1. What does Lula come away with from Beijing?

In addition to the fifteen agreements signed between Brazil and China, Lula also leaves Beijing with a path toward greater cooperation even beyond trade. Given that China is Brazil’s number one trading partner, this visit was an important seal for Lula, wrapping up his first hundred days in office having visited Brazil’s top three economic partners: Argentina, the United States, and now China.

Recent comments by Brazilian Finance Minister Fernando Haddad reflect Brazil’s intent to deepen economic relations with both China and the United States. “Brazil has the size to make bilateral agreements,” Haddad told journalists during the China trip.

—Valentina Sader is an associate director and Brazil lead at the Atlantic Council’s Adrienne Arsht Latin America Center.

2. During the trip, Lula called for BRICS countries to trade in their own currencies and end the dollar’s trade dominance. How real is this threat?

In calling for an end to the dollar’s dominance in world trade during his China visit, Lula was singing to a choir whose theme song is renminbi (RMB) internationalization. His advocacy of a “BRICS currency” to replace the dollar in settling trade transactions among leading emerging-market countries (Brazil, Russia, India, China, and South Africa make up the informal BRICS group) likely won’t come to much—at least in the foreseeable future. Nonetheless, it does underline the opportunities for Beijing to increase the international use of the Chinese currency. As Brazil’s trade with China hit a record $150 billion last year, the RMB emerged as the country’s second-largest reserve currency (representing 5.37 percent of foreign-exchange holdings). That’s an indication of a trend of increasing RMB-real transactions, which likely will continue in the future as the two countries have signed several agreements aimed at expanding trade. However, Brazilian imports and exports continue to be settled overwhelmingly in dollars, and the US currency still occupies over three-quarters of Brazilian reserves.

At the end of March, a Brazilian bank (controlled by a Chinese parent) became the first financial institution in Latin America to join China’s Cross-Border Interbank Payment System, which settles trade deals in the Chinese currency. But most Brazilian companies continue to use the dollar-based SWIFT messaging system. Even as the RMB’s global share of trade transactions doubled to 4.5 percent in 2022, the dollar remained the currency of choice in 84 percent of all trade deals worldwide.

—Jeremy Mark is a nonresident senior fellow with the GeoEconomics Center. He previously worked for the IMF and the Asian Wall Street Journal.

3. What did China gain from this visit?

From what we have seen thus far, Lula and Xi gained crucial “wins” from their bilateral meeting. The two signed fifteen bilateral agreements in everything from agriculture to technology, demonstrating further development of the China-Brazil comprehensive strategic partnership. Lula even visited a Huawei technology development center and received a presentation about how 5G can revolutionize telemedicine and education; this suggests Lula’s willingness to accelerate China’s 5G expansion in Brazil, despite US efforts to slow China’s 5G advance in the region due to espionage concerns.

Both leaders also successfully projected themselves as champions of the Global South, professing their desire to “balance world geopolitics,” advocating for their countries as mediators in Ukraine, and upholding the BRICS mechanism as a counterweight to the US-dominated international system. However, Lula’s most inflammatory statement that BRICS countries ditch the US dollar and trade in their own currencies was likely bluster, especially given the fact that the US dollar still accounts for 60 percent of global central bank reserves.

—Leland Lazarus is a nonresident fellow at the Global China Hub and associate director for national security at Florida International University’s Jack Gordon Institute of Public Policy. He formerly served as special assistant and speechwriter to the commander of US Southern Command and as a US State Department foreign service officer in China and the Caribbean.

4. What do Lula’s visits to both Washington and Beijing reveal about his foreign policy approach?

Differently from the trip to Washington in February, Lula’s visit to Beijing had a more clear and concrete purpose. The trip to Washington was aimed at reestablishing relations and discussing cooperation on common challenges, such as democracy and climate. The visit to Beijing had an important business component. Both were significant in consolidating Lula’s foreign-policy goals.

Brazil will continue its traditional non-alignment, non-interventionist approach to foreign policy, seeking to maintain close diplomatic relations with strategic partners, which include both the United States and China. At the same time, Lula will continue to push for the rethinking of the global order to reflect current times, carving out that relevance for Brazil. A few examples include Lula’s interest in leading peace conversations between Russia and Ukraine, hosting the Group of Twenty (G20) summit in 2024, questioning the reliance on the dollar, proposing changes to the United Nations Security Council, and sending a special foreign policy advisor to Venezuela for meetings with the Maduro regime and its opposition. The question that remains is whether or not Lula is picking the right battles—and if he will have the support, domestically and internationally, to be successful.

—Valentina Sader

5. How can the Lula visit be seen within the context of Xi’s renewed outreach to the Global South?

Lula’s visit to China and meeting with Xi reflects Lula’s desire to again—as in his previous times in office—be at the center of the global stage. And it is a visit that is squarely within China’s priorities to deepen ties with Brazil as part of its quest for greater leadership in the Global South. China is Brazil’s number one trade partner. And this visit is a clear signal that those economic ties will only deepen in the years to come.

What cannot be missed is the difference in pomp and delegation size between the China visit and Lula’s trip to Washington two months earlier. Whereas the US visit was a short, two-day stop without a business contingent, the China trip is twice as long with a large delegation of businesspeople looking for new commercial opportunities now that China has reopened after its COVID-19 lockdowns. It’s also reflective of Lula’s inauguration: China sent then Vice President Wang Qishan—a close ally of Xi—to lead its delegation, while the US delegation was led by Interior Secretary Deb Haaland.

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

The post What the Lula-Xi partnership means for the world appeared first on Atlantic Council.

In politics and positions of power, the lack of equitable representation of women is striking. Women represent 49.7 percent of the world population, yet only twenty-seven countries have a female leader as of February 2023.2 Brazil, which elected its first and only woman president in 2011, has seen slow progress in ensuring greater female participation in politics. Political violence against women, among other factors, is a deterring factor for women’s political participation.

Political violence is not a new phenomenon, nor it is exclusive to women. However, evolving analysis has identified differences between political violence generally and political violence against women. The latter is directed at women with the intent of restricting their political participation and active voice, while also generalizing women’s participation as “wrong.” In the Brazilian context, political violence against women is a “physical, psychological, economic, symbolic, or sexual aggression against women, with the purpose of preventing or restricting access to and exercise of public functions and/or inducing them to make decisions contrary to their will.” As such, political violence against women plays an important role in deterring women’s active participation in politics—and even more daunting for black, indigenous, or LGBTQI+ (lesbian, gay, bisexual, transgender, or queer) women.

Brazil has a unique opportunity to adjust its legislation and reframe the incentives in the political sphere tackle this issue now, ahead of municipal elections in 2024. Doing so will ensure greater and more equitable political participation, enrich the political debate, strengthen the legislative agenda, and further solidify the country’s democratic ethos, even if other challenges to democracy remain. This report presents solutions Brazil could take to reach this more representative and resilient version of democracy.

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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These actions are welcome, given the troubling environmental legacy of the prior administration. Deforestation rates surged under former President Jair Bolsonaro’s term, reaching the highest levels in 2021 since 2008. The Bolsonaro administration weakened environmental agencies intended to protect the Amazon rainforest, eased protections on protected land, and fired the head of Brazil’s National Institute for Space and Research (INPE) after it released data showing that deforestation rates had increased. Lax environmental policies resulted in land robbery and the increase of illegal activity, particularly related to logging and mining. Illegal mining saw a 46 percent increase in the Yanomami Indigenous territory in northern Brazil from 2020 to 2021, raising environmental justice concerns as the uniquely impacted Yanomami community experienced increased violence and diseases due to polluted rivers as a result of ore processing.

Lula’s return to office marks a return to the protection and conservation of the Amazon and its people while balancing the sustainable development of the region. The president created the country’s first Ministry of Indigenous Peoples, representing 307 indigenous groups. Lula also welcomed Marina Silva back to the federal government as Minister of Environment, the position she held during Lula’s first term as president. A well-known environmentalist from the Amazon state of Acre, Silva’s return to the Ministry signals Lula’s commitment to prioritizing environmental protection.

The return of the Amazon Fund

Deforestation of the Brazilian Amazon has made the forest a net carbon emitter since 2016, accelerated by Bolsonaro’s policies and the shuttering of the Amazon Fund. Soon after Lula’s victory, however, Brazil’s Supreme Court ruled to reactivate the fund, which he signed on his first day back in office.  With this reversal, Brazil is taking steps to once more be a clean energy and decarbonization leader in the region. But in order to reach these goals, expanding and diversifying funding is crucial.

Deforestation is a major factor in driving up greenhouse gas emissions, with tropical deforestation being responsible for roughly 20 percent of annual emissions. The Amazon rainforest holds 48 billion tons of carbon and its preservation is essential in the global fight against climate change and reaching ambitious net-zero goals. To assert low-carbon leadership in the region, Brazil should take advantage of the momentum behind the Amazon Fund right now.

The fund has historically been supported by Norway and Germany, but its support is set to grow. The Norwegian government—after backing out of the fund while Bolsonaro was in power—is keen on resuming donations immediately, and Germany signed a new pledge committing to donations following Lula’s October win. Additionally, following President Lula and Biden’s meeting this month, the two leaders released a joint statement in which Biden committed to work with the US Congress to contribute funds to conserve the Brazilian Amazon, including directly to the Amazon Fund. France, the European Union, and the United Kingdom have also announced their intentions to contribute to the fund.

While the addition of some of the world’s wealthiest countries are a significant step to broaden the fund’s scope, it is not enough. At COP27 in Glasgow, over one hundred world leaders representing more than 85 percent of the world’s forests pledged to halt deforestation by 2030, but little momentum has been seen since. As governments raise their ambition in forest preservation and funding, the focus must next turn to industry whose spending power and contributions in technology will be vital to expanding conservation efforts.

Private-sector participation in conservation funding would prove beneficial for Brazil, where although early satellite data shows deforestation in the Amazon has been declining since Lula’s return to office, experts say it may take years to show major progress following environmental setbacks under Bolsonaro. This progress will more effectively be accomplished with a suite of multi-sectoral funders. The fund’s potential for impact should be marketed to a broad coalition of funders from government, finance, and industry alike, with the option to contribute using verifiable carbon credits.

Building an even cleaner energy mix

Brazil’s environmental leadership need not be confined to the management of its ecosystems, however. Brazil already has one of the world’s highest shares of renewable energy in primary energy consumption, where clean energy sources meet 46 percent of total energy supply—not just electricity—in Brazil. By such a measure, Brazil is a clean energy powerhouse. Nonetheless, there are areas for Brazil to expand its low-carbon leadership.

Much of Brazil’s high share of clean energy in its energy supply is owed to biofuels, which are used in the industrial and residential heat, and transport sectors, at 50 percent and 25 percent, respectively. The country has been a pioneer in the use of biofuels for transportation, and in 2017 issued the RenovaBio policy which links the use of biofuels in transportation with Brazil’s Nationally Determined Contribution (NDC) under the Paris Agreement to reduce its emissions by 43 percent from 2005 levels by 2030. The country has committed under its NDC to increase the use of bioenergy, with high blending standards to support this. However, as an alternative to biofuels, Brazil could benefit from more targeted investment and policy support for electromobility, which does not pose the same concerns associated with the carbon intensity of land use. Brazil surpassed 100,000 cumulative electric vehicle sales in 2022, but deployment is limited by a lack of charging infrastructure. The country has less than 5,000 charging stations, while Germany, for instance, has over 1 million.  

Furthermore, the country has a genuine opportunity to increase the share of clean energy in the power grid above 86 percent. Much of this share is owed to hydropower, which accounts for about 65 percent of total generation. Brazil is being eyed as a prime destination for wind development, with a potential of 1.8 terawatts (TW) onshore and offshore. The Ministry of Mines and Energy has taken steps to clarify the regulatory and legal frameworks for offshore wind development, which are severely lacking across Latin America, and could be catalytic for investment beyond the 17 GW of offshore wind already planned in Brazil.

However, the integration of intermittent renewables onto the electric grid will require more power system balancing to ensure generation matches demand. This comes amid a troubling outlook for hydropower in Brazil, historically a reliable baseload energy source, but whose generation is forecast to be more variable, as climate change leads to abnormal weather patterns. Increasingly frequent droughts and less predictable rainfall may increase the need for energy storage or gas peaker plants, if necessary, to ensure the consistent delivery of electricity to consumers.

Another area for Brazil to lead is by modernizing Petrobras and orienting it towards the energy transition. Petrobras is the largest oil company in Latin America and Brazil’s flagship state-owned enterprise. Prior to Lula’s victory, core energy advisors expressed a desire to make Petrobras more active in investing in renewable energy assets. After his election, Lula appointed Jean Paul Prates to the role of CEO, a senator and political ally of Lula. Prates has a history of introducing sustainability-focused legislation, even during Bolsonaro’s term. This background could bode well for the management of Petrobras at a critical juncture. Debt-constrained Petrobras will need to find innovative models if it desires to pair energy-transition ambitions with returns for the Brazilian public, but if it succeeds, it could offer lessons for national or state-owned oil company modernization on a global scale.

Bolstering Brazil’s environmental and clean energy leadership will require careful planning in the years ahead. The re-emergence of Lula does not seal this fate.  While it can showcase its clean electricity sector, Brazil will need to balance using resources for conserving the Amazon and expanding electrification amid competing domestic economic and political priorities. For instance, Brazil will need to invest to maintain its social welfare state, amid a high benchmark interest rate of 13.75 percent and conflict between the Lula administration and the Central Bank of Brazil over fiscal policy, challenges which will impact the investment climate and Lula’s domestic political efficacy in tandem. Despite these challenges, Brazil has the potential to act as a first mover among emerging markets in making progress towards net-zero.

Lizi Bowen is associate director for digital communications and community engagement at the Atlantic Council Global Energy Center.

Maia Sparkman is an assistant director at the Atlantic Council Global Energy Center.

William Tobin is a program assistant at the Atlantic Council Global Energy Center.

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Lizi Bowen

Associate Director, Digital Communications and Community Engagement

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Maia Sparkman

Assistant Director

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Africa Climate Change & Climate Action

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William Tobin

Assistant Director

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The post Lula is back. Are Brazil’s climate credentials? appeared first on Atlantic Council.

​​​​​What you should know

• Nicaragua: On February 9, the Ortega-Murillo regime released and expelled 222 political leaders, priests, students, and other dissidents to the United States.
• US-Brazil relations: Presidents Biden and Lula da Silva met on February 10, during which they underscored the importance of strengthening democracy, promoting respect for human rights, and addressing the climate crisis.
• Ecuador: Ecuadorians rejected all eight items on a constitutional referendum backed by President Lasso, signaling anti-incumbent sentiments and the clout of pro-Correísmo opposition political forces.

Monitoring economic headwinds and tailwinds in the region

• Argentina: Annual inflation reached 98.8 percent, while activities in the construction and manufacturing sectors continued to decline.  
• Brazil: The government met with Mexico, Germany, Colombia, Chile, the World Bank, and the Inter-American Development Bank (IDB) to explore issuing green bonds this year. 
• Belize: The government launched two new projects in cooperation with Taiwan, a business support program focused on women and micro, small, medium-sized enterprises (MSMEs), and a flood warning system for disaster prevention.  
• Colombia: 2022 GDP growth is estimated to be 7.9 percent, down from 2021’s 10.8 percent growth. In 2023, growth is expected to further decline to 1.05 percent. 
• Peru: Continuing protests and supply shortages have led several mines to suspend or reduce operations, threatening copper production.  
• Suriname: President Santokhi expressed willingness to collaborate with neighboring Guyana on oil and gas exploration and development to position the Caribbean as an energy hub. 

In focus: Inflation and infighting

As regional inflation continues, political pressures are leading to criticism of central bank policy in Brazil and Colombia. Recently-elected presidents Lula and Petro have both questioned rate hikes as a method to tackle inflation, suggesting more flexible targets and alternative policies. The governor of Colombia’s Central Bank, Leonardo Villar, expects the region to require continuing tight monetary policy, which critics argue may complicate other policy goals such as growth. Roberto Campos Neto, president of the Central Bank of Brazil, has expressed his willingness to coordinate with the Lula administration to achieve growth and control inflation. 

Despite the public clashes, central bank policy in both countries remains independent. In Brazil, a 2021 law protects central bank autonomy and is unlikely to be repealed. In Colombia, the central bank has maintained a course independent of presidential advice for two decades. 

Health + Innovation

• Colombia: President Petro presented a health reform to Congress that seeks to improve primary care, expand access to treatment, raise healthcare worker salaries, and fight corruption by eliminating private sector management of payments.
• Brazil: Nearly three years since COVID-19 claimed the life of its first victim, the country has for the first time registered zero pandemic-related deaths in a day on February 12.
• Jamaica: The Bureau of Standards launched the Jamaican Standard Specification for Telemedicine, which provides the framework through which telemedicine may be safely practiced while upholding the integrity of the medical profession.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 18, 2023 appeared first on Atlantic Council.

1. Lula pitches a global sustainability fund

Lula proposed the creation of a new global fund for sustainability, which would designate funds from developed nations to sustainable efforts across the world. There seems to be a willingness from the United States’ side to contribute to the existing Amazon Fund, joining Norway and Germany, on efforts to protect the Amazon rainforest.

Brazil is home to the largest portion of the Amazon and is an indispensable partner for the United States on climate and sustainability. As Biden prioritizes sustainable infrastructure and equitable clean energy domestically and more ambitious climate goals abroad, Brazil is an important ally in the hemisphere. Of Brazil’s available energy resources, around 80 percent are from renewables, and, as an agricultural powerhouse, it has the potential to be an even greater asset in solving the global food crisis. The US-Brazilian cooperation on climate and the environment is expected to deepen as the United States Special Envoy for Climate John Kerry plans to visit Brazil soon.

2. UN Security Council reforms are on the table

Lula has proposed to be a peace broker in Ukraine by pushing the rhetoric around the conflict to be about finding peace rather than continuing the war. He told reporters after the meeting that he and Biden discussed “the need to create a group of countries that are not involved directly or indirectly in the war with Russia in order to find a way to make peace.”

In this context, Lula also advocated for the need to reform the United Nations Security Council to become more representative of current geopolitical dynamics—a long-standing demand of the Brazilian president—to which Biden seemed to agree, Lula said.

3. Lula embraces progressive stardom

Lula met with prominent progressives on Friday morning before heading to the White House. With Senator Bernie Sanders (I-VT), Lula discussed ways to increase international cooperation to protect the Amazon rainforest and preserve the environment for future generations. The Brazilian president also met with Reps. Alexandria Ocasio-Cortez (D-NY), Pramila Jayapal (D-WA), and Ro Khanna (D-CA). They discussed shared commitments to environmental, social, and economic justice—and US-Brazil cooperation to fight authoritarianism and strengthen relations between the two countries’ legislators. The meetings represent an important effort to extend cooperation beyond the executive level, but in order to be effective and long-lasting, this kind of outreach must be bipartisan.

4. The presidents have a small window for cooperation

Lula’s Washington visit opens a new chapter as he seeks to position Brazil as a critical player regionally and internationally. Next month, he will travel to China, and he is also planning a trip to Angola, Mozambique, and South Africa.

But both Lula and Biden face challenges at home, as expectations rise for Lula to deliver on key campaign promises and Biden prepares for the 2024 elections. The window of opportunity for furthering cooperation is slim, but the stage is set for both countries to capitalize on new momentum. Particularly on the environment, Friday’s visit was a promising start.

Caroline Arkalji is a Young Global Professional with the Atlantic Council’s Adrienne Arsht Latin America Center.

The post What came out of the Lula-Biden meeting? appeared first on Atlantic Council.

“It’s a good incentive… to invest in all these green infrastructures,” Pouyanné said at an Atlantic Council Front Page event on Thursday.

Pouyanné agreed with many Europeans that the IRA is protectionist and undermines the transatlantic relationship, saying that this is part of a “trend” in which the United States, by creating its own rules, seems to be believing less and less in the multilateral trading system built on World Trade Organization agreements. But he also said that the law is a “clear political decision by the United States” made because “they want that green industries will take place on their territory.” For example, he noted, nearly 90 percent of solar panels are manufactured in China, creating “another problem of dependency” for both Europe and the United States in the future.

According to Pouyanné, the United States took advantage of an “opportunity” in the energy transition by passing the IRA, so “let’s do the same in Europe.” To avoid a future in which Europe relies heavily on imports, he said, the continent “must take decisions” to guarantee “that green industries [will] be located in Europe.”

Below are more highlights from the event, moderated by Atlantic Council President and CEO Frederick Kempe, where Pouyanné discussed the role of oil and gas in the energy transition and the energy impacts of Russia’s war in Ukraine.

“No way to escape” natural gas

• Pouyanné said that because this year’s United Nations Climate Change Conference of the Parties (COP28) in the United Arab Emirates is being hosted by a major oil-producing country, “it raises the bar for the whole oil and gas industry… [We have] to engage, as a lot of stakeholders are expecting us to do.”
• At COP26 in Glasgow, US President Joe Biden released a plan to tackle methane emissions from the oil and gas industry; Pouyanné said that TotalEnergies can lower methane emissions by 80 percent by 2030, while keeping an eye on lowering all other emissions from the production process. “If I can produce oil and gas with no emissions, I’ve done my job in production” to cut emissions, he argued.
• “Natural gas is a fundamental energy for the transition” because it emits half the methane that coal does, Pouyanné explained. Natural gas, he added, will also help provide a consistent source of energy to fill the gaps of intermittent wind and solar power while new infrastructure to support energy storage and transmission is brought up to scale.
• This year, with Russia’s war in Ukraine raising questions about the global energy supply, Pouyanné said that the world discovered how important energy reliability, affordability, and sustainability are—and how much reliability depends on gas. “On one side, the Biden administration [said] one year ago, ‘you need to diminish your emissions,’ and then we hear ‘you need to drill more.’” That, Pouyanné said, shows how the world will “need gas for very long.”

The global divide

• While TotalEnergies had invested fifteen billion dollars in Russia, it has begun withdrawing from its Russian investments. “We have impaired almost all of our Russian assets,” Pouyanné explained. “We have step-by-step progressively retracted from almost all of our business in Russia.”
• As Russia’s war in Ukraine continues, Pouyanné warned, the West must “be careful” to avoid believing that the rest of the world sees the conflict as a fight between democracy and autocracy. “It’s not the dominant [narrative] today in the Middle East, in Asia, [or] in Africa,” he said, explaining that leaders in the Global South are more focused on developing their economies than the war. He recalled how there have been mixed responses from countries to imposing sanctions on Russia and to voting on condemning Russia in the United Nations.
• Pouyanné noted that he sees a similar division between the West and the rest in the climate debate with each passing COP. “It should not be” so divided, he said, “Let’s avoid antagonism. Let’s keep humility. Let’s listen to these [Global South] leaders.”

Investing in renewables—and fossil fuels

• A day after TotalEnergies posted a record yearly net profit, Pouyanné talked about the French oil major’s plan to spend the increased profits. The company plans to invest sixteen to eighteen billion dollars of its capital, with around five billion going toward low-carbon energies and about twelve billion going toward hydrocarbons. “With twelve billion dollars,” Pouyanné explained, the “objective is to continue to maintain… stable production for this decade and continue to grow our liquefied natural gas business.”
• But, he noted, it will be “very important” to “continue to invest in oil and gas” to keep profits and investments high across the energy sector: “If I can invest five billion dollars in low-carbon energy in 2023, it is because I have made money from oil and gas,” he explained.
• Pouyanné said that the biggest investment opportunities lie in emerging economies such as Brazil, India, and African countries. TotalEnergies, he explained, has invested in new oil fields in Brazil and new projects, including a $3.5-billion pipeline, in Uganda.
• While people in the West “complain about the Chinese influence in Africa,” he said, that influence is growing because of China’s more long-term approach to investing in the continent—rather than exporting natural resources right away.
• The TotalEnergies head said the company will take some of the profits made in Uganda, Mozambique, and elsewhere to “invest in Africa.” That includes the electric grid. “When you don’t have electricity in the country, it is difficult to [improve] economic growth,” he said.
• Pouyanné explained that with technologies such as electric vehicles gaining in popularity, “the oil market at a certain point will begin to decline… this is why we invest in electricity, because this is a growing market.”

Katherine Walla is an associate director of editorial at the Atlantic Council.

Watch the full event

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While it is simplistic to compare the two, such public threats to democratic stability may have created a shared concern that could realign US and Brazilian foreign-policy objectives and ultimately the bilateral relationship. With Lula’s visit with US President Joe Biden at the White House on Friday coming just weeks before March’s Summit for Democracy, the leaders should talk through ways to address the common threats to democracy they face, such as cooperation and knowledge-sharing on legal and defense issues related to Brazil’s January 8 investigations. That conversation can also be a jumping off point for discussing other shared priorities including grappling with the changing geopolitical landscape, protecting the environment and addressing climate change, and increasing trade across the Americas.

The synergies are there, but the window of opportunity for Biden and Lula to capitalize on the moment is disappearing as ordinary citizens, amid rising polarization, are losing the sense that democracy is valuable. That makes the strength of the US and Brazilian democracies—collectively serving almost seven hundred million people—all the more important.

The geopolitical agenda

Lula’s reemergence onto the regional and global stage can turn Brazil into the United States’ preferred partner in the Western Hemisphere. Brazil could prove a valuable diplomatic and trade entry point to a region where Washington has faced challenges—and even downright hostility—in pursuing its interests. Lula, who has the support of both the emerging and older generations of left-wing leaders and touts a pragmatic approach to the economy and foreign relations, has the type of clout that can convene Latin American and Caribbean leaders for frank discussions on the future of the hemisphere. One of Lula’s top foreign-policy priorities will be to strengthen ties across Latin America and Caribbean. This could also present an opportunity for Brazil to play a mediating role with regard to the Venezuela crisis, for example.    

In addition, Brazil’s number one trading partner is China, with the United States a close second. Recently, US foreign-policy positions toward Latin America have prioritized outcompeting China in the region. But in that competition, the United States has been losing. It is important for the United States to present Latin American and Caribbean countries such as Brazil with alternatives to some of China’s key investments, particularly in renewables and technology.

Lula is positioning Brazil as a potential diplomatic force in proposing peace negotiations on the Russia-Ukraine war. Bringing to mind the negotiating role that Brazil played in the Iran nuclear deal, Lula proposed a club of non-aligned nations to find peace through diplomatic means, although that is not a very popular option in Western capitals. Lula could be an important ally in eventual conversations about Russia’s war in Ukraine, especially because Brazil will take the Group of Twenty (G20) presidency in 2024.

Progress on the environment

Beyond the geopolitical sphere, Biden and Lula should discuss how they can work together to protect the environment and address the effects of climate change. In one of the Biden administration’s first moves, the president issued the Executive Order on Tackling the Climate Crisis at Home and Abroad. But doing so abroad requires partners, and in Lula, Biden may have found one. These two leaders should work together immediately and with urgency, as the Western Hemisphere is significantly affected by the climate crisis: Latin America and the Caribbean is the region second-most prone to natural disasters (behind the Asia-Pacific), and the United States is a frequent target of intense hurricanes that result from warming waters.

The fact that Lula is bringing Minister of Environment Marina Silva with him to Washington is a sign of how much he is prioritizing the issue. There is great expectation that under Lula, Brazil can push forward efforts to address the climate crisis, particularly because the country houses the “lungs of the Earth”—the Amazon, which is one of the most biodiverse zones on the planet. Protecting the forest while also sustainably developing the region is a key element in capping and potentially reducing carbon emissions while also furthering the country’s—and the region’s—economic prosperity. The United States could take a big step forward by contributing to the Amazon Fund, which Norway and Germany already do.

