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The US and Brazil have not had an easy time with each other in recent years. Although relations between the two countries are by no means adversarial or even unfriendly, they have featured more discord than cooperation—both regionally and globally. And there is little reason to expect dramatic change any time soon.

At the 2005 summit meeting of hemispheric leaders, disagreements between the US and Brazil brought a halt to the faltering negotiations for the Free Trade Area of the Americas (FTAA). In 2009, it was largely US-Brazilian differences that delayed resolution of the Honduran political impasse for almost a year. Later in 2009, Brazil galvanized opposition across South America to block a US-Colombian military accord. Today, the two countries remain at loggerheads over Cuba’s participation in hemispheric affairs, disagree on how to manage relations with Paraguay in the aftermath of the impeachment and ouster of President Lugo, and continue to have sharply diverging views on the appropriate roles of the Organization of American States and its Inter-American Human Rights Commission.

Even more unsettling for US-Brazilian relations have been the clashes over global issues. Washington has been especially troubled, and the bilateral relationship most bruised, by Brazil’s defense of Iran’s nuclear program and its opposition to UN sanctions on Iran. The two countries have also taken conflicting positions on nonproliferation questions, the Israeli-Palestinian conflict, and international responses to the uprisings in Syria and Libya. World trade negotiations have long been a matter of contention for both nations.

Yet, despite their persistent disagreements, the US and Brazil are not antagonists or adversaries. The two countries have maintained friendly ties for years. US presidents and other senior officials are welcomed in Brazil, and Brazilian leaders are warmly received in Washington. The governments have consistently found ways to accommodate their differing views and defuse tensions and conflicts. For instance, only months after Brazil campaigned against a US-Colombia security pact, it signed its own, albeit modest, military accord with the US. Increasingly, Washington routinely defers to Brazil for leadership in South America—even on issues where the two countries differ. The US has supported and appreciated Brazil’s management of the UN peacekeeping mission in Haiti for the past seven years. President Obama even sought Brazilian help in dealing with the sensitive issue of Iran’s nuclear ambitions—although it later regretted doing so when Brazil joined Turkey in a far more ambitious and public negotiating role than had been anticipated.

Brazilian and US leaders often publicly assert that their bilateral relationship is as good or better than it has ever been, and claim that it is continuing to improve. Although more commonly expressed by US officials, it is not unusual for each of the two governments to refer to the other as a global or regional partner—and to suggest that the two nations are working toward a more robust, even strategic relationship. Yet, despite the continuing rhetoric, neither country has done much in recent years to advance the development of deeper, more cooperative ties.

Relations are not getting worse, but they are not getting better either. The two countries are not cooperating more today than they were a dozen years ago—and their differences have extended to a wider range of issues. They certainly have not found many areas for collaboration. The agreements they have reached seem mostly to be insubstantial or peripheral to the relationship, or they have not been effectively implemented. They have not led to any particularly productive collaboration. On most fronts, relations seem to be drifting, propelled largely by inertia, without much direction or decision.

Even when the two nations have identified shared objectives that would advance the interests of both, they have rarely developed the cooperation needed to pursue them. The US and Brazil clearly have an array of common economic interests. Yet, they have not signed a single major economic pact in more than two decades—a period when Washington has reached free trade accords with some 20 countries worldwide, 11 in Latin America alone. In 2007, the two countries, which produce nearly 90 percent of the world’s ethanol, agreed to work together to establish world markets for the fuel and develop improved technologies for its production. But they have made little progress on either front.

More generally, as the world’s two largest agricultural exporters, Brazil and the US are well aware of how much they would gain by diminishing global trade barriers to food products. But they have never been able to collaborate effectively to achieve that goal. On the contrary, agricultural trade issues remain a source of bitter dispute between the two countries. Cooperation has been equally elusive and disappointing in many other areas of interest to both governments including, for example, nuclear nonproliferation, transnational drug and crime challenges, and climate change.

