Dilma’s US Trip: The Take Away

Dilma’s popularity may have received a mini-boost with her visit to the USA. But it’s hard to find any immediate evidence of a boost beyond the thawing of U.S.-Brazil relations. It’s clear that Brazil needs the US more than the US needs Brazil. Obama might have been too gracious in describing Brazil as a “great power”.

As with all presidential visits, the objectives of Dilma’s trip, maybe better, the intentions, were outlined in a joint communiqué, which spoke about the ongoing dialogue in economic cooperation, energy and defense between Brazil and the United States.

As China’s economy has slowed, so has Brazil’s. Dilma was trying to make up some of the ground that Brazil’s manufacturers have lost in the US during the past 15 years. Obama, in turn, hopes to promote US exports to Brazil, especially in the energy sector both in oil and other areas. The devil is always in the details. A closer reading of the joint communiqué reveals intentions but little change of substance.

Brazil maintains it traditional stance on imports (make it hard) and Dilma did not budge on her push for local content in the oil industry and deep sea drilling.

One positive gain for Brazil or at least JBS, Brazil’s largest meat company and the owner of numerous assets in the US, is the promise of opening the US market to Brazilian fresh beef. This is suppose to be a two-way exchange but it remains to be seen how much can actually happen on this front.

Another significant gain, not only for Brazil, but also for other nations, was the renewal of GSP (the General System of Preferences) on June 29, ending a two-year suspension of the program.

The joint communiqué also covered travel, education, science and technology and innovation. The main points here are muted in the their effect. The U.S. requires that Brazilians have visas before entering the U.S. This requirement will not be dropped despite the wishes of some. The US is instead offering a Global Entry Program for business and elite Brazilians. The program will continue to require a visa for Brazilians, together with a FBI background check in return for being able to use a computerized kiosk at some U.S. airports.

The agenda on science and technology was pretty much wrapped up in the Science without Borders Program.  Recently, Brazil has sent close to 30 thousand students to US universities but budget problems are delaying payments. Apparently University of California President Janet Napolitano made mention of the issue. Finally, on Dilma’s last day in the Bay Area, she made a big deal of riding around in Google’s driverless Prius and stated she never expected such “innovation”. Meanwhile in Brazil, people jokingly refer to the driverless country.  More positively, on the other hand, Google is substantially increasing its investment in its research center in Belo Horizonte, Minas Gerais.

Obama got Dilma to commit to zero deforestation by 2030.   This is largely a vague promise as Dilma will be termed out in 3 years and her current policy at home involves expansion of Brazil agricultural frontier and greater use of the Amazon’s water resources for energy. Both of which involve cutting down trees.

Dilma and Obama also put in writing their “agreement” on Syria, the Israeli-Palestinian conflict (“two state solution”) and hunger and poverty in the Caribbean (i.e. Haiti) and Africa. Brazil has committed troops under the UN flag in Haiti as well as having a long-standing involvement in Angola and Mozambique, two former Portuguese colonies. In short, Dilma and Obama agreed that the solution in the  Middle East must be diplomatic and that hunger should be addressed in Haiti and Africa. All this is very nice but a bit short on details.

Jacques Wagner, Brazil’s defense minister, signed a couple of defense accords which in the heyday of former Brazilian President Lula probably would have been regarded as a submission to “Yankee” forces. Nevertheless, the accords were proudly presented as positive for the possible benefits to Brazil’s aerospace industry in Sao Jose dos Campos.

Overall, it is interesting to note how the reaction of Dilma’s labor party to her U.S. visit. Just as she was leaving for the US, the labor party held its annual convention and produced its program statement. Some of the main economic and political points include: “free Brazil from the dictatorship of finance capital” and give it more “autonomy” from the financial system controlled by the USA and Europe. The party states the need for a new financial structure through the recently created mechanisms of the “Bank of the South” (UNASUL), the BRICS development bank and the Chinese-controlled Asian Development and Industry Bank.

Obviously, the labor party program is either disconnected from Dilma or she is in a “tight skirt” with her party backers as she engages with Obama and the “Yankee imperialists” of Wall Street.

Brazil is a complicated place. The rhetoric and political demands, the nationalism, and the tone often do not match what happens in the country’s economic engagement with the rest of the world. Dilma’s ideological cohort is perhaps looking more to Greece and the Grexit with applause while her economic and technocratic teams serve up the country as an important attraction to the “Colossus of the North”.

Contradictions abound and keep things interesting but perhaps a little too much so.

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