The first leader-to-leader meeting between Biden and Lula is full of symbolism. It shows the resumption of stronger US-Brazil relations, a willingness to leverage opportunities for cooperation on the environment, and the United States’ recognition of Brazil as a more strategic partner—and a more significant actor in the region and the world. And, following the January 8 events, the meeting shows that the United States and Brazil are a united pro-democracy front invested in strengthening their democratic institutions and promoting democratic values globally.

Valentina Sader is an associate director and the Brazil lead at the Atlantic Council’s Adrienne Arsht Latin America Center.

The post Biden and Lula must discuss fortifying their democracies—but that’s just the start appeared first on Atlantic Council.

​​​​​What you should know

• PAHO: Dr. Jarbas Barbosa took office on February 1 as the health organization’s new director, pledging to work in partnership with member states to end the pandemic and ensure that the region’s health systems recover stronger than before.
• IMF: The organization raised its global growth forecast to 2.9 percent, up from its original 2.7 percent. The outlook is also better for the region’s two major economies: up 0.2 percent for Brazil, to 1.2 percent, and a half point for Mexico, to 1.7 percent.
• Migration: The 250,000 migrants that irregularly crossed into Panama through the Darien Gap in 2022 represents a record high that is nearly double the 133,000 entries recorded in 2021.

Monitoring economic headwinds and tailwinds in the region

• Mexico: The national statistics agency reported that the economy grew 0.4 percent in Q4 of 2022 compared to the previous quarter.
• Argentina: The government will leverage new gas exports to Chile, and potentially Brazil, to improve its trade balance and pay down debt.  
• Brazil: Alongside Argentina, the government is floating the development of a common currency linking the two countries to facilitate trade. 
• Colombia: The Minister of Mines and Energy Irene Velez announced at Davos that the country will no longer approve new oil and gas exploration contracts.
• Jamaica: Third-quarter GDP grew by 5.9 percent over 2022 due to a resurgent tourism sector, which has boosted hotels, restaurants, and services, among other sectors.  
• Peru: Ongoing protests and road blockades have cost the country $550 million since the ousting of President Pedro Castillo last December. 
• Transatlantic ties: German Chancellor Olaf Scholz visited Argentina, Brazil, and Chile, to discuss the EU-Mercosur trade agreement and support for Ukraine. 

In focus: Energy expansion in Trinidad and Tobago

On January 24, the United States licensed Trinidad and Tobago to develop a natural gas project off the coast of Venezuela in the Dragon field region. The project will support overall Caribbean energy security, with a requirement that some of the produced gas must be exported to Jamaica and the Dominican Republic. To comply with US sanctions, Trinidad will pay for the gas with humanitarian aid. 

Atlantic Council experts reacted immediately, emphasizing the importance of this move towards meeting Caribbean energy demand. You can read more here. 

Health + Innovation

• Haiti: As of January 17, the Ministry of Public Health and Population has reported over 24,400 suspected cholera cases.
• Education: A World Bank study shows that by 2045, nearly 5 million people across LAC would fall into poverty due to pandemic-induced learning losses.
• Brazil: The Health Ministry announced that it will roll out bivalent COVID-19 booster shots as early as February 27.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 6, 2023 appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: The Supreme Court will investigate whether former President Jair Bolsonaro incited the January 8 attack on Congress and other government buildings in Brasilia.
• Peru: People—mainly from remote Andean regions—descended on the nation’s capital to protest against President Dina Boluarte in support of her predecessor and demand elections and structural change in the country.
• Trade: The value of goods exported from Latin America and the Caribbean (LAC) increased at an estimated rate of 18.8 percent in 2022, a downward trend from 27.8 percent in 2021, due to higher prices and low volumes.

Monitoring economic headwinds and tailwinds in the region

• Argentina: The government will buy back overseas bonds equivalent to over $1 billion to improve its debt profile, looking to send a positive signal to markets despite low reserves levels.
• Brazil: Vice President Alckmin said that Lula’s administration wants to remove a key tax on manufacturing and importing, the IPI, as part of a broader tax reform package. 
• Guyana: The government announced $43.4 billion in funding for a new natural gas power plant, alongside distribution infrastructure improvements, to promote business and development. 
• Multilaterals: During his inauguration, new Inter-American Development Bank (IDB) president Ilan Goldfajn announced three key priorities for the bank: social issues, climate change, and sustainable infrastructure. 
• Mexico: The 2023 North American Leaders Summit concluded with new agreements to promote sustainability, strengthen supply chains, and respond to migration. 
• Peru: The national statistics institute (INEI) said the economy expanded 1.7 percent year-on-year in November, marking a slight slowdown from the rise of 2.0 percent in October.

In focus: LAC in Davos

Latin American and Caribbean public- and private-sector leaders gathered alongside their counterparts from across the world in Davos, Switzerland, for this year’s Global Economic Forum. Colombia’s finance minister Jose Antonio Ocampo used the opportunity to push for a stronger agreement on minimum taxes for multinational companies. Brazil’s finance minister, Fernando Haddad, and environmental minister, Marina Silva, discussed Brazil’s positive economic outlook, environmental stewardship, and desire for regional integration. 

Spanish prime minister Pedro Sánchez also delivered a speech, in which he emphasized Spain’s role in building ties between Europe and Latin America, as Spain prepares to take over the Presidency of the Council of the European Union later this year. 

Health + Innovation

• Vaccines: The Canadian government will donate $33.4 million to the Pan American Health Organization (PAHO) to increase access to COVID-19 immunizations for populations across the region. This donation is in addition to a prior contribution of $40 million in 2021.
• Belize: The country will celebrate 34 years of relations with Taiwan through the construction of a new general hospital in San Pedro.
• Nutrition: A new United Nations report found that 22.5 percent—or 131.3 million people—of the region’s population cannot afford a healthy diet, citing a country’s income level, the incidence of poverty, and level of inequality as contributing factors.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 21, 2023 appeared first on Atlantic Council.

We don’t see them, but they’re out there. 

Rare, elusive, and well-camouflaged, snow leopards are exceptionally hard to spot. When sighted, these majestic cats seem to have come out of nowhere. And yet they were around us all along.  

In the discipline of global foresight, as the Atlantic Council’s Peter Engelke wrote last year, a “snow leopard” is “a known but underappreciated—perhaps even forgotten—phenomenon” that has the potential to change the world and shape its future even though appearances might suggest otherwise.  

The snow leopards discussed here are not predictions, but rather prompts for us to scrutinize overlooked phenomena. A technological breakthrough, for example, may not seem world-changing when still in development. Other phenomena might be so woven into our daily lives that they’ve become invisible to us, as with the recommendation algorithms highlighted below. The actors involved also influence how much weight we give to events and trends: If a head of state were to announce a country’s economic disengagement from China, we would sit up and pay attention, but companies deciding one by one to proceed with such “decoupling” may fly under the radar.  

Our next-generation foresight experts at the Scowcroft Center for Strategy and Security brought a fresh perspective to the task of spotting the hard-to-spot. Check out their list of six snow leopards to watch closely in the year ahead. 

Algorithms are everywhere yet almost invisible, serving as the silent sifters and sorters of our lives. Their influence is baked into everything from email and smartphones to GPS and government services. On search engines and social media, “recommendation algorithms” leverage user data and history to curate information for billions of people. In their simplest form, algorithms are instructions or sets of rules—often used by computers—for completing a task. At their most complex, they drive machine learning and enable artificial intelligence (AI) to grow smarter and more sophisticated by the second. 

With such sweeping capacity to shape how individuals and societies order and consume information—from the mundane recommendations of photo feeds and shopping lists to the grave amplification of extremist conspiracy theories that cause real-world terror—algorithms (and their designers) hold some responsibility for the social and political consequences of the content they propagate and the decisions they advance. 

The need for AI governance, particularly to rein in algorithms, is increasing—and policymakers have demonstrated an appetite for it. This October, the White House published an AI Bill of Rights with a blueprint for addressing “algorithmic and data-driven harms” and potential remedies. Lawmakers in the US Congress have proposed legislation to limit algorithmic promotion of extremist content by holding social-media platforms liable if certain forms of amplified content lead to offline violence, with other bills on the subject under consideration as well. China implemented a law in 2022 to reduce algorithmic influence on public opinion by enabling users to decline algorithmic recommendations on websites and apps. (The law was part of China’s pursuit of “positive energy” online, under the country’s aggressive censorship.) The EU’s Artificial Intelligence Act, the first major, still-pending regulatory framework for AI that could set global standards, strives to curb algorithmic bias. The EU’s General Data Protection Regulation (GDPR) also offers guidelines on when companies can and can’t use algorithmic automated processing for decision-making—for example, regarding who to offer a loan to or at what interest rate.  

Regulating algorithms is a broad and complex challenge, and pushback by the tech industry along with legal hurdles could halt even the most ambitious regulators. The public, and even policymakers, often lack the conceptual clarity to identify, define, and classify algorithms. And because it can be difficult to prove causation between algorithmic decision-making and the behavior or opinions of individuals influenced by it, accountability is hard to track. 

Further breakthroughs may happen below the national level. New York City is reviewing the use of algorithms in decision-making across its government agencies and offices. The City Council curtailed the use of AI algorithms in decisions about hiring and promotion. And these steps are just the beginning, as state houses and activists energetically join the race to shape this new frontier. 

Danielle Miller, Assistant Director, Scowcroft Strategy Initiative

Prior to joining the Atlantic Council, Miller worked in the US House of Representatives and was a research assistant at the University of California Berkeley’s Institute of European Studies.

In the days after the Kremlin launched its illegal war on Ukraine, Western companies based in Russia started fleeing the market, fearing unprecedented transatlantic sanctions, consumer backlash for continuing to do business with an invader country on an imperialist bender, and investor pressure to maintain profit margins. Now, as tensions between the West and China escalate, wary investors and multinational corporations may be starting to preemptively shift their market presence, supply chains, and investments away from China to insulate themselves from similar future impacts should the Sino-transatlantic relationship deteriorate.  

Among the most interesting early developments: Apple, which has a huge production footprint in China, has decided to shift production of its iPhone 14 model to India, while some of Google’s production for the new Pixel phone will likely be heading to Vietnam. Another space to watch is pension funds, as growing concerns about political risks are prompting discussions about potentially exiting or at least reducing exposure to the Chinese market.   

While it’s still early to call such decisions formal decoupling, these signs point to Western companies’ unease about the state of the Sino-transatlantic relationship, as well as a preemptive, corporate-led fragmentation of markets and supply chains in case tensions between China and Western countries bubble over. The private sector’s concerns about China’s restrictive zero-COVID policies, which have led to recurring lockdowns and disruptions at factories, may also be a factor in these developments, but the roots of these corporate moves can be traced back further to extensive tariffs and other economic tit-for-tat measures between China and the West—as well as nervousness about China’s own pursuit of self-sufficiency via efforts such as its “Made in China 2025” initiative. At stake in how these trends play out is nothing less than the future of globalization as we know it, along with the shape of the multipolar geoeconomic order, in which countries such as India will likely play an enhanced role.   

Anca Agachi, Associate Director, Transatlantic Security Initiative

Previously, Agachi worked for the EU’s European Defence Agency on defense capability development projects in the information security and space domains, and served as a United Nations Youth Representative for Romania, focusing extensively on the UN 2030 Agenda and sustainable development goals.

The two main reasons why consumers are reluctant to buy electric vehicles? They cost a lot and can’t get very far on a charge. But a battery that could make electric cars cheaper, more efficient, and thus more popular may be on the horizon. The next breakthrough could come not by way of an updated lithium-ion battery—the kind that powers most electric vehicles on the road today—but rather by using current battery technology in different form through structural batteries built into a car’s frame. This has the effect of reducing the car’s weight (a chassis made of battery cells isn’t as heavy as a chassis plus a separate battery) and a lighter car can travel farther on a single charge. The potential benefits go far beyond increasing range. Integrating the battery into a car’s chassis could also cut down on manufacturing costs and make cars cheaper, while strengthening the body of the car as well.  

Tesla has experimented with structural batteries in its Model Y cars and GM used them in the electric model of its Hummers, but their versions have yet to yield broader adoption. Yet technical development among automakers and other actors is ongoing and promising. Researchers at Sweden’s Chalmers University of Technology, for example, recently developed a more efficient structural battery that performs ten times better than its predecessors. Right now, electric vehicles are driven mostly by the wealthy: In the United States, for instance, 78 percent of federal electric-vehicle credits go to those with incomes over $100,000. If structural batteries can deliver on their promise, it will result in many more electric vehicles on the road around the world, democratizing ownership.  

Imran Bayoumi, Assistant Director, Scowcroft Strategy Initiative

Bayoumi graduated with his master’s degree in global affairs from the Munk School at the University of Toronto where he held a Joseph-Armand Bombardier Canada Graduate Scholarship. He also holds a BA from Queen’s University in political studies.

An uneven post-COVID-19 economic recovery has stoked a labor-rights movement in the United States and efforts to unionize in some of the country’s largest corporations—from Starbucks to Amazon to Trader Joe’s. Around the world, meanwhile, similar fallout from the pandemic has produced another phenomenon: Platform workers—those who work for organizations that provide services directly to consumers through an online platform—are leading efforts to create better working conditions for themselves. Strikes and other protests from Brazil to the United Kingdom to the Philippines and beyond speak to rising unrest among these workers. The causes for disputes and the types of protest vary across regions, but concerns about pay are often a primary driver of the activity.  

Such developments are significant in part because platform workers are a subset of the informal economy, which encompasses economic activities that are not monitored by the state. These activities include a wide range of work—from domestic labor to rideshare driving to market stands. More than 60 percent of the world’s adult labor force operates, at least part-time, in the informal sector, and on average that sector represents 35 percent of gross domestic product in low- and middle-income countries. In many cases, particularly in emerging markets and developing economies, platform workers are not aiming to formalize their economic activities. But their budding efforts to improve their working conditions could alter the world of work for the better, more strongly linking them with government protections and helping curb global poverty and precarious employment. 

Caroline Multerer, Deputy Director of Operations, Scowcroft Center for Strategy and Security

Prior to joining the Atlantic Council, Multerer was a program associate at Jones Group International, a global consulting firm owned by General James L. Jones.

One approach to combating climate change is geoengineering, or deliberate, large-scale, technologically based interventions in the environment to mitigate some of the effects of climate change. These include removing carbon dioxide from the atmosphere and reflecting the sun’s rays back into space. Futuristic though it may sound, geoengineering is already here. China and the United Arab Emirates have undertaken efforts to “seed” clouds by artificially increasing the amount of precipitation they hold and creating rain. Researchers from the UAE’s National Center of Meteorology have looked into creating an artificial mountain that would induce cloud formation and rain. Other countries, including China, India, and the United States, are making steady progress in advancing their geoengineering capabilities. The 2022 federal appropriations act, for example directed the US Office of Science and Technology Policy to develop a multi-agency group for coordinating research on solar geoengineering. This form of climate engineering, where sunlight is sent back into space, seems most likely to have the biggest impact on limiting the consequences of climate change and thus most likely to be pursued. 

But along with its promise solar geoengineering also brings numerous risks, including the potential alteration of regional weather patterns. There’s also the increasing likelihood that, given the pace of climate-driven impacts such as floods, droughts, severe storms, and heat waves, a country or multiple countries will attempt to geoengineer the planet unilaterally, before the underlying science is solidified and before adequate global governance mechanisms are in place. 

Imran Bayoumi, Assistant Director, Scowcroft Strategy Initiative

Bayoumi graduated with his master’s degree in global affairs from the Munk School at the University of Toronto where he held a Joseph-Armand Bombardier Canada Graduate Scholarship. He also holds a BA from Queen’s University in political studies.

Although Japan and South Korea normalized diplomatic relations in 1965, their relations have continued to be complicated by the legacy of Japan’s colonization of Korea from 1910 to 1945, memories of World War II, and disputes over how to compensate Korean women who were forced into wartime sexual slavery by the Japanese military. 

Despite this history, deeper reconciliation between the two countries, while politically difficult, is not an impossibility. In one indicator of a coming thaw, a meeting between South Korean President Yoon Suk-yeol and Japanese Prime Minister Fumio Kishida on the sidelines of the 2022 United Nations General Assembly, framed as a brief, informal gathering to avoid setting off domestic opposition at home, marked the first bilateral meeting between the leaders of these nations in three years. In another sign, the Japanese and South Korean publics are coalescing around concern about China. Were such a rapprochement to occur, it would dramatically alter the geopolitical environment in Asia while delivering significant benefits to both countries. Japan and South Korea face common and acute threats from China, North Korea, and Russia. With better relations, the two countries could pursue closer bilateral military ties, reach mutual understandings of regional threats, and develop responses to crises as they emerge. South Korea, one of the world’s leading advanced economies, could get more involved in the Quad grouping of Australia, India, Japan, and the United States. The United States would be able to count on both nations to counterbalance China’s influence in the region, while the three could promote shared values throughout the Indo-Pacific. 

Imran Bayoumi, Assistant Director, Scowcroft Strategy Initiative

Bayoumi graduated with his master’s degree in global affairs from the Munk School at the University of Toronto where he held a Joseph-Armand Bombardier Canada Graduate Scholarship. He also holds a BA from Queen’s University in political studies.

Global Foresight 2023

In this year’s edition of Global Foresight, the Atlantic Council’s senior experts identify the top risks and opportunities for 2023. Our foresight team spots “snow leopards” that could have major unexpected impacts in 2023 and beyond. And we share findings from our survey of global strategists and foresight practitioners on how human affairs could unfold over the next decade.

Learn more Full survey

Atlantic Council Strategy Paper Series Jan 9, 2023

Welcome to 2033: What the world could look like in ten years, according to more than 160 experts

To survey the future, we polled global strategists and foresight gurus on our most burning questions about the biggest drivers of change over the next decade. Check out their forecasts on everything from the prospect of nuclear proliferation to the probability of great-power war to the potential for more global volatility.

Read More

Atlantic Council Strategy Paper Series Jan 20, 2023

Six ‘snow leopards’ to watch for in 2023 

Atlantic Council foresight experts spot the underappreciated phenomena that could have outsize impact on the world, driving global change and shaping the future.

Brazil China

Atlantic Council Strategy Paper Series Dec 23, 2022

The top 23 risks and opportunities for 2023

The war in Ukraine changed the world in 2022. How will it continue reshaping global affairs in 2023 and what else looms on the horizon? The Atlantic Council’s top experts brought their globe-spanning expertise to the task of forecasting the near future.

Africa Americas

The post Six ‘snow leopards’ to watch for in 2023  appeared first on Atlantic Council.

The Biden administration is under increasing pressure from progressive leaders in Latin America and the US Congress to compel Bolsonaro to leave the United States. While the Biden administration needs to demonstrate moral leadership in upholding democracy and the rule of law, acting too hastily could fuel the flames of Brazil’s increasingly polarized politics and do more damage to democracy in the long term. In order to navigate this politically sensitive situation, the US government must follow established legal processes and ensure Bolsonaro does not undermine Brazilian democracy from US soil.

Ideally, Bolsonaro—who may have entered the United States on a diplomatic visa, which would have expired when his successor was sworn in on January 1—would simply return to Brazil voluntarily. He has said he plans to accelerate his planned departure at the end of January, which would resolve the problem.

Should Bolsonaro not leave voluntarily, it may take years to compel his departure, as the history of high-profile extradition requests to the US government shows. However, today there is hope that Bolsonaro will be persuaded to leave the United States of his own accord because of the possibility that he could face years of shameful publicity trying to stave off the extradition the Brazilian government, when it decides the time is right, is almost sure to seek.

While Bolsonaro would have ample opportunity to challenge the evidence against him in US courts before any action is taken to extradite or remove him, the Brazilian government would have an equal opportunity to make the case for Bolsonaro’s responsibility for the riots before the world’s media. The US government also would have the opportunity under US law to provisionally arrest Bolsonaro for at least several months, an indignity he may prefer to avoid.

Since 1964, the United States and Brazil have agreed by extradition treaty that each country must “deliver up” those charged with or convicted of certain enumerated crimes—which include destroying government property, as happened in Brasília—when committed within the territorial jurisdiction of the requesting country and when criminalized in both countries.

While there are some exceptions for when the offense is of a “political character,” the treaty notes that “[c]riminal acts which constitute clear manifestations of anarchism or envisage the overthrow of the bases of all political organizations will not be classed as political crimes or offenses.” It is unlikely that a court would rule that the exception for acts of a “political character” would apply in Bolsonaro’s case, if he is found culpable, because the incitement resulted in violence.

To avoid getting mired in political sensitivities, the Biden administration would be wise to pursue three immediate priorities.

1. Follow the law—even if it moves slowly

First, the White House should demonstrate what the rule of law looks like. If Bolsonaro chooses to stay in the United States, the Biden administration should urge the Brazilian government to initiate a formal extradition request. While it could be appealing to swiftly end Bolsonaro’s presence in the United States by exercising the authority that the president and the secretary of state have to declare him persona non grata (if he actually entered on a diplomatic visa) or to revoke his visa and have the Department of Homeland Security remove him, Bolsonaro would still have the right to contest that in court. In the end, little time would be saved if Bolsonaro wants to delay his return.

The question over Bolsonaro brings to mind one faced by the Obama administration in 2016, when Turkey’s government requested the extradition of Fethullah Gülen, a Turkish religious leader living in Pennsylvania, following a failed coup against Turkey’s government by some of Gülen’s supporters. However, despite repeated urging (including from then-Vice President Joe Biden) and expert-level consultations in which the Department of Justice explained US extradition requirements to Turkish counterparts, the Turkish government never presented evidence sufficient to convince a US magistrate to turn Gülen over to Turkey for trial.

Insistence on following established legal processes in the Gülen matter allowed the US government to navigate a politically sensitive situation without eroding the rule of law, even under serious pressure from the Turkish government.

While a formal extradition process for Bolsonaro would take several years to unfold, starting with the issuing of a warrant and a hearing to establish whether sufficient evidence exists to sustain the charge, this would keep Bolsonaro out of Brazil and, perhaps, allow for restrictions on his access to media and electronics that could be used to incite supporters to further violence.

From there, the process involves several layers of preliminary review by the US Department of State and a probable cause determination by the US Department of Justice before the case is forwarded to the US attorney for the district where the individual is located. An extradition order is not appealable, but Bolsonaro could petition for a writ of habeas corpus to ensure that he gets a hearing. The US secretary of state then makes the final decision whether to extradite.

The Biden administration should be clear that the length of the process is not any indication of US government reluctance to turn Bolsonaro over or interest in delaying the process. Bolsonaro’s status as a former head of state does not privilege or penalize.

2. Provide US law enforcement and intelligence support to Brazil

Second, the Biden administration should also support efforts to hold those responsible for the January 8 attack accountable for their assault on democracy by promising total cooperation from US law enforcement and intelligence agencies to share what they know, including any information regarding Bolsonaro’s role in instigating, directing, or supporting it.

A public announcement of US law enforcement’s full cooperation would have a chilling effect on Bolsonaro’s capacity to machinate disruptions to Brazil’s democracy from his current location in Orlando, Florida, given the ability, and obligation, of US law enforcement and intelligence agencies to prevent acts of violence or crime emanating from a foreign national on US soil.

3. Allow civil cases to run their course

Third, Bolsonaro no longer holds any official position, so in the United States, he is subject to US laws for civil damages—and the Biden administration should not shield him from culpability. His assets can be tied down or even frozen while US courts decide whether he is liable for the January 8 riots and subsequent events. He could also be required to give depositions and provide evidence about his own actions even outside of any criminal or extradition proceedings.

Life in the United States could quickly look less and less attractive for Bolsonaro. The threat of being cut off from his supporters while under the watchful eye of US law enforcement agencies may be the deciding factor in whether Bolsonaro decides to stay in the United States or go home. Either way, he will face justice.

Gissou Nia is a human rights lawyer and director of the Strategic Litigation Project at the Atlantic Council. Follow her on Twitter: @GissouNia.

Tom Warrick is a senior fellow at the Scowcroft Center for Strategy and Security’s Forward Defense practice at the Atlantic Council. He served in the Department of State from 1997 to 2007 and as a deputy assistant secretary in the Department of Homeland Security from 2008 to 2019. Follow him on Twitter: @TomWarrickAC.

The post As Brazil investigates Bolsonaro’s role in anti-democratic riots, should the US kick him out? appeared first on Atlantic Council.

It’s a shock to the system. One week after new Brazilian President Luiz Inácio Lula da Silva was sworn into office, thousands of supporters backing former President Jair Bolsonaro—who falsely claimed that October’s election had been stolen from him—descended upon the country’s Congress, Supreme Court, and presidential palace, leaving shattered windows and overturned furniture in their wake. Now that authorities have cleared the protests and launched an investigation into security failures, our experts break down what’s to come.

• Jason Marczak (@jmarczak): Senior director of the Adrienne Arsht Latin America Center
• Iria Puyosa (@NSC): Senior research fellow at the Digital Forensic Research Lab
• Valentina Sader (@valentinasader): Associate director and Brazil lead at the Adrienne Arsht Latin America Center

Failures abound

• Brazil’s January 8 triggered comparisons to the United States’ January 6 attack. “But that is an oversimplification,” Jason says. “In Brazil, rioters were focused on absolute destruction of Brazil’s legislative, judicial, and executive buildings without the ability to disrupt the democratic order.”
• Iria points out that Bolsonaro’s supporters had been planning publicly for days, and the call to action “was not made on fringe or secret sites but in public groups and channels” on TikTok, YouTube, Telegram, and WhatsApp. Security forces “had the chance to take preventive measures,” she says, calling it “inexplicable” that Brazilian authorities never “established strong security controls.”
• Calls rose on Sunday for stronger regulation of social media, Iria tells us, even though Brazil has one of the more “vigorous” regulatory regimes in the region. One way Brazilian policymakers can tackle the problem, she says, is to improve intelligence agencies’ capabilities to monitor open-source data that provides “early warnings” about extremist threats—but in a way that doesn’t “limit freedom of expression and association of citizens.”
• While Lula wasn’t even in Brasília at the time, Jason says that the riots are still a “wake-up call” for the Lula government because they highlight the risks that lie ahead for “the continued peaceful functioning of Brazil’s institutions.”

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Lula’s moment

• “Democracy prevailed, but it’s cracked,” Valentina tells us. While Brazil’s democratic institutions have proven resilient, “they still must be strengthened.”
• According to Valentina, the fact “that some police forces, officials, and financial backers appear to have enabled this anti-democratic vandalism underscores the danger to Brazil’s democratic system.”
• But politicians from across the political spectrum have responded to the riot with an “eagerness to defend democracy,” a rare moment of “common ground,” Valentina says. “Lula must seize the opportunity to pacify the country and gain political power in Congress” to show the strength of democracy, punish wrongdoers, and enact key planks of his policy agenda. 

Friends in need

• US President Joe Biden quickly condemned the attack on Sunday. Jason tells us that next, his administration should “take action to reassure the new Lula government that US support will not be in statements alone.”
• That could take the form of a Lula visit to Washington early this year. “That visit should be prioritized and scheduled as soon as possible,” Jason says, “to show Lula and allies around the hemisphere that the United States is here to help when partners are in need.”
• Valentina says the United States can view January 8 as “yet another failed attempt by the extreme right to undermine democracy.” But “amid global trends of declining democratic freedoms and political instability across Latin America and the Caribbean, which country is the next target?”

The post How Brazil can respond to its democracy stress test appeared first on Atlantic Council.

Click to jump to an expert reaction:

Jason Marczak: January 6 comparisons are an oversimplification, but the US has a role to play now

Valentina Sader: It’s Lula’s time to show strength as democracy is challenged

Iria Puyosa: Brazilian intelligence agencies failed. Here’s what they can do now.