From Lula to Dilma

US-Brazil relations reached a low point in the final year of President Lula’s government. On May 18, 2010, Secretary of State Hillary Clinton expressed outrage at Lula’s announcement from Tehran that he and his Turkish counterpart had reached a breakthrough agreement with Iran on its uranium enrichment activities. Secretary Clinton quickly condemned Brazil for meddling in a situation that it did not fully understand, and putting at risk a fragile international consensus to impose new sanctions on Iran. The Financial Times reported “Hillary Clinton…all but accused Turkey and Brazil of being international ingénues, suckered into a spoiling operation by Iran.” Secretary Clinton, however, may have been unreasonably critical and dismissive of the Brazilian negotiating initiative—which had, after all, been initially encouraged by the White House. Moreover, according to several highly regarded former US diplomats, the negotiations produced what Washington should have recognized as a potentially useful outcome. Still, whoever was right, US-Brazil relations were badly strained and have not yet fully recovered.

The inauguration of Dilma Rousseff six months later, on January 1, 2011, was viewed with some optimism in Washington. Following her election, some US commentators voiced concern about her background as an urban guerrilla and the prospect of her bringing a left-wing ideological agenda to the presidency. Her speeches and interviews before taking office (prominently including an interview in the Washington Post), however, quieted the US critics. She appeared ready to pursue a less flamboyant, less ambitious foreign policy than her predecessor and stated that her government was committed to improving relations with the US. She suggested as well that she intended to take a more critical position toward Iran and human rights violators generally.

Brazilian officials tend to emphasize the continuity in Brazilian foreign policy. They maintain that Dilma has introduced only modest changes in Brazil’s overseas engagements, and suggest that what shifts have been made mainly respond to an evolving international context and her own focus on domestic matters rather than new ideological or policy approaches. But whatever the motivation, Dilma has adopted a more restrained approach to foreign affairs than Lula, which has resulted in a lowering of Brazil’s international profile—even if the content of the nation’s policies have not changed much.

During her 18 months in office, there has been a noticeable easing of tensions in US-Brazil relations and major clashes have so far been avoided. From Washington’s standpoint, the most important change has been the apparent distancing of Brazil from its once close embrace of Iran. Dilma declined to meet with President Ahmadinejad when they were together in Rio de Janeiro for the UN environmental conference, and Brazil was not part of his itinerary on two earlier visits to Latin America during her presidency. And she has shown no inclination to travel to Tehran. Still, Brazil maintains an active commercial relationship with Iran and continues to oppose UN sanctions on the country, which the US considers essential to stopping its development of nuclear weapons.

US diplomats seem more comfortable with Dilma than her predecessor. Although no dramatic initiatives are yet visible, they believe the prospects for more constructive and cooperative relations have risen—while the risks of confrontation have declined.

Obama’s visit to Brazil in March 2011, just three months after Dilma assumed office, and her trip to Washington 13 months later were important windows on the state of the bilateral relationship. Obama was enthusiastically received by the Brazilian people and, from all accounts, he and Dilma had a productive dialogue. No evident progress was made on any high visibility, high priority issues affecting US-Brazil relations, however. Nor did commercial ties receive much of a boost even though the White House had billed the US president’s trip as a quest for expanded trade and investment opportunities. Brazilians were also largely disappointed by Obama’s failure to endorse Brazil for a permanent seat on the UN Security Council—as he had done for India on a prior visit to New Delhi.

Dilma’s trip to the US was a lower profile affair, which got comparatively little attention. She spent only one day in Washington, where she made a single public appearance. By visiting two premier US universities, Harvard and MIT, she highlighted increased cooperation to develop Brazil’s capacity for scientific and technological innovation—a critical priority, but hardly central to the bilateral relationship. All told, the Brazilian President’s visit was unfavorably compared to the more elaborate reception received by India’s Prime Minister six months earlier, which was viewed as emblematic of the relative status of the two countries in Washington.

Brazil and the US on Separate Tracks

Brazil and the US have largely pursued their own independent foreign policy courses. Only rarely have their objectives or priorities intersected—and when they have, conflict rather than cooperation was often the result. Neither country has been particularly attentive to the potential benefits of compromise or collaboration. Even when their interests and goals were compatible, they have seldom sought to align their approaches or strategies, or adjust their policy choices, to the needs or preferences of the other.

