United States

Brazil Table of Contents

The United States was the first nation to establish a consulate in Brazil in 1808, following the transfer of the Portuguese royal court to Rio de Janeiro and the subsequent opening of the ports to foreign ships. However, it was not until after World War II that the United States became Brazil's number-one trading partner and foreign investor. After 1945 United States-Brazil relations took on five basic dimensions: promoting and protecting United States investments in and exports to Brazil; promoting Brazil's exports of primary goods or products and supporting Brazil's industrialization policies; garnering Brazil's support for United States policy positions in the hemisphere and in other world forums; promoting Brazil's emergence as a middle-level world power in Latin America and the developing world; and showcasing Brazil's successful independent foreign policy and autonomous development strategy among its peers in the developing world.

During the presidency of Enrico Gaspar Dutra (1946-51), Brazil's foreign policy was aligned closely with that of the United States. Brazil outlawed the PCB (Brazilian Communist Party) in 1947 and broke off relations with the Soviet Union. Vargas's return to power in 1951 signaled a cooling of relations. Vargas blamed the United States for his ouster in 1945 and appealed to Brazilian nationalism, which was growing in many sectors, including the armed forces. The Korean War and the European recovery were then high United States priorities. Brazil was not at the time threatened by communism, and United States arms sale policies equated formerly pro-Axis Argentina with Brazil. Brazil's foreign policy of actively promoting its agricultural exports, whose terms of trade (see Glossary) were diminishing, ran counter to United States interests. The establishment of the Petrobrás oil monopoly in 1953 crowned these nationalist sentiments and was hailed as an economic declaration of independence from United States oil companies. These sentiments were further fanned by charges of United States involvement in Vargas's ouster and suicide in August 1954. His suicide note blamed "international economic and financial groups."

President Kubitschek (1956-61) improved relations with the United States, while strengthening relations with Latin America and Europe, and exploring market possibilities in Eastern Europe. His industrial development policy attracted huge direct investments by foreign capital, much from the United States. He proposed an ambitious plan for United States development aid to Latin America in 1958 (Operation Panamerica). The outgoing administration of President Dwight D. Eisenhower found the plan of no interest, but the administration of President John F. Kennedy appropriated funds in 1961 for the Alliance for Progress (see Glossary).

Relations again cooled slightly after President Quadros announced his new independent foreign policy in January 1961. Quadros also made overtures to Cuba and decorated Cuban revolutionary Ernesto "Che" Guevara with Brazil's highest honor.

Severe economic problems, political and economic nationalism, union populism, and strained relations with the United States frustrated President Goulart, eventually causing his overthrow in 1964. Before assuming the presidency, Goulart was known for having been a Vargas protégé and for being pro-Fidel Castro, procommunist, and antiforeign capital. However, during the first parliamentary period (September 1961 to February 1963) of his presidency, Goulart tried to maintain close relations with the United States by naming strongly pro-United States Roberto Campos as ambassador in Washington and Deputy Santiago Dantas as minister of foreign affairs. Nonetheless, certain domestic and foreign policy issues clouded this relationship. First, Goulart's brother-in-law, Leonel Brizola, then governor of Rio Grande do Sul, insisted on expropriation of foreign-owned public utilities (electric power and telephones), and nationalists in Congress pushed for zero or minimum compensation. Second, Brazil joined Argentina, Bolivia, Chile, Ecuador, and Mexico in abstaining from a final vote on an OAS resolution expelling Cuba from that organization. Third, in August 1962, Congress approved a more restrictive law governing profit remittances, and new foreign investments dwindled to almost zero in early 1964.

In late 1963, Washington, alarmed that Brazil might become a hostile, nonaligned power like Egypt, reduced foreign aid to Brazil. The exact United States role in the March 31, 1964, military coup that overthrew Goulart remains controversial. However, the United States immediately recognized the new interim government (before Goulart had even fled Brazilian territory); a United States naval task force anchored close to the port of Vitória; the United States made an immediate large loan to the new Castelo Branco government (1964-67); and the new military president adopted a policy of total alignment with the United States.

The Castelo Branco regime broke off relations with Cuba (while enhancing them with the Soviet Union and Eastern Europe); purged or exiled leftists and alleged communists; adopted a more discreet position in the UN vis-à-vis Portuguese colonialism; duly compensated expropriated foreign capital investments; passed a new profit remittances law; and sent a 1,200-man battalion as part of the Interamerican Peace Force to the Dominican Republic in 1965. Brazilian foreign policy centered on combating subversion and contributing to the collective security of the hemisphere. Brazil ranked third after Vietnam and India as recipients of United States aid; it received US$2 billion from 1964 to 1970. Nonetheless, Castelo Branco's all-out support for United States policies only served to increase anti-Americanism rather than to lessen it.

