U.S., Brazil Search for Equilibrium in an Unstable Relationship

U.S., Brazil Search for Equilibrium in an Unstable Relationship

Brazil and the United States have long had a relationship unlike others in the Western Hemisphere. Despite some obvious similarities and important common interests, Brasilia and Washington have not traditionally shared the same worldview—perhaps they never will. As a result, policymakers are frequently left searching for an elusive equilibrium in the relationship, and casual observers can be taken by surprise when events, such as the revelations of U.S. intelligence gathering activities in Brazil, occur that highlight both the promise and also the fragility of the bilateral partnership.

Brazil is clearly a nation on the rise. Its strong democracy makes it a positive example for others in the region in the context of sound economic management that incorporates the populist characteristics of today’s Latin America. Designation as a BRIC nation in 2001 and rising trade with China gave voice and impetus to the long-standing Brazilian ambition of playing a larger role in global governance commensurate with its size. Brazil has expanded its profile in terms of international institutions such as the G-20 and the World Trade Organization, as well as across the hemisphere.

With stable politics and a growing economy, however, has come a new middle class, eager to participate more fully in the political and economic life of the nation. Expectations have risen; so too have domestic demands, as illustrated by the explosion of pent-up frustrations that began in June over the seemingly innocuous issue of bus fare increases and has grown into a months-long cri du coeur of the middle class. Compounding the issue is China’s slowing growth; anticipation of the U.S. Federal Reserve’s bond purchase taper is also hitting Brazil hard. Projections for 2013 growth are barely more than 2 percent. Investors are increasingly nervous: High-profile auctions for infrastructure concessions have been underbid, and the number of qualified bidders for the mid-October auction of the next tranche of pre-salt oil properties has attracted barely a quarter of the companies predicted.

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