In the early 1990s, President Bush set out his vision of an economically integrated hemisphere, which was transformed into the FTAA and launched at the 1994 Summit of the Americas. Never an enthusiastic supporter, Brazil only reluctantly agreed to participate in the early rounds of negotiation. In 2001, President Cardoso forcefully expressed Brazil’s reservations about the enterprise and made clear the many obstacles to Brazilian participation. Four years later, Lula’s opposition was a major factor in bringing the free trade talks to an end.

With the path toward a hemisphere wide free trade accord effectively blocked, Washington invented the policy of “competitive liberalization”—which called for the US to forge bilateral free trade pacts with countries willing to do so. Eleven Latin American nations have now reached agreements with the US (including Mexico and Chile who negotiated pacts earlier). Neither Brazil nor its partners in Mercosul, the four-country Southern Cone common market, however, were prepared to negotiate, individually or collectively, a trade arrangement with Washington. They have together been negotiating with the EU for several years, but are still far from an agreement.

From the outset, Brazil was uneasy about US-led hemispheric integration efforts, and kept its regional economic strategy focused on Mercosul, which was established in 1991, some three years prior to the North American Free Trade Agreement (NAFTA). And the notion of a broader South American economic arrangement gained impetus when President Cardoso organized the first meeting ever of the continent’s presidents in 2000. Four years later, strongly supported by the Lula administration, the Community of South American Nations was formally launched –and shortly thereafter transformed into UNASUR (the Union of the South). UNASUR has since gained sufficient credibility and authority to deal regularly with conflicts and governance problems in South America, although its role in economic affairs remains limited. Brazil took considerable initiative also in establishing CELAC (the Community of Latin American and Caribbean States), an incipient hemispheric grouping founded in 2010 that incorporates Cuba and excludes the US and Canada.

There is some concern in Washington that the new institutions, without US participation, may end up displacing the OAS and other traditional regional organizations. It has not been reassuring that Brazilian diplomats consistently express doubts about the continuing value of the OAS and the Summits of the Americas—and, indeed, of the Western Hemisphere concept in general. Yet, the US has never publicly objected to either UNASUR or CELAC and, recognizing its own limitations, has largely deferred to UNASUR in its efforts to deal with conflicts in South America. And it has acknowledged, even welcomes at times, Brazil’s pivotal role in these efforts. The US has seemed comfortable with the leadership that Brazil has assumed in South America, even when the two countries disagree.

For its part, Brazil largely defers to the US in the rest of Latin America, outside of South America, although it makes its objections clear when it opposes Washington’s policies, as in the cases of Cuba and Honduras. The most successful experience of US-Brazilian cooperation in the hemisphere in recent years has been in Haiti, where the two nations have worked closely together with surprisingly little discord. The interests of the two countries are clearly complementary here.

Brazil has also pressed forward internationally with minimal US support or cooperation. It has widely diversified its global relations, built strong ties to an array of industrial and developing countries, and today exercises considerable influence in almost every global forum, usually independently of the US and sometimes in opposition. Brazil rarely hesitates to voice its differences with the US.

Brazil is not India

The central question for US-Brazil relations is whether the two countries can rise above their differences and find ways to cooperate more effectively. Will they be able to shape a fresh relationship that allows them to join forces to advance their interests, at least on some critical issues? What will it take for Brazil and the US to develop partnerships in a few high priority areas? The recent past suggests that this will not be a simple task for either country. Brazil has achieved its current stature and influence not through cooperation, but largely by acting on its own and by regularly saying no to Washington. For its part, the US has become wary of an increasingly powerful Brazil. It opposes Brazil’s position on many issues, and does not fully trust Brazil’s judgment on international affairs or the country’s approach to foreign policy.

One path to cooperation is that taken by the US and India. The two countries have developed a strategic relationship that largely deals with security and geopolitical challenges, but has important economic consequences as well. Despite severe political and bureaucratic obstacles—no less difficult than those facing the US and Brazil—New Delhi and Washington were able to make the concessions and accept the trade-offs needed to reach agreement on several contentious issues, most importantly on security matters and India’s nuclear program.