Divergence and some hostility characterized relations during the Costa e Silva period (1967-69). Brazil perceived that United States leadership in the global struggle was faltering because of the winding down in Vietnam, making it more difficult for Brazil to support United States positions in world forums. In 1969 the Richard M. Nixon administration assumed a low-profile policy with Latin America. Washington provided less economic aid and fewer arms shipments to Brazil and sharply reduced its military mission in Brazil (from 200 in 1968 to sixty in 1971).

Although Costa e Silva did not turn to economic nationalism and the climate for foreign investments remained generally favorable, Brazil asserted its independence in other ways. It withdrew support from the Interamerican Peace Force, declined to sign the NPT (Non-Proliferation Treaty), tried to organize a Latin American nuclear community, assumed a leadership role in the nonaligned G-77, and increased Soviet-Brazilian trade. Nevertheless, Costa e Silva paid a state visit to Washington in 1967, and in 1969 Brazil sided with the United States against the nationalization of oil properties by the Peruvian military government.

The Médici and Geisel governments (1969-79) generally followed the same course of increasingly independent foreign policy combined with friendly relations with the United States. Brazil sought to pursue its own advantages by leaving open its nuclear options, greatly expanding trade with the Eastern Bloc, recognizing the Beijing government four years before the United States normalized relations with mainland China, and asserting a 322-kilometer maritime zone (always referred to by Brazilians as "200 miles") contrary to United States policy and fishing interests.

Brazil's policies emphasized North-South issues over the East-West conflict. Brazil took the lead in organizing commodity cartels (coffee, sugar, and cocoa). In 1975 Brazil voted for the UN resolution equating Zionism with racism and did not condemn the Soviet and Cuban intervention in Angola.

The Nixon administration remained basically sympathetic to Brazilian hopes for growth and world power status, and considered Brazil to be one of the developing world nations most sympathetic to the United States. In February 1976, Secretary of State Henry Kissinger and Minister of Foreign Affairs Antônio Azeredo da Silveira signed a memorandum of understanding that the two powers would consult on all issues of mutual concern and would hold semiannual meetings of foreign ministers. Brazil had signed similar agreements with Britain, France, and Italy in 1975. Only Brazil and Saudi Arabia, aside from the major Western allies, had such an agreement with the United States. Although these agreements had no great practical consequences, they indicated a changed United States policy of wooing Brazil.

The Carter administration marked a definite cooling of United States-Brazil relations. The confrontation involved two very sensitive issues--human rights and nuclear proliferation. In 1967 Brazil had signed a contract with Westinghouse to build a 626-megawatt nuclear power station at Angra dos Reis, Rio de Janeiro State, to be completed in 1977. In 1973-74 the petroleum crisis jolted Brazil into a high-priority policy of seeking alternative energy sources (hydro, solar, alcohol, biogas, Bolivian natural gas, and nuclear). However, the United States Nuclear Regulatory Commission renounced its guarantee of delivery of enriched uranium, casting doubts on the value of nuclear cooperation with the United States, which had prohibited Westinghouse from constructing enrichment and reprocessing plants in Brazil.

Brazil, desiring independent control of the full cycle from ore to kilowatts, signed a broad nuclear agreement with West Germany in June 1975. It involved furnishing technology and equipment for eight nuclear power plants, plus enrichment and reprocessing facilities. Despite safeguard provisions, some thought this agreement opened the door for Brazil to construct nuclear weapons, if desired. The Ford administration reacted only mildly to the agreement, but from his first day in office, President Carter sought to prevent its implementation.

In 1975 the United States Congress mandated that the Department of State produce a general report on human rights performance by all recipients of United States military assistance. The section of the report dealing with Brazil noted some improvements and described violations as mildly as possible. This report might have gone unnoticed if the United States Embassy had not delivered a copy to the Foreign Office in Brasília just hours before its release in Washington. This gesture, intended as a courtesy, was interpreted as an intolerable interference in Brazil's internal affairs. The next day, Brazil renounced the United States-Brazil Military Assistance Agreement, which had been in effect since 1952, and some military nationalists pushed for breaking diplomatic relations. Formal relations between the two military organizations have still not been reestablished.

The Reagan administration made ostensible gestures to improve relations with Brazil. A former military attaché to Brazil during the 1964 coup, retired General Vernon Walters was dispatched to Brasília to express United States concern over the Cuban-supported guerrilla movement in El Salvador and to request support and assistance. Brazil listened politely, but then refused to join the military governments of Argentina, Uruguay, and Chile in support of the Salvadoran government. Moreover, it increased trade credits to Nicaragua and signed several large trade agreements with the Soviet Union.