January 6 comparisons are an oversimplification, but the US has a role to play now

Brazil is a divided nation. But hopefully, unlike in the United States, those divisions do not play out in holding accountable those responsible for Sunday’s attacks. Leaders across the Brazilian political spectrum have condemned the violence; what is needed are swift actions to hold responsible those directly and indirectly complicit in the ransacking of Brazilian institutions. That started on Sunday with the arrest of hundreds of looters and the order by Supreme Federal Court Justice Alexandre de Moraes calling for the ninety-day removal of Federal District Governor Ibaneis Rocha following the absolute failure of Federal District security.

Comparisons will continue to be made to January 6. But that is an oversimplification of what happened in Brazil. The January 8 rioters took their cues from the United States, but, in Brazil, rioters were focused on absolute destruction of Brazil’s legislative, judicial, and executive buildings without the ability to disrupt the democratic order. Lula had taken office one week earlier and was not even in the capital city at the time. Still, for the Lula government, the Brasília violence is a wake-up call regarding the forces that will continue to undermine the continued peaceful functioning of Brazil’s institutions.

What should the United States do? Unlike the reaction to the recent self-coup in Peru, from left to right, governments across the Americas and Europe voiced a loud and resounding condemnation of the Brasília attacks. Multiple US officials, including President Joe Biden, forcefully spoke out. This is the moment for the United States to take action to reassure the new Lula government that US support will not be in statements alone. A potential Lula visit to Washington is in the cards for early in the year. That visit should be prioritized and scheduled as soon as possible to show Lula and allies around the hemisphere that the United States is here to help when partners are in need.

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

It’s Lula’s time to show strength as democracy is challenged

January 8, 2023 will go down as an ugly day in Brazilian history. The past few months have been clouded by the fear that a January 6-like event would take place in Brazil, and that fear sadly came to fruition on Sunday. One week separates Lula’s inauguration, a celebratory moment for the democratic process and the peaceful transition of power, and this weekend’s violence.

Inspired by the United States’ January 6 riots, the attacks in Brasília targeted all three branches of government. The fact that some police forces, officials, and financial backers appear to have enabled this anti-democratic vandalism underscores the danger to Brazil’s democratic system. The repercussions of this day will be long-lasting.

The United States and the West should see what happened in Brazil as yet another failed attempt by the extreme right to undermine democracy. But amid global trends of declining democratic freedoms and political instability across Latin America and the Caribbean, which country is the next target?

In Brazil, democracy prevailed, but it’s cracked. The country proved that its democratic institutions are resilient, but they still must be strengthened. Lula has an even greater opportunity to do that now. The horror of the day and the eagerness to defend democracy pushed politicians from across the political spectrum to find common ground. That’s a rarity in Brazilian politics, and Lula must seize the opportunity to pacify the country and gain political power in Congress, backed by a pro-democracy front, to show the strength of his government and of Brazilian democracy, to punish those involved, and to move the needle forward on key policy priorities.

—Valentina Sader is the associate director and Brazil lead at the Adrienne Arsht Latin America Center.

Brazilian intelligence agencies failed. Here’s what they can do now.

Brazil’s security and intelligence agencies failed to take effective measures to prevent the assault on the National Congress, the Federal Supreme Court, and the Presidential Palace. They are not the first security forces taken off guard by a popular uprising or an attempted coup d’état. But they had a chance to take preventive measures, given the amount of open-source data available.

Contrary to what typically occurs in attempted coup d’états, the assault on the Brazilian government was publicly announced. The call was not made on fringe or secret sites but in public groups and channels with thousands of followers. Videos, flyers, and texts indicating places and times of departure for Brasília, age requirements to participate, necessary supplies for the trip, and the objective of the mobilization circulated on TikTok, YouTube, public Telegram groups, and public WhatsApp groups for several days.

It is inexplicable that the Brazilian authorities have not investigated these calls and established strong security controls to prevent pro-Bolsonaro extremists from taking over the Square of the Three Powers.

On Sunday, calls began to rise for greater regulation of social media and messaging platforms, even as Brazil has been among the more vigorous countries in Latin America in restricting the circulation of misleading or polarizing content on messaging platforms. Policymakers should consider how intelligence agencies can activate resources for open-source monitoring that do not limit freedom of expression and association of citizens but provide early warnings about actual threats from extremist activities.

—Iria Puyosa is a senior research fellow at the Atlantic Council’s Digital Forensic Research Lab.

The post Experts react: Brazil has suffered its own attack against democracy. Here’s what the government and its allies can do next. appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: On January 1, Luiz Inácio Lula da Silva was sworn in as president for a third term after defeating incumbent Jair Bolsonaro.
• Outlook: According to the Economic Commission for Latin America and the Caribbean (ECLAC), economic growth will continue to slow in 2023 and reach 1.3 percent.
• Venezuela: The opposition-led legislature dissolved the interim government led by Juan Guaidó. The vote signaled that members of the opposition had lost faith in Guaidó’s ability to oust Maduro. The United States will continue recognizing the 2015 National Assembly as the last remaining democratic institution in Venezuela.

Monitoring economic headwinds and tailwinds in the region

•  Brazil: In 2022, trade surplus reached a record high of $62.3 billion. Total exports also reached a 335 billion high, helped by a boost in prices in the agriculture and livestock sector.
• Argentina: The IMF disbursed a tranche of $6 billion from its $44 billion program with Argentina, citing positive indicators including falling inflation, a better trade balance, and foreign reserves. 
• Colombia: Minimum wage will increase by 16 percent this year, to $242.7 per month. President Petro said the move would boost an economy slowed by inflation. 
• Dominican Republic: The S&P upgraded the country’s credit rating from “BB-“ to “BB,” highlighting its strong recovery from the pandemic and long-term growth potential. 
• El Salvador: The government will receive a $150 million loan from the CAF development bank, designed to strengthen its education system in the wake of the pandemic.  
• Peru: The government launched a $1.6 billion plan to increase welfare and investment in regions gripped by protests following the ouster of former president Pedro Castillo. 

In focus: Nearshoring opportunities in the Americas

With the next North American Leaders Summit (NALS) set for this incoming week (January 9 and 10), nearshoring – the relocation of supply chains closer to the United States – is rising in importance.

Rising costs of and delays during shipping, coupled with the pandemic, have made businesses in the United States wary of relying on supply chains across the Pacific. As a result, some 400 companies explored reshoring to Mexico from Asia in 2022. Mexico’s manufacturing sector is now larger than it was before the pandemic, and Mexican exports to the United States have rapidly increased. Firms such as Walmart have already relocated some business to Mexico, while Tesla is planning a new factory in northern Mexico. NALS will pay particular attention to the electric vehicle production chain in North America.

Health + Innovation

• Chile: In an effort to curb the spread of the BF.7 COVID-19 subvariant, travelers coming from China are now required to show a negative PCR test.
• Haiti: Over 14,700 suspected cholera cases have been reported since December. Nine in every ten cases are from areas hit hard by food insecurity.
• PAHO: Most countries in LAC invest less than the minimum 6 percent of GDP in health and allocate less than 30 percent of the health budget to the first level of care as recommended by the regional health organization.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 7, 2022 appeared first on Atlantic Council.

While many countries are still on the rebound from the COVID-19 pandemic, new crises—and their effects—are emerging, and are expected to continue into the next year. From global inflation to a costly energy crisis, and from food insecurity to new political shifts, how can the region meet changing dynamics head-on? And how might risks turn into opportunities as we enter a highly consequential 2023?

Join the Adrienne Arsht Latin America Center as we look at some of the key questions that may shape the year ahead for Latin America and the Caribbean, then take our signature annual poll to see how your opinions shape up against our predictions.

How might new regional collaboration take shape across Latin America and the Caribbean with a wave of new leaders? What decision points might shape government policy? Will Bitcoin continue to see the light of day in El Salvador? Are the harmful economic effects of Russia’s war in Ukraine in the rearview mirror for the region, or is the worse yet to come? Will China’s new foreign policy ambition translate to closer relations with LAC?

Take our ten-question poll in less than five minutes!

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Experts react: As the US eases oil sanctions, is Venezuela coming in from the cold?

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The post What might be ahead for Latin America and the Caribbean in 2023? Take our ten-question poll and see how your answers stack up appeared first on Atlantic Council.

​​​​​What you should know

• Peru: President Castillo was ousted by lawmakers after he sought to dissolve Congress ahead of an impeachment vote.
• Brazil: The Economy Ministry rejected assertions by President-elect Lula’s transition team that Bolsonaro’s outgoing administration was leaving government finances “bankrupt.”
• Social outlook: A recent Economic Commission for Latin America and the Caribbean (ECLAC) report projects that by the end of 2022, LAC will have 201 million people living in poverty – an increase of 15 million compared to the pre-pandemic situation.
• ICYMI: On December 7, the Atlantic Council launched a paper on improving tax policy in LAC. Read it here.

Monitoring economic headwinds and tailwinds in the region

• Argentina: signed a new information-sharing agreement with the US designed to root out tax evasion. It could increase tax revenue for Argentina by $1 billion US.
• Barbados: concluded new funding arrangements with the IMF, $113 million US to continue its fiscal reform package and $189 million US towards its climate change response.
• Brazil: President-elect Lula announced that Fernando Haddad, former minister of education and mayor of São Paulo, would be his finance minister.
• Mexico: announced that additional consultations on the USMCA energy dispute would be held through early January, to ensure continued investment and confidence.
• Peru: was placed under a state of emergency after protests gripped the country. Political upheaval led S&P to lower the country’s economic outlook to “negative.”
• Transatlantic relations: Argentina called for reviewing the potential EU-Mercosur trade agreement, highlighting threats to local auto industry and barriers to agricultural exports.
• Uruguay: criticized Mercosur’s inaction on trade agreements with large economies, drawing criticism for its own independent negotiations with China and to join the TPP.

In focus: Guyana’s carbon credits

Guyana is the first country to issue carbon credits designed to prevent forest loss and the first under the ART’s REDD+ Environmental Excellence Standard to ensure integrity and independent verification. The Hess Corporation, which is a partner in an oil consortium led by ExxonMobil that operates in Guyana, will purchase $750 million US of these credits. This move reflects how resilient growth, balancing between the opportunities in the energy sector and protecting its valuable environment, has become a priority in light of climate change and stresses like the COVID-19 pandemic.

These credits will support Guyana’s Low Carbon Development Strategy, with 15 percent of the revenues set aside for indigenous communities. With some 18 million hectares of forest, Guyana is a major carbon sink, and has previously worked with Norway to protect this resource. The new credits reflect Guyana’s status as a “High Forest, Low Deforestation” country, another first.

Health + Innovation

• Argentina: Transport Ministry officials recommended all passengers travelling on public transportation to return to wearing face-masks amid a spike in COVID-19 cases.
• Universal Health Day: The Pan American Health Organization (PAHO) director called on the region to redouble efforts towards achieving universal health as they begin to rebuild from the pandemic.
• Mexico: The state of Nuevo Leon reintroduced the mandatory use of face masks in closed public spaces as the number of COVID-19 infections and other respiratory diseases rise.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: December 17, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• Economic outlook: The head of the UN Economic Commission on Latin America and the Caribbean (ECLAC) said that the region’s stagnation is ”worse than the 1980s” due to weak investment, low productivity, and inadequate education.
• Mexico: Remittances sent from workers abroad surpassed $5.35 billion in October, beating economists’ forecast on US job strength.
• #ProactiveLAC: On Wednesday, December 7, the Atlantic Council will host a virtual conversation on LAC’s economic outlook, fiscal policy, and small and medium-sized enterprises in uncertain times. Register here.

Monitoring economic headwinds and tailwinds in the region

• Argentina: Upcoming legislation is set to encourage investment in its liquified natural gas sector, as demand, driven by the war in Ukraine, continues to grow. 
• Bolivia: The country lowered its 2023 growth forecast from 5.1 to 4.8 percent, as an ongoing strike in Santa Cruz has led to over $780 million in losses.  
• Chile: During the recent high-level dialogue with the United States covering migration and sustainable development, both parties agreed to relaunch their bilateral Science, Technology, and Innovation Council. 
• Dominican Republic: The United States will block sugar imports from Central Romana, the Caribbean nation’s largest employer, accusing it of using forced labor. 
• Ecuador: The government is considering a new financing deal with the International Monetary Fund (IMF) for 2023, as its current agreement is set to expire at the end of 2022.  
• Guyana: According to new ECLAC data, the country recorded the highest FDI growth in the Caribbean in 2021, and now accounts for half of all Caribbean FDI, thanks to its booming hydrocarbon sector.  
• Peru: Farmers and truckers set up roadblocks to protest rising gas and fertilizer prices, driven up by the war in Ukraine.  
• FDI: In a 2022 ECLAC report, Foreign Direct Investment (FDI) in Latin America and the Caribbean (LAC) rose by 40.7 percent in 2021 but fell short to achieve pre-pandemic levels.

In focus: Venezuelan thaw

Last weekend, the United States granted Chevron a six-month license to expand operations in Venezuela after the Maduro government agreed to resume talks in Mexico City with the country’s opposition. The two sides signed an agreement to use frozen Venezuelan assets for humanitarian relief as well.  

The United States has framed this policy shift as a “targeted” response to promote “concrete steps” forward by the parties meeting in Mexico City. At the same time, the energy crisis driven by Russia’s war in Ukraine has elevated Maduro’s–-and Venezuela’s –-importance in a time of rising oil demand.  

Health + Innovation

• ICYMI: On November 16, the Atlantic Council launched a report with actionable recommendations for improving immunization program outcomes and financing in the region. Read it here.
• Uruguay: Health authorities issued a recommendation that immunocompromised patients and over 50 year-olds should take their fifth dose of the COVID-19 vaccine.
• Food insecurity: An ECLAC report found that 56.5 million people in LAC are impacted by hunger.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: December 3, 2022 appeared first on Atlantic Council.

The Global South won, but did the climate? Negotiators at the UN climate-change conference known as COP27 extended their stay in Sharm el Sheikh, Egypt to hammer out a final agreement that will create a loss and damage fund to compensate developing countries harmed by climate change. But the deal barely addresses other urgent topics such as reducing greenhouse-gas emissions, even as the consequences of climate change become clearer by the day. Have negotiators done enough to help save the planet and the people on it? What other surprises cropped up at COP? Our experts, who were on the ground in Sharm el Sheikh, are here to weigh in.

• Kathy Baughman McLeod (@KBMcLeodFLA): Senior vice president and director of the Adrienne Arsht-Rockefeller Foundation Resilience Center
• Jorge Gastelumendi (@Gasteluj): Director of global policy at the Adrienne Arsht-Rockefeller Foundation Resilience Center and former climate negotiator for the government of Peru
• Landon Derentz (@Landon_Derentz): Senior director of the Global Energy Center and former director for energy on the US National Security Council and National Economic Council

A damaging loss?

• While the creation of the loss and damage fund was “immensely welcome,” Kathy tells us, the lack of new emissions-reduction commitments by the countries gathered at COP27 represents an “utter failure” that is “devastating to plans to keep global heating to no more than 1.5 degrees Celsius” above pre-industrial levels, as pledged in the 2015 Paris Agreement.
• Jorge says ”current major emitters” such as China, India, Brazil, and Indonesia are let off the hook by the lack of those commitments—and by the fact that, as developing nations, they won’t have to contribute to the loss and damage fund, “which could have been one other leverage point to” make them cut emissions. As a result, countries like these are poised to replace developed countries as the primary cause of climate-related loss and damage.
• The structure of the loss and damage fund “also lacks a clear focus on the most vulnerable, which poses fundamental questions about the future use of the funds by recipient countries,” Jorge notes.

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Fossil flip-flop

• Kathy attributes much of the conference’s failures to attack global warming to the fact that “the fossil-fuel industry is still so deeply influential over country delegations,” with more than six hundred fossil fuel-tied delegates in attendance according to the advocacy group Global Witness.
• Vladimir Putin had a say too: Russia’s invasion of Ukraine has contributed to a near-term global energy crisis that at times has sidelined long-term climate concerns. The COP results “did not match the level of urgency many in the climate community were hoping for,” Landon tells us, because “climate action appears to have an energy-security problem.”  
• Fossil-fuel geopolitics also helped deliver the Global South’s big win. “Europe’s present hunt for conventional oil and gas resources in Africa and Latin America,” a major break from the West’s recent anti-fossil fuel stance, may have “served to disarm” long-running Western efforts to block a loss and damage fund, Landon says. 
• That’s because this year’s mad hydrocarbon dash is forcing Western countries “to grapple with the consequences of failing to move more swiftly to abate global emissions,” Landon adds.

Adapt or die

• For real progress, Kathy says, you have to look beyond the negotiators: “NGOs and civil society, young and indigenous activists, philanthropy and the private sector (particularly the finance and insurance sectors), and mayors and governors played their largest role yet in driving new solutions for climate mitigation and adaptation.”
• One example, as Jorge points out, is the Sharm el Sheikh Adaptation Agenda (SAA), a commitment from non-state actors to build climate resilience for four billion of the world’s most vulnerable people. The Resilience Center team helped secure a commitment in the SAA to mobilize some three thousand insurance companies to finance climate-adaptation projects. “In short, we managed to elevate a business-led effort into a global policy platform,” Jorge adds.
• Next year’s COP will be a short hop away in the United Arab Emirates, and Kathy says the agenda “will need to focus on adaptation and resilience, and taking the next steps in detail on the loss and damage facility.” But once again, she adds, the formal negotiations will only be part of the story: “I expect action by the non-state actor community, especially around finance, to outpace the official process.”

The post The big success and bigger failure of COP27 appeared first on Atlantic Council.

It’s back to the future. Left-wing former Brazilian president Luiz Inácio Lula da Silva defeated right-wing President Jair Bolsonaro on Sunday in a closely contested runoff election that portends a huge policy shift for Latin America’s largest country on everything from protecting the Amazon rainforest to social justice. How will Brazil reposition itself on the world stage? Our experts peer into the future that awaits.

• Jason Marczak (@jmarczak): Senior director of the Adrienne Arsht Latin America Center
• Tatiana Prazeres: Director of trade and international relations for the Federation of Industries of the State of São Paulo and columnist for the Folha de São Paulo newspaper
• Valentina Sader (@valentinasader): Associate director and Brazil lead at the Adrienne Arsht Latin America Center

Left turn?

• Lula joins a growing set of left-leaning leaders across the continent, including Andrés Manuel López Obrador in Mexico, Gabriel Boric in Chile, Gustavo Petro in Colombia, and Alberto Fernández in Argentina. But Jason says that “characterizing Lula’s election as part of a shift to the left in the region oversimplifies the state of regional politics.”
• Instead, the voters’ verdict is about the need for leaders who can deliver. “People want leaders who they think will govern with a deeper interest in making the average person’s life better, especially as inflation and high food and energy prices take hold,” Jason adds. The “clear frustration in Brazilian society with the status quo”—reflected in the fact that Bolsonaro has now become the first president since Brazil transitioned to democracy to not win re-election— mirrors results “in democracies around the world.”

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Southern hospitality

• When he was in office the first time, from 2003 to 2010, “Lula cast himself as the leader of the Global South,” Jason tells us, and we can expect a return of that brand of “South-South diplomacy.” But at the same time, look out for a Lula-led Brazil to deepen its partnerships with the United States and Europe “in the areas of trade and environmental cooperation,” he adds.
• Tatiana predicts that Lula will see the BRICS grouping of emerging economies—Brazil, Russia, India, China, South Africa—as “an important platform not only to improve dialogue among its participants but also to influence global discussions,” though she notes that “it is unclear how the new administration will see China’s push to expand BRICS and shape it as a counterweight to the West.”
• While Tatiana expects more cooperation between Brasília and Beijing relative to the Bolsonaro years, she said the jury is out on whether Brazil will join China’s Belt and Road Initiative (BRI): “Brazil could consider collaborating with or supporting BRI projects, including in other countries, without formally joining the initiative, in a [show of] somewhat hedged support.”
• More broadly, “a key challenge for Lula is to leverage Chinese investments and technologies to help reinvigorate Brazilian industry,” Tatiana adds.

Sigh of relief—for now

• While there were outbreaks of violence late in the campaign that had the world “on edge,” Jason notes that election day “passed without major incidents.”
• And Valentina said the biggest winner may have been Brazil’s electronic voting system. “It allowed for confidence in the results being released within hours of voting sites closing, effectively constraining any credible questioning of the result,” she says.
• The results showed that Lula won with about 51 percent of the vote, a margin of some two million votes, but as of this writing Bolsonaro had yet to concede—after intimating for months that he planned to challenge any loss at the ballot box.
• US President Joe Biden issued a congratulatory statement within minutes of the election being called in Lula’s favor by the Superior Electoral Court, helping legitimize the result. It was, Jason tells us, “an important step” to “shore up the importance of US-Brazil ties.”
• To seal the deal, Jason hopes that the Biden administration will “send a steady stream of high-level representatives” to meet with the incoming administration, just as it has done in Colombia.

The post Lula is back in Brazil. Here’s what’s coming. appeared first on Atlantic Council.

This post will be updated as the news develops and more reactions come in.

Jump to an expert reaction

Jason Marczak: A critical moment to shore up US-Brazil ties

Tatiana Prazeres: Expect closer cooperation between Brazil and China

Valentina Sader: The biggest winner? Brazil’s electronic voting system

Abrão Neto: Lula’s environmental stance will bring closer US ties

A critical moment to shore up US-Brazil ties

Brazilians and the world were on edge on Sunday, uncertain of how voting would play out following violence and polarization during the campaign. While there were a few incidents—which included highway police making it difficult to get to the polls in certain Lula strongholds—the day passed without major problems.

Lula’s win by over two million votes is a major development for Brazil: Bolsonaro is now the first president in the democratic history of Brazil to not win re-election. The rejection of an incumbent president—although by smaller margins than expected—shows the clear frustration in Brazilian society with the status quo, which continues to play out in democracies around the world.

When Lula becomes president again on January 1, 2023, his third term will signal a likely return to the South-South diplomacy that characterized his previous terms, in which Lula cast himself as the leader of the Global South. It is expected that he will increase collaboration between Brazil and other governments with similar perspectives such as those in Argentina, Chile, Mexico, and Colombia. Characterizing Lula’s election as part of a shift to the left in the region oversimplifies the state of regional politics. Rather, the shift is a sign that people want leaders who they think will govern with a deeper interest in making the average person’s life better, especially as inflation and high food and energy prices take hold. 

As in Colombia, the Biden administration will hopefully send a steady stream of high-level representatives to Brazil to meet with Lula and his team. It’s an essential moment to shore up the importance of US-Brazil ties. The White House took an important step in that direction with a quick statement congratulating Lula soon after he was declared the winner. With concerns about whether the results would be as expected, this was an important move by the United States; many European and Latin American governments have done the same. Lula has made it clear that he sees the United States and Europe as valuable partners for Brazil, especially in the areas of trade and environmental cooperation. In the next administration, Brazil’s engagement with Latin America and the Caribbean will depend on ideological affinity but also on pragmatic areas of collaboration. 

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

Expect closer cooperation between Brazil and China

Under Lula, two new priorities are likely to emerge in Brazil’s foreign policy: sustainability, from a substantive standpoint, and South America, from a geographical one. Both priorities mark a departure from Bolsonaro’s worldview; both reflect Lula’s understanding that Brazil needs to rebuild its international reputation as well as its ability to influence global and regional discussions. Lula’s narrative is likely to put significant emphasis on restoring Brazil’s credibility abroad.

In addition, Lula is expected to take a different approach to China-Brazil relations, deepening bilateral relations in areas beyond the economy. 

Despite negative rhetoric against China during the Bolsonaro administration, trade and investment between the two countries evolved largely undisturbed. However, the political noise generated by the anti-China discourse prevented the deepening of bilateral relations in other policy areas, such as science and technology. The strong economic relationship between the two countries does not match their less intense political relationship; this deepened in Bolsonaro’s years. Under Lula, we can expect Brazil and China to explore other areas for cooperation.

The future of the BRICS grouping of developing economies may also take a different turn under Lula. While Bolsonaro has never rejected fellow BRICS countries, his priorities focused elsewhere, particularly on promoting Brazil’s accession to the Organisation for Economic Co-operation and Development. It is unclear how the new administration will see China’s push to expand BRICS and shape it as a counterweight to the West. It is clear though that the Lula administration will see BRICS as an important platform not only to improve dialogue among its participants but also to influence global discussions. 

Some analysts are betting that, under Lula, Brazil would join the Belt and Road Initiative (BRI). It remains to be seen how far Lula would go in that regard. It may well be that Brazil takes a more positive approach toward the Chinese initiative. Having said that, Brazil could consider collaborating with or supporting BRI projects, including in other countries, without formally joining the initiative, in a somewhat hedged support.

Lula’s efforts to promote Brazil’s reindustrialization may cause some friction with China but, by and large, that should not derail bilateral relations, in part because of the powerful agribusiness sector. A key challenge for Lula is to leverage Chinese investments and technologies to help reinvigorate Brazilian industry. Sustainability also provides renewed opportunities for cooperation with China, which Lula would be keen to explore.

—Tatiana Prazeres is director of trade and international relations for the Federation of Industries of the State of São Paulo and a columnist for the Folha de São Paulo newspaper.

The biggest winner? Brazil’s electronic voting system

With a two-million-vote difference between Lula and Bolsonaro, Brazil is clearly split down the middle. The hyperpolarization that marked the months leading up to the election was reflected in tonight’s results. As such, the biggest winner tonight may not have been Lula, but Brazil’s electronic voting system. It allowed for confidence in the results being released within hours of voting sites closing, effectively constraining any credible questioning of the result. The once again newly elected President Lula will be tasked with uniting a country that is split in half, and he must confront much more difficult economic and political circumstances than he faced when he was first elected in 2002. But if there is anything Brazilians should appreciate tonight, it is the efficiency and reliability of their voting system.

—Valentina Sader is the associate director and Brazil lead at the Adrienne Arsht Latin America Center.

Lula’s environmental stance will bring closer US ties

The election of Lula as president for a third term will lead, among other things, to a substantial change in Brazil’s environmental agenda. As a consequence, this is likely to benefit Brazil’s external image and improve its relationship with several countries, including the United States.

US-Brazil economic relations will continue to be driven by pragmatic mutual interests. The fact that bilateral trade and investment flows are so important to each of the countries is favorable for continuous and constructive engagement. A renewed stance from the Brazilian government on climate change and other environmental issues might offer an extended avenue for bilateral cooperation, with positive spillovers for the overall political and economic relationship between the United States and Brazil.

—Abrão Neto is a nonresident senior fellow at the Adrienne Arsht Latin America Center, executive vice president of Amcham Brasil, and former secretary of foreign trade of Brazil.

The post Experts react: Lula defeats Bolsonaro in Brazil. What should the region and the world expect? appeared first on Atlantic Council.

​​​​​What you should know

• Regional recovery: Of the 20 million people in Latin America who fell into pandemic-induced poverty, only 7 million have escaped it during the recovery.
• Nicaragua: The United States announced new sanctions on its mining industry in response to continued repression, targeting its largest export, gold.
• Brazil: Incumbent President Bolsonaro and former President Lula de Silva will face off in a second-round run-off election this Sunday. Join us Monday for post-election analysis.

Monitoring economic headwinds and tailwinds in the region

• Brazil: The government nominated its former central bank director, Ilan Goldfajn, for the presidency of the Inter-American Development Bank. Also nominated is Alicia Bárcena, former head of ECLAC, by Mexico.  
• Cuba: The United States granted $2 million in humanitarian assistance to assist in the country’s  recovery from Hurricane Ian last month. 
• Ecuador: The government secured joint IDB-EU funding for an energy interconnection project with Peru, estimated to save $61 million annually through reduced fossil fuel use. 
• Jamaica: The country welcomed a $300 million investment by Huawei in an effort to double down on its goal of digital transformation.
• Peru: Ongoing political instability prompted a new negative rating for its credit outlook, attributed to cabinet reshuffling and impeachment attempts against President Pedro Castillo. 
• ECLAC: This week, the Economic Commission for Latin America and the Caribbean (ECLAC) redoubled its commitment to transform development models for productive regional transformation during its thirty-ninth session.

