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Why Brazil’s Relationship With the United States Isn’t Taking Off

For the latest Pivotal States event, a new series that examines alternative U.S. foreign policy approaches to the world’s key nations, American Statecraft Program director Christopher S. Chivvis was joined by Margaret Myers, director of the Asia & Latin America Program at the Inter-American Dialogue, and Matias Spektor, professor and associate dean at the Fundação Getulio Vargas’s School of International Relations, to discuss Washington’s strategic alternatives in its relations with Brazil. This Q & A was adapted from a transcript of the event and has been edited and condensed for clarity.

Chris Chivvis: Why does Brazil matter to the United States?

Matias Spektor: Historically, Brazil has been very cooperative with the United States, yet this is a relationship that never really took off—even when the two sides have a lot of interests in common and they share a similar view of what’s going on. For example, for the first time in many years, the [Joe] Biden administration and the administration of [Luiz Inácio Lula da Silva] have a common read of what’s happening in Venezuela, yet even then they find it very hard to cooperate. Brazil matters because when Brazil moves in the region, it affects America’s interests in the one part of the world where the United States is unrivaled.

All the geopolitical changes are beginning to unsettle this—in particular, Chinese influence in the Americas. China has been investing big time in Latin America for twenty years, not least because the United States invited China twenty years ago to invest big time in Latin America. There’s another side to this—why Brazil matters moving forward—and these are two very important things that people in Washington normally don’t talk about. The first one is that in the next twenty years, Brazil is going to be a major, major player with the United States in providing food to the rest of the world. And in the context of the geopolitical changes we are seeing, these will make Brazil matter all the more.

The second one is that Brazil is now becoming a big player in the oil field. Brazil was never a significant oil exporter, but it’s becoming one. And although this was never the case before and therefore there’s no track record of U.S.-Brazil cooperation on the oil front, this is something that will impose itself in coming years. Then there is the issue of climate change. Brazil is a major driver of deforestation, and this is not something Brazil can deal with on its own, partly because it needs money to compensate those losers if deforestation were to come to an end. But [also] partly because there’s so much political interest at the local level in Brazil for deforestation that Brazil will need international cooperation big time to turn the tide.

There’s another element to this: deforestation in Brazil is linked to the global supply chain of cocaine and other drugs and is related to transnational crime. So the issue of climate change in Brazil intersects with transnational crime, which is one of the biggest items in America’s relationship with Latin America. And finally, Brazil matters for procedural reasons, because [the United States] needs Brazil’s cooperation if it wants to get things done in the UN General Assembly or in the World Trade Organization. For example, NATO operations in the South Atlantic require procedural cooperation with Brazil. Brazil is very, very weak internationally, but it can make things more difficult.

Chris Chivvis: How should the United States approach Brazil’s deepening relationship with China?

Margaret Myers: We’ve seen attempts by two administrations now—especially the [Donald] Trump administration—to try to dissuade Brazil from engaging with China in various areas, especially those of security concern to the United States, [such as] 5G and Huawei. It resonated to a degree with the [Jair] Bolsonaro administration, and there were some efforts to consider purchasing other equipment—at least by the government or by certain parts of the Brazilian military. But Lula made it very clear during his visit to China that collaboration was very much on the table. These attempts [at dissuasion] just haven’t made a dent. And it’s not just in Brazil—it’s across the entire region. . . .

That said, there are areas where Brazil and the United States can cooperate in policy setting, agenda setting, nuclear policy, space policy—areas of interest to Brazil where [Washington] or may not align with China. It’s a matter of thinking about this a little bit more strategically and understanding really what would appeal to Brazil.

Chris Chivvis: How should U.S. policymakers understand this apparently open-ended relationship between Brazil and China? Is it really open-ended or are there natural limits, as Margaret was just suggesting?

Matias Spektor: I think Margaret is spot on.

