By Anthony Boadle
BRASILIA, Sept 17 Brazilian President Dilma
Rousseff on Tuesday called off plans for an October state visit
to Washington because of revelations that the United States
spied on her personal communications and those of other
Rousseff's decision, which came despite a 20-minute
telephone call from President Barack Obama on Monday night in an
attempt to salvage the trip, is a big blow to relations between
the two biggest economies in the Americas and could hurt U.S.
business interests, such as a $4 billion sale of jets fighters.
Both the White House and Rousseff's office billed the
decision as a mutually agreed postponement, and said a state
visit could take place at an unspecified later date. However,
two officials with knowledge of Rousseff's decision told Reuters
that such a visit was unlikely to happen anytime soon.
White House spokesman Jay Carney said the presidents agreed
in their phone call to postpone the visit because the
disclosures of alleged U.S. spying could overshadow their
meeting. But U.S. moves to address the surveillance complaints
will be slow.
"As the President previously stated, he has directed a broad
review of U.S. intelligence posture, but the process will take
several months to complete," Carney said.
Ties between Brazil and the United States had been improving
steadily since Rousseff took office in 2011 and before the
revelations that the U.S. National Security Agency had snooped
on emails, text messages and calls between the president and her
aides. The spying revelations came from documents leaked by
former NSA contractor Edward Snowden.
"Illegal surveillance practices intercepting the
communication and data of citizens, companies and members of the
Brazilian government constitute a serious affront to national
sovereignty and individual rights, and are incompatible with
democratic cooperation between friendly nations," the Brazilian
government said in a statement.
In the absence of explanations and a "commitment to cease
such surveillance activities, the conditions are not in place
for the visit to go ahead as previously scheduled," it said.
U.S. officials said the NSA surveillance was aimed at
tracking suspected terrorist activity and did not pry into
But Rousseff was not convinced.
Next week, in a speech at the United Nations General
Assembly, she plans to raise Brazil's concerns and push for an
international agreement on Internet governance.
Rousseff's trip was expected to be a platform for deals on
oil exploration and biofuels technology, and the Brazilian Air
Force's potential purchase of F-18 fighter jets from
Chicago-based Boeing Co.
The coveted defense contract, which has also involved years
of negotiations with rival proposals from France and Sweden,
could be the main victim of the spying affair. Brazilian
officials have said Brazil will not buy such a strategic
aircraft from a country it cannot trust.
Business leader Gabriel Rico, chief executive of the
American Chamber of Commerce in Sao Paulo, lamented a lost
opportunity to boost investment flows and advance talks to
eliminate double taxation.
The spying revelations sparked a political uproar in Brazil
that Rousseff could not ignore. A senior government official
told Reuters that Rousseff's top advisers, including her mentor
and predecessor as president, Luiz Inacio Lula da Silva,
encouraged her to scrap the state visit.
The issue is not likely to go away soon in a country that
has long harbored suspicions that the United States wants to
control its rich mineral resources in the Amazon basin and off
its Atlantic coast, where Brazil has made the world's largest
oil deep-water discoveries in decades.
Brazil's Congress has opened an investigation and on Tuesday
questioned oil industry regulator Magda Chambriard on whether
NSA spying could have given U.S. companies the edge in bidding
for offshore production rights to be auctioned next month.
The spying scandal will raise risks for U.S. companies
operating in sensitive industries, such as the defense, telecom
and energy sectors, and Boeing's chances of securing the jet
fighter contract will be "significantly reduced," the Eurasia
consultancy in Washington said in a note to clients.
"In the energy sector, there will certainly be a political
firestorm if an American company wins the (subsalt) bid round in
October," Eurasia said, referring to the deep sea oil deposits
that sit beneath a thick layer of salt under the ocean floor.
Rousseff, who is widely expected to run for re-election in
October 2014, could score political points from the spying
scandal. "She will hype this trip cancellation as 'kicking Uncle
Sam in the ass' and this will boost her popularity," said David
Fleischer, a politics professor at the University of Brasilia.