In focus: Transatlantic ties

A recent report highlights the potential for strengthening European investment and connections with LAC, focusing on three main pillars: digital connectivity, cybersecurity, and digital rights. Emphasizing the key opportunity of Spanish leadership through Spain’s upcoming presidency of the EU, the report also explores the potential of the EU-LAC Digital Alliance planned for 2023. 

At the same time, the EU High Representative for Foreign Affairs, Josep Borrell, attended the fourth EU Investment Forum in Montevideo this week. He used the opportunity to reaffirm European commitment to a free trade agreement with Mercosur.  

Health + Innovation

• Ecuador: The latest country to drop all travel restrictions and return to pre-pandemic entry policies for foreigners.
• Brazil: Brazilians paid tribute in São Paulo to COVID-19 victims. To date, Brazil has lost 680,000 lives to the pandemic.
• Recovery: The World Bank granted Guatemala a recovery loan for healthcare and social services in the wake of the COVID-19 pandemic.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: October 30, 2022 appeared first on Atlantic Council.

What do the first-round results, with Bolsonaro closer to Lula than polls had indicated, tell us about the runoff?

If there is a winner from this first round of presidential elections in Brazil, it is Bolsonaro. Polls indicated that Lula could get close to winning in the first round by securing 50 percent of the vote. Not only did he not—which is not necessarily a surprise—but Bolsonaro had higher percentages than some may have anticipated. In addition to the presidential race, Bolsonaro’s former ministers and key supporters were successfully elected. Marcos Pontes and Damares Alves were elected senators to São Paulo and the Federal District, respectively; General Eduardo Pazuello was one of the highest vote-getters among federal deputies for the state of Rio de Janeiro, and Tarcísio de Freitas, although not elected, is leading heading into the second round for governor of São Paulo against Fernando Haddad from the Workers’ Party—ending almost thirty years of the Brazilian Social Democratic Party’s reign in the state. These results may ignite more energy for Bolsonaro’s supporters, increasing his chances on October 30. Lula will likely appeal to Simone Tebet of the Brazilian Democratic Movement for support after she finished in third place with about 4 percent of the vote. But if Lula is elected, with these newly elected Bolsonaro supporters in Congress, it could be challenging for him to pass legislation and govern effectively.

—Valentina Sader is an associate director and Brazil lead at the Adrienne Arsht Latin America Center. 

What are the primary differences between the two candidates’ platforms?

We’ll know the night of October 30 who will be the next president of Brazil. Even though Lula received nearly 5 percentage points more votes tonight, that is by all means not an indication that he will have the same margins later this month. With a highly contentious electoral cycle, which will become even more polarizing in the next few weeks, Bolsonaro and Lula will each take extra steps to show differences in how they would govern.   

On the economic front, Bolsonaro proposes a continuation of his economic priorities, doubling down on a business-friendly, open-market economy and diminishing the size of the state through privatizations. Lula’s campaign has focused on how he would bring back the prosperous economic times under his watch when in office. His economic approach will aim to tackle hunger and poverty levels.

For both, regardless of who wins on October 30, the priority should be on fostering economic growth and sustainable development, while also maintaining fiscal responsibility. Guaranteeing a stable political environment and an attractive business climate will be critical for attracting foreign investment and advancing long-term prosperity.

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

How would each candidate likely work—or not work—with the United States, Europe, and Latin America and the Caribbean once in office?

If the polarization that marked this electoral cycle is indicative of the next four years, what’s clear is the extremely different ways in which Bolsonaro and Lula would govern—and foreign policy is no exception. International affairs were not a central topic in this year’s debates, and the lack of attention to the implications of global developments is a testament to the inward gaze of Brazil in recent years. Don’t expect that to change as the campaigns dig in deeper for the second round.

Looking back to the prosperous economic times under his watch, Lula would again prioritize cooperation across the Global South and would work to regain the prominent role Brazil once had internationally. Lula would often prioritize a mutually beneficial relationship with the United States and Europe, but, as during his previous presidency, moments of tension are likely to arise. Common ground would certainly be found when it comes to adopting more ambitious climate commitments.

Bolsonaro would continue to lead Brazil’s foreign policy with an economic focus, prioritizing steps focused on an open-market economy. In Latin America and the Caribbean, where recent elections have shifted the political tendencies to the left, Bolsonaro’s right-leaning approach would be met with skepticism from some of the region’s newest leaders. Bolsonaro would have to either compromise to find common ground regionally or risk being an outlier. The next president must align his foreign policy to meet domestic demands and international challenges.

—Jason

Bolsonaro has already sowed seeds of doubt in Brazil’s electoral integrity. What can we expect to see from him during this runoff, and what does that say about Brazil’s democratic trajectory?

Bolsonaro’s questioning of the political system has ignited democratic institutions in Brazil to double down on their efforts to raise awareness and regain public confidence in their proper functioning. The United States and the international community have also recommitted their trust in Brazil’s electoral system and in the legitimacy of results. Sunday’s first round was a testament to how the Electoral Superior Court, among other institutions, have been getting ahead of any potential crisis by tackling disinformation and bringing in international observers at polling stations. These efforts will continue in the runoff. As democracies across the world experience declines in democratic freedoms and questioning of democratic principles even beyond elections, this is an opportunity for Brazil to strengthen its democratic institutions to ensure an even more robust democracy.

—Valentina

The post Lula vs. Bolsonaro: Your expert breakdown of Brazil’s presidential election runoff appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: Incumbent Jair Bolsonaro and former President Luiz Inácio Lula da Silva will face off in presidential elections this Sunday, October 2. See more below.
• 4.1 million: The number of people facing food insecurity in the English and Dutch-speaking Caribbean. This amounts to 57 percent of the total population.
• Diplomatic relations: Colombia and Venezuela reopened their border to vehicles transporting goods following several years of politically-induced closure.

Expert take: Looking ahead at Brazil’s presidential election

From state-level representatives to Congressional members to the next president, Brazilians have their work cut out for them this Sunday. Brazil’s economy is rebounding but new challenges still lie ahead. Political leadership and the innovative economic policies that come with it will be vital to navigating these challenges, particularly in an uncertain and evolving global context.

Clouded by an extremely polarizing political campaign, polls suggest the contest will be between former President Luiz Inácio Lula da Silva and incumbent President Jair Bolsonaro. On the economic front, President Bolsonaro proposes a continuation of his economic priorities, doubling down on a business-friendly, open-market economy. On the other hand, former President Lula will adopt a pragmatic approach with a focus on a social agenda, targeting hunger and poverty levels. The challenge, regardless of who wins on October 2 or October 30 (if there is a second round), is in Congress, which will likely be highly fragmented. In that regard, the pandemic will continue to play a role in politics with the economy – and fiscal responsibility – at the top of the priority list for the next administration.

Staff

Valentina Sader

Deputy Director, Impactful Programming and Brazil Lead

Adrienne Arsht Latin America Center

Brazil Corruption

Monitoring economic headwinds and tailwinds in the region

• Honduras: The Central American Bank for Economic Integration (CABEI) issued a $200 million loan in order to mitigate fuel price pressures.
• Brazil: Despite a boost in activity as COVID-19 infections drop worldwide, real GDP growth projections for 2022 and 2023 are set to slow from 2.5 percent to 0.8 percent, respectively.
• Cuba: Hurricane Ian made landfall as a Category 3, knocking out power for the whole island. This comes after several months of intermittent blackouts due to failing power generators. 
• Mexico: AMLO announced an agreement with companies to freeze prices on key foods as the country battles inflation of 8.8 percent. 
• Paraguay: Officials met with the US for the first trade and investment council under their bilateral Trade and Investment Framework Agreement (TIFA) to discuss ways to deepen trade ties along intellectual property, agriculture, and the digital economy.  
• Ecuador: The government announced it reached a debt agreement with Chinese lenders, delivering $1.4 billion in debt service relief over the next three years. 
• Argentina: The International Monetary Fund (IMF) reached an initial agreement on reviewing the country’s debt restructuring, and is set to make $3.9 billion available upon completion. 

In focus: LAC-Europe Relations

Several meetings covering transatlantic relations with Latin America and the Caribbean convened on the sidelines of last week’s United Nations General Assembly, including the Fifth Forum on Latin America, the United States, and Spain in the Global Economy, and AALAC’s side event “From Ukraine to the Americas: Fortifying recovery against global shocks.”  

Spain’s Prime Minister, Pedro Sánchez, spoke with Colombian president Gustavo Petro about issues affecting both Latin America and Spain, including climate change and supply chains. Spain is set to hold the next presidency of the European Union, and hopes to revitalize EU-LAC ties. At the Atlantic Council’s event, Josep Borrell, Vice President of the European Commission, spoke about the EU’s willingness to work with LAC on key issues worsened by the Russian invasion of Ukraine, such as food insecurity and gas shortages. Both discussions focused on the importance of relocating supply chains to ensure stability. 

Health + Innovation

• Argentina: A laboratory manufacturing Russia’s Sputnik V COIVD-19 vaccine announced it would halt the production line to target other types of diseases.
• PAHO: Ministers of Health and other high-level authorities from around the Americas met on September 26 for the organization’s 30^th Pan American Sanitary Conference. At the conference, Dr. Jarbas Barbosa da Silva Jr. of Brazil was elected new Director for PAHO.
• COVID-19: Life expectancy in LAC for 2022 fell 2.9 years, from 75.1 years in 2019 and 72.7 years in 2021.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: October 1, 2022 appeared first on Atlantic Council.

Table of contents

Introduction
The case of Brazil: A young, yet resilient democracy
A stronger democracy in the long run
The role of the United States and the international community
Conclusion
Acknowledgements

Brazil—Latin America’s largest economy and the fourth-largest democracy in the world—will elect its next president, governors, congress, and state-level assemblies in October 2022. This is one of the most momentous elections in recent years, a result of the inflection point that Brazil faces alongside concern about what may transpire on the day of the election and in the days afterward. This uncertainty, combined with global trends of declining democratic freedoms in recent years, suggests that in the aftermath of the October elections, Brazil has an opportunity to reinforce efforts to strengthen its institutions and recalibrate its democracy to meet domestic and global challenges. This issue brief compiles actionable recommendations for Brazil to do just that. 

Introduction

At the 2022 Summit for Democracy, President Joe Biden noted that democratic backsliding is the “defining challenge of our time.”¹

Democracy, as a system of government, is ever evolving. However, democratic freedoms have been waning worldwide for the past sixteen years.² In 2021, twice as many countries lost civil liberties and freedoms compared to those that improved them.³ Today, more than two-thirds of the world population lives in nondemocratic regimes, or in countries that have seen democratic backsliding in recent years.⁴ 

This trend also holds true in Latin America and the Caribbean. Authoritarian regimes in Venezuela, Cuba, and Nicaragua have survived for years. Other countries in the region have seen a dramatic decline in civil liberties. According to 2021 data, half of the countries in Latin America and the Caribbean are experiencing some degree of democratic erosion.⁵ 

Brazil is no exception to these global trends. The October elections offer an opportunity to begin addressing concerns about the resilience of its democracy. From the state to the national level, Brazilians will have an opportunity to choose the future trajectory of their democracy. The challenges that Brazilian democracy has confronted in recent years—beginning with the massive demonstrations of 2013 and continuing through questioning of the democratic model among some sectors in recent years—suggest that, regardless of which parties and politicians are elected, Brazilians must prioritize strengthening their democratic institutions now, and in the years to come. 

The case of Brazil: A young, yet resilient democracy

As the world undergoes a wave of democratic questioning, and even backsliding, Brazilians head to the polls as the country is at a crossroads, making it important to shift its gaze from the headlines of the day to thinking about longer-term solutions to the country’s political crisis.

Brazil is a young democracy. It was not until 1989 that the country held its first direct presidential elections, after the end of the military dictatorship. Since then, Brazilian democracy has made great strides, establishing a well-regarded electoral system, overcoming hyperinflation and economic crises, and consolidating around a vibrant party system.

The October 2022 elections are a crucial test for Brazilian democracy. Although the elections will be another opportunity to see democracy in action, increasingly high levels of polarization and disinformation have contributed to extremist narratives, episodes of violence, and the questioning of democratic principles. 

The Brazilian electoral process has been regarded as one of the fastest and most reliable in the world. But the turbulent run-up to the election has raised concerns that the transparency and fairness of democratic processes may be undermined, and that the resiliency of the electoral process and democratic institutions will be tested. Ensuring the integrity of this process, while also mitigating the risk of political violence, is imperative. Any action to further strengthen the resilience of Brazil’s democratic system is contingent upon an electoral process that fosters the proper function of institutions, and protects civil society and an independent media. This critical moment presents a unique opportunity for Brazil to further bolster its democratic system and public trust in its democracy in the years to come.  

Over the past generation, Brazilian democracy has fluctuated between moments of high confidence in the democratic system and periods of political and institutional crisis, in which the strength and resilience of its democracy were in doubt. In recent years, Brazilian democratic institutions have risen to the challenge of recalibrating their capabilities to face new challenges. 

Three examples illustrate their resilience. First, in response to the COVID-19 pandemic, Brazil was able to delay the electoral process and shift the date of municipal elections, all within the bounds of its constitution.⁶ Further, state and local governors adopted a variety of strategies to respond to the pandemic, with democratic federalism contributing to a panoply of experiments for addressing isolation and lockdown measures.⁷ Second, following antidemocratic protests in September 2021 that included messages threatening the Supreme Court and elections, a variety of representatives of democratic institutions (such as the Supreme Court, the House of Representatives, the Senate, civil-society organizations, and the media), came together to publicly condemn such proposals.⁸ The backlash forced President Jair Bolsonaro to change his tone and back down from his more extreme positions.⁹ Lastly, the manifestation of professors, jurists, students, civil-society representatives, business leaders, and former and current government officials, through a letter with more than nine hundred thousand signatories in favor of democracy in Brazil, is yet another example of the esteem for democratic principles and respect of civil liberties, especially when institutional credibility is questioned.¹⁰

Brazilian institutions are already taking concrete steps to fortify their capabilities ahead of, and beyond, the upcoming electoral cycle. Such efforts are, and will continue to be, important to ensure a healthy democracy. But as we look ahead, even beyond the October elections, what mechanisms are needed to prevent backsliding and foster the resilience of democratic institutions and the strength of Brazilian democracy in the coming years? 

A stronger democracy in the long run

In July 2022, the Atlantic Council held individual consultations and convened a group of key Brazilian and international experts from civil-society organizations, the public and private sectors, academia, the press, and others to discuss concrete ways in which Brazil could further support its democratic system ahead of, and beyond, the upcoming elections. Below are actionable recommendations for next steps, including suggestions for the role the United States and the international community could play to support a prosperous Brazilian democracy in the long run. 

Institutionalize unwritten democratic norms that ensure independence. In recent years, many unwritten democratic norms have been taken for granted and, in some cases, flaunted. One example is the nomination of the prosecutor general of the republic (PGR), the lead of the federal prosecutorial service (Ministério Público Federal, MPF). Constitutionally, the nomination of the PGR must follow a process that includes presidential nomination and approval by the Senate.¹¹ Customarily, however, since 2003 the president selects a name from a list of three names chosen by prosecutors. The benefit of this so-called lista tríplice is that it ensures some coherence within the MPF, as well as ensuring that the prosecutor general is more independent from the other branches of government. 

To reinforce checks and balances, institutionalizing such norms and consolidating the autonomy of institutions with political oversight is imperative. The practice of selecting the PGR via a lista tríplice guaranteed an initial layer of independence to the prosecutor general’s role. This was especially important because the MPF should remain autonomous given its oversight role, including in the electoral process.¹² Thus, institutionalizing such norms would ensure the impartiality of the prosecutor general’s nomination and foster the autonomous role of the MPF within the political system, while also reaffirming the independence of the Brazilian judiciary and its prosecutors. Using the example of the lista tríplice for the MPF, instilling processes in other democratic organs—such as the Federal Police, the Federal Accountability Office (TCU), and the Comptroller General of Brazil (CGU)—could be internal mechanisms to guarantee checks and balances, and the appropriate indepence of these offices from established political forces and interested groups. 

Address challenges for effective rule of law. To ensure a vibrant democracy, the rule of law must be effective. In Brazil, 17.6 people were killed daily by police forces in 2020, with such violence rarely leading to consequences.¹³ Data show that 28 percent of federal officeholders have been investigated or indicted for criminal behavior, while only a handful have been held accountable.¹⁴ In the case of the state of Rio de Janeiro, for example, members of militias and organized-crime groups also have ties to the political system.¹⁵ These data imply that strengthening the rule of law remains a key challenge. Better trainings for police forces to address abuses, reforms to oversight agencies to improve the accountability of Brazil’s judicial system, and fostering a lawfulness culture through the school system and civil-society activism could help ensure the effectiveness of the rule of law, while also targeting the younger generations as positive agents of change, and promoters of democracy and the rule of law. 

Depoliticization of the armed forces. The armed forces are a state institution responsible for protecting the sovereignty of the state, the order of the democratic system, and the safety of citizens, while also guaranteeing the ability of the three branches of government to properly function.¹⁶ As such, the armed forces must remain impartial in politics. In recent years, active military officials have taken civil positions within the Brazilian political system. As a way of example is Minister Eduardo Pazuello, a three-star general, as Minister of Health.¹⁷ Even in the constitution, deepening and solidifying the impartiality of the armed forces is imperative for the proper control of powers within the democratic system. Congress should take a more active role in ensuring this impartiality, as it began to do with a bill introduced in 2021 that aims to clarify the role of the armed forces and active military in the political system.¹⁸ It is critical for the military, the police, and members of any state institutions to refrain from any interference in political and political party-based activities—including, but not limited to, the elections. 

Ensure equitable political representation. There has been long-standing dissatisfaction with the lack of representativeness of the political system. Women represent more than 50 percent of the Brazilian population, yet account for only about 15 percent and 13 percent of representatives in the House and the Senate, respectively. The data are just as concerning for other groups. Ensuring better representation and equal participation in politics by women, indigenous communities, black Brazilians, and other marginalized groups would be a first step in having a better representation of Brazilian society at the decision-making table and, thus, more effective public policies to target their needs. More ambitious goals and affirmative action would help to move Brazil in that direction. However, enforcement is also imperative. Brazil has a gender quota requiring that women make up 30 percent of candidates for political parties. But lack of incentives for further engagement of women in politics, in addition to the high number of cases of violence against women in politics and structural imbalances, limit the potential for women’s equitable participation.¹⁹ New legislation that aims to punish violence against women in politics, in effect for the 2022 elections, is a first step in that direction.²⁰ Civil society has an important contribution to make in monitoring and denouncing cases of violence against women in politics, including those happening virtually. In addition to monitoring, electoral agencies should follow through on the enforcement of this legislation. Establishing the means through which more women could take on leadership positions in political bodies and parties could help push Brazilian politics toward more realistic representation and actual participation.

Safeguard a welcoming environment for a vibrant civil society. Among many actors in healthy and vibrant democracies, civil society and the media play key roles in ensuring a healthy public debate and a democratic political system. In Brazil, journalists and activists often face dangerous threats against their activities, and even their lives. Journalists Conrado Hubner and Patricia Campos Mello faced intimidation for criticizing political figures, while journalist Dom Phillips and activist Bruno Pereira were killed in 2022 during an excursion in the Brazilian Amazon, apparently for photographing illegal fishing in the area.²¹

In addition to further bolstering safeguards for press freedom, respect for and inclusion of perspectives from civil-society organizations, among other stakeholders, is imperative to promote effective public policies—and a democratic system that delivers to its citizens. Further cooperation among civil-society organizations, domestically and internationally, could boost the role and significance of these voices within Brazil. More coordinated efforts—from local associations to leading international civil-society organizations in country—would help promote a louder and more cohesive voice for civil society in Brazil. This was recently done through a letter with more than three thousand signatories, including former Supreme Court justices, actors, musicians, and even executives, expressing their support for democracy and trust in the Brazilian voting system.²² In addition, guaranteeing penalties for intimidation against civil-society representatives, as well as members of the media, is also imperative to safeguarding a prosperous environment for independent civil society and media.  

Further strengthening institutional capabilities to manage the challenges of disinformation. Disinformation and misinformation are global challenges. As such, Brazil’s Electoral Supreme Court (TSE, in Portuguese) has prioritized disinformation as a challenge to the electoral processes in 2022 and beyond. Brazilian institutions, civil-society organizations, fact-checking bodies, and news outlets should work together to mitigate impact and risks. Based on the developments that unfolded after the US elections in 2020—including, but not limited to, January 6—as well as the role that disinformation played in Brazilian elections in 2018 and 2020, TSE established partnerships with social media and messaging platforms, creating a united front to mitigate risks and raise awareness to the known challenge of disinformation.²³ This is a proactive initiative to promote and endure the credibility of electoral bodies. To go one step forward, Brazilian news outlets could use already-established COVID-19 data-gathering strategies and go directly to local and state governments to identify disinformation and its sources. This strategy could facilitate and speed up the work of fact-checking institutions in explaining disinformation, of the media (and TSE itself) in countering and spreading it, and of social media platforms in removing it, as appropriate. Overall, having a more coordinated civil society and safeguarding an independent media will result in greater checks against authoritarian tendencies.

Re-establish trust in the political system and foster civic engagement beyond electoral cycles. In recent history, corruption cases among politicians, disinformation, misinformation, and other factors have exacerbated distrust in political institutions in Brazil.²⁴ Polarization has also deepened political and social divides. Regaining confidence in the democratic system is an uphill battle. However, in the long run, revigorated trust in the political system is imperative to foster civic engagement beyond electoral cycles. As a fundamental principle of democracy, broad and active civic engagement is essential to fortify an established and well-functioning democracy in Brazil. This educational effort must begin in schools, to educate the next generations to be active and engaged citizens, and to tackle the question of what democracy means.

But developing a comprehensive awareness-raising campaign—led by government agencies, in coordination with civil-society organizations and other key actors—could be a first step in the right direction to clarify the roles and responsibilities of elected officials and other public figures, as well as individuals’ rights and duties. In a country where voting is mandatory (with a few exceptions), society must have the tools to make well-informed decisions about its political representatives. Most importantly, only a well-educated society with access to transparent and accurate information, and comprehension of the political game, can hold politicians and democratic institutions accountable. 

The role of the United States and the international community

Support immediate recognition of results and quick confirmation of the legitimacy of the electoral process. Given Brazil’s electronic-voting system, electoral results are determined and announced on the same day elections are held. The agility of the system and the seal of credibility given by international recognition curbs potential unrest in the expectation of results. As such, the international community, represented by individual countries and international organizations, must be able to recognize the legitimacy of results immediately after their announcement. 

Continuing the long tradition of welcoming international electoral-observation missions, the upcoming elections will include missions from the Organization of American States, Mercosur’s Parliament, and the Inter-American Union of Electoral Organizations (Uniore).²⁵ These missions should aim to release their verdicts on the freedom and fairness of the electoral process quickly, ideally no more than forty-eight hours following Election Day. Beyond the electoral cycle, countries should be explicit in recognizing the historical respect of Brazil toward its democratic system and principles, as well as efforts to improve their capabilities. The United States, for example, recently endorsed trust in the Brazilian electoral system, following questions about the legitimacy of this process.²⁶ 

Establish a US-Brazil high-level dialogue on democracy promotion. In the context of recent commitments made by both the United States and Brazil on the occasion of the Summit for Democracy, both countries restarted the US-Brazil Human Rights Working Group. This is one step forward in both countries’ efforts to strengthen their own democracies and promote the principles of a rules-based order globally. Given similarities and the strong, historic partnership between the United States and Brazil, both countries could benefit from a more direct dialogue in terms of best practices and lessons learned with regard to common challenges to democracy, and potential common solutions. More broadly, high-level cooperation on this front would safeguard principles of a rules-based democratic order, in addition to deepening the bilateral relationship and fostering similar practices across the hemisphere. Within this framework, further cooperation with the US Department of State, and even the US Departments of Justice and Defense, could help move the needle forward, while also including civil-society and private-sector representatives from both countries.

Conclusion

The next Brazilian government will face a critical moment to strengthen the country’s democracy and its institutions to prove effective in addressing citizens’ needs, especially in challenging times both economically and socially. A key ingredient for democratic crisis is the growing belief that democratic government does not serve citizens’ needs. Addressing this issue and rebuilding trust in the political system are vital for long-term domestic stability in Brazil. 

This issue brief aimed to suggest a path forward to begin this task. 

Beyond Brazil itself, the country’s democracy is a bellwether for democratic health in the Western Hemisphere. The polarization, concerns of electoral violence, marginalization of minority voices, and other patterns occurring in Brazil must be addressed and condemned. Only through systemic analysis and prevention can all stakeholders work to guarantee democratic health presently, and in the years to come. 

Acknowledgements

Many of the ideas in this spotlight were informed by a July 27 strategy session organized by the Atlantic Council, which featured the participation of key Brazilian and international experts from civil-society organizations, the public and private sectors, academia, the press, and others. We thank the many participants in the strategy session, including those who gave permission to be publicly acknowledged: President Laura Chinchilla, Ambassador Michael McKinley, Ambassador Liliana Ayalde, Miriam Kornblith, Feliciano Guimarães, Patricia Campos Mello, Flávia Pellegrino, Guilherme Casarões, Bruno Brandão, Emilia Carvalho, Thiago Esteves, Cintia Hoskinson, and Francisco Brito. This document is also a product of independent research and consultations carried out by the Atlantic Council’s Adrienne Arsht Latin America Center. We thank those who took the time to share their insights with us, including Daniela Campello and Cesar Zucco. A special thank you also goes to our Brazil nonresident senior fellow, Ricardo Sennes, for the countless advice through the years and during the production of this publication. Isabel Bernhard provided invaluable writing and editorial support. Thank you to Jason Marczak, senior director of the Adrienne Arsht Latin America Center, and Maria Fernanda Bozmoski, deputy director for programs, for their guidance. Finally, the Atlantic Council would like to thank Action for Democracy for the partnership and generous support, as well as the Brazilian Center for International Relations (CEBRI) for its continued collaboration, as an institutional partner to this initiative.

About the author

Valentina Sader is associate director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the center’s work on Brazil, gender equality, and diversity, and manages its advisory council. She has co-authored publications on the US-Brazil strategic partnership and coordinated events with high-level policymakers, business leaders, and civil-society members in both Brazil and the United States. Valentina provides regular commentary in English and Portuguese on political and economic issues in Brazil to major media outlets. Prior to joining the Atlantic Council, Valentina worked at the Eurasia Group, the embassy of Brazil in Washington, DC, and the mission of Brazil to the Organization of American States (OAS). Valentina holds a bachelor’s degree in international studies from American University. Originally from Brazil, Valentina is a native Portuguese speaker, fluent in English, and proficient in Spanish.

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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This month’s topline events

NATO Moves to Expand. NATO leaders, meeting at a summit in Madrid, formally agreed to invite Finland and Sweden to join the Alliance, paving the way for the admission of NATO’s newest members since 2020. The move came after Turkish president Recep Tayyip Erdogan dropped his objections to the accession process when the two Nordic nations agreed to take certain actions to restrict terrorist groups, including PKK, a Kurdish pro-independence group against which the Turkish government has sought to clamp down.

• Shaping the order. Sweden and Finland’s momentous decision to seek NATO membership, after decades of official neutrality, reinforces NATO’s critical role as an alliance of democracies aimed at defending its members against aggression. The move also represents a strategic setback for Russian president Vladimir Putin, who has been seeking to weaken and divide NATO and had warned against admitting the two nations, but now faces an Alliance that is perhaps more unified and determined than ever.
  
