Brazil and the US:A Strategic Relationship, A Strategic Dialogue

When I was elected President, there were those who foresaw the deterioration of relations between Brazil and the United States. They were roundly mistaken.  On the contrary, our relations today are going through one of their best moments ever. Economic and trade relations have expanded greatly and our political dialogue has gained a much higher quality.

-- President Luiz Inácio Lula da Silva, on the occasion of President George W. Bush’s visit to Brazil (November 2005).

Let me start off by saying that the [Brazilian] President is right, relations between Brazil and the United States are essential, and they are strong. […] I want to thank you [President Lula] for your leadership around the world and in the hemisphere.

-- President George W. Bush, on the same occasion.

The excerpts reproduced above, taken from statements made by Presidents Luiz Inácio Lula da Silva and George W. Bush during the United States (US) President’s visit to Brasilia in early November 2005, reflect, in a very conspicuous manner, the high level achieved by the relationship between Brazil and the United States.

The two nations share the fundamental goals of preserving and consolidating democracy and freedom. Brazil and the US are fully engaged in the promotion of prosperity and social justice. Both societies, with their multiethnic character, adhere wholeheartedly to the principles of tolerance and mutual respect. So many common structural elements contribute decisively to the quality of our bilateral relations. They bring us close together as societies and governments.

Let me make it clear, though, that in no way am I implying that there is an absence of differing views in the relationship between Brazil and the United States. Our bilateral agenda is so vast and rich that the emergence of specific disagreements is virtually inevitable. Sometimes such disagreements stem from the simple fact that, circumstantially, our interests do not coincide in a given issue-area—and it is only too natural that this should happen from time to time. At other moments, the disagreements derive from the different outlooks we hold on a number of global issues, as a result of the quite distinct nature of each one of our two nations’ interaction with the international system—this also should be seen as part of the game. To my mind, what really matters—and what really shows the strength of our relationship—is that we are mature enough to tackle the disagreements we come across within the boundaries of the fora where they appear. Never do we allow them to contaminate our relations as a whole. Good friends discuss and even argue, but, in the end, they manage to find common ground on which to keep moving forward.

And that is precisely what Brazil and the United States have been doing: we have been moving forward by solving our specific disagreements with the tranquility provided by our friendship and by working together with a view to further diversifying our relations and to giving concrete expression to our common values.

The November visit to Brazil by President George W. Bush, with which I started this brief collection of thoughts I wish to share with the reader, is a clear illustration of all that. The visit was the culminating point of a series of very intense meetings held between Brazilian and American ministers and other senior officials, a series that began with the official visit to Washington by President Lula in June 2003. 

The Brasilia meeting reflected continuity—a dynamic and creative continuity. In the Brazilian capital, Presidents Lula and Bush unequivocally reiterated the excellent status of our bilateral relations. The two leaders decided to initiate a strategic dialogue about important issues on the bilateral, regional and global levels.

As stated in their joint communiqué, the Presidents launched new cooperation mechanisms in important areas such as science and technology, education, health care, the environment and trade and investment promotion. These mechanisms, that are already being put together, have added to three pre-existing working groups—on agriculture, energy and economic growth—that had been established on the occasion of President Lula’s visit to Washington in 2003 and that have been working very successfully, in a pragmatic and results-oriented fashion. 

The establishment of a working group to enhance the flows of trade and investment between the two countries is to be underscored. We aim at substantially increasing bilateral trade—and ideally doubling it to US$ 70 billion—by 2010. In 2004, Brazilian exports to the United States, which were in the range of roughly US$ 21 billion, accounted for only 1.4 percent of total US imports. I am convinced that Brazil can have a larger share of the gigantic US market.

Another factor that is worth highlighting about President Bush’s visit is the coinciding views expressed by President Lula and his guest with regard to how decisive it is to reform agricultural markets in rich countries in order for the Doha Round of trade negotiations to succeed. Contrary to what had occurred in previous rounds, currently Brazil and the United States have, to a large extent, converging opinions about aspects that are centrally important to the World Trade Organization (WTO) negotiating process.

Additionally, and with respect to the role played by Brazil in its region, a highly significant result of the American President’s visit to Brasilia was the explicit recognition by the United States that the integration processes taking place in Latin America constitute “important tools for promoting prosperity, stability and democracy in the region.” In recognizing this fact, President Bush specifically referred to two endeavors that carry decisive meaning for Brazil and its neighbors: MERCOSUR and the South American Community of Nations (CASA), whereby South American nations are organizing the space they share according to common needs and interests, with an emphasis on structural integration, trade initiatives and more political dialogue.

The issue of energy was also the subject of discussions between Presidents Lula and Bush. And this is certainly a field in which Brazil and the United States can do a lot together. Particularly in the context of the uncertainties that haunt the oil and the gas markets, it comes as an opportunity for the two nations—that account for approximately 70 percent of the global production of ethanol—to work towards the creation of a world market for this source of energy, in whose production Brazil is recognized as a paradigmatic case. The development of a global market for ethanol would reduce, for all countries involved, dependence on imported oil, with very positive environmental consequences. The achievement of such a goal, as I have been telling my American interlocutors, both in government and in the private sector, would require a consistent Brazil-US partnership, inter alia, in designing compatible regulatory frameworks, in developing technical cooperation programs (including for joint research), in promoting ethanol production and consumption in third markets and in enhancing ethanol trading in relevant commodity-marketplaces (NYBOT, CBOT and so on). We have to move hand in hand. At this juncture, the trade barriers imposed by the United States on ethanol imported from Brazil are, with all due respect, counterproductive. In light of the broader energy equation, there are valid reasons, in my understanding, for the US to revise the burden represented by the specific duty of 54 cents it imposes on each gallon of ethanol imported from my country, on top of a 2.5 percent ad valorem tariff. Given the magnitude of the US market for ethanol, trade liberalization would undoubtedly prove complementary to domestic US production.

To sum up, the main message I wish to convey is that Brazil and the United States are deepening their relationship on the basis of an increasingly dynamic strategic dialogue. Our relations are gaining in agility and scope. They have been capable of producing beneficial effects not only bilaterally and regionally, but also in other continents and with regard to a variety of topics on the global agenda.