And there is a compelling case for Washington to treat Brazil more like India—for the US to drop its ambivalence over Brazil’s diplomatic ambitions and acknowledge, more than halfheartedly, its emergence as a powerful country. It surely makes sense for the US to endorse Brazil’s elevation to a permanent seat on the UN Security Council—since it is almost inevitable that, sooner or later, Brazil will occupy that seat. By acting now, Washington will gain some political and diplomatic dividends. By postponing its support, the US has allowed the question of Brazil’s UN representation to become a continuing irritant to the bilateral relationship.

Some 15 years ago, the US and India concluded that closer, more cooperative relations, particularly focused on security issues, would serve the vital interests of both countries. That decision followed a long period of frosty, sometimes adversarial relations between the two nations. Recall that during the Cold War, India sided far more often with Moscow than with Washington—and that, for much of the 1990s, India and the US squabbled over nuclear proliferation issues. An angry Clinton Administration imposed harsh sanctions on India when it detonated an atomic weapon in 1998 (coincidentally, the year Brazil joined the NPT).

The turnaround in US-India ties was not as quick or thoroughgoing as either nation wanted, but a substantial transformation has occurred. The two countries have signed a mutual defense treaty, largely directed at China, and the US is now the largest supplier of military equipment to India. Washington has fully accepted the nation’s status as a nuclear power, acknowledged its right to enrich uranium to weapons-grade levels, and provides advanced technology to India’s civilian nuclear program. An exchange of state visits in the past two years, which only a handful of other countries (Great Britain, China, Mexico, and Canada) have enjoyed during the Obama presidency, is evidence of the status the two nations assign to their bilateral relationship.

A similar transformation in US-Brazilian relations, however, is unlikely any time soon. The main obstacle is not that Brazil and the US disagree on too many critical issues. Nor is it the evident mistrust between the two countries. US differences with India are greater than those with Brazil on a range of global issues, including such high-profile concerns as nonproliferation, Indian relations with Iran, the political turmoil in the Middle East, and international trade policies. Mutual trust has not been a prominent feature in US-Indian relations. What has brought India and the US together is a powerful set of common interests and purposes that both regard as urgent first-order priorities. Brazil and the US share no such potent commonality of interests or purposes.

By the start of the new millennium, India’s long border with an increasingly formidable China was probably incentive enough for heightened Indian-US security cooperation. But another reason for closer Washington-New Delhi relations has been the continuing instability in neighboring and nuclear-armed Pakistan, which today is in considerable danger of becoming a failed state that cannot control its territory, army, or population. Pakistan’s problems have already damaged the US war effort in Afghanistan, and there is, in addition, the constant threat of open warfare between Pakistan and India.

The US may only share a small number of mutual interests with India, but they are urgent and unambiguous. Three successive US presidents—Clinton, Bush, and Obama—have assigned highest priority to US-Indian relations. In just the past year, the central focus of US military strategy has been shifted to Asia, with India, according to Secretary of Defense Leon Panetta, being the “linchpin of that strategy.”

Brazil lives in a very different neighborhood—surrounded by friendly, mostly democratic neighbors. Although criminal violence has become a massive problem across Latin America, the nations of the region are at peace with one another. Their armies are small, mostly with limited budgets. None of them has a nuclear weapon or is likely to acquire one any time soon. The dangers of armed conflict are among the lowest in the world. Neither Brazil nor the US confronts any urgent threats or crises in the region. No one is fighting over territory, religion, race, or ideology. There may be good reasons for Brazil and the US to pursue a closer relationship, but they are very different from those that motivated the India-US partnership. Security will not be a strong motivation for US-Brazilian cooperation, nor are there any other vital issues on the bilateral agenda.

Nor Is Brazil Mexico

As an alternative route to cooperation, Brazil and the US could focus hard on building more productive economic ties—which government officials and business leaders in both nations routinely put at the top of their agendas. An effort in this direction would resemble the decision of the US and Mexico to remake their economic relationship by negotiating the NAFTA arrangement.

