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Wednesday, August 3, 2011

Brazil-U.S. Relations


Peter J. Meyer
Analyst in Latin American Affairs

As its economy has grown to be the eighth largest in the world, Brazil has consolidated its power in South America, extended its influence to the broader region, and become increasingly prominent on the world stage. The Obama Administration’s national security strategy regards Brazil as an emerging center of influence, whose leadership it welcomes “to pursue progress on bilateral, hemispheric, and global issues.” In recent years, U.S.-Brazil relations have generally been positive despite Brazil’s prioritization of strengthening relations with neighboring countries and expanding ties with nontraditional partners in the “developing South.” Although some disagreements have emerged, Brazil and the United States continue to engage on a number of issues, including counternarcotics, counterterrorism, energy security, trade, human rights, and the environment.

Dilma Rousseff of the ruling center-left Workers’ Party was inaugurated to a four-year presidential term on January 1, 2011. She is Brazil’s first female president. Rousseff inherits a country that has benefited from what many analysts consider 16 years of stable and capable governance under Presidents Cardoso (1995-2002) and Lula (2003-2010). Since taking office, she has maintained generally orthodox economic policies while continuing to assert a role for the state in development. Her 10-party electoral coalition holds significant majorities in both houses of Brazil’s legislature; however, keeping the unwieldy coalition together has already proven challenging. Elements of the governing coalition have criticized Rousseff and even voted with the opposition on key pieces of legislation to express displeasure over her attempts to constrain spending and her quick dismissal of a number of officials accused of corruption. Nonetheless, Rousseff remains relatively popular among the general population, with 49% of Brazilians considering her performance good or excellent in June 2011.

With a gross national income (GNI) of $1.6 trillion, Brazil is the largest economy in Latin America. Over the past eight years, the country has enjoyed average annual growth of over 4%. This growth has been driven by a boom in international demand for its commodity exports and the increased purchasing power of Brazil’s fast-growing middle class. In 2010, the value of Brazil’s exports reached some $202 billion, contributing to a trade surplus of $20.3 billion. The country’s current economic strength is the result of a series of policy reforms implemented over the course of two decades that reduced inflation, established stability, and fostered growth. These policies have also enabled Brazil to better absorb international shocks like the recent global financial crisis, from which Brazil emerged relatively unscathed. Although current conditions and Brazil’s recent performance suggest the country will sustain solid economic growth rates in the near term, several constraints on mid- and long-term growth remain.

The 112
th Congress has maintained interest in U.S.-Brazil relations. Several pieces of legislation have been introduced, including bills that would suspend foreign assistance to Brazil (H.R. 2246) and the issuance of visas to Brazilian nationals (H.R. 2556) until the country amends its constitution to allow for the extradition of its citizens. Additionally, the House adopted legislation (H.R. 2112) that includes a provision (H.Amdt. 454) that would prevent any funds made available under the Act from being used to provide payments to the Brazil Cotton Institute.

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



Date of Report: July 29, 2011
Number of Pages: 37
Order Number: RL33456
Price: $29.95

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