First of all, Brazil is increasingly dependent on China, and China is increasingly dependent on commodities coming from Brazil, and China is very exposed to Brazil. For example, [at least 12 percent] of energy distribution is now owned by Chinese capital in Brazil. But the relationship is not an easy one. China treats Brazil in a manner that is very top down. Meetings at the BRICS are very scripted. Brazil finds itself having very little room to maneuver with China. Brazil can have a far more flexible set of conversations with the United States than it can with Beijing. Beijing has a very set view of where Brazil fits in the global pecking order, and it’s not at the top of that pecking order, and it’s not at the top of Beijing’s regional pecking order in Latin America. Beijing has far closer ties with other countries in the region, even if Brazil is the biggest [country].

There’s another set of constraints, and I think it’s very important for U.S. policymakers to understand this because it shapes the way any Brazilian leader is bound to deal with China. In the past twenty years, there’s been the birth of pro-China constituency groups [in Brazil]. . . . Brazilian leaders increasingly have their hands tied simply because China is such an important economic magnet, and breaking that is going to be really tricky. Now, if you think the future of U.S.-China relations is relatively peaceful, these constraints needn’t be a problem. Brazil will become more enmeshed, more interdependent with China. Lots of Brazilian interest groups will derive their bread and butter from trade with China and Chinese finance, and we won’t see a problem.

This is exactly what the [Bill] Clinton administration had in mind. Then, subsequent administrations encouraged China to come to Latin America to join the Inter-American Development Bank, for example, because it was a useful way to have excess capital coming from China fill a void that the United States was not willing or able to fill itself. The problem is that if we think that the future of U.S.-China relations is going to be more conflictual, then we’re in deep trouble. Then, the United States will have a big incentive to try to push and shove countries in Latin America—and Brazil in particular—to sever ties with China. They won’t be able to do it, because domestically this will be politically impossible, and the United States will have very little choice but to play regional hegemony and lay down the law.

Chris Chivvis: [The environment is] a very complicated domestic political and economic problem for Brazil. What are the things that the United States could really do in order to help reduce or even halt deforestation of the rainforest?

Margaret Myers: I think there is a sense within the United States right now that more does in fact need to be done, and a realization that the $500 million commitment to the Amazon Fund really did fall short of what Brazil would’ve hoped for. Especially when you look at the numbers that China tends to throw around—which are quite large, [though] they don’t always come to pass. The Biden administration is now looking to increase this amount by mobilizing something in the neighborhood of $1 billion to support land restoration. So if that materializes, it will hopefully make more of a difference for the Amazon and for the bilateral relationship.

But the tools that the United States has at its disposal right now are limited, and they’re not quick. And this is something that applies to the whole of Latin America, as countries look for assistance from the United States and to engage with the United States. There is interest in diversifying partnerships. But if the finance isn’t there, if it isn’t there in the right amount, then that ends up being problematic. So I would say that there are some restrictions on our toolkit that will make more engagement, including in the climate space, a little bit difficult.

Chris Chivvis: How does it look from a domestic political economy perspective in Brazil?

Matias Spektor: Brazil’s deforestation problem and climate problem in general is gargantuan, partly because so many millions of people depend on carbon emissions for their living. Land use is the major driver of carbon emissions in Brazil. So transitioning to anything different is going to cost tens of billions of dollars. And within that, there’s very little the United States can do—no amount of money will be sufficient compared to what Brazil needs. So I would bet that the future of the U.S.-Brazil relationship should center around that, but there’s an opportunity now.

Brazil is about to unveil its own Inflation Reduction Act. It’s basically subsidies and industrial policy to facilitate a transition to a lower carbon economy. The task to get that to work without major corruption scandals or major inefficiencies is going to be enormous. There is a real opportunity for collaboration between the two countries—in particular, the private sectors.

The other area where there’s room for collaboration—but a lot of danger—is on the issue of climate-related organized crime. One of the problems Brazil faces in the Amazon in particular is that organized crime is behind cattle laundering, illegal logging, and illegal mining. When the Lula administration took office, the minister of the environment found out the Amazon region had [at least 1,200] illegal airstrips. And the problem with illegal airstrips in a landmass the size of Europe is that if you bomb them from the air with support from the federal police, they get rebuilt within three or four days.