Economic interests are probably the most realistic basis for a longer-term partnership between Brazil and the US. There is no question that the two countries have a great deal to offer one another. The US is the world’s largest and most technologically advanced economy; it imports more goods and services and invests more overseas than any other nation. Although only about 15 percent the size of the US economy, Brazil boasts the sixth or seventh largest economy worldwide, and within a generation, it is projected to rise to fourth or fifth. And it is increasingly converging with many dimensions of the US economy.

Beyond the direct impact of two-way flows of trade, investment, and technology, US-Brazilian economic relations will importantly affect patterns of commerce in the Americas and beyond. Without an agreement between the US and Brazil, there is no prospect of a hemisphere-wide trade arrangement or any other form of regional economic integration. The revival of global trade negotiations also depends on greater US-Brazilian accord.

Although three years ago, China replaced the US as Brazil’s leading economic partner, US trade with Brazil has flourished in the past decade, more than doubling since 2002. The US accounts for some 16 percent of Brazilian trade and remains the largest market for Brazil’s manufacturing exports and the primary source of foreign capital and new technologies—all critical to the country’s continuing industrial development. In contrast, commodities make up the overwhelming share of Brazilian exports to China.

Brazil today plays only a small part in the US economy. In 2011, it was the US’s eighth largest trading partner—but accounted for only two percent of US commerce worldwide, slightly more than India, but only one sixth of US trade with Mexico. Still, Brazil, year by year, has been absorbing increasing amounts of US investments and exports, and its recent offshore oil discoveries could turn Brazil into a major US energy supplier, overtaking both Venezuela and Mexico. Brazil already serves as headquarters for most US firms doing business in South America.

Combined with the promise of its oil wealth, Brazil’s impressive economic performance in the past eight years and its transformation into a middle class society make the country an attractive commercial and financial partner. Since 2004, Brazil has enjoyed its fastest pace of growth in more than a generation. It suffered only marginally from the global economic crisis—a reflection of the rising quality of the country’s fiscal and financial management, the strength of its financial institutions, and its expanding export capacity. Along with nearly all other major economies, Brazil’s growth has slowed in the past year, but the country will likely remain an economic powerhouse in the coming years—particularly if it begins effectively to address some critical shortcomings that it already acknowledges, including a deteriorated, outmoded infrastructure, mediocre schools and universities, inadequate tax and regulatory systems, archaic labor codes, and a hard-to-navigate business environment.

The value of deeper US-Brazilian economic ties has not eluded the US. Commercial issues were the centerpiece of Obama’s agenda when he visited Brazil in March 2010. The president brought along nearly all of his administration’s top economic officials and invited some 50 CEOs from leading US corporations to join him as well. His first public meeting in Brasilia was with 400 Brazilian CEOs. Dilma’s subsequent trip to the US in April 2012 also emphasized trade, business, and technology. The US Chamber of Commerce hosted her only public meeting in Washington.

Nonetheless, some daunting obstacles stand in the way of a more robust special economic relationship between Brazil and the US.

First, the two countries remain deeply at odds on a range of critical economic issues. Many are long standing, and have been sources of continuing friction and occasional confrontation. Over the years, economic disagreements have blocked progress toward bilateral trade, tax, and investment agreements, led to the failure of FTAA negotiations, and kept the US and Brazil from joining forces in global trade talks.

There have been bitter disputes over tariffs and subsidies, which limit Brazilian agricultural sales to the US, and make it harder for Brazil to compete with US exports globally. Two of the most contentious, over cotton and ethanol, have been settled temporarily, but the underlying issues remain unresolved. For its part, the US has long pressed Brazil to lower import barriers to services and manufactured goods and strengthen its protection of intellectual property.
In the past year, as economic growth has become more precarious in the two countries, both have bitterly criticized the economic stimulus efforts of the other. The US has objected to Brazil’s rising tariffs and other trade barriers, while Brazil has vehemently complained about the US Federal Reserve’s policy of “quantitative easing”—essentially a substantial expansion of the US supply of money and credit—calling it unfair and protectionist and comparing it to China’s persistent undervaluation of its currency.

