March 15, 2011 / 3:59 PM / 8 years ago

FACTBOX-Obama's Brazil visit to yield oil, tech deals


Brazil has lobbied for over a decade for a permanent seat on the U.N. Security Council, saying it deserves a greater role in global affairs because its strong growth could establish it as the world’s fifth-biggest economy in coming years.

Officials have recently been careful not to discuss the issue in public, to avoid creating a perception that Obama’s visit will be a success or failure based on just one topic. In private, however, they hope for some kind of breakthrough, and are lobbying their U.S. counterparts behind the scenes.

Obama surprised the world by endorsing India’s candidacy for a permanent Security Council seat when he was there last year, and Brazil hopes for a similar gesture on this trip. They say Brazil should be a stronger candidate for U.S. support because, unlike India, it does not have a nuclear bomb and it shares common Western values. U.S. officials do not rule out developments but are treating the issue with caution.

Under Rousseff’s predecessor, Luiz Inacio Lula da Silva, Brazil alienated the United States and some European countries by trying to broker a deal with Iran over its nuclear program. Rousseff has pledged a tougher line on countries with human rights violations — including Iran — but skepticism over whether Brazil’s foreign policy is pro-Western enough to justify U.S. support for the Security Council remains high, especially among Republicans in the U.S. Congress.


This issue is extremely important to Brazil. Rousseff is vehemently opposed to a French proposal that seeks to limit rising commodities prices, and she wants U.S. help to ensure it does not gain support in upcoming forums such as the G20.

Brazil is one of the world’s largest producers of commodities such as iron ore, soy and beef, and has benefited enormously in recent years from rising demand from China and other developing economies. U.S. officials are skeptical of the French proposal and appear likely to support Brazil.


Rousseff appears to be leaning toward Boeing (BA.N) in a multi-billion dollar Air Force tender, and Washington hopes to advance the bid, although no major developments are expected.

Rousseff’s surprise decision in January to restart the bidding process for the tender was one of the earliest signs of the pro-U.S. shift under her administration. [ID:nN0884390]

Lula strongly favored a competing bid by France’s Dassault (AVMD.PA). Yet Rousseff told Treasury Secretary Timothy Geithner she believes Boeing’s F-18 is the best jet among the finalists, and that the deal could modernize the Air Force and improve strategic and trade ties with Washington.

Rousseff’s doubts revolve around Washington’s willingness to authorize transfers of proprietary technology that Brazil wants as a way to help develop its own defense industry.


Officials say they are working on a deal that could involve transfers of U.S. technology to Brazil’s satellite program.

An agreement could lay the groundwork for the United States to participate in or assist a launch facility operated by the Brazilian Air Force. Brazil wants to build a civilian space and satellite program, but needs to improve its technology first.


Brazil is a pioneer in the use of biofuels and other renewable energy sources and Washington feels it can learn from Brazil’s experience and technology. Environmental Protection Agency chief Lisa P. Jackson is part of the Obama delegation.

Under Lula, talks were characterized by Brazil’s anger over high U.S. tariffs that make it nearly impossible in practice for sugar cane ethanol to be exported to the United States.

However, those pressures have abated somewhat recently. Brazil’s booming consumer market means that there is less ethanol for Brazil to export.

As a result, the focus will be on other areas for increased cooperation. One proposal under discussion would look at how Brazilian technology and fuels could be used to supply biofuel for jets and other Pentagon hardware. (Editing by Kieran Murray)

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