Last week, Hillary Clinton’s visit to Brazil was less than stellar. An unsmiling President Luiz Inancio Lula da Silva (“Lula” ) stood next to the Secretary of State for photo opportunities. Brazil had just rejected the US proposal for tougher sanctions against Iran for their continued violation of nuclear weapon development. He was firm that the slow route to an agreement using dialogue was preferable. Thus another element of failure was added to the Obama Administration’s record.
In a separate move, Brazil had gone to the WTO for permission to levy tariffs on 102 products from the US. Cotton is the focus of the tax. It is government subsidized in the US and Brazil is opposed to that. The decision takes effect next month, starting a 30-day period during which US and Brazilian officials will attempt to negotiate a solution to the dispute.[Financial Times] Should the US not comply, a trade war could ensue and
Brazil could also impose further penalties – known as “cross-retaliation” – on US intellectual property rights, potentially breaking patents in the pharmaceuticals, technology and media industries.
Last year, President Obama authorized
billions of dollars to Brazil’s state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil’s Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil’s planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan. [Wall Street Journal]
In light of the above, there is ample room for negotiation. But extraction of a pound of flesh from the US will no doubt continue in some form as Brazil continues to gain economic and political clout in the world but with a little help from its friends.
Here is how the Obama Administration wanted US and Brazil relations to appear last year as Obama welcomed Lula to the White House.