Peter Hakim’s take on U.S.-Brazil Relations

Peter Hakim, President Emeritus of the Inter-American Dialogue, recently summed up the state of U.S.-Brazil relations by arguing that

“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.”

In his recent article, Inter-American Discord: Brazil and the United States, published in the IPEA Boletim de Economia e Política Internacional, Hakim traces the outlines of bilateral affairs in recent years.  Throughout the article, he threads the issue of international commerce as a major obstacle toward greater bilateral cooperation, reporting

“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.”

Hakim does not mention it by name, but undergirding his argument is the perplexing case of U.S. cotton subsidies that continue to bleed the good will between these two countries.  As Burleigh Leonard noted in The Hill recently,

“In 2009, after seven years of negotiating the cumbersome WTO dispute settlement and appeals process, Brazil was given the green light to retaliate for the injury it sustained as a result of certain U.S. cotton support payments and export credit guarantees, to the tune of more than $800 million. In granting the authority, the WTO allowed Brazil not only to retaliate against imports of U.S. goods, but also to engage in cross-retaliation, that is, to take retaliatory actions in the areas of services and intellectual property rights.”

Leonard recalls, Brazil suspended retaliation in exchange for a promise that the U.S. Farm bill reauthorization would bring the U.S. into compliance with respect to World Trade Organization (WTO) rules and U.S. cotton producer support programs.  Yet, as Leonard details and Hakim implies, the U.S. Congress is moving toward a Farm bill reauthorization that continues to provide world price distorting supports to U.S. agricultural producers.  In this sense, U.S. policy continues to undermine the legitimacy of international commercial law while also sinking bilateral relations with Brazil.

Hakim is careful to blame both national governments and pivots on the former President Lula’s efforts to team up with the government of Turkey to resolve the nuclear question with the perplexing Iranian regime.  Of course, the jury is still out on whether or not Brazil can play an important role in the Middle East; and certainly the Brazilian government has not always taken advantage to advance important national interests through deeper cooperation with the U.S., but the inability of the U.S. Congress to openly comply with the WTO cotton case is equally or more disturbing than any one issue or element of bilateral relations today.  Hakim characterizes agricultural trade issues as the source of a “bitter dispute” between the two countries, and certainly the cotton case has left a bitter taste to bilateral relations.  Yet, the cotton case is quickly undergoing a transformation from formal dispute to a rather open and arrogant exercise of U.S. power over the WTO and Brazil’s right to be made whole, either by accord or retaliations.

Before the two countries can commit to longer term and deeper forms of cooperation, the U.S. government (both Congress and the Executive) must resolve those issues and sources of grievance under its unilateral control, including global market distorting agricultural subsidies to U.S. producers.  Yes, as Hakim argues, Brazil is not India or Mexico with respect to U.S. foreign policy; but then maybe this is the original source of the problem. U.S. foreign policymakers and congressional leaders need to eliminate the evident obstacles to long-term cooperation with Brazil so that U.S. foreign policy can be designed to maximize cooperation rather than manage discord. The first step should naturally be with a soft and fluffy ending to the cotton conflict.