Now, no talk of America cooperating militarily or even police cooperation in Brazil will fly. Brazilian elites are terrified of an American military presence in South America. But what can fly is cooperation to help Brazil deal with the end of the illegal trade cycle, which is trade through the Atlantic going into Africa and then to Europe, where the consumer markets are for drugs, illegal logging, illegal mining, and so on. Intelligence cooperation, military-to-military cooperation outside the Amazon—I think that would be an opportunity. But as Margaret said, America’s ability to support Brazil in this is going to be limited.

Chris Chivvis: How do you see the similarities and differences between Brazilian strategic thinking and the other emerging powers in the BRICS?

Matias Spektor: Let me take two: India and Indonesia. These countries are in many respects parallel to Brazil, and Brazil has had increasingly positive and closer ties with these countries. They see themselves as coming from a postcolonial experience and are moving up the ranks in the world.

So what can we say about the comparisons? This is really tricky. India is in an enviable position from Brazil’s standpoint because India can trade support with the United States in ways that Brazil cannot. India matters geopolitically in the context of counterbalancing China. And India is making a buck out of this, mostly through military cooperation and purchases, [as well as] a phenomenal diaspora that is highly educated and well-employed in the United States. Brazil doesn’t have any of this, so we cannot really compare what’s happening in the ties between Washington and New Delhi to Washington and Brasília. Brazil is much weaker.

Then take Indonesia. Indonesia too is a country whose foreign policy resembles Brazil’s a lot. When you listen to diplomats from Indonesia talk, it sounds like a Brazilian is talking. Joko Widodo, the president, is the only man I believe in the last few months to have met the presidents of the United States, Russia, and Ukraine. This is a man who sees himself as trying to hedge his bets and not take sides and benefit from the existing competition. But Indonesia is in a part of the world that China claims as its own regional hegemony. So the differences are enormous.

Stewart Patrick from Carnegie had a [recent] piece arguing that we shouldn’t really call the Global South “the Global South.” This is a very diverse set of countries, but there is something that unites them. And what unites them is a common experience of being at the bottom end of a global hierarchy. These are countries that have an experience with colonialism, economic injustice, and racial injustice, and these provide a common ground.

Does this mean they produce a common platform and they are united in multilateral fora? No. But they’re united in the belief that unipolarity is not good for them. So defending the global liberal international order is not going to fly with them because they see advantage in having not only a strong China but also a strong Russia.

Chris Chivvis: How might the United States counter Chinese influence in Brazil in a way that is smart and sophisticated?

Margaret Myers: I think there are a few things that can be done. First of all, I’m a big proponent of greater economic engagement with the region generally, given long-standing feelings among Latin American leaders that the region has been abandoned by the United States.

Chris Chivvis: What are you thinking about in particular?

Margaret Myers: We’re at a bit of an impasse with [trade], but certainly economic assistance in various forms, and also investment, especially in the case of Brazil.

As the United States looks to secure supply chains, which have been a big part of an effort to reduce reliance on China and to reorient production toward the region, it’s my view that Brazil can and should play a role in this process, especially in the production of higher value-added products. The United States right now is a major contributor to value-added production across the region. This is not something that we talk about enough, and we should engage with Brazil on these terms.

The problem is this idea of “friendshoring,” right? Creating opportunities for countries with demonstrated commitments to U.S. interests. But Brazil has a mixed record there. Friendshoring is necessarily exclusive by nature, so maybe we ought to think about this as “making friends-shoring” or something of that nature. It strikes me that the administration would seem to be taking this to heart—at least to some degree, having just talked about a jobs initiative with Brazil, which could be great depending on its scale.

I think also another thing that needs to be done—and is being done to a certain degree—is bringing Brazil into the fold. As in this recent G7 meeting, acknowledging its prominence on the global stage and in global agenda-setting. This is a critical component to maintaining fruitful bilateral ties and to ensuring at least some alignment on issues of global interest, even though there is this profound commitment to avoiding an overreliance on one single partner or on the United States in general.

[A third step] is maintaining and strengthening the many existing mechanisms for bilateral cooperation. In some of these, ideally, there may be a degree of policy coordination that can be achieved that would be beneficial, as the United States looks to compete in broader terms with China, not just in Brazil but globally.

Source: CEI