• Hitting home. The addition of Sweden and Finland to NATO will bring in two new highly capable partners to help the United States defend against threats to American security, including those posed by Russia.
• What to do. The Biden administration and other NATO governments should work with lawmakers in their countries to ensure swift ratification of the accession protocols required to admit the two new Alliance members.

EU Aligns on Ukraine. On a historic visit to Kyiv, the leaders of France, Germany, and Italy stood together with Ukrainian president Volodymyr Zelenskyy as they pledged to bolster assistance for Ukraine and announced their support for Ukraine’s bid to become a member of the European Union. The EU followed by granting the country “candidate status,” marking the beginning of what could potentially be a years-long process for accession. The European leaders later joined President Biden and other G7 partners for a summit in Germany at which they agreed to strengthen penalties against Russia, including banning Russian gold, cracking down on the Kremlin’s efforts to evade sanctions, and considering a price cap on Russian oil.

• Shaping the order. The joint visit to Kyiv by the three European leaders showcased a remarkable degree of alignment with Ukraine, after it appeared that France and Germany were resisting Ukraine’s efforts to join the EU and pushing Ukrainian territorial concessions. The move to begin accession talks on EU membership marks a significant milestone, and, if approved, could deeply undermine Putin’s efforts to bring Ukraine into Russia’s economic orbit.
• Hitting home. America benefits from working closely with the EU – which has a combined economy larger than the United States – to help support frontline democracies and stand up to autocratic aggression.
  
• What to do. The Biden administration should continue to work closely with its European and G7 allies to provide military and economic assistance to Ukraine, while supporting Ukraine’s efforts to meet the requirements to become a member of the EU.

BRICS Stand with Putin. Vladimir Putin joined the leaders of China, India, Brazil and South Africa at a virtual BRICS summit meeting organized by Chinese president Xi Jinping, giving Putin his most high-profile international engagement since Russia’s February invasion of Ukraine. Putin used the occasion to cite the “deepening cooperation” among BRICS members, as the five leaders signed a “Beijing Declaration” pledging to work together on supply chain resilience and digital trade. Iran and Argentina reportedly submitted applications to join the BRICS as well.

• Shaping the order. The participation by the leaders of three rising democracies – India, Brazil, and South Africa – highlighted the failure of Western efforts to isolate Putin in the wake of his invasion of Ukraine. As India continues to increase its purchases of Russian oil, Putin suggested that Russian trade with BRICS countries jumped 38% in the first quarter of this year, providing the Kremlin with an important conduit to undercut Western sanctions.
  
• Hitting home. Though they have led to higher gas prices for Americans, sanctions on Russian oil are serving to pressure the Kremlin to end its brutal war in Ukraine and constrain Russia’s ability to challenge US security interests.
  
• What to do. Washington should seek new ways to incentivize India and other developing nations to join the West in penalizing Moscow for its invasion of Ukraine. Building on the global infrastructure initiative announced at the G7 summit, the administration should consider launching an ally shoring partnership that could reorchestrate supply chains to democracies willing to limit economic engagement with Russia and China.

Quote of the month

“At a time when the world is threatened by division and shocks, we, the G7, stand united. We underscore our resolve to, together with partners, jointly defend universal human rights and democratic values, the rules-based multilateral order, and the resilience of our democratic societies.” 

– Statement by the leaders of the G7, June 28, 2022

State of the Order this month: Strengthened

Assessing the five core pillars of the democratic world order    

Democracy ()

• In a visit to Hong Kong to mark the 25th anniversary of the British transfer of the territory to China, Xi Jinping commended the city’s incoming Chief Executive John Lee, who oversaw the crackdown on political dissent that has left Hong Kong’s democracy in a state of disarray.
• In Colombia’s presidential election, Gustavo Petro defeated Rodolfo Hernandez, a right-wing populist who once praised Adolf Hitler. But Petro, a former leftist guerrilla leader, is likely to pursue warmer relations with Cuba and Nicaragua and could strain the close US-Colombia security partnership.
• Despite a boycott from Mexico and a few other nations, President Biden stuck to his decision to exclude the leaders of the hemisphere’s three autocratic dictatorships – Cuba, Venezuela, and Nicaragua – from a Summit of the Americas that he convened in Los Angeles to discuss regional issues.
• On balance, the democracy pillar was unchanged.

Security ()

• Ukrainian forces withdrew from the city of Severodonetsk in eastern Ukraine, marking a significant gain for Russia as it continues its brutal war of aggression.
• NATO agreed to strengthen its military presence in eastern Europe by deploying additional forces to Poland and the Baltics, and its invitations for Sweden and Finland to join the Alliance could help defend against security threats in northeastern Europe and the Baltic Sea.
• China is building a secret naval facility in Cambodia, along the Gulf of Thailand, its second such overseas outpost (the other located in Djibouti) and the first in the Indo-Pacific region, a potentially important element of China’s expanding global military presence.
• Iran switched off surveillance cameras used by the IAEA to monitor activity at the country’s key nuclear facilities and began installing advanced centrifuges at an underground enrichment plant, as multilateral negotiations to revive the Iran nuclear agreement struggle to make progress.
• During a visit by Venezuelan president Nicholas Maduro to Tehran, Venezuela and Iran signed a 20-year cooperation agreement, aimed at boosting strategic ties between the two anti-Western nations.
• On balance, the security pillar was unchanged.

Trade (↑)

• The EU granted candidate status to Ukraine and Moldova, a significant step in what is likely to be a long process as both nations prepare to meet the criteria for joining the bloc’s common economic market and political institutions.
• China has proposed a free-trade bloc among the five BRICS countries in a bid to enhance economic ties, as Russia suggested that the bloc create an international reserve currency as an alternative to the dollar.
• G7 leaders agreed to explore a price cap on Russian oil, a measure aimed at limiting the Kremlin’s oil revenues and potentially holding down global oil prices.
• Amidst an exacerbating food crisis caused by Russia’s blockade of Ukrainian ports in the Black Sea, G7 leaders announced that they will contribute over $4.5 billion to address global food security, while calling on Russia to end its blockade.
• With the prospect of EU membership for Ukraine and Moldova, the trade pillar was strengthened.

Commons ()

• The CDC lifted the requirement of a negative COVID-19 test result before entering the United States, but a new more contagious Omicron variant began to spread around the world.
• NATO released a report assessing the global security risks of climate change and announced a decision by allies to reduce gas emissions by at least 45% by 2030, and to net zero by 2050.
• Overall, the global commons pillar was unchanged.

Alliances (↑)

• In addition to inviting two new members to join the Alliance, NATO adopted a new Strategic Concept that calls Russia “the most significant and direct threat” to peace and security, and for the first time, cites China as a strategic priority.
• The leaders of Australia, Japan, New Zealand, and South Korea also joined the meeting in Madrid – their first time participating in a NATO Summit – marking a significant elevation in efforts to strengthen cooperation between the transatlantic Alliance and its Indo-Pacific partners.
• Demonstrating solidarity with Ukraine, the leaders of France, Germany, and Italy made a historic visit to Kyiv, before joining the United States and other allies at a G7 Summit to bolster support for Ukraine.
• The leaders of India, Brazil and South Africa joined Vladimir Putin at a virtual BRICS summit meeting, undermining Western efforts to garner support from other democracies to isolate Russia for its invasion of Ukraine.
• On balance, the alliance pillar was strengthened.

Strengthened (↑)________Unchanged ()________Weakened (↓)

What is the democratic world order? Also known as the liberal order, the rules-based order, or simply the free world, the democratic world order encompasses the rules, norms, alliances, and institutions created and supported by leading democracies over the past seven decades to foster security, democracy, prosperity, and a healthy planet.

This month’s top reads

Three must-read commentaries on the democratic order     

• Ivo Daalder and James Lindsay, in Foreign Affairs, call for a new G-12 to institutionalize security cooperation among the US and its democratic allies across the Atlantic and Pacific and reinvigorate the rules-based order.
• Michael Kofman, in The Economist, warns that NATO should avoid underestimating the threat of Russia as a long-term strategic competitor, despite its lackluster campaign in Ukraine.
• Paul Poast suggests, in World Politics Review, that analysts may one day point to the 2022 BRICS Summit as the dawn of an alternative to the Western-led liberal international order. 

Action and analysis by the Atlantic Council

Our experts weigh in on this month’s events

• Ash Jain and Matthew Kroenig co-authored two new Atlantic Council reports as part of a project on Shaping a New Democratic World Order. The first, A Democratic Trade Partnership: Ally Shoring to Counter Coercion and Secure Supply Chains, proposes an integrated framework for leading democracies and other partners to reduce strategic dependency on revisionist autocracies, coordinate on economic challenges, and foster free, fair, and secure trade. The second, Toward a Democratic Technology Alliance: An Innovation Edge that Favors Freedom, outlines the need for a Democratic Technology Alliance that would help the free world prevail in the race for advanced technologies by jointly investing in innovation, countering unfair practices, and developing rules and norms consistent with democratic values.
• Fred Kempe, in CNBC, urges Western and Asian allies to work together through military, economic, and political means to stop Putin’s brutal war in Ukraine and ensure rule of law triumphs over rule-of-the-jungle.
• Matthew Kroenig and Dan Negrea joined a panel discussion at the 2022 Copenhagen Democracy Summit and launched the Atlantic Council’s new Freedom and Prosperity Indexes.
• Amanda Rothschild and Jeffrey Cimmino, in an Atlantic Council issue brief, present key recommendations for how US diplomacy can be strengthened in the twenty-first century.
• Daniel Fried and Brian O’Toole, in the New Atlanticist, lay out a long-term strategy that the United States and its G7 allies can take to sustain economic pressure against Putin and his regime.
• Melinda Haring, in the New Atlanticist, warns that, while Ukraine has succeeded in the first phase of the war, Russia has not abandoned its goal of crushing Ukrainian statehood.

__________________________________________________

The Democratic Order Initiative is an Atlantic Council initiative aimed at reenergizing American global leadership and strengthening cooperation among the world’s democracies in support of a rules-based democratic order. Sign on to the Council’s Declaration of Principles for Freedom, Prosperity, and Peace by clicking here.

Ash Jain – Director for Democratic Order
Dan Fried – Distinguished Fellow
Jeffrey Cimmino – Associate Director
Danielle Miller – Program Assistant
Otto Hastrup Svendsen – Georgetown Student Researcher

If you would like to be added to our email list for future publications and events, or to learn more about the Democratic Order Initiative, please email AJain@atlanticcouncil.org.

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The year 2022 will be one of change across the Western Hemisphere. From presidential elections in Brazil and Colombia to newly elected presidents taking office in Chile and Honduras, regional leaders will be looking at new ways to rebuild economies from the COVID-19 pandemic while balancing mounting social pressures. So, what might or might not be on the horizon in 2022?

Join the Adrienne Arsht Latin America Center as we look at some of the key questions that may shape the year ahead for Latin America and the Caribbean, then take our signature annual poll and see how your opinions shape up against our predictions.

How might key presidential elections shake out? Will regional economies recover to pre-pandemic growth rates? What might be the outcome of the US-hosted Summit of the Americas, and will Caribbean voices play a larger role than in previous gatherings? Will the region expand its ties with China?

Take our ten-question poll in less than five minutes!

Question #1: Caribbean – Will Vice President Kamala Harris make her first trip to the Caribbean in 2022?

Question #2: Central America – Will the United States have confirmed ambassadors in all three northern Central American countries (currently only Guatemala) by year-end 2022?

Question #3: Chile – Will the new Chilean constitution be approved when put to a referendum?

Question #4: China and Latin America – Considering Nicaragua’s newly established China ties, will the three other Central American countries that currently recognize Taiwan—Belize, Guatemala, and Honduras—also switch recognition to China?

Question #5: Colombia – Will Colombia’s presidential election go to a second round?

Question 6: Economy – Can the region recover pre-pandemic growth rates in 2022?

Question #7: Mexico – Will Mexico remain the United States’ top trading partner throughout the next year?

Question #8: Bitcoin – Following in El Salvador’s footsteps, will support for Bitcoin tender grow in the region?

Question #9: Venezuela – Will Nicolas Maduro return to the negotiating table in Mexico City?

Question #10: Brazil – Will President Jair Bolsonaro win another term this year?

Bonus Question: Will Latin America and the Caribbean be represented in the final of the World Cup?

Our answer to question #1: YES

In 2022, the Biden-Harris administration will look for big wins and opportunities to expand its leadership in the Americas. This is achievable in the Caribbean with a high-profile visit, which would optimally be accompanied by a major policy announcement from Vice President Harris. President Joe Biden was the last vice president to visit the region, where he focused his time discussing the Caribbean Energy Security Initiative.

The stage is set for a similar visit to occur with Vice President Harris. Economic recovery is slow, vaccine hesitancy is increasing, and other actors, such as China, are playing a more active role in the Caribbean. Regional leaders often note that US attention is inconsistent, and that few high-profile US officials travel to the Caribbean. A visit and subsequent policy announcement that aids the Caribbean in its time of need would build on recent conversations between the Vice President and Prime Minister of Trinidad and Tobago Keith Rowley (virtual) and Prime Minister of Barbados Mia Mottley (in person).

Our answer to question #2: NO

Given President Nayib Bukele’s recent personal attacks against President Biden and other US government officials, including Ambassador Jean Manes and current Charge d’Affaires Brendan O’Brien, it is unlikely that the United States will confirm all ambassadors to the Northern Triangle countries. President Bukele’s attacks were a response to the Biden administration’s decision to add Osiris Luna Meza, the chief of the Salvadoran penal system and vice minister of justice and public security, and Carlos Marroquin, chairman of the Social Fabric Reconstruction Unit, to the Specially Designated Citizens and Blocked Persons List. Both Salvadoran officials are accused of having a direct relationship with gangs, including MS-13. In Honduras, however, a new administration under President-elect Xiomara Castro provides a renewed sense of cooperation between the United States and the Central American country.

Our answer to question #3: YES

Once the constitutional draft is finalized by summer 2022, the Constitutional Convention will vote to approve or reject the new legal charter. If the body rejects the new constitution, Chile will keep its current one. However, if it is approved, the group will present the document to the newly elected head of state, who, in turn, will issue a call for a national referendum in which Chileans will vote to approve or reject the new constitution. Voting will be mandatory, and the new constitution will move forward only if an absolute majority is achieved.

While 78.3 percent of voters cast their ballot in favor of a new constitution in 2020, rising polarization and inefficiencies within the Constitutional Convention have left thousands of Chileans disenchanted with the reform process. However, the desire for fundamental changes remains high. If the new legal charter is approved by Chilean voters, it will be put into effect shortly after the vote through a formal ceremony. However, if Chile votes to reject, the 1980 Constitution written under Augusto Pinochet will remain in place. With just one opportunity to get the new constitution approved, the convention will attempt to generate a moderate bill that will stimulate consensus among the political left and right.

Our answer to question #4: NO

It is unlikely that all three of Taiwan’s Central American allies will switch recognition to China in 2022. But, considerations of international benefits, domestic political agency, or both may prompt a change in at least one of the countries. Internationally, US COVID-19 vaccine donations far outstripped those of China, sending a reassuring message to Taiwanese allies in the region.

But, Chinese vaccine diplomacy—including early, well-publicized vaccine sales and shipments—and broader medical, humanitarian, and economic assistance could still prove alluring for countries in need. Despite running with a pro-China message, Honduran President-elect Xiomara Castro recently declined to switch diplomatic recognition from Taiwan to China. Absent any external shocks, Belize, Guatemala, and Honduras will likely attempt to maintain the status quo for as long as possible, favoring Taiwan while leaving the door open for closer ties with China. This delicate balancing act has served to remind larger countries not to take their allegiances for granted and will continue to do so. But, it will be increasingly tested, as seen with Nicaragua, in the critical and uncertain year ahead.

Our answer to question #5: YES

There has yet to be an election in Colombia’s history in which a president is elected in the first round. Senator Gustavo Petro, who served as mayor of Bogotá (2012–2014), leads the left-wing political party Colombia Humana, and was the runner-up in the 2018 presidential election against incumbent President Ivan Duque. With nearly 42 percent of the vote, Petro has positioned himself as the candidate with the greatest support from Colombian voters.

However, Petro currently polls at 25.4 percent, which is not enough for an absolute majority that will grant him the presidency in the first round. Petro will most likely go to a second-round vote against a center-right or center-left candidate, potentially former Mayor of Bucaramanga Rodolfo Hernández or former Governor of Antioquia Sergio Fajardo. To date, Hernández polls at 11 percent and Fajardo at 7 percent. As recommended by the Atlantic Council’s US-Colombia Task Force, co-chaired by Senators Roy Blunt and Ben Cardin, strengthening the alliance between Colombia and the United States ahead of 2022 presidential elections is paramount to safeguard Colombia’s gains in terms of development, rule of law, and democracy. Regardless of election results, the United States should continue to position itself as Colombia’s strongest ally, advancing stability and prosperity at home and abroad.

Our answer to question #6: YES

Led by its five major economies, regional gross domestic product (GDP) is on track to return to pre-pandemic levels in 2022, though per-capita income will likely not recover until 2023. Key uncertainties may alter this outlook: the extent of success in vaccination and pandemic management, stimulus trade-off between continued support and fiscal discipline, labor markets (currently experiencing slower recovery than GDP), inflation, electoral outcomes, and external conditions including evolving investor appetite and commodity prices.

The region as a whole is not expected to return to pre-pandemic growth trajectories in the coming years, signaling permanent output losses due to COVID-19. In a divergent recovery, smaller and vulnerable states, such as those in the tourism-dependent Caribbean, are experiencing an even slower return to normal. Lastly, Latin America and the Caribbean (LAC) should set an ambitious agenda beyond “recovery”—given unimpressive pre-pandemic growth rates and patterns—and, rather, seek ways to accelerate development and build forward in a more inclusive, productive, and sustainable way.

Our answer to question #7: YES

It is likely that Mexico will remain the United States’ top trading partner throughout 2022. Mexico currently holds the top position—overtaking China in February 2021—with Canada in the second spot, lagging behind by $2.9 billion in total trade. COVID-19 significantly hindered US-Mexico trade—which largely relies on land trade via trucks and railcars—due to the pandemic-induced land-border closures to “non-essential” traffic. As of November 8, 2021, however, the United States reopened its borders to non-essential traffic and booming commerce is expected along the border. Moreover, US-Mexico trade topped $545 billion through October 2021 (the most recent data available), an increase of over 24 percent from one year earlier. Given the highly integrated nature of US-Mexico trade in the automotive and energy sectors, coupled with the efforts in border cities and ports to increase capacity and efficiency, trade is likely to continue to grow between the United States and Mexico.

Our answer to question #8: YES

Bitcoin presents an attractive option for countries in Latin America and the Caribbean, yet those countries will not replicate El Salvador’s approach. The government of El Salvador claimed that adopting Bitcoin would reduce financial exclusion and high remittance fees. These issues also affect the entire region. The World Bank predicted that remittances to Latin America and the Caribbean rose 21.6 percent in 2021, costing roughly $6.9 billion in remittance fees. According to the International Monetary Fund (IMF), financial inclusion in the region falls below global averages, and is exacerbated in the Caribbean due to the de-risking of correspondent banks. The worsening effects of climate change will also likely generate support for a decentralized virtual currency, as remittances typically increase following natural disasters, alongside decreased access to financial institutions.

Despite Bitcoin’s allure, its implementation in El Salvador has been marred by technological unreliability, weak financial regulations, and high price volatility. Politicians in Paraguay, Mexico, and Panama have already introduced legislation to regulate Bitcoin’s use as legal tender, and more will follow in 2022. As support for Bitcoin rises, so will debates on its social and environmental risks. Countries across the region will chart their own paths instead of following El Salvador’s playbook.

Our answer to question #9: YES

Although, the latest round of negotiations in Mexico has been suspended since October 2021, a combination of long-term incentives will likely propel Maduro to negotiate with the Venezuelan Unitary Platform—the umbrella organization encompassing the main political opposition parties in the country. Maduro seeks access to capital, legitimacy, guarantees against prosecution, and division within factions of domestic opponents—all of which he can accomplish through negotiations.

However, these factors are not the only ones at play in determining Maduro’s negotiation participation. After the highly visible diverging strategies within the opposition during the recent regional elections—and Julio Borges’ recent resignation and call for the interim government’s dissolution—Maduro might decide to simply wait out further erosion of opposition unity, instead of engaging with it directly. The success of such a strategy, if taken, would enhance the regime’s monopoly on power.

Our answer to question #10: Too early to call.

The odds are not in his favor, but it’s too early to say. Recent polls suggest that President Bolsonaro and former President Luiz Inacio Lula da Silva will face each other in a second round of elections, repeating the 2018 Bolsonaro versus Workers’ Party (PT) duel. However, this time around, former President Lula, as the PT candidate, is leading the way in early polling. Both candidates have a strong support base, but former President Lula’s history with corruption and President Bolsonaro’s mismanagement of the pandemic and current economic hurdles also give them significantly high rejection rates.

Third-way candidates, such as President Bolsonaro’s former minister of justice, Sergio Moro—famous for leading the Car Wash Operation that put President Lula in jail—is running on an anticorruption, center-right platform. Those Brazilians who in 2018 voted for President Bolsonaro as a “vote against corruption” might be more inclined to seek other alternatives. Current high inflation and unemployment rates might also play against President Bolsonaro’s reelection. Having said that, it will likely be a close race, and there is still a long way to go until elections in October 2022.

BONUS QUESTION ANSWER: YES

Brazil and Argentina are the only Latin American counties that have already qualified for the 2022 World Cup. In the Caribbean, Jamaica seems to be the only country with a chance of qualifying. While it is impossible to know who will be in the final (RIP Paul the Octopus), Brazil and Argentina are always strong contenders.

The post Spotlight: Latin America and the Caribbean – Ten questions for 2022 appeared first on Atlantic Council.

On September 10, Foreign Policy published a biweekly column featuring Scowcroft Center deputy director Matthew Kroenig and New American Engagement Initiative senior fellow Emma Ashford discussing the latest news in international affairs.

In this column, they discuss Belarus’ attempt to inundate Eastern Europe with migrants, threats to democracy in Brazil, and the newly announced Taliban government in Afghanistan.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

Former staff

Emma Ashford

New American Engagement Initiative Scowcroft Center for Strategy and Security

Conflict Economic Sanctions

The post Kroenig and Ashford discuss the brewing refugee crisis in Eastern Europe and the new Taliban government appeared first on Atlantic Council.

Successfully concluding these talks will require both parties to navigate some difficult issues over the next six-seven months. This post recaps the situation at hand and the key issues that require resolution.

National security tariffs on steel and aluminum

Section 232 of the Trade Expansion Act of 1962 authorizes the president of the United States (and, thus, the US Trade Representative) to impose tariffs on imports if it is found that the imported items in question constitute a threat to US national security. Section 232 tariffs therefore assume a highly globalized economy generates vulnerability for the domestic economy based on factors other than the terms of trade. The factors all seek to ensure that the US Government can acquire necessary materials from domestic sources in the event of a national emergency. When the Trump administration in 2018 imposed tariffs on steel and aluminum imports under Section 232 of the Trade Expansion Act, it triggered widespread fears of a global trade war. The controversy arose over (i) the foundation for the tariffs on national security grounds and (ii) the global scope of the tariffs, which included traditional transatlantic allies in Europe while exempting the United States’ bordering neighbors in Canada and Mexico pursuant to tariff-free commitments under the United States-Canada-Mexico Agreement.¹ Global trade war fears escalated further when the European Union threatened retaliatory action.  Fortunately, trade tensions simmered down in 2019 with no further action. The May 17, 2021 joint statement by the US Trade Representative and the EU Commission acknowledged these concerns by highlighting that “as the United States and EU Member States are allies and partners, sharing similar national security interests as democratic, market economies, they can partner to promote high standards, address shared concerns, and hold countries like China that support trade-distorting policies to account.” Even as the announcement of negotiations focused on eliminating tariffs between the US and the EU, the joint statement also indicated that both the United States and the European Union face damage from steel dumping and overcapacity in the global steel market. However, they may find it difficult to eliminate the tariffs despite best intentions.

Metals trade: Key data points

Policymakers on both sides of the Atlantic frequently assert that Chinese steel and aluminum production generate the majority of adverse competitive effects on the global steel market. The actual import data in the United States tells a slightly different story. Department of Commerce data shows that the top 10 sources of steel imports into the United States do not come from China. Steel imports dropped significantly following the imposition of Section 232 tariffs, including even from Canada that had been exempted from the tariffs.

The data also indicate that the dispersion of importers is far from even. The top three steel importers (Canada, Brazil, and Mexico) account for 50 percent of steel imports. Germany only accounts for 4 percent; Italy for even less.

The import structure for aluminum is more concentrated. Canada accounts for over two-thirds of US aluminum imports. The next three largest importers are the United Arab Emirates, Argentina, and Russia. Aluminum imports from China to the United States are limited to a small set of products (such as rods, wire, and bars). European imports to the United States are minimal.

Finally, the imposition of an import tariff does not mean the tariffs remain in place without the possibility of change. The United States permits US firms to request exclusions from the tariffs, and the Congressional Research Service indicates that the Department of Commerce to date has granted roughly 60 percent of all exclusion requests regarding aluminum.  At the end of 2020, the Department of Commerce further announced that 105 steel and fifteen aluminum products would become eligible for a “general exemption.”

European exports of steel and aluminum also are similarly muted. Italy’s exports to the United States are dominated by pharmaceuticals products (17 percent), machinery (12 percent) and aircraft (7 percent). Germany’s exports to the United States follow a similar structure.

In other words: the economic significance of the aluminum and steel tariffs for transatlantic trade is not as large as media headlines might suggest. Similarly, claims that Chinese steel and aluminum distorts import markets are less impactful than asserted. Rather, the symbolic and geopolitical significance of aluminum and steel tariffs is much higher, particularly in the context of global market dynamics.

Two key issues for 2021

The Joint US-EU Statement this week makes clear that policymakers on both sides of the Atlantic seek to join forces to combat a larger, persistent problem in the global market for steel: Chinese over-production. Powered by state subsidies, Chinese steel production alone has increased 418 percent since 2000, making it responsible for nearly 50 percent of all global production by 2019. The success of the Chinese steel market seems to have also inspired many large emerging steel markets (India, South Korea, Russia, Taiwan, Brazil, and Mexico) to scale up rapidly, supported by state subsidies and market intervention.

Transatlantic policymakers must now grapple with two very difficult issues if they are going to successfully eliminate the Section 232 tariffs applied to European producers.

• State subsidies: On the surface, a joint US-EU effort to address Chinese overcapacity could take the form of challenging state subsidies provided by Beijing to local firms. The challenges could include bilateral initiatives as well as more formal complaints within the World Trade Organization (WTO).

This will not be an easy transatlantic conversation. Certain EU member states currently provide significant subsidies to their domestic steel and aluminum manufacturers. Market intervention also is not uncommon. Pandemic-era industrial policy spending priorities focused on preserving and creating jobs by funding the transition to a green economy mean that traditional manufacturing companies are likely to receive even larger shares of government funding to facilitate changes in their production processes that decrease their carbon emissions.

European efforts to pressure China to decrease state subsidies for steel and aluminum may not be as effective as policymakers might like. If the elimination of Section 232 tariffs for European steel and aluminum becomes contingent on Chinese action, the prospects for a deal by year end dramatically decrease.

• National security: US policymakers could certainly decide that no national security issues arise from European steel and aluminum imports based solely on the nearly minimal amount of such imports relative to other trading partners. European policymakers certainly will seek to promote the perspective that they should at least be treated on a par with the largest importer of both products (Canada), which already receives a large exemption due to the USMCA’s tariff terms.