These differences present huge hurdles. Still, according to senior negotiators, the US and Mexico, prior to NAFTA, were farther apart on the issues than the US and Brazil are today. Why the NAFTA negotiations succeeded, they suggest, is that Washington and Mexico were committed to reaching an agreement, and they remained at the negotiating table until they had one. But neither the US nor Brazil have that depth of commitment to an enhanced economic relationship. To the contrary, Brazil and the US have been content to pursue their own, independent strategies.

The US is increasingly looking to Asia and the Pacific for trade and economic partnerships, with the prospect of incorporating Mexico and many of its other hemispheric free trade partners in the new arrangements. Brazil has been largely satisfied with its broadly diversified economic ties, and appears reluctant to pursue any special arrangement with the US. Unlike Mexico, which depends on the US market for four-fifths of its exports, Brazil does not need any such arrangement. Less than one-fifth of Brazil’s exports go to the US. Geography turns out to be a key factor in shaping the US’s special relations with both India and Mexico.

Beyond Economics and Security

Several other global issues could potentially offer opportunities for Brazil-US collaboration. The most frequently cited are nuclear nonproliferation and global climate change. On both, the two countries, at least superficially, would seem to have important shared interests.
Brazil has signed the UN Nonproliferation Treaty (NPT) and is bound to forego nuclear arms by its own constitution, an agreement with Argentina, as well as the Latin American-wide Tlateloco treaty. The US has little concern that Brazil is preparing to develop atomic weapons. Brazil, however, has embarked on a uranium enrichment program, not only for clearly civilian objectives, but also to produce fuel for a nuclear submarine. In addition, it has refused to sign the NPT’s additional protocol allowing for more intrusive inspections of its nuclear facilities. Both Brazil’s rejection of the protocol and its continuing opposition to UN sanctions on Iran are viewed by Washington, with justification, as weakening an already shaky global non-proliferation regime.

For its part, Brazil claims, also with justification, that it is in total compliance with the NPT and that there is no reason for any suspicion that it might violate the treaty. It further asserts that, by retaining huge stockpiles of atomic weapons, the US and Russia are, in fact, the principal and most dangerous violators of the NPT. Brazil argues that the US and Russia should substantially curtail their stockpiles, as the NPT requires, before demanding that Brazil and other non-nuclear powers take further nonproliferation measures. But regardless of who has the stronger argument, nonproliferation remains an area of US-Brazil contention, not of common purpose. That could change in the future—as US-Indian relations demonstrate—but there is no sign that either side is yet ready to make the necessary compromises.

The US and Brazil will surely both be at the center of international debates on climate change and energy use for many years to come. Worldwide efforts to deal with these challenges will be crucially affected by how Brazil manages the Amazon and exploits its untapped petroleum reserves. And the US, given the size of its economy, will be one of the world’s largest consumers of energy and primary sources of greenhouse gases. Neither of the two countries, however, has developed its own policy framework for coping with climate problems. (Indeed, the US appears to be going backward as its polarized politics make serious discussion of the issues virtually impossible). Until Brazil and the US are able to formulate their own strategies and priorities for dealing with climate threats, this hardly seems like a promising area for bilateral cooperation.

Finding Agreement

To be sure, the US and Brazil should be working hard to resolve their disagreements. But discord is not the major challenge confronting the bilateral relationship. Indeed, given the US’s worldwide interests and involvements coupled with Brazil’s outsized global aspirations and its growing economic and diplomatic heft, the two countries should expect to disagree and clash over many issues. And so far, the two counties have been remarkably successful in accommodating their differences, keeping their clashes within bounds, and sustaining a friendly relationship.

No, the central problem for Brazil-US relations has not been their disagreements. It has been their inability to find areas of agreement. An improved, more productive US-Brazilian relationship will require the two countries to identify issues and goals on which they are willing to commit themselves to sustained, long-term cooperation.

For now, both nations seem comfortable with maintaining the status quo in their bilateral relations. The two governments may have aspirations to reshape global institutions and practices and to mold a new international order, but neither Brazil nor the US appears yet ready to invest much in building a more robust relationship with the other.