In the early 1980s, tension in United States-Brazil relations centered on economic questions. Retaliation for unfair trade practices loomed on the horizon and threatened Brazilian exports of steel, orange juice, commuter aircraft, frozen chickens, shoes, and textiles. The United States criticized Brazil for its trade restrictions and unfair practices (in the area of pharmaceutical patents and restrictions on United States computer giants), and for its US$5 billion trade surplus with the United States. Brazil replied that it needed desperately to maintain large balance of payments surpluses to meet its foreign debt obligations.

When President Sarney took office in March 1985, political issues, such as Brazil's arms exports to Libya and Iran, again surfaced. Brazil's foreign debt moratorium and its refusal to sign the NPT caused the United States Congress to put Brazil on its mandated blacklist, thereby restricting Brazil's access to certain United States technologies. On taking office in March 1990, President Collor sought a quick rapprochement with the United States in order to begin an aggressive policy of inserting Brazil into the world economy and placing it at the negotiating table of world powers. Collor concluded a nonproliferation agreement with Argentina, which was registered with the International Atomic Energy Agency in Vienna. He moved to deactivate Brazil's autonomous nuclear project and the nuclear submarine project, as well as the air-to-air Piranha missile project. He also gained congressional approval for eliminating the market reserve on computer products and beginning tariff reductions. Collor abolished the National Intelligence Service (Serviço Nacional de Informações--SNI) and the National Security Council (CSN), and fashioned a Strategic Affairs Secretariat (Secretaria de Assuntos Estratégicos--SAE) with a civilian head. However, after a year in office the Collor government concluded that these overtures had been in vain. Reciprocity by the United States was not forthcoming, and Brazilian policies reverted to a more pragmatic, independent approach.

The Franco administration maintained an even more independent stance and reacted coolly to proposals by the Clinton administration for a Latin American free-trade zone. Brazil pushed ahead with its Satellite Launch Vehicle (Veículo Lançador de Satélite--VLS) program, based in Alcântara, Maranhão. Because Brazil wants to participate in the very lucrative satellite launching market, it had consistently refused, until October 1995, to sign the MTCR (Missile Technology Control Regime), which it believed restricted developing nations from attaining access to this technology. In June 1995, the Israeli military attaché in Brasília denounced Brazil for continuing sales of Astros II surface-to-surface missile launchers and heavy bombs to Libya, despite UN embargoes. In October 1995, after continuous pressure from the United States, Brazil finally met the conditions to join the MTCR and was accepted as a member. Brazil joined the MTCR because it was necessary to gain access to crucial rocket technology to finalize the VLS IV and to ensure that it would become operational in 1997.

Relations with the Cardoso government in 1995-97 were good. Cardoso made a very successful trip to Washington and New York in April 1995, and the Clinton administration was very enthusiastic regarding the passage of constitutional amendments that open the Brazilian economy to increased international participation. The United States was especially pleased with the break-up of state monopolies in the petroleum and telecommunications sectors. However, the United States called for increased efforts to stem international drug smuggling across Brazil's territory from Andean neighbors, and better coordination between the United States Drug Enforcement Administration (DEA) and Brazilian authorities. In April 1995, Brasília and Washington signed a new cooperation agreement.

Related to the problem of surveillance of drug smuggling across the Amazon region was the controversial Amazon Region Surveillance System (Sistema de Vigilância da Amazônia--Sivam) contract. In the 1970s and 1980s, Brazil had installed three air surveillance and traffic control systems in the South (Sul), Southeast, and Northeast, purchased from Thomson CSF, the French electronics manufacturer. In the 1990s, several international consortiums, including Thomson CSF, hotly contested the proposed Sivam contract (worth US$1.5 billion). A timely visit by United States Secretary of Commerce Ron Brown in June 1994 heavily influenced the decision, and two days after his departure, the Brazilian government decided in favor of a consortium led by the American firm Raytheon, instead of Thomson CSF. United States incentives included very favorable Export-Import Bank financing and assurance that Raytheon would participate in the privatization of the Brazilian Aeronautics Company (Empresa Brasileira Aeronáutica--Embraer), which never happened.

In 1995, before the final signing of the contracts with Raytheon, Brazil's Congress, under pressure from environmental groups and the governors of the Amazon region, decided to review the decision process and contract details. Under intense pressure from the United States Embassy in Brasília, however, the Brazilian Senate and Chamber of Deputies finally approved the plan in May 1995, over protests from the governors from the Amazon region.

In response to United States criticism over its unfair trade practices and its failure to protect intellectual property rights, Brazil finally signed a new patent protection law in March 1996. The new law includes protection for pharmaceutical patents and contains a "pipeline" mechanism. The United States also looks to Brazil to fulfill its longstanding commitments to enact legislation on computer software and semiconductor layout design, and to introduce amendments to its copyright laws.

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Source: U.S. Library of Congress