Eliminating the Section 232 tariffs would certainly go a long way towards assuaging the diplomatic insult of being deemed a national security threat to the United States. But making this decision based on geopolitical grounds potentially undermines the ability to make progress regarding state subsidies that distort global markets.

Transatlantic policymakers have thus created a potentially problematic framework for discussion. If US officials lift the Section 232 tariffs on EU steel and aluminum imports, they effectively determine that European state subsidies and market intervention in this sector is not as important as geopolitical priorities. In other words, they suggest that the problem with the tariffs were not state subsidies themselves – but who was giving them.

Prioritizing preferential treatment for allied nations makes it far more difficult to persuade China by making arguments about substantive market distortion. Any such move instead could backfire, incentivizing China to call out the various government subsidies being distributed as part of the pandemic-era recovery process. Pursuing all these initiatives outside the WTO umbrella potentially further weakens the global trade body. How Europe and the United States resolve the steel and aluminum tariffs issue will thus tell us a great deal about the shape of global trade policy over the near- to medium-term.

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The Leaders Summit brought together forty world leaders, including seven from Latin America and the Caribbean, representing Antigua and Barbuda, Argentina, Brazil, Chile, Colombia, Jamaica, and Mexico. The Americas are a crucial player in coordinated efforts to tackle global climate change, so we asked experts from the Atlantic Council and elsewhere to lay out what’s next.

What were some of the most ambitious commitments made by Latin America and the Caribbean in mitigating climate change? Are they aligned with the expectation put out by the Biden administration and COP26? How will the international community contribute to these regional efforts? 

Jorge Gastelumendi is the global policy director at the Atlantic Council’s Adrienne Arsht-Rockefeller Foundation Resilience Center. He is also a COP26 high level climate champions co-lead for the Race to Resilience.

Putting nature-based solutions at the core of the efforts to fight climate change was the most outstanding, though not surprising, feature of commitments advanced by Latin American and Caribbean representatives—from Brazil’s president, Jair Bolsonaro, indicating the country’s commitment to end illegal deforestation in the Amazon by 2030, to Mexico’s president, Andrés Manuel López Obrador, committing to implement one of the largest reforestation programs in the world. Peru went even farther by committing that 50 out of the 150 actions in its climate plan will be nature-based solutions in sectors such as water management, land use, and forests. The main obstacles to materialize these commitments is the lack of implementation capacity in the region and the lack of financial resources from both public and private actors, particularly the financial sector. The international community, with the leadership of the United States, is critical in helping overcome these two obstacles. Colombia, for example, highlighted exploring innovative financial mechanisms, such as debt-for-adaptation swaps, which could avoid deforestation in the Amazon (a priority of Brazil, Colombia, and Peru) and protect the oceans (a priority for Chile).

President Bolsonaro, in his speech, raised the need for the right to development of current and future generations, also mentioning the Amazonian Paradox. What is the Amazonian Paradox and in what ways can a collaborative approach with the international community, the private sector, civil society, and indigenous communities help address it?  

Rodrigo Lima is a lawyer with expertise in international trade, non-tariff barriers and sustainable development. He is the director of Agroicone, a Brazilian sustainable agribusiness organization.

The Amazonian Paradox emerges from the immense contradiction between the assets and potentials from a mega-biodiverse forest that covers almost five million square kilometers over nine countries, and the social realities and inequalities among its more than twenty-three million inhabitants. The possibility to provide effective value to the forest, generate profits from its services, promote its sustainable use, and allow its population to thrive from the economic benefits and environmental services reflects the challenge of the Amazonian Paradox.

It is reasonable to compare the Amazon to a puzzle that needs time and effort to be assembled. The Amazon is home to 329 indigenous lands, covering almost one million square kilometers—local communities, family farmers, medium and large farmers. About 640,000 square kilometers are non-designated public lands, which should be designated as national parks, private areas, indigenous land, or for other uses.

To organize the territory and create policies to enable a low carbon economy, while considering different actors and interests, depends on federal and state governments. But it also relies on cooperation from multiple sources. In this regard, climate finance can play a critical role not just in promoting Reducing Emissions from Deforestation and forest Degradation (REDD+) projects, but more broadly in creating and sustaining a flourishing nature-based economy.

The completed puzzle relies on fostering a thriving economy based on natural resources, tourism, sustainable agriculture, forest management, and conservation activities. Bioeconomy opens a huge possibility to build upon this challenge, connecting extractivist producers to processing facilities and the market, generating social co-benefits from REDD+ projects, harnessing sustainable agriculture production based on innovation and good practices, and generating cosmetics and medicines, among other activities that could transform the Amazonian Paradox into the Thriving Amazonia.

International cooperation, as discussed at the Leaders Summit on Climate and other forums, has a fundamental role to play to support assembling this puzzle. The Amazon cannot be seen as a pure protection area; it must enable and promote social, economic, and environmental benefits for its population while it generates environmental goods to all society.

President López Obrador, in mentioning Mexico’s reforestation program, suggested its expansion to the South of Mexico and into Central America, generating jobs. He also suggested temporary work-permits and residency in the United States for those committed to this program, as a mechanism to address the migration crisis. How could the climate crisis be a greater challenge to the current border crisis? In what ways could addressing climate issues also be an opportunity to solve migration?

Maria Fernanda Bozmoski is the deputy director for programs at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Mexico and Central America.

Hurricane season in Central America is right around the corner, and back-to-back natural disasters may bring the region to the breaking point. The number of migrants will likely increase in anticipation of hurricane season, as well as in the aftermath. While migration from the dry corridor—which stretches from Guatemala to Costa Rica—is likely, hurricanes also greatly affect the Caribbean coast. The Central American Integration System (SICA) estimates that up to eight hurricanes may form in the region this year. Four of the eight may be intense, according to the organization.

Climate change is both a long-term push factor for migration and an accelerant. The United Nations estimates more than 7.3 million people were directly impacted by hurricanes in 2020, and there are more than 8 million starving people in Honduras, Guatemala, and El Salvador—up from 2.2 million in 2018. While the nearly four-fold increase in starvation is not all a result of the climate crisis, the destruction of crops and villages is a factor in this increase. In fact, experts find that climate change is a major factor explaining in the current surge in hunger.

The consequences of climate change are being felt now by current generations and the Caribbean nations are particularly impacted. Like other heads of state, the leaders of Antigua and Barbuda, and Jamaica reinforced the need for support and collaboration on addressing climate change. How could the international community support Caribbean nations in adapting to the existing and upcoming consequences of the rise in global temperatures?

Vicki Assevero is a former senior fellow for the Adrienne Arsht Latin America Center’s Caribbean Initiative.

The international community can support Caribbean nations and other small island developing states (SIDS) by acknowledging the World Meteorological Association’s 2020 Report that sea level rise has doubled, and hurricanes have intensified, so the imperative to finance climate adaptation is urgent. Prime ministers Gaston Browne of Antigua and Barbuda, and Andrew Holness of Jamaica urged acceleration of the pace of implementation of existing accords. This would mean not only funding the financing mechanisms foreseen in the original Paris Climate Accord but also those outlined in the Warsaw Mechanism and the Samoa Pathway. More importantly, multilateral institutions must continue to mobilize capital for greater investments in renewable energy and green technologies. The Caribbean SIDS are also urging new metrics in the form of a multi-dimensional vulnerability index that would facilitate access to concessional financing. 

Commitments on energy transition and renewable energy were popular among leaders at the summit. In terms of transitioning to cleaner energy, how close is Latin America and the Caribbean to reaching that goal and significantly reducing its greenhouse gas emissions? What key steps could be taken to accelerate an energy transition in the Americas?

Randolph Bell is the director of the Atlantic Council’s Global Energy Center, and Reed Blakemore is the deputy director of the Atlantic Council’s Global Energy Center.

Though the reaffirmation and raised ambitions for climate action last week from across Latin America and the Caribbean were encouraging, regional progress to meeting climate goals has thus far been inconsistent. That said, growing electricity demand and the cloudy forecast for hydropower (long the prevailing baseload electricity source in the region) presents an important opportunity for countries to take significant steps to transform their energy mix and kickstart their climate goals. Accelerating the introduction of a mix of variable renewables, low-carbon natural gas resources, and in some cases nuclear energy, will offer alternatives to bioenergy, diesel, and coal in order to fulfill new electricity demand while also replacing potential declines in hydropower output. Additional efforts to decarbonize the transportation sector will also further electrify the region and support reduced emissions. Taken together, this makes investment into accompanying grid infrastructure as well as digitalization and energy efficiency important next steps in maximizing the emissions-reducing potential of regional electrification and energy transition.

Valentina Sader, is assistant director and Brazil lead at the Adrienne Arsht Latin America Center.

AfricaSource Apr 23, 2021

Climate change will not be fixed without Africa

By Rama Yade

When Congolese President Félix Tshisekedi spoke at the virtual Leaders Summit on Climate this week, he had the force of the continent behind him. And his message was that developed countries must do more. As the summit comes to a close, the world still has so much to learn from Africa about how to tackle the climate crisis—if the world would only listen.

Africa Climate Change & Climate Action

Fast Thinking Apr 13, 2021

FAST THINKING: Why economic development is key to addressing the migration crisis at the US border

By Atlantic Council

On this episode of Fast Thinking, Atlantic Council experts Rebecca Scheurer and Jason Marczak dive into the root causes of mass emigration from Guatemala, Honduras, and El Salvador, and offer recommendations for long-term solutions to the underlying push factors that drive people from their homes—including crime, gang violence, corruption, and climate change.

Migration Northern Triangle

New Atlanticist Apr 25, 2021

Climate diplomacy can help turn action into results: UAE minister

By Larry Luxner

Al Jaber, the United Arab Emirates’ minister of industry and advanced technology, reflected on the connection between climate partnerships and economic results.

Climate Change & Climate Action Energy & Environment

The post Raising ambitions: How Latin America and the Caribbean is tackling the climate crisis appeared first on Atlantic Council.

As we approach one year since the first COVID-19 case in Latin America and the Caribbean, we look ahead at what might or might not be on the horizon for the region over the next year.

Join us as we look at some of the key questions that may shape the region, then take our informal poll and see how your opinions shape up against our analysis.

Will the region see mass vaccinations? How will regional economies fare? What might be on the agenda for the US relationship with Brazil and Mexico? US President Joe Biden’s administration has entered office with a full inbox: how will developing trends in the region affect the new administration’s agenda?

Here are the eleven questions that the Adrienne Arsht Latin America Center is answering to map the rest of the year.

Question #1: COVID – Will Latin America and the Caribbean achieve widespread vaccination in 2021?

Question #2: Economy – Will regional economies outpace growth forecasts in 2021?

Question #3: Central America – Given the extent of damage from the 2020 hurricanes in Central America, will the region see more climate migrants?

Question #4: Mexico – Will joint security challenges top the list of priorities in the US-Mexico relationship under Biden?

Question #5: Stability – Latin America has faced sporadic, but massive, waves of protests and national strikes prior to and during the pandemic. Will 2021 be a year of even greater social unrest?

Question #6: Venezuela-EU – Will the European Union (EU) resume conversations with Nicolás Maduro’s regime to monitor Venezuela’s regional elections in 2021?

Chapter #7: Brazil – Will the Biden administration and that of Brazilian President Jair Bolsonaro find ways to cooperate on a climate agenda?

Question #8: Colombia – Will the United States and Colombia reform the underlying premises of their anti-narcotics policies?

Question #9: China and the Caribbean – Will the five Caribbean nations and two Central American countries that still recognize Taiwan shift to recognizing the People’s Republic of China (PRC)?

Question #10: Caribbean – Will the Caribbean Community and Common Market (CARICOM) achieve its goal of a Caribbean Single Market and Economy (CSME) in 2021?

BONUS QUESTION: In the 2016 Summer Olympics in Rio de Janeiro, Brazil (#13), Jamaica (#22), and Cuba (#23) were the only Latin American and Caribbean countries to finish in the top twenty-five in the medal count. Assuming the Olympics are held, will more countries from the region finish in the top twenty-five this summer?

OUR ANSWER TO QUESTION #1: NO

The first case of COVID-19 in Latin America and the Caribbean was reported in Brazil on February 26, 2020. Since then, the region has reported nearly 17.5 million cases and more than 550,000 COVID-19-related deaths, accounting for one third of global deaths. Countries have actively worked to secure vaccines through bilateral and multilateral arrangements, including agreements with Pfizer, Moderna, AstraZeneca, Russia’s Sputnik V, and China’s CoronaVac. Nevertheless, widespread vaccination requires not only adequate planning for vaccine acquisition, but efficient and equitable distribution. Recent incidents in Germany and the United States show that even more resourceful countries are experiencing hiccups in massive vaccine rollouts, such as logistical challenges (especially the required temperature-controlled supply chain), personnel shortages, and vaccine hesitancy. Latin American and Caribbean nations may face these hurdles at a greater scale, due to resource and capacity constraints.

As of January 19, 2021, eleven Latin American and Caribbean countries have authorized emergency use of COVID-19 vaccines: Argentina, Brazil, Bolivia, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Mexico, Panama, and Venezuela.  On December 24, 2020, Mexico, Chile, and Costa Rica became the first countries in Latin America to begin mass vaccination. Despite moving quicker than most others in the region, Mexico aims to inoculate only 75 percent of its population by March 2022. For most countries in Latin America and the Caribbean, definitive delivery and mass vaccination timeframes remain unclear, and could be delayed over time.

Some low-income countries in the region may be able to vaccinate, at most, 20 percent of their populations in 2021, a figure considerably lower than the 65-percent theoretical threshold for herd immunity. Of added concern, the COVAX initiative—a key global initiative launched to secure vaccine doses for poor countries—currently faces a $4.9-billion funding gap. This could potentially complicate the initiative’s goal of helping inoculate 20 percent of each low-income country’s population against COVID-19 by the end of 2021. With stark disparities in vaccine access across and within countries, widespread vaccination is a distant prospect for Latin America and the Caribbean in 2021.

OUR ANSWER TO QUESTION #2: YES

In July 2020, a month after Latin America and the Caribbean became the global epicenter of the coronavirus pandemic, Alicia Bárcena, head of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), cautioned that the region should brace for a “lost decade.” By the end of 2020, the economic contraction in Latin America reached 7.7 percent—its steepest contraction ever, albeit 1.4 percent less than ECLAC’s earlier forecast. Can the region rebound in 2021 and exceed current growth forecasts?

After experiencing its worst economic crisis ever in 2020, the regional economy is expected to grow 3.7 percent in 2021. But, it’s also possible that the region can outpace this forecast, if it can manage a strategic balancing of expanded fiscal support for social-protection programs and small businesses, investment in job-generating productive sectors, and structural reforms to tackle long-standing challenges in the rule of law, equality, productivity, and climate. To accelerate economic reactivation, the region must leverage international investment and cooperation from global institutions such as the World Bank and the International Monetary Fund (IMF), as well as from regional organizations such as the Inter-American Development Bank. The private sector, at the national and international levels, must also play a central role in revamping growth, but will require strong incentives from local governments and risk-mitigated business climates.

Eyes will be on Brazil, Mexico, and Argentina (the region’s three largest economies) as well as Peru, which has had one of the best developing-world growth rates in the past decade, to recover from their 2020 economic downturns. In comparison to these four countries, Chile and Colombia suffered less devastating declines and could be positioned for stable growth over the year, but the migration crisis in Venezuela will continue to pose a heavy burden on neighboring countries’ already-strained public resources.

OUR ANSWER TO QUESTION #3: YES

This year will almost certainly see a surge in Central American migrants and refugees trekking north to the US southern border, due to a unique confluence of the devastation caused by Hurricanes Eta and Iota, as well as the myriad effects of the coronavirus pandemic and other long-standing migration pressures. Days before Biden’s inauguration, a caravan of more than nine thousand Hondurans created international headlines. The caravan was fueled, in part, by the promise of a revamped immigration policy in the United States.

The back-to-back hurricanes—which made landfall in Central America less than two weeks apart—wreaked havoc across Nicaragua and the Northern Triangle (Guatemala, Honduras, and El Salvador), affecting more than five million people and forcing at least 350,000 Hondurans and Guatemalans into emergency shelters. With hundreds of thousands of Central Americans internally displaced, shelters lacking basic services and sanitation quickly became new ground for rapid coronavirus infection. The destruction to essential infrastructure—such as bridges, roads, buildings—and entire communities was a heavy blow to a region that saw a 6.5-percent economic decline in 2020.

Food insecurity in Nicaragua, Guatemala, and Honduras is expected to rise significantly, due to the destruction of large swaths of agricultural lands, livestock, and infrastructure. In a region with long-standing pre-pandemic challenges around rule of law, insecurity, and economic opportunity, the most likely outcome from these push forces is a novel wave of “new” climate refugees seeking better livelihoods in the United States.

In 1998, Hurricane Mitch, the second-deadliest Atlantic hurricane, caused a massive surge in Central American migration to the United States. If history is any indication of the future, Hurricanes Eta and Iota—Category 4 and 5, respectively—can trigger a similar scenario in 2021.

OUR ANSWER TO QUESTION #4: NO

Security cooperation will be an important, though complicated, part of the US-Mexico relationship. In the days leading up to Biden’s inauguration, Mexican President Andrés Manuel López Obrador’s (AMLO) administration decided to stop investigations into former Mexican Secretary of National Defense General Salvador Cienfuegos—who was arrested in Los Angeles at the end of last year, and then sent for prosecution to Mexico. AMLO then released more than seven hundred pages of confidential evidence and intelligence, prompting an unusual rebuke by the US Department of Justice. The General Cienfuegos saga is just the latest example of a strained US-Mexico security relationship.

The Mexican Congress passed a new law in December 2020 that limits and deters the work of foreign enforcement agents in Mexico. Under the law, all communications—at all levels—with foreign enforcement agents will need to be reported, meetings with foreign agents must be approved in advance, and senior federal officials will need to be present at said meetings. Failure to do any of the above may result in expulsion of foreign agents. The law has prompted serious concerns that international cooperation with Mexico on the security front will be henceforth paralyzed. Most of the intelligence on criminal groups and illicit activities comes the United States.

AMLO has sought to double down on addressing the root socioeconomic causes of crime, and has moved away from the drug-kingpin strategy of past administrations. These actions also reflect a desire to move away from a “war” with cartels and other powerful criminal organizations in Mexico. But, security cooperation goes beyond reduction of homicides and combating drug trafficking—a stable security climate is a requisite for business and commerce to thrive. The Biden administration will have to navigate this complex scenario in Mexico.

OUR ANSWER TO QUESTION #5: YES

Protests in Bolivia, Chile, Colombia, Ecuador, Peru, and Haiti that began in 2019 were expected to continue into 2020, but extended lockdowns to control the spread of the pandemic led to the suspension of protests in the first half of 2020. Despite the lockdowns and the inherent risk of public gatherings, citizens gathered in large numbers last fall in Argentina, Chile, Colombia, Costa Rica, Guatemala, and Peru for reasons ranging from a rejection of government austerity plans to calls for racial equality, better social and economic protections, increased transparency, and free elections.

As vaccines become available and social activities resume, protests will most likely resume in 2021 as citizens will air new grievances. The pandemic has increased inequality in the region, pushing an additional forty-five million people below the poverty line. As governments struggle to fund social-protection programs, discontent with ruling governments will rise. Costa Rica will likely see protests as President Carlos Alvarado Quesada’s administration resumes negotiations with the IMF to secure a much-needed loan. In 2020, the Costa Rican government quickly retracted proposed tax measures after protestors blocked major roads. Colombia may also continue to see protests as long as marginalized groups, including Colombia’s indigenous and Afro-Caribbean groups, feel the government has failed to address their demands.

Finally, as Nicaragua heads toward an election in November in which the opposition will be unable to run, protestors against Nicaraguan President Daniel Ortega’s regime should be expected to return to the streets. Protests may also gain momentum in Chile, Ecuador, Honduras, and Peru, as they also head toward elections.

OUR ANSWER TO QUESTION #6: YES

The EU will continue to promote a democratic transition in Venezuela. In September 2020, a European mission was sent to Venezuela in a failed attempt to promote minimum democratic conditions ahead of legislative elections. High Representative of the EU for Foreign Affairs and Security Policy Josep Borrell, who announced the EU’s rejection of Venezuelan election results, asked Maduro to “chart a path towards national reconciliation.” Borrell also reiterated the EU’s commitment to supporting Venezuela’s transition to democracy.

In 2021, municipal and regional elections are set to occur according to the Venezuelan Constitution. This will open a new opportunity for the EU and a multilateral coalition to continue engaging in close dialogue with the Maduro regime, the opposition, academia, non-governmental organizations, and other civil organizations to seek to promote conditions that allow for the participation of all political parties in a competitive electoral process. However, conversations aside, the Maduro regime is unlikely to see any upside in allowing elections that are transparent or fair.

OUR ANSWER TO QUESTION #7: MAYBE

In past years, the synergy between the United States and Brazil has led to the signing of the Alcântara Technological Safeguards Agreement, advancing scientific and technological cooperation; support from the United States for Brazil to join the Organisation for Economic Co-operation and Development (OECD); and, at the end of 2020, the signing of a protocol to facilitate trade and investment between the two largest economies in the Western Hemisphere. Despite some diverging views at the presidential level, stronger bilateral relations between Brazil and the United States are mutually beneficial, and opportunities could still exist for advancing on a common agenda.

Brazil has been criticized for recurrent fires in the Amazon rainforest and Pantanal wetlands, environmental disasters such as the Brumadinho dam collapse, and high levels of deforestation, heightening pressures on the Brazilian government to take action to protect its environment.

For Bolsonaro, the economy and structural reforms are top priorities. The government has pursued trade agreements with the EU, South Korea, and Canada, as well as the United States. However, with increasing pressure from the EU, and now the United States, failing to advocate for strong democratic principles and a concrete plan for sustainable development can isolate Brazil in the global arena, undermining possibilities for cooperation with the United States and other countries. To advance on the trade and investment fronts, which are priorities for the Bolsonaro administration, Brazil will need to double down on its efforts to reconstruct its image and role abroad, particularly regarding the climate agenda.

OUR ANSWER TO QUESTION #8: YES

In December 2020, the Congressional Western Hemisphere Drug Policy Commission (WHDPC) unveiled a bipartisan report recommending that the United States rethink many of its historical anti-narcotics policies. The report found that while Colombia has made remarkable progress in strengthening state authority in marginalized areas, the United States’ $11.6-billion Plan Colombia was unsuccessful in meaningfully curbing coca cultivation. Despite having significantly increased manual eradication efforts in Colombia, coca cultivation and cocaine production remain high; it is unlikely the current strategy will allow the United States and Colombia to reach their joint objective of decreasing coca cultivation and cocaine production to half of 2017 levels. As discussed in the report “The Untapped Potential of the US-Colombia Partnership,’’ the United States and Colombia must take measures to reduce coca cultivation and also target other stages of the drug market, including cocaine production, trafficking, and consumption.

Entering office with a profound understanding of the Americas and a track record of advancing policies fundamental to the region’s prosperity, Biden will prioritize strengthening the United States’ ties to the region—particularly the US-Colombia partnership, which he has referred to as the keystone of US foreign policy in the region. In light of the WHDPC report, the new administration has new thinking on how to reorient the US counter-narcotics policy in Colombia away from mass eradication and toward a more holistic approach, placing renewed emphasis on providing physical and economic security to rural Colombians and demobilized rebels. There is also new momentum for the United States to develop a whole-of-government strategy to counter transnational criminal organizations (TCOs) and the international drug trade, per the report’s recommendations.

OUR ANSWER TO QUESTION #9: NO

It is unlikely that all five Caribbean countries that currently recognize Taiwan—Belize, Haiti, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines—will instead recognize the PRC in 2021. However, the Dominican Republic’s switch to establish diplomatic ties with the PRC in 2018 puts significant pressure on Haiti, with whom it shares the island of Hispaniola. In its overtures to Haiti, the PRC recognizes the country’s extreme poverty and holds out a promise of building the kind of capacity that allowed China to lift 850 million of its citizens out of extreme poverty, but only if Haiti recognizes the “One-China” policy. The other Caribbean countries have long, and sometimes ethno-cultural, histories with Taiwan, which has been a loyal and generous partner. Nevertheless, the geopolitics playing out between Washington and Beijing will put pressure on these small island nations to choose—not necessarily in their own developmental interests, but in the interest of alignment with one great power.

For Guatemala, Honduras, and Nicaragua—the three Central American countries that still recognize Taiwan—pressing domestic issues around the pandemic, natural disasters, citizen and food insecurity, and the economic downturn will prevail over the diplomatic issue of recognition. In addition, the new administration in the United States will move away from a bilateral and mostly stick approach to the isthmus, and toward a more regional and balanced carrot-and-stick approach, in which the question of China can be a powerful bargaining chip. A ramping up of conditionality on foreign aid and support to the region from the United States can be highly persuasive, and can discourage Central American leaders from switching sides.

Caribbean and Central American recognition of China versus Taiwan also hinges on the intensity of Chinese outreach efforts. This, in turn, is often dictated by the state of play in cross-strait relations between China and Taiwan. Since 2016, Taiwan under Tsai Ing-wen’s leadership—in alignment with former US President Donald Trump’s administration—has shifted to a more explicitly competitive stance vis-à-vis Beijing. As cross-strait relations soured, both sides became more aggressive in maintaining or courting new diplomatic allies (e.g., the Dominican Republic, El Salvador, and Panama). In this context, China will likely continue its soft-power diplomacy in the region. The PRC’s staunch verbal support for multilateralism also has the potential to tilt more Caribbean countries toward its orbit. However, much of this could change in the next four years, contingent upon new dynamics in the US-China-Taiwan triangle, as well as Biden’s promised return to global, non-transactional cooperation and a renewed focus on the Americas.

OUR ANSWER TO QUESTION #10: NO

Although the CARICOM has operationalized the single market, the prospect of a single economy remains unlikely. A little history will help. CARIFTA was formed in 1965, shortly after anglophone Caribbean countries achieved independence. CARIFTA removed tariffs and other non-tariff barriers to regional trade. CARICOM was formed in 1973 to implement the Treaty of Chaguaramas, which replaced the free-trade area with a single market. The intended free movement of people, goods, and capital is still not a reality because there is not a “regional body with powers and accountability that can help transform community decisions to binding laws in individual jurisdictions is a key impediment,” according to a 2020 report from the IMF.

In 1989, the CARICOM heads decided that further economic integration was required in an era of globalization. The Treaty of Chaguaramas was revised in 2001 to accelerate the implementation of the CSME, which started in 2006. The 2008 global financial crisis further delayed what former Managing Director of the London-based Caribbean Council David Jessop called “a process plagued by rhetoric and inaction.”

COVID-19, however, may have done what neither of the two best-known analyses of the Caribbean’s challenges, the Golding Report and the Ramphal Commission, could: show the fragmented Caribbean nations the real benefits of integrated, unified coordination when faced with externalities. As she relinquished the CARICOM chair In June 2020, Barbadian Prime Minister Mia Mottley praised the regional architecture for its sterling performance in organizing and supporting the region during the pandemic.

Current Chairman of CARICOM and Prime Minister of Trinidad and Tobago Keith Rowley called for 2021 to be “the year of CARICOM,” and challenged the region to live up to its promise: “Let this be the year that we make CARICOM work for us and construct the resilient society that will provide a safe, prosperous and viable community for all of us.” He boldly called for the CSME to become the principal framework for recovery. Despite the real obstacle of establishing a single currency and its attendant institutions, CSME got a shot of energy from the COVID-19 crisis.

