Brazilian President Luiz Inacio Lula da Silva came to an important decision during his visit to Xi Jinping last week: He will accelerate plans to move Latin America’s largest economy even closer to China and he doesn’t care if this upset the US.
(Bloomberg) — Brazilian President Luiz Inacio Lula da Silva came to an important decision during his visit to Xi Jinping last week: He will accelerate plans to move Latin America’s largest economy even closer to China and he doesn’t care if this upset the US.
According to five high-ranking Brazilian government officials, the trip made it clear to Lula that China will be crucial to his goal of reviving Brazil’s industry. His plan includes courting Chinese companies to install new plants in Brazil, getting more funding from China and reducing the role of the dollar in foreign trade transactions, they said, requesting anonymity to discuss Lula’s strategy.
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The trip to the Asian giant ended with the signature of more than 15 agreements worth about 50 billion reais ($10 billion) in Chinese investment pledges, in sharp contrast to Lula’s visit to Joe Biden in Washington in February, which produced no meaningful deals. In private conversations, Brazilian officials have expressed extreme frustration with lack of fresh US investment in the country, particularly as some American companies are pulling out of Brazil.
In an emblematic case, Ford Motor Co left the country in 2021 and is now in negotiations to sell one of its plants in the Bahia state to China’s BYD Co, which intends to produce electric cars there. “We were looking for alternatives to boost employment and income, which with the departure of Ford from Bahia ended up in a feeling of emptiness”, Governor Jerônimo Rodrigues said in an interview.
Lula and his Finance Minister Fernando Haddad said in Beijing that the relationship between Brazil and China was going through a “great moment” and benefiting from a “leap in quality.” While Brazilian officials say Lula has no intention of provoking the US, they are making clear they expect more from their North American ally.
The leftist president is in a hurry to create jobs and deliver on his promise of prosperity. Lula won office by the slightest of margins after beating his foe Jair Bolsonaro in October and is already facing wanning popularity as he struggles to navigate a deeply polarized Brazil amid sluggish growth.
“The reaction I expect from the US is more partnership,” Haddad told journalists in Beijing on April 14. “We’re almost going through a period of US disinvestment, with companies leaving the country.”
War Approach
The Brazilian officials stressed that stronger economic ties with China do not mean automatic alignment on geopolitical issues, as that’s not part of Brazil’s diplomatic tradition.
Yet Lula is also more politically aligned with Xi on the issue of Russia’s invasion of Ukraine. He believes that an end to the conflict may come if China, Brazil and Turkey intermediate negotiations with Russia’s Vladimir Putin, the officials said.
While US officials have said they welcome any effort to restore peace to Ukraine, and that Brazil has the right to conduct its diplomatic outreach, the White House clearly no longer regards Lula’s government as a neutral arbiter of the dispute.
After Lula repeated the claim that the US, EU and Ukraine shared responsibility for the war, a Biden administration spokesman accused Brazil of “parroting Russian and Chinese propaganda.”
The White House also took a dim view of Brazil’s Foreign Minister Mauro Vieira’s meeting with Sergei Lavrov, his Russian counterpart, in Brasilia on April 17. The tone of the meeting shocked the Biden administration, Press Secretary Karine Jean-Pierre told reporters during her daily briefing Tuesday. It “was not the tone of neutrality,” she said.
The two nations have taken steps to patch up the relationship over the past 24 hours: Celso Amorim, Lula’s top foreign affairs adviser, spoke by phone with White House National Security Adviser Jake Sullivan. During the call, Amorim and Sullivan had a frank discussion in an attempt to clear up misunderstandings, according to a person familiar with the details.
Amorim, the person said, stressed to Sullivan that Brazil supports an immediate cease-fire and opposes the idea of allowing Russia to keep control of Ukrainian territories it occupied last year, an aspect of China’s proposal that contributed to its swift dismissal by the US and EU.
But significant differences remain. Brazil opposes sanctions against Russia, which it regards as an ineffective strategy. And Amorim told Sullivan that Brazil wants the US and EU to stop funding Ukraine’s war efforts, the person said, also asking not to be cited commenting on policy.
–With assistance from Courtney McBride.
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