receiving a state visit to Washington and, privately, officials in Brasilia are said to feel snubbed.

It is not that relations are bad between the two nations – far from it. But Brazil’s growing power on the world stage has at times left the US uncertain over whether it will use its growing diplomatic clout to fully support Washington’s geopolitical priorities.

“This is a relationship that suffered a major setback in 2010 around the Iranian episode and that is in the rebuilding phase since the visit last year of President Obama to Brazil …. I think this is a mature relationship with much promise. It is up to leaders, to the business community to engage and to deepen this relationship.

– Paulo Sotero, the director of the Brazil Institute

In 2010, Lula da Silva, the then Brazilian president, along with Turkey, attempted to forge an independent civilian nuclear deal with Iran. And last year Brazil backed Palestinian statehood. These are just two examples of Brazil diverging with US policy.

But there is much they do agree on.
 
As South America’s fastest growing economy, Brazil’s new middle class is an important market for US exports. At the same time, Brazil hopes to bolster its sales of aircraft and weaponry to the US.
 
Brazil and the US are the top two ethanol producers in the world – and the two nations are joining forces to advance research on bio-fuels. Then there is the development of deepwater oil drilling – another joint undertaking.

And the last, and perhaps most important issue for Brazil, is to garner US support to become a permanent member of the UN Security Council. However, it is thought that that support is unlikely to be forthcoming any time soon.

So, how is the relationship between the two most dominant powers in the Americas evolving? Is China’s gain in its relationship with Brazil, the US’ loss?

Joining Inside Story Americas with Shihab Rattansi to discuss this are: Paulo Sotero, the director of the Brazil Institute at the Woodrow Wilson Center, a Washington-based think tank; Paulo Vieira Da Cunha, a consultant to the IMF and former deputy governor of the Central Bank of Brazil; and Peter Hakim from Inter-American Dialogue, a Washington-based centre for policy analysis.

“Brazil is so important for the United States and the United States is as important for Brazil, if not more so. It has an economy that is five times larger than Brazil’s. [It is] a major source of capital, technology, also a major buyer of Brazilian products …. But Brazil and the United States haven’t advanced their trade agenda very much …. There are 11 countries with which the United States has signed free trade agreements in the Americas. The United States and Brazil can’t find enough common ground to even begin negotiating a free trade agreement. The US and Brazil have signed virtually no trade agreements …. It’s really a shame because I think that relationship could be a lot more productive.”

Peter Hakim from Inter-American Dialogue


FACTS: AN EMERGING ECONOMIC POWER

  • Brazil’s GDP is more than $2tn – representing 3.37 per cent of the world economy
  • Brazil’s economy ranks highest in South America for size and growth
  • In 1999, Brazilians had a disposable income of just over $6,000. That had risen to almost $11,000 by 2010
  • Brazil has increased its diplomatic clout and seeks a permanent UN Security Council seat
  • Brazil is a member of the BRIC group with Russia, India and China
  • BRIC countries are considered to be leading emerging economies
  • Over the past decade or so, the value of trade between Brazil and the US has steadily risen from $30bn a year to nearly $60bn a year
  • Brazil’s trade with China has increased at a much larger rate over the same period – from just $3bn in 2001 to $56bn in 2010
  • If you include the $30bn that China has invested in Brazil, China now has a higher stake in the Brazilian economy than the US
  • Brazil has asked China to open its markets more to Brazilian imports
  • Brazil’s trade surplus with China reached $11.5bn in 2011
  • Brazil’s exports to China grew by 46.9 per cent annually between 1999 and 2010