BONUS QUESTION ANSWER

Assume the Olympics occur this summer. Several factors contribute to a country’s medal-count prospects—population size, the promotion of women in sports, national investment in sports, etc. While no single factor explains a country’s success or failure, decisions and investments made by Latin American nations over the past four years could be an indication of a strong Olympic showing.

Brazil has made the strategic decision not to prioritize one sport, and has instead sought to be in the competition for as many Olympic slots as possible, securing one hundred and eighty so far. Cuba, in comparison, has focused on boxing and baseball to achieve its Olympic medal goals. Mexico’s Olympic team is also looking promising, with a fairly gender-balanced team (forty-nine men and thirty-seven women). AMLO also announced a financial stimulus for athletes who participated in the 2019 Pan American Games and are now preparing for Tokyo 2020+1 amid the COVID-19 pandemic. Jamaica is also investing in its Olympic athletes, despite the economic constraints of the pandemic, providing $40 million in funding for its athletes’ preparation and qualification.

With all eyes hopefully on the Summer Olympics, the authors predict that countries that provided the most comprehensive support to their athletes during the pandemic will come out on top in the upcoming games. 

The post Spotlight: 10 Questions for Latin America and the Caribbean appeared first on Atlantic Council.

On this week’s #DFRLabCoffeeBreak, Assignment Editor and Research Associate, Luiza Bandeira sits down with Heloisa Massaro, Head of Research at InternetLab. InternetLab is a Brazilian think tank focused on law, technology, and internet policy. The two explore COVID-19 disinformation inside the country and the resulting outbreak that has made it a global hot spot. Massaro explains the disinformation’s resulting effect on Brazil in the wake of COVID-19 and the country’s hastily put together bill meant to combat “fake news.”

The DFRLab Coffee Break is a video series meant to discuss how disinformation and digital change affect industries, policy making, and society with a community of experts, academics, and leaders from around the world.

The Atlantic Council’s Digital Forensic Research Lab (DFRLab) has operationalized the study of disinformation by exposing falsehoods and fake news, documenting human rights abuses, and building digital resilience worldwide.

learn more

The post #DFRLabCoffeeBreak with InternetLab Head of Research Heloisa Massaro appeared first on Atlantic Council.

As Brazil and the United States grapple with the devastating effects of the coronavirus pandemic, both countries are trying to chart paths to economic recovery. And according to officials from both countries, the road to renewed growth could include deepening their trade and investment relationship.

In a June 4 webinar titled “The Next Phase of the US-Brazil Relationship,” US Ambassador to Brazil Todd Chapman and Nestor Forster, chargé d’affaires at the Brazilian Embassy in Washington, described how their respective jobs have evolved as the pandemic worsens.

The virtual event was hosted by the Atlantic Council’s Adrienne Arsht Latin America Center, moderated by the center’s associate director, Roberta Braga, in partnership with the Brazilian Trade & Investment Promotion Agency (Apex-Brasil) and in collaboration with AmCham Brasil.

As of June 8, Brazil has confirmed 691,758 coronavirus cases, up 31 percent since June 1 and now second in the world after the United States. Brazil, with 212 million people, has now also passed Italy, France, and Spain to rank third in total COVID-19 deaths (36,455) after the United States and Britain.

“When anticipating my arrival in Brazil, we had a very expansive dialogue and agenda to pursue, from economics to education to health,” said Chapman, who began his post March 30 in Brasília. “But with the advent of COVID-19, the health situation is now my first, second, and third priority—and also to attend to the 1,500 staffers at the US mission and the 275,000 resident Americans in Brazil—as we focus on how to address the pandemic and loss of life.”

Forster defended the approach toward the pandemic taken by President Jair Bolsonaro. “There’s a clear division between the role played by the federal government and the guidelines enforced by state and local governments,” said Forster. “From the onset, our president has said that in a country as large and regionally diverse as Brazil, it’s very hard to have a one-size-fits-all solution.”

Forster added: “This is a public health emergency, but it’s not only a health issue. It has tremendous repercussions for society and the economy, and the view of our president has been that we should tackle all these fronts at the same time.”

Braga, noting that both Bolsonaro and US President Donald J. Trump have compared COVID-19 to the flu, explained that on May 27 the Trump administration began banning the entry of non-US citizens who had recently traveled to Brazil. Forster said the restrictions are a measure to address the spread of the pandemic.

“Brazil had taken the same measure on March 27, when we established restrictions on all foreigners coming by plane,” he said, noting exceptions to this rule. “Those measures are temporary. They should go away as soon as the numbers start to improve.”

Chapman, a career diplomat and former US ambassador to Ecuador, said he’s set a target of doubling the value of US-Brazil trade from the current $105 billion to $210 billion over the next five years. By comparison, annual trade between the United States and Mexico—which has only 60 percent of Brazil’s population—exceeds $600 billion.

“At 15 percent growth a year, it’s possible,” Chapman said. “You get there by improving the overall business climate here in Brazil to make it more attractive, and by reducing every barrier possible. Our economic teams are meeting constantly to look at very specific issues—and the more specific the dialogue, the more progress we’ll make. That’s the objective that’s been set for us.”

Even though Brazil’s travel and tourism industry has been devastated by COVID-19, Forster believes the crisis will pass.

“Brazil just had its largest agriculture harvest ever,” he said. “Even during the pandemic, Brazil has been the country least affected by foreign trade among the [Group of Twenty]. We’re showing resilience in our trade performance.”

In 2019, Brazil received $78 billion in foreign direct investment (FDI), making it the world’s fourth-largest recipient. It seeks to join the Paris-based Organization for European Co-operation and Development (OECD)—an effort the United States formally supported this year—and would also like to enact a free-trade agreement with the United States.

“It’s the ultimate goal that both our countries think is worth pursuing, though how soon it can happen is not clear, because there are questions and legal requirements,” Forster said in addressing when a US-Brazil free trade agreement might come about.

“Instead of thinking when we can have an FTA, we should work on the goal of doubling trade between Brazil and the US. There’s a tremendous potential here, and I think we should add to that the goal of doubling bilateral investment both ways,” he said, estimating that Brazilian investment in the US economy has grown by 350 percent over the past decade.

“Our minister of economy, Paulo Guedes, said the pandemic should not be an excuse to do less or procrastinate,” Forster said. “By year’s end, we can tackle tax reform and put Brazil in a better shape to face the dire economic situation. We’re not sitting idly by. On the contrary, we’ve been extremely busy.”

To that end, Forster said, “we’ve made lots of progress regarding trade facilitation—getting rid of red tape and inefficiencies, and streamlining the process of imports and exports—and we’ve had ongoing talks on e-commerce and regulatory practices. We have just begun talks on an anti-corruption package and a dialogue on intellectual property issues.”

In response to concerns raised by members of the US House of Representatives’ Ways and Means Committee regarding environmental protections and labor rights in Brazil, Forster added: “This administration is as committed to environmental protection in Brazil as any other. What’s different is that President Bolsonaro has expressed a big concern about the 25 million Brazilians who live in the region. We need to bring sustainable development to these people, and economic opportunities for those who need it badly.”

Larry Luxner is a Tel Aviv-based freelance journalist and photographer who covers the Middle East, Eurasia, Africa and Latin America. Follow him on Twitter @LLuxner.

Further reading:

New Atlanticist May 21, 2020

Guatemalan president criticizes US over lack of COVID-19 assistance

By Larry Luxner

“Guatemala is an ally of the United States, but I don’t believe the US is an ally to Guatemala, because they don’t treat us like one,” he said. “We’ve seen how they’ve assisted other countries with ventilators, and we haven’t even gotten a dime from them—not even one single mask from the United States. We don’t feel appreciated.”

Coronavirus Migration

New Atlanticist Jun 2, 2020

Costa Rica legalized same-sex marriage. Where does the rest of Latin America stand on marriage equality?

By Isabel Kennon

As Costa Rica becomes the first in Central America to take this step toward equality, it remains to be seen who will be next to turn the Inter-American Court on Human Rights’ opinion into action.

Civil Society Human Rights

New Atlanticist May 20, 2020

The day after COVID-19 and saving emerging markets

By Mohammed Soliman and Francisco Campos

While developed markets have responded with historical levels of fiscal stimulus, globally there is immediate fiscal need in the emerging markets to tackle the health and economic fallout.

Africa Coronavirus

The post Where the US-Brazil relationship is going next appeared first on Atlantic Council.

On May 12, 2020, the Atlantic Council’s Adrienne Arsht Latin America Center hosted a timely conversation on the implications of the coronavirus on Sino-Brazilian relations. The event also marked the launch of the new China-Latin America Policy and Business Consultation Group, which will discuss some of the most pressing issues around China’s relationship with countries across the region.

The conversation featured Julie Chung, principal deputy assistant secretary (PDAS) in the US Department of State’s Bureau of Western Hemisphere Affairs; Thiago de Aragão, a partner and director of intelligence at Arko Advice; Ambassador Marcos Caramuru de Paiva, currently a partner and manager of KEMU Shanghai and former Brazilian ambassador to China; and José Roberto Martins, partner at Trench Rossi Watanabe Advogados. Jason Marczak, director of the Adrienne Arsht Latin America Center, gave opening remarks, and Pepe Zhang, associate director and lead on Latin America-China affairs for the Adrienne Arsht Latin America Center, moderated the conversation.

PDAS Chung opened the dialogue by calling for increased bilateral, regional, and global cooperation to combat the economic and public health crises. “The more we can pool our resources, the better we can overcome and fight this current situation,” she said. She also encouraged long-term capacity building and bilateral coordination efforts through capital investments, regulation coordination, and trade collaboration.

Ambassador Caramuru de Paiva noted that Brazil’s response to COVID-19 has been distributed between federal and local governments. In his view, states and municipalities have played a larger role against the pandemic, partly because of the size and diversity of the country, but also because the federal administration has followed a more lenient public health strategy. According to Ambassador Caramuru de Paiva, “the local governments took the right steps to protect people [and the] federal government was efficient in approving measures to protect businesses.”

Transitioning to external affairs, Caramuru de Paiva shared that trade with China has flourished despite the pandemic. Martins spoke on the mutual respect between the Brazilian and Chinese business communities. Both countries, he explained, have developed a “business infrastructure”—China has been Brazil’s major trading partner for at least ten years, and there is a strong bilateral business community. Caramuru de Paiva and Martins agreed that the active trade and infrastructure investment that characterize Brazil’s relationship with China are both beneficial and necessary.

Offering the political perspective on the Brazil-China relationship, de Aragão explained that there have been aggressive comments against China coming from individuals in government and Congress. However, these narratives have not transformed into concrete actions. De Aragão stated that while the Sino-Brazilian political relationship has suffered from these comments, the commercial relationship has thrived. This contrast between political and trade relations can be managed, he said, but political narratives can eventually materialize and contaminate the commercial relationship.

Therefore, according to de Aragão, China has several concerns regarding its relations with Brazil. First, the perceptions that Brazilian decision-makers have about China; second, US influence in Brazil—for example, a suspicion toward Huawei and 5G investments; and third, non-trade opportunities that could pose a problem for operations due to regulations of mergers and acquisitions. Therefore, de Aragão stated, China’s short-term goals are to understand the presidential decision-making process; to increase strategic partnerships in infrastructure; and to counteract the negative portrayals of China within the Brazilian government.

When asked if there is political pressure to impose tariffs on Chinese products, de Aragão asserted that Brazilian imports from China reflect the nature of free trade and supply chains. He stated that due to its complex tax system and labor laws, Brazil has been unable to boost local production at competitive prices.

The panelists compared the Chinese and US approach to Latin America. PDAS Chung encouraged Brazil and Latin American countries to be careful of China’s intentions, given their lack of transparency, predatory lending tactics, and strict government control over the Chinese business sector. Caramuru de Paiva responded that Brazil is not facing a dilemma between China and the United States, even if both powers have different economic models. “We have to have a decent dialogue with both,” he stated.

Chung explained that Brazil does not face “a choice between the United States and China,” but a choice about what Brazilians want and what values they want to import and integrate into their nation. Caramuru de Paiva mentioned that many Brazilians favor democracy, multilateralism, free trade, and international health cooperation; however, he expressed confusion over the values that are leading current US foreign policy.

To close the conversation, Martins observed that “Brazil doesn’t have the luxury to choose investors,” and noted that “any restriction to investors, whatever country, would be unconstitutional and unsustainable.” He lauded Brazil’s recent regulatory efforts and acknowledged that Brazil should continue to build upon this platform.

Observing that Brazil received more foreign direct investment in the first four months of 2020 than in the entirety of 2019, Martins shared that Brazil has a privatization plan to open the market further after the pandemic. He looked toward the future with optimism, declaring, that despite challenges, Brazil has institutions that will continue to attract foreign investments. “I would love to see investors from everywhere, to challenge, participate, and contribute in [the Brazilian] market,” Martins concluded.

The post China-Brazil relations under COVID-19 appeared first on Atlantic Council.

Since February, when the first case of COVID-19 was confirmed in Latin America, leaders have begun directing citizens on the best course of action to reduce the spread and loss of life. But whether to assuage fears or to assert their own political interests in a time of crisis, some heads of state have also been the culprits of spreading disinformation and misinformation. In Brazil and in Venezuela—two very different countries but both with oversaturated, highly polarized online information environments—thousands could end up paying for the spread of disinformation and misinformation with their lives.

At this moment of uncertainty and too many “expert voices,” societies are desperately seeking reliable, trustworthy sources of information. The COVID-19 pandemic is the first global health crisis in the age of social media—in countries where conversations on social media are hyperpolarized, governments must work even harder to create an atmosphere of confidence and reliability.

The number of COVID-19 cases in Latin America had surpassed 12,000 as March turned to April. As the situation worsens, it is imperative that governments be able to effectively implement national public health measures with which societies will comply. Yet the more governments send clouded, confusing, or outright inaccurate messages, the less likely it will be that their populations will heed mandates or warnings. In Brazil’s case, for example, the president himself is urging citizens to go back to work for the sake of the economy, contradicting health experts advocating for social distancing around the world and prompting the legal system to legally prohibit Jair Bolsonaro from amplifying directives against social isolation.

Disinformation and misinformation, especially circulating within the biggest economy in Latin America (Brazil) and the country with the worst man-made humanitarian crisis in the hemisphere (Venezuela), can foment national catastrophes that will be felt well beyond the realms of the online information space and national borders.

Two of the region’s most polarized countries, whose leaders espouse nearly opposite ideologies, provide stark glimpses into the very real effects of disinformation and offer a warning for how we should proceed.

Brazil 

In Brazil, President Jair Bolsonaro has failed outright to recognize the sheer potential of the virus—he has on various occasions called the coronavirus a “gripezinha,” (a small cold), as well as a fantasy amplified by the media. On March 29, he took to walking the streets of a market outside Brasilia, the capital, in an attempt to encourage Brazilians to keep the economy going rather than heed lockdown directives coming from health experts. Just days before, in a YouTube announcement streamed live on March 24, he affirmed that he will not sacrifice Brazil’s economy, and again referred to the virus as a small cold—going so far as to say it would not affect him as he is healthy and athletic, prompting enraged responses from scientists and some local government officials.

And, thanks in part to some encouragement from the president himself, mass gatherings like the pro-government protests that took place on March 15 brought together thousands of people at a time when social distancing was the recommended course of action by the World Health Organization. On the streets of São Paulo, some protestors called the virus a “hoax to discourage protesting.”

Confusing directions from the top, combined with the rising tide of disinformation spreading through Brazilian social media and messaging platforms, means millions of Brazilians are taking inappropriate, or outright ineffective, measures to contain the virus’s spread.

Brazilians, and most visibly the country’s most vulnerable populations, cannot afford to be put at risk by disinformation, misinformation, or the minimization of the seriousness of the virus. The first cases of coronavirus were confirmed on March 21 in the City of God favela. With low levels of access to health care services and high exposure to poor sanitary conditions, these are the populations that will suffer the most from this pandemic.

Venezuela

Nowhere is the information environment more conducive to the spread of disinformation than in Venezuela—the regime of Nicolas Maduro controls all of the major channels of communication, and independent media and civil society organizations struggle to make their voices heard within an environment replete with censorship, persecution, torture, and extrajudicial killings. Additionally, no epidemiological information has been publicly reported since Maduro took office in 2014, with one exception. In December 2016, then Minister of Health Antonieta Corporale published an epidemiological report, and the following day, the regime fired her.

In the middle of the COVID-19 crisis, on March 26, the US Department of Justice charged Nicolás Maduro and fourteen other former and current officials with drug trafficking, corruption, money laundering, and narco-terrorism. Hours later, Juan Guaidó, interim president of Venezuela recognized by more than fifty countries including the United States, called for the creation of a national emergency government to face the pandemic, excluding Maduro.

More than any other country in the region, the coronavirus pandemic could hit Venezuela at its very core. Just after Maduro ordered mandatory social quarantine in Venezuela, social media videos emerged from the streets of Petare, the country’s largest slum, showing hundreds heading to street markets to access basic goods. In a country where “59 percent of households have insufficient income to buy food” according to the Food Security Assessment published on February 2020, its unlikely that people could follow social distancing regulations.

The political stalemate in Venezuela and the US “maximum pressure” campaign is opening the door for the Maduro-controlled military to reinforce regulations exposing the population to larger violations of human rights, as well as political violence, persecution, and chaos.

As the online information environment in Venezuela continues to evolve, monitoring the digital engagement space with an approach to countering false narratives is increasingly necessary. #AlertaVenezuela, an Adrienne Arsht Latin America Center and Digital Forensic Research Lab effort, is paving the way for a deeper understanding of the complexities of the information environment in and around Venezuela. On March 27, we hosted a virtual discussion with key partners in Venezuela to look at the impact of COVID-19 disinformation in the country. By exposing and explaining disinformation in this context, the Atlantic Council has and will continue to shed light on the path ahead for combatting disinformation during this crisis.

A call to action

From the highest echelons of government to those sitting at home interacting with these developments from their phones or computers, there is a joint responsibility to stick to the facts, to verify everything, and to think twice before sharing.

Fact-checkers, media, and civil society have quickly mobilized to counter the rapid spread of disinformation. Technology companies launched control centers to help counter the spread of false news. And media outlets across the world opened bureaus focused on coronavirus reporting. 

But, these efforts alone are not enough if leaders are contributing to the infodemic. Disinformation, misinformation, or misleading information coming from the top will not do the region any favors—at this time of uncertainty, the countries’ leaders must stick to the facts and avoid minimizing the dangers of this pandemic.

Roberta Braga is an associate director at the Adrienne Arsht Latin America Center of the Atlantic Council, where she focuses on Brazil and disinformation, and co-leads the organization’s #AlertaVenezuela work focused on countering disinformation in Venezuela with the Digital Forensic Research Lab.

Diego Area is an associate director at the Adrienne Arsht Latin America Center of the Atlantic Council, where he leads the Center’s work on Venezuela that covers themes including illicit activities, democracy and governance, crisis management, depolarization, and countering disinformation.

Further reading:

New Atlanticist Mar 25, 2020

What Mexico’s response to H1N1 can teach us about coronavirus and future pandemics

By Pablo Reynoso Brito

While the A(H1N1) and novel coronavirus (COVID-19) crises are different in magnitude and were caused by viruses with different levels of lethality, Mexico’s experience with the A(H1N1) can offer valuable lessons for current disruptions.

Coronavirus Mexico

New Atlanticist Mar 23, 2020

What Latin American countries are doing to confront coronavirus

By David A. Wemer

As governments in North America, Europe, Asia, and around the world continue to combat the spread of the novel coronavirus (COVID-19), Latin American leaders are stepping up their efforts as cases are beginning to be documented in their countries. Although the number of cases across the region remains mostly lower than the epicenters in Europe and the United States, “we are not letting our guard down,” El Salvador’s Minister of Foreign Affairs Alexandra Hill Tinoco said on March 23. “No one can guarantee us that it is not going to hit us,” she explained, so every Latin American government is taking the threat seriously.

Colombia Coronavirus

New Atlanticist Mar 16, 2020

Addressing the coronavirus “infodemic”

By David A. Wemer

“Information, including disinformation and misinformation about the novel coronavirus is spreading faster than the pandemic itself,” Atlantic Council President and CEO Frederick Kempe explained. The sheer amount of information on the outbreak means that government and business leaders need to take specific actions to ensure that their citizens and employees receive important credible information.

Disinformation Economy & Business

The post The coronavirus infodemic in Latin America will cost lives appeared first on Atlantic Council.

In October 2020, Brazilians will head to the polls to elect new mayors and city counselors in thousands of municipalities across the country. For the first time in history, Brazil’s thirty-five individual political parties will be required by law to allocate at least 30 percent of their campaign funding toward the election of women candidates. As the deadline for candidates to register with their respective parties approaches, the moment is ripe to elevate women’s participation in politics in a country where the playing field for women remains severely unequal.  

Brazil has one of Latin America’s largest gender gaps. It ranks twenty-second out of twenty-five countries in the region. The main drag on the country’s overall performance is political empowerment—ranking 104^th in the world, behind other Latin American countries, such as Nicaragua (third), Costa Rica (sixth), Argentina (twenty-second), Bolivia (twenty-seventh), Colombia (thirty-third), and even Venezuela (seventy-sixth).

Diversity, Equity, and Inclusion

Mar 10, 2020

Venezuela’s democratization: Leading with women to achieve peace

By Cristina Guevara

In order for Venezuela to transition to a more democratic, inclusive, and peaceful society, the interim government must strengthen women’s political participation and decision-making power.

Democratic Transitions Venezuela

With regards to local governments, only one of the twenty-six states and the federal district is governed by women. In 2016, when the last municipal elections took place in Brazil, 11.6 percent of Brazil’s 5,568 municipalities elected women mayors, while 1,286 municipalities did not even elect a woman as city councilor. Only twenty-four cities had majority women on their city council.  

Women represent nearly 52 percent of Brazil’s voting population. However, as of June 2019, two positions in Brazil’s twenty-two-member cabinet were held by women (Teresa Cristina, Minister of Agriculture, Livestock and Supply, and Damares Alves, Minister of Human Rights, Family and Women). In addition, only 15 percent of federal deputies and senators are women.

Though Latin America has made strides for women’s advancement over the last decades, women in the region still face significant hurdles to inclusion and prosperity. Leadership is an area where we can observe not only women’s modest yet visible progress but also the clear need for mechanisms to sustain and expand female representation. Today, only Barbados and Trinidad and Tobago have elected women heads of states, and Bolivia has a woman interim president. 

As Brazil prepares to hold municipal elections in October 2020, the country should aim to increase women’s political participation and learn from its fellow Latin American countries.

Why should Brazil aim to increase women’s political participation?

The UN Sustainable Development Goals, to which Brazil is a signatory, highlight key urgent global challenges that must be addressed for a better and more sustainable future. Goal 5 highlights the importance of gender equality.

According to the United Nations, “equal access to education, health care, decent work, and representation in political and economic decision-making processes will fuel sustainable economies and benefit societies and humanity at large.” Having women in political positions facilitates the representation of women’s interests in politics, helping implement “new legal frameworks regarding female equality in the workplace and the eradication of harmful practices targeted at women,” for example, gender-based violence, such as femicide.

Research proved that in India, the number of drinking water projects in areas with women-led councils was 62 percent higher than in those with men-led councils; and in Norway, the presence of women in municipal councils had a direct causal relationship with regard to childcare coverage.

Women, like men, have “proven abilities as leaders and agents of change, and the right to participate equally in democratic governance.”

What can Brazil learn from other Latin American countries?

Argentina was the first country in the world to introduce a gender quota into law, in 1991. Since then, other countries in Latin America have adopted similar legal requirements.

Nicaragua ranks third in the world for political empowerment. Unlike Brazil, Nicaragua has a unicameral political system, but the country’s gender quotas apply for both the lower house and the subnational level. Implemented in 2012, the legislation enforces a 50 percent rate for women candidates in legislative elections, and gender balance of elected officials. Today, forty-three out of ninety-one seats (47 percent) in the National Assembly are held by women.

Colombia ranks thirty-third in the world for political empowerment. Even though there is space for improvement, under President Iván Duque, Colombia has a woman vice president and its first ministerial cabinet with gender parity. The country’s gender laws are more aligned with those of Brazil, also requiring a minimum 30 percent of women candidates, but these regulations apply not only to the Lower House and subnational level, but also to the Senate.

Diversity, Equity, and Inclusion

Mar 10, 2020

Colombia ¿Cómo vamos?: Women’s political and economic empowerment

By Camila Hernandez

Closing gender gaps in economic and political empowerment will move Colombia forward in its path toward sustainable development. Greater female participation in the economy and in politics will not only boost the country’s economy (by increasing productivity, diversifying the economy, reducing income inequality, increasing organizational effectiveness, among others), but will also contribute to more inclusive, democratic, and sustainable policies.

Colombia Women

Brazil instituted “gender quotas” in 1995, establishing a 20 percent minimum quota for women candidates in local elections. In 1997, a new electoral law determined that each party or coalition had to put forward a minimum 30 percent women candidates. These quotas, however, only apply to positions elected through a proportional representation system—therefore, the quota does not apply to presidents, governors, and senators.

For the 2020 elections, slight changes apply regarding gender quotas. The end of party coalitions will now require individual political parties to meet the 30 percent minimum requirement for women candidates. In addition, to guarantee greater participation, political parties are now required to allocate at least 30 percent of their campaign funding towards women candidates. In the case the number of women candidates exceeds the minimum requirement, the funding allocated should be proportionate.

These changes in regulations can make a difference in electing more women to political positions at the local level. But to shrink the gender gap in Brazil, clear mechanisms must be in place to enforce and punish those not compliant with these regulations, avoiding additional cases of misappropriation of campaign funding.  

Beyond 2020, gender quotas for the Senate could also be helpful in guaranteeing greater women participation throughout the political system.

Valentina Sader is an assistant director at the Adrienne Arsht Latin America Center. Follow her on Twitter @valentinasader.

Related reading:

Diversity, Equity, and Inclusion Mar 10, 2020

Colombia ¿Cómo vamos?: Women’s political and economic empowerment

By Camila Hernandez

Closing gender gaps in economic and political empowerment will move Colombia forward in its path toward sustainable development. Greater female participation in the economy and in politics will not only boost the country’s economy (by increasing productivity, diversifying the economy, reducing income inequality, increasing organizational effectiveness, among others), but will also contribute to more inclusive, democratic, and sustainable policies.

Colombia Women

Diversity, Equity, and Inclusion Mar 5, 2020

Venezuelan women: The unseen victims of the humanitarian crisis

By Angela Chavez

Although gender inequality is not a novel issue in Latin America and especially not in Venezuela, the current humanitarian crisis has made women more vulnerable financially, politically, and socially, and made sexual violence and discrimination commonplace. According to a recent report by Venezuelan non-profit organization Center for Peace and Justice (CEPAZ), the crisis has increased women’s vulnerability through the lack of governance and weakened institutions, impoverishment, lack of access to food and medicine, and the rising forced migration, among other factors.

Migration Venezuela

Diversity, Equity, and Inclusion Feb 24, 2020

Women protest for their lives: Fighting femicide in Latin America

By Isabel Kennon and Grace Valdevitt

Femicide continues to claim the lives of Latin American women on a daily basis. In Mexico, they are standing up to say something about it.

Civil Society Human Rights

The post Ahead of Brazil’s municipal elections, novel legal requirements can elevate women’s participation in politics appeared first on Atlantic Council.

Growing cooperation between the United States and Brazil has created “a very unique moment in our bilateral relations,” as both sides move closer to a potential deepening of their economic relationship, Ambassador of Brazil to the United States Nestor Forster said on March 5.

Joe Semsar, acting under secretary of commerce for international trade at the US Department of Commerce, agreed, saying that it “feels like there is some momentum behind this bilateral relationship,” Semsar suggested that both the United States and Brazil are now focused on continuing to “build the foundations for a potential free trade agreement.”

