Spying Reaction: Mexico vs Brazil

Brazil’s president formally postponed her state visit to Washington scheduled for October.  Dilma is beginning an election campaign and her popularity has fallen significantly since the June protests.  Standing up to Big Brother USA spying is certain playing well with Dilma’s supporters.

Mexican President Enrique Pena Nieto, on the other hand, is only at the beginning of his six year term.  As such, his indignation has been more muted.  He has no state visit to cancel and Mexico’s nationalism, traditionally stronger than Brazil’s, has been eroded on the right by the success of NAFTA.

About 80 percent of Mexico’s exports go the the US.  But less than 20% of Brazil’s foreign trade is with the US.  It has already been three years since China overtook the US as Brazil’s largest trading partner.  Still, the US is Brazil’s main source of foreign investments and as the country is currently facing a decline in Chinese demand for commodities, US direct investment has become more significant in maintaining the balance of payments.

There is a curious mixture of pride, hubris and politics in the whole spying scandal.  On the US side, Brazil and Latin America have never been at the top of Obama’s priority list.  At the same time, the President Obama has been inept at gaining control over the U.S. security apparatus. The NSA and other U.S. intelligence agencies seem to be operating autonomously based in part on the successful assassination of Osama Bin Laden and the prolonging of the so-called war on terrorism.  In such a scenario, all macro snooping and meta data become confused and anything goes.  I don’t think Obama has any personal stake in spying on Petrobras.  This actually wounds Obama and hurts relations with Latin America.  But, who cares?  It is not a top priority.   The NSA scandal was tremendously amplified in Brazil and Latin America because the Guardian journalist reporting on Snowden happens to live in Rio de Janeiro and has a Brazilian boyfriend who was stupidly mistreated by British security agents (perhaps at the behest of the US).

Brazil and Mexico should certainly take offense but neither country should feign naivete about espionage.  Dilma is playing to her supporters.  Pena Nieto is as well in his complaints.  Dilma has been more strident but her careful postponing of the state visit to Washington D.C., rather than outright cancellation, gives her room to backpedal.

Overall, I think the whole episode is much ado about very little.  The main issue is atmosphere and distrust and here Brazil has more to lose than the US.  It is true that Dilma might instruct the military not to buy US fighters but the Brazilians also know that the French Rafaeles aircraft fighters or other options will not match up in the long run.

Both Brazilian and US business people already in the game will not be put off by the ideological loggerheads.  However, it is bad for new business and only reinforces the image of Brazilian petulance and recalcitrance, which many see manifest in the challenges of doing business in Brazil.  Mexico stands to gain as it appears more welcoming and less put off by the inefficient and fairly irrelevant NSA activities.

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