The Economist
Dilma Rousseff's visit to America
Our friends in the South
BRAZIL has probably never mattered more to America than it does now. America has probably never mattered less to Brazil. Not that relations are bad between the two countries—far from it; they are increasingly cordial and productive. But America has finally, belatedly, woken up to the fact there is a vast, stable country to its south as well as its north; a country, moreover, with a fast-growing and voraciously consuming middle class that seems to offer salvation to American businesses struggling in a moribund domestic market. Brazil, meanwhile, neither needs loans from American-dominated global financial institutions, nor is it otherwise beholden to the country. The United States is no longer even its biggest trading partner. China took that spot in 2009.
A more balanced relationship may be a more fruitful one too. Since Barack Obama’s visit to Rio de Janeiro and Brasília last year, America has delighted Brazil by removing import tariffs on its ethanol and piloting a scheme to make it easier for Brazilians to get visas—two long-standing bugbears. Brazil’s president, Dilma Rousseff, makes a return visit to Washington in the coming week, and there is much to talk about still. What Brazil wants from America above all is endorsement for a seat on the UN Security Council. Britain has already backed its bid, and during his visit to Brazil Mr Obama made baby steps in the same direction, acknowledging Brazil’s “aspiration”, though stopping short of full support.
That support is unlikely to be forthcoming, at least in the near future. Though Brazil is hardly geopolitically troublesome, its worldview—a hard-to-pin-down blend of pragmatism, relativism and a seemingly indiscriminate willingness to be friends with everyone—is unappealing to the United States. The previous president, Luiz Inácio Lula da Silva, was flexible enough to be “my man” to Barack Obama and “our brother” to Fidel Castro. In 2010 Lula stuck his neck out trying to co-broker, with Turkey, an anti-proliferation agreement with Iran’s president, Mahmoud Ahmadinejad. That infuriated countries far more important to Brazil’s strategic interests, and left Lula looking silly when Mr Ahmedinejad made no concessions in return. Ms Rousseff has rowed back from that friendship, but it reinforced an impression that Brazil is unpredictable and naive.
Mr Obama will surely want to know, too, what exactly Brazil means by its big new foreign-policy idea. That is to complement the UN’s justification for intervention in another country’s affairs under the rubric “Responsibility to Protect” with “Responsibility while Protecting” after it has gone in. Since Brazil tends not to support going in in the first place, when would it want to see this new responsibility kick in? Even some experienced and sympathetic diplomatic observers in Brasília say they have no idea what concrete difference this would make on the ground.
For America, trade, not diplomacy, will surely be top of the agenda. Judging from the number of American investors turning up in São Paulo every week, Mr Obama must hear about the glowing opportunities Brazil presents in just about every time he meets businessfolk. But with the most overvalued currency of any big economy, Brazil’s own industrialists are prodding the government to keep imports out. It has hiked already-high tariffs on many imports even further, and is taxing foreign-currency inflows increasingly heavily to keep out speculative inflows. Brazil has made it clear it only wants long-term investment, and is only interested in foreign businesses that are willing to make whatever it is they want to sell in Brazil.
If Mr Obama tries to argue for freer trade, he will get short shrift. Both Ms Rousseff and her finance minister, Guido Mantega, regard the floods of cheap money being pumped out by the Fed and the European Central Bank as a far worse trade distortion than Brazilian barriers, which they term “safeguards” rather than “protectionism”. Brazil’s drift towards protectionism is in fact becoming a problem for its own economy. But that is an argument for another day. Mr Obama will surely be aware there is still a lot of mileage to be got out of helping American companies to set up shop in Brazil.
http://www.economist.com/blogs/democracyinamerica/2012/04/dilma-rousseffs-visit-america
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