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Thursday, March 18, 2010

Brazil-U.S. Relations

Peter J. Meyer
Analyst in Latin American Affairs

On January 1, 2007, Luis Inácio Lula da Silva, of the leftist Workers' Party (PT), was inaugurated to a second four-year term as President of Brazil. Lula was re-elected in the second round of voting with fairly broad popular support. His immediate tasks were to boost Brazil's lagging economic growth and address the issues of crime, violence, and poverty. Despite President Lula's significant personal popularity, occasional corruption scandals and inter-party rivalries within his governing coalition have made it difficult to advance his agenda through Brazil's fractured legislature. Lula's top priority for 2010 is legislative approval of a new regulatory framework that will increase the state's role in the exploitation of Brazil's considerable offshore oil reserves. A presidential election to choose Lula's successor is scheduled to be held in October 2010. 

President Lula has benefitted from a strong economy throughout most of his second term. The global financial crisis, however, slowed Brazil's economic growth and threatened to erase some of the social gains made in recent years. President Lula implemented a number of countercyclical policies to boost the economy and protect those most exposed to the effects of the economic downturn. These actions appear to have been reasonably successful, as the Brazilian economy was one of the first to recover from the global crisis and analysts now expect Brazil to experience significant growth in 2010. 

During the first Lula term, Brazil's relations with the United States were generally positive despite the fact that President Lula prioritized strengthening relations with neighboring countries and expanding ties with nontraditional partners, including India and China. Brazil-U.S. cooperation has increased during President Lula's second term, particularly on energy issues. Two presidential visits in March 2007 culminated in the signing of the Memorandum of Understanding (MOU) Between the United States and Brazil to Advance Cooperation on Biofuels; the agreement was expanded in November 2008. President Obama has made strengthening U.S.-Brazilian relations an important part of his policy toward Latin America. Although several differences between the countries have emerged in recent months, Brazil-U.S. relations remain friendly. 

Members of Congress demonstrated considerable interest in Brazil during the first session of the 111th Congress. Members expressed particular concern over an international custody case involving Brazil. Both houses passed resolutions (H.Res. 125 and S.Res. 37) calling on Brazil to comply with the requirements of the Convention on the Civil Aspects of International Child Abduction, and another measure (H.R. 2702, C. Smith) was introduced in the House, which would suspend the Generalized System of Preferences for Brazil until the country meets its Convention obligations. Several other initiatives relating to Brazil also were introduced in the first session of the 111th Congress: S.Res. 74 (Lugar) would recognize the importance of the U.S.- Brazil partnership and call on the U.S. Treasury Secretary to pursue negotiations concerning a bilateral tax treaty; S. 587 (Lugar) would provide $6 million to expand U.S.-Brazil biofuels cooperation in FY2010; and S. 2044 (Menendez) would provide for re-liquidation of entries relating to certain Brazilian orange juice imports. 

This report analyzes Brazil's political, economic, and social conditions, and how those conditions affect its role in the region and its relationship with the United States. 

Date of Report: March 5, 2010
Number of Pages: 32
Order Number: RL33456
Price: $29.95

Document available electronically as a pdf file or in paper form.
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