Brazil-U.S. Relations: A New Chapter?

Lincoln Gordon

Now President Cardoso has been received by President Bush for meetings at the White House, first of the two men alone and then with senior aides on foreign and trade policy. The authors of the Council on Foreign Relations’ Independent Task Force on U.S. Policy Toward Brazil would probably have preferred a longer meeting, perhaps even with a night at Camp David. That Task Force called for a special relationship with Brazil, going beyond the projected Free Trade of the Americas (FTAA) to include collaboraion on strengthening of democracy in South America, control of the international trade in drugs and arms, and global issues in the WTO and the United Nations more generally. This would not be a satellite-like relationship, rather something akin to the U.S. relationship with the United Kingdom in Europe. Whether anything like that ambitious agenda is realistic may become clearer in late April, when the two presidents will meet again at the Western Hemisphere summit in Quebec City.

Compared with most of the half century since World War II, recent relations between the two governments have been quite good, in spite of U.S. restrictions on several important Brazilian export items (orange juice, sugar, ethyl alcohol, and steel, among others) and Brazilian challenges to pricing of U.S.-based pharmaceuticals. In earlier phases, differences extended far beyond trade, to include the fundamentals of foreign and security policies. During the Cold War, important segments of the Brazilian polity favored the Soviet side. In the second decade of the military regime (1975-85), a curious coalition was formed between extreme nationalists and romantic socialists, promoting the idea of Brazil as “Leader of the Third World,” presumably in some sort of crusade against a capitalist First World led by the U.S. There was also a clandestine effort to develop atomic weaponry, paralleling an equally misguided effort by the military junta in Argentina.

Since 1990, these dreams (or nightmares) have been discarded, replaced by special cooperation with Argentina through Mercosur, full participation in global efforts to limit proliferation of nuclear and other weapons of mass destruction, and—since 1994—macroeconomic policies making Brazil’s Rial a respectable currency after decades of galloping inflation.

When a Western Hemisphere Free Trade Area (FTAA) was first proposed by the senior President Bush in 1990, Brazil welcomed the initiative with enthusiasm. At the Miami Summit of 1994, Cardoso as president-elect joined with lame-duck president Itamar Franco in supporting the goal of a hemisphere-wide FTAA Treaty by 2005. Meanwhile, Mercosur forged ahead with a huge expansion in internal trade and in Argentine-Brazilian business collaboration, seemingly a great success until the Real devaluation of 1999 and the current financial crisis in Argentina. On the Brazil-U.S. front, a wholly unnecessary schoolboy-type spat developed between Washington’s trade negotiators and the Brazilian Foreign Office. The Americans argued for achieving FTAA simply by adding South American countries to NAFTA one at a time, starting with Chile, and then dissolving Mercosur as irrelevant and useless. The Brazilians saw Mercosur not only as an embryo Common Market, en route toward a European-style Economic Union, but also as a grouping to be expanded to embrace the whole of South America (sometimes referred to as SAFTA). Then FTAA would be negotiated between SAFTA, led by Brazil, and NAFTA, led by the U.S.

This dispute, fortunately, was ended by President Clinton during his 1997 visit to Sao Paulo, when he endorsed the ambitious aims of Mercosur and said that he saw no conflict with the goals of FTAA. Meanwhile, however, he was failing at home to secure renewed “fast-track” authority from Congress. The momentum toward FTAA slowed, even though the Santiago summit meeting in 1998 established a negotiating structure of working groups. They have been proceeding methodically to draft components of an ultimate treaty, but those drafts still contain large numbers of unagreed “bracketed” provisions.

It is regrettable that the Quebec summit was timed for April 2001. The Bush administration is still in a formative phase and the Cardod administration is beginning to feel the winds of competition for the super-elections of OCtober 2002—for president and vice-president, all deputados in Congress, two-thirds of the Senators, all state governors, and all state legislatures. The recently floated date of advancing the target date for an FTAA Treaty to 2003 was unrealistic and now seems to have been dropped.

We do not yet know the precise content of the Bush proposals to the U.S. Congress on “fast track (now renamed “Trade promotion authority”), nor can we yet predict the congressional action with certainty. Argentina’s emergency economic measures, including major changes made without advance consultation, have placed severe strains on Mercosur. There are severe political stresses in Colombia, Venezuela, Ecuador, and Peru, threatening to undermine both democratic institutions and economic and social progress in the Andean region.

On all these issues, there may be a need for constructive collaboration between Brazil and the U.S. as anchors of consolidated democracy and economic stability in South and North America. If the Washington meetings have begun to lay the foundations for such collaboration and the FTAA project can be kept on the rails at Quebec, the Summit will make a positive, though probably modest contribution to a better life for the Hemisphere’s nations and peoples.