Semsar and Forster spoke at the Atlantic Council on March 5 to mark the launch of a new Atlantic Council report “US-Brazil trade and FDI: Enhancing the bilateral economic relationship.” The report, authored by Brazilian and US experts, offers a new vision for strengthening US-Brazilian trade and foreign direct investment, with the ultimate goal of a free trade agreement between both countries.

Read the report:

Issue briefs and reports

Mar 5, 2020

US-Brazil trade and FDI: Enhancing the bilateral economic relationship

By Abrão Neto, Roberta Braga

The United States and Brazil would benefit from a closer and stronger trade and foreign-direct-investment-relationship that would amplify growth and prosperity, in both the short and long terms. Deepening the economic relationship would pay dividends in other areas as well, translating into greater opportunities for strategic bilateral cooperation. This paper recognizes that the moment is now and that 2020 is a pivotal year to substantively advance bilateral economic ties.

Brazil Economy & Business

According to Sergio Segovia, president of Apex-Brasil, the report does not just advocate for pursuing a free trade agreement, but “creates a strategy for a way forward.” Forster agreed, praising the report for suggesting achievable goals for the short term that both countries can utilize “as building blocks towards longer-term objectives.” Semsar argued that the report will help provide leverage as a “focusing document to move [the US-Brazilian relationship] forward.”

The time is ripe for real progress on building economic ties between both countries, as years of hard work have provided a chance for breakthroughs. The US government and their “Brazilian counterparts have worked together for many years to prevent, reduce, and remove barriers to bilateral trade,” Semsar said, adding that “through years of engagement under our bilateral mechanisms, such as the US-Brazil commercial dialogue, we have been able to have productive and meaningful discussions.” According to US Representative Darin LaHood (R-IL), who co-chairs the Brazil Caucus in the US Congress, there has been “growing recognition” in both the United States and Brazil that economic cooperation “can help both countries.”

LaHood also credited the personal relationship between US President Donald J. Trump and President of Brazil Jair Bolsonaro as having “spurred where we are at today.” He further suggested that the successful completion of the United States-Mexico-Canada Agreement (USMCA) “showed our allies around the work that we can negotiate a trade agreement” successfully that is beneficial to all sides.

But while LaHood agreed that a free trade agreement should be a long-term goal for both the United States and Brazil, he cautioned that “there are a number of things that have to be met before we get to this next step.” He stressed the need in Brazil for tax reform, pension reform, and more significant anti-corruption measures as requirements for a serious push toward a free trade agreement. Semsar agreed, stressing that “if this were easy, we would have done it a long time ago.” For the United States, he continued, “details matter. There are fundamental issues that we need to work through before an agreement is possible.”

Forster acknowledged these continued challenges and argued that these make the intermediate steps outlined in the Atlantic Council report more important as an alternative to simply “throwing obstacles on the course” before beginning the race. He also warned against either side becoming too obsessed with potential economic competition between both countries, who often export similar goods. “I think it is about time that we overcome this logic of competition for market access; trying to get a larger slice of each other’s pie,” he said. “I see so much we can do to increase the size of the pie so we all end up with a large slice.”

One intermediary step, Semsar explained, will be to boost US investment into Brazil’s growing infrastructure construction. “US companies are only involved in 2 percent of infrastructure projects in Latin America,” he reported, while Spain accounts for nearly 19 percent and China 7 percent. By working to close this gap and taking other small steps to strengthen the underlying economic relationship, Semsar argued that both sides can “continue to build the foundations for a potential free trade agreement.” LaHood agreed, stressing that both sides should focus on “meeting the goals that we have put in place,” as maintaining progress “internally in Brazil will pay the best dividends down the road.”

“We all agree that we have a tremendous opportunity before us,” Forster said. But he warned that “we cannot keep opportunity for later. This is a unique moment; we should grab the moment.”

David A. Wemer is associate director, editorial at the Atlantic Council. Follow him on Twitter @DavidAWemer.

Further reading:

Issue briefs and reports Mar 5, 2020

US-Brazil trade and FDI: Enhancing the bilateral economic relationship

By Abrão Neto, Roberta Braga

The United States and Brazil would benefit from a closer and stronger trade and foreign-direct-investment-relationship that would amplify growth and prosperity, in both the short and long terms. Deepening the economic relationship would pay dividends in other areas as well, translating into greater opportunities for strategic bilateral cooperation. This paper recognizes that the moment is now and that 2020 is a pivotal year to substantively advance bilateral economic ties.

Brazil Economy & Business

New Atlanticist Dec 3, 2019

Brazil and Argentina surprised by tariff announcement: What comes next?

By Jasper Gilardi

On December 2, US President Donald J. Trump announced that he would impose new tariffs on Brazilian and Argentinian steel and aluminum coming into the United States, a retaliation for alleged currency manipulation, which he claimed was hurting US farmers.

Brazil Latin America

Report Apr 11, 2019

Spotlight: Five key economic avenues for strengthening US-Brazil trade and FDI

By Daniel Marteleto Godinho, Abrão Neto

In what five key ways can the United States and Brazil work more effectively together to strengthen bilateral trade and foreign direct investment?

Brazil Economy & Business

The post The path forward for the US-Brazil economic relationship appeared first on Atlantic Council.

Foreword

The year 2020 marks the turning of a page for the Western Hemisphere, a region that in 2019 saw uncertainty dominate headlines as new governments came in and out of office, trade tensions grew, and citizens took to the streets to voice their concerns with the status quo.

For years, the opportunities that could come with a stronger bilateral relationship between the United States and Brazil have been underestimated. Significant potential exists to produce sizeable benefits for both societies. That potential must be maximized.

While US and Brazilian governments and businesses have begun to seize the benefits of the synergies the two countries share, hurdles remain that prevent a full and successful commercial reality.

The United States and Brazil would benefit from a closer and stronger trade and foreign-direct-investment-relationship that would amplify growth and prosperity, in both the short and long terms. Deepening the economic relationship would pay dividends in other areas as well, translating into greater opportunities for strategic bilateral cooperation. This paper recognizes that the moment is now and that 2020 is a pivotal year to substantively advance bilateral economic ties.

Building upon the successes and progress made over the years, this paper incorporates the input and expertise of the US and Brazilian private sectors and policymakers to offer a renewed vision and new momentum for strengthening US-Brazil trade and foreign direct investment (FDI), supporting concrete steps toward deepening the commercial relationship, and laying the foundation for a potential free trade agreement (FTA) between the United States and Brazil.

As the global balance of power shifts, as the world faces new hurdles that could slow growth, and as Latin America must contend with more uncertainty amid new external shocks, the two countries strategically and economically have countless reasons to deepen commercial relations. Stronger ties will ultimately provide additional certainty at this critical time.

Jason Marczak
Director, Adrienne Arsht Latin America Center Atlantic Council

Table of contents

Executive Summary

1. A New Chapter for US-Brazil Relations
2. Deepening US-Brazil Trade and Investment
3. Institutional Hurdles and Potential Opportunities
4. The US Perspective
5. The Brazil Perspective
6. Working Toward Greater Foreign Direct Investment
7. Domestic Reforms Paving the Way for Greater Investment
8. Bilateral Pathways for Deepening Investment
9. Key Recommendations
10. Conclusion
11. Acknowledgments
12. About the Authors

Executive summary

Scan the global horizon today and one can’t help but note the trends that are fundamentally reshaping the world order. New global players are taking center stage, as countries reconsider their approaches to collaboration and cooperation. Changes in technology are evolving at unprecedented speeds—changes that have brought forward a fourth industrial revolution that has generated new questions about how best to solve global challenges not confined by borders. These transformative trends are affecting the world, and the marketplace. But, change also brings immense opportunity.

In this environment, the United States and Brazil are uniquely positioned to advance momentum for a more robust bilateral economic relationship. As the United States and Brazil look at delivering on such a goal, the Atlantic Council’s Adrienne Arsht Latin America Center, alongside intellectual partners in both countries, lays out the benefits that a closer economic relationship may offer. The goal: provide new ideas and reinforce momentum for deepening the bilateral relationship at a time of great synergy between the countries’ leadership.

An open, transparent, inclusive, and international rules-based bilateral trading system is key to sustainable growth and prosperity for the United States and Brazil.

This paper, authored by two US and two Brazilian experts, showcases the scope for the United States and Brazil of deepening trade and FDI ties. In particular, it highlights the institutional hurdles and opportunities for lowering trade barriers and enhancing convergence in the near term, while articulating the benefits of a comprehensive free trade agreement in the long term, as well as what the two countries can do to achieve even stronger investment ties. To highlight the potential benefits of a stronger US-Brazil partnership and increased investment in different sectors of the economy, this paper, from a bilateral and non-partisan perspective, proposes short-term and long-term approaches to seizing on opportunities for greater engagement. It also highlights, through call-out boxes, the authors’ perspectives on key themes and opportunities for particular industries.

Throughout 2020, the United States and Brazil have the chance to focus on key, practical, short-term wins that could pave the way for next steps toward a comprehensive long-term free trade agreement.

In the areas of trade, recommendations include a multi-chapter trade enhancement agreement that could encompass bilateral rules on customs administration and trade facilitation, good regulatory practices, technical barriers to trade, and digital trade, among other areas. Working closely with the private sectors of the two countries, the United States and Brazil should continue to identify specific bottlenecks to reduce trade uncertainty, and work to finalize a mutual recognition agreement between national trusted traders or Authorized Economic Operator (AEO) programs. Key to short-term success will be expanding digital documentation in bilateral trade and expanding upon sharing good regulatory practices, including conducting impact analyses and public consultations, and implementing a whole-of-government approach.

The two countries should work to move beyond the pilot program to establish a full-fledged Global Entry Program for pre-approved Brazilian travelers entering the United States, start negotiations to avoid double taxation, and consider the implementation of a high-level mechanism at the vice presidential level to oversee the bilateral relationship (in coordination with existing dialogues and groups). The United States and Brazil can also increase policy cooperation in third countries and international fora in areas of investment and trade policy coherence.

The United States should continue to support Brazil’s process of accession to the Organisation for Economic Co-operation and Development (OECD), which would energize and consolidate important economic domestic reforms in Brazil.

Beyond 2020, and using momentum of short-term progress, the United States and Brazil should work toward launching and concluding negotiations for a comprehensive free trade agreement (FTA) and bilateral investment treaty (BIT).

An open, transparent, inclusive, and international rules-based bilateral trading system is key to sustainable growth and prosperity for the United States and Brazil. By articulating the spillover effects of stronger ties from a bilateral approach, this paper provides a new perspective on the benefits of closer trade and investment linkages between the two countries. The moment to catapult the joint relationship to the next level is now.

A new chapter for US-Brazil relations

As the two largest economies in the Western Hemisphere, the United States and Brazil have a long and prosperous relationship, one dating back to 1824, when the United States became one of the first countries to recognize Brazil’s independence.¹

More recently, and over the course of decades, Brazil and the United States have taken steps to foster deeper engagement within sectors of strategic mutual importance. These have included the aerospace, energy, tourism, defense and security, healthcare, infrastructure, and automotive industries, among many others.

The partnership is one characterized by a shared vision of growth and prosperity, while each country’s viewpoint regarding the role of the public and private sectors in leading growth has varied. Recent numbers give a glimpse of the mutual benefits behind the bilateral relationship. In 2018, two-way trade in goods and services amounted to more than $100 billion, which is also likely to be the case in 2019.*

For Brazil, the United States is a crucial economic and commercial partner. As of 2019, the United States ranked as Brazil’s second-largest trading partner— having only recently been overtaken by China—when considering goods and services together. The United States is the most important destination for Brazilian exports in services and in manufactured products. In terms of FDI, while flows from China have accelerated in recent years (especially in the energy and infrastructure industries), the United States remains the largest investor of FDI in Brazil—five times greater than China, reflecting the breadth and depth of the longstanding relationship between the United States and Brazil.²

The United States also benefits from its relationship with Brazil. As Latin America’s largest democracy and economy, Brazil ranks fourteenth as a US trading partner, and it is the United States’ number-two destination for goods in the region. According to the US Trade Representative (USTR), in 2018, the United States had an overall trade surplus of $30.6 billion for goods and services, including an $8.5 billion trade surplus for goods alone.³ Brazil’s main imports from the United States are aircraft, machinery, petroleum products, electronics, and optical and medical instruments. 

One can look at the number of student exchanges between the United States and Brazil as another example of the importance of the bilateral relationship—Brazil is the ninth-leading country sending students to the United States.⁴ Between 2017 and 2018, per US Immigration and Customs’ SEVIS (Student and Exchange Visitor Information System) by the Numbers Report, the number of Brazilian students studying in the United States increased by 13.1 percent.⁵ From 2018 to 2019, that number increased by 9.8 percent, the second-largest percentage increase in international students from any country worldwide in that timespan.⁶

There is no denying that the United States and Brazil are key partners and allies. But the two largest economies in the Americas have yet to remove the barriers necessary to maximize the full potential of actual and possible trade and investment ties.

The positive state of bilateral relations offers a unique opportunity to build momentum to deepen economic ties in this longstanding and enduring partnership. The key reforms being advanced in Brazil to strengthen the economy, and the role of the private sector in it, make this an opportune moment to advance and achieve key short-term outcomes that would position both countries to deepen and expand trade and investment in the longer term.

Over the past year, the administrations of US President Donald Trump and Brazilian President Jair Bolsonaro have made commitments to further bring the two economies closer together in increasing prosperity, enhancing security, and promoting democracy and national sovereignty.

In his first bilateral visit abroad after assuming office, President Bolsonaro met in Washington, DC, with President Trump in March 2019, joined by seven of his twenty-two ministers, including Economy Minister Paulo Guedes, Justice Minister Sérgio Moro, and Foreign Affairs Minister Ernesto Araújo. The visit defined an agenda that prioritized expanding cooperation in trade and FDI, defense and security, and innovation.

On more than one occasion, leaders of both countries have expressed their willingness to negotiate a trade agreement—notwithstanding the complicated and ongoing challenges that have held back such negotiations in the past.⁷ The two presidents have thus far made several specific trade-related commitments. They agreed to build a Prosperity Partnership to increase jobs and reduce barriers to trade and investment, putting emphasis on exploring new initiatives to facilitate trade, investment, and good regulatory practices. They also pressed for the conclusion of a mutual recognition agreement regarding their trusted trader or AEO programs.

To show their mutual intent to tackle some long-standing bilateral trade disputes, President Bolsonaro announced the intention to expand US access to the Brazilian wheat and pork markets, while President Trump indicated the United States would take steps to resume Brazil’s beef exports. Brazil has also implemented the commitment to extend the annual duty-free tariff rate quota (TRQ) of 750,000 metric tons (MT) of wheat imports.⁸

As written in the joint statement between the two countries, President Trump offered his support for Brazil’s accession to the OECD—a process that started in 2017 with Brazil formally expressing its interest in joining the organization—and President Bolsonaro announced that Brazil will begin to forgo special and differential treatment in World Trade Organization (WTO) negotiations.

Brazil affirmed it would waive the tourist visa requirement for US citizens to enter the country, which became effective in June 2019, and both presidents agreed they would work to enable Brazil to participate in the US Global Entry Program.⁹ They also decided to resume the activities of the Brazil-US CEO Forum.

On the defense-and-security front, both countries signed a Technology Safeguards Agreement that enables US spacecraft to be launched from Brazil’s Alcântara Launch Center. The agreement was approved by Brazil’s Congress in November 2019 and launches are expected to begin in 2021.¹⁰ This agreement is part of a broader effort to continue expanding bilateral cooperation beyond trade. The United States also designated Brazil as a “major non-NATO ally,” facilitating Brazil’s ability to purchase US weapons and defense equipment.¹¹

The Brazil-US CEO Forum, which met in Washington, DC in November 2019 after a four-year lapse, also laid the groundwork for deeper collaboration. The chief executive officers’ (CEOs’) joint recommendations included “proposals to increase bilateral trade, infrastructure cooperation, collaboration in the technology sector, and improvements in health, education, and workforce development.”¹² They recommended “several measures to advance discussions toward the long-term goal of a free trade agreement, focusing on issues such as Brazil’s entry into the OECD, tax reforms, trade facilitation and a Double Taxation Agreement (DTA).”¹³

Brazil’s own economic-reform agenda is also helping to lay the groundwork for a deepening of the relationship. The Brazilian Pension Reform, passed in the fourth quarter of 2019, bolsters Brazilian public finances, particularly in the longer term, by easing pressure on the budget over the coming years.¹⁴ More importantly, it is the first of various planned reforms to Brazil’s fiscal challenges—a much-needed tax reform is one of the next long-awaited reforms on the horizon.

As the United States and Brazil look at further delivering on a stronger bilateral agenda, this publication sheds light on the possibilities to advance short-to-long-term commercial opportunities in goods-and-services trade through a multi-chapter trade enhancement agreement, coordinated efforts to ensure Brazil’s accession to the OECD, the conclusion of a mutual recognition agreement between national trusted traders, continuing to enhance good regulatory practices and sector-specific regulatory cooperation, enhancing commercial policy cooperation in third countries, the implementation of a full-fledged Global Entry Program, and eventually, the conclusion of a US-Brazil Free Trade Agreement, a Double Taxation Agreement, and a Bilateral Investment Agreement.

* From a statistics standpoint, imports reported by one country do not necessarily coincide with exports reported by its trading counterpart. Various factors, including valuation and timing, explain such differences. Discrepancies may also occur in FDI data generated by each country. The Central Bank of Brazil and the Bureau of Economic Analysis may be using different methodologies for measuring FDI.

President Trump offered his support for Brazil’s accession to the OECD—a process that started in 2017 with Brazil formally expressing its interest in joining the organization—and President Bolsonaro announced that Brazil will begin to forgo special and differential treatment in World Trade Organization (WTO) negotiations.

Deepening US-Brazil trade and investment

Building toward a comprehensive free trade agreement

Brazil and the United States have long made strides toward the potential negotiation of an FTA. This would be the most ambitious and wide-ranging economic and trade measure toward which both countries could aim. Estimates predict that a US-Brazil FTA would have a net positive impact not only on both countries’ gross domestic product (GDP) and national income, but also on exports, imports, wages, and employment.¹⁵ An FTA would also create a long-standing legal framework that would further integrate both economies, and would shape the trade and investment patterns between them in the future.

However potentially positive an FTA may be, it is a long-term goal. The production of mutually beneficial results will demand time, resources, and political capital. There are several stages in the process of negotiating an FTA. In the US case, there is the need to notify Congress prior to the start of trade talks. Special pre-initiation assessments and congressional consultations are required, including an assessment of existing tariff disparities on agricultural products and an assessment by the International Trade Commission of import-sensitive agricultural products.

On the Brazilian side, it is necessary to decide whether the agreement would be a joint enterprise alongside the Southern Common Market (Mercosur), or whether it would be a bilateral undertaking—which would entail changes to the current legal structure of Mercosur.

Once talks formally start, multiple rounds and strenuous hours of negotiations are needed to reach agreements on a vast array of technical issues, involving numerous negotiating teams, private-sector consultations, and political instructions. If a deal is reached, the United States and Brazil would run the “last mile” of legal revisions, signing, congressional approvals, and, finally, ratification.

In a nutshell, the road to an FTA is a long one. As such, various steps can be taken to ripen the path to an eventual agreement.

Institutional hurdles and potential opportunities

As a member of Mercosur, Brazil is bound by its rules to negotiate tariff agreements as part of the trading bloc.¹⁶

Until recently, the administration of President Bolsonaro had firmly maintained its commitment to pursuing FTAs together with Mercosur, especially after successfully concluding negotiations in 2019 with the European Union and the European Free Trade Area (EFTA)—blocs that represent a combined gross domestic product (GDP) of $20 trillion.

But, the change in administration in Argentina, with Alberto Fernández assuming the presidency in December 2019, may impact next steps. Despite Brazil and Argentina’s long relationship as partners and allies, the two administrations may not see eye to eye on all issues of global integration. Such a position could eventually lead to new Mercosur legislation granting members full autonomy to negotiate treaties. It could also lead to a downgrade in Mercosur’s status from an “incomplete common market” to a “free trade area”—which would allow its members to unilaterally change their import tariffs. On the other hand, a pragmatic approach by the Argentine administration would open the door for continued cooperation through the existing Mercosur mechanism.

Any changes to the Mercosur normative framework require consensus from all Mercosur members, including Argentina. This is also valid for somewhat simpler modifications, as is the case of Decision CMC 32/00, which states that tariff preferences given to third parties must be jointly negotiated. A return to a free trade area involves even more complex and time-consuming legal and political arrangements.

Conversely, a withdrawal from Mercosur would be a last resort, with significant consequences. A withdrawal would impact Mercosur’s ongoing trade negotiations with third parties, as well as the recently concluded European Union-Mercosur trade agreement (as the agreement has not yet been signed and the European Union mandate was to negotiate with Mercosur as a bloc, and not with individual countries). It would also lead to time-consuming discussions regarding what tariffs would be in place in trade between Brazil and the other Mercosur countries.

All alternatives seem to come with a substantial cost to the political balance in the region, and would demand considerable time and energy.

Against this backdrop, from Brazil’s perspective, the case for an FTA negotiation with the United States is an incredible opportunity but not a simple task: FTA negotiations would have to take place within and alongside Mercosur (which demands Argentina’s new government be onboard and the United States be keen to negotiate with the four Mercosur countries as a trading bloc), or Brazil would come up against the need to adjust Mercosur’s rules to allow a bilateral negotiation.

Nevertheless, 2020 provides an opening to glance at alternative opportunities that could pave the way for an eventual FTA.

Brazilian President Jair Bolsonaro, Uruguayan Vice President Lucia Topolansky, Paraguayan President Mario Abdo Benitez, and Chilean Foreign Minister Teodoro Ribera attend a Mercosur summit, in Bento Gonçalves, Rio Grande do Sul, Brazil, December 5, 2019.

The US perspective

During President Bolsonaro’s visit to Washington in March 2019, Presidents Trump and Bolsonaro committed to “enhancing the work of the United States-Brazil Commission on Economic and Trade Relations, created under the Agreement on Trade and Economic Cooperation (ATEC) to explore new initiatives to facilitate trade investment and good regulatory practices.”¹⁷

In a historic move, President Trump also welcomed Brazil’s ongoing efforts to institute much-needed domestic economic reforms, as well as a regulatory framework in line with the standards of the OECD.

From the US perspective, the moment is ripe for both countries to engage in productive conversations that will yield positive outcomes for both parties and the private sector. The personal relationship between both presidents and their directives to reevaluate their respective countries’ trade relations presents a unique opportunity for dialogue and concrete results.

While an FTA should continue to be the goal toward which the United States and Brazil strive, given administrative and legislative priorities, results in the short term are key to laying the groundwork for an eventual agreement. The building blocks for a potential FTA between Brazil and the United States will be the short-term opportunities, which—if successfully implemented over the current year—can pave the way for a potential FTA and for the various long-term recommendations laid out in this paper.

As the United States and Brazil work to deepen trade of goods, the United States will look to seize on opportunities to increase regulatory cooperation, identify and eliminate technical barriers, and identify new openings for harmonizing standards and assessment procedures.

A focus on goods

Though the United States and Brazil have made progress on trade and investment over the years, Brazil remains one of the countries with the highest tariff barriers. As the United States and Brazil work to deepen trade of goods, the United States will look to seize on opportunities to increase regulatory cooperation, identify and eliminate technical barriers, and identify new openings for harmonizing standards and assessment procedures.

Brazil’s Most Favored Nation (MFN) applied tariff averaged 10.2 percent for agricultural products and 13.9 percent for non-agricultural products in 2017. Brazil’s WTO maximum bound-tariff rates are 55 percent for agricultural products and 35 percent for non-agricultural products.

US exporters face significant uncertainty as result of frequent increases and decreases in tariffs. According to the World Bank, Brazil’s average (trade-weighted) tariff rate was 8.3 percent in 2015, the highest rate among emerging and advanced economies.

Though the United States and Brazil have made progress on trade and investment over the years, Brazil remains one of the countries with the highest tariff barriers.

According to the USTR, Brazil imposes relatively high tariffs on a variety of sectors, including automobiles, automotive parts, chemicals, plastics, information and communications technologies (ICT), industrial machinery, steel, textiles, and apparel.¹⁸

Beyond tariffs, US industrial goods are subject to non-tariff barriers to trade. These barriers include import licensing, product standards, conformity assessment procedures, and technical regulations. As an example, the United States and Brazil take different approaches to the recognition of international standards. Conformity-assessment procedures for toys and medical devices are examples of areas for discussion and improvement.¹⁹ The complexity of meeting unique country requirements is particularly burdensome on small and medium-sized enterprises (SMEs). Such non-tariff measures create additional costs and loss of time for businesses and consumers. According to estimates using data from the United Nations Conference on Trade and Development Trade Analysis Information System (UNCTAD TRAINS) and UN Comtrade data, the ad-valorem equivalent of non-tariff measures is almost 12 percent.²⁰

Although some of these non-tariff measures serve legitimate health-and-safety policy objectives, a higher percentage of products are subject to such measures in Brazil than world averages. The percentage of imports subject to sanitary and phytosanitary measures and technical barriers, for example, is 66 percent and 89 percent, respectively, as compared to 26 percent and 61 percent, respectively, per the World Bank.²¹

There are also opportunities to improve trade logistics and trade facilitation between the United States and Brazil. Brazil ratified the WTO Trade Facilitation Agreement in 2016 and continues to work toward implementation of the agreement.

US companies continue to express concerns regarding burdensome and inconsistent documentation requirements for imports of certain goods, (e.g., heavy equipment). While great progress has been made in certain sectors (e.g., medical devices), unpredictability and delays in customs clearance remain problematic in other sectors (e.g., pharmaceuticals).

Brazil has improved its trade-facilitation environment by implementing ATA Carnet, an international customs process permitting the duty-free and tax-free temporary export and import of goods for up to one year, per the International Chamber of Commerce.²²

The country has also done so by working toward a mutual recognition agreement with the United States for its Authorized Economic Operator program. The AEO is a partnership program that many customs administrations are pursuing to facilitate global trade by providing incentives to customs and traders that have decided to work in partnership to improve supply-chain security, per the World Customs Organization.²³ The mutual agreement refers to two countries closing an agreement or arrangement to mutually recognize AEO authorizations.

A focus on services

Brazil has more restrictions on trade in services than the average country in Latin America, according to the World Bank Services Trade Restrictiveness Index (STRI), with the most restrictive scores in financial and professional services, essential for productivity growth and competitiveness.²⁴

US companies experience barriers to trade across a wide variety of services sectors. For example, services barriers in audiovisual services include: higher taxes on foreign film; requirements of percentages of programming by Brazilian on “open-broadcast” channels; express delivery (e.g., 60-percent duty on goods imported through Simplified Customs Clearance, lack of a de minimums exemption, partially funded automatic express-delivery clearance system, per-shipment value limits of $10,000 per exports, and $3,000 for imports); financial services (requirement that Brazilians be directly responsible for administration of a foreign bank subsidiary); and local content requirements (LCRs) in telecommunications.²⁵

Relevant gains for the United States

Given the size of Brazil’s economy and the successful implementations of US FTAs with other key countries in the region, it is clear that a US-Brazil FTA would bring tangible economic benefits to the United States.

First, an FTA would strengthen hemispheric commercial cooperation, enhancing the overall bilateral relationship between the United States and Brazil. As Brazil is by far South America’s largest economy, reducing barriers to trade would open this important market to US businesses. A 2016 study estimated an FTA would add $24 billion to US GDP and $30 billion to real national income, and expand employment by nearly one hundred thousand jobs.²⁶ Employment growth was projected in every US state.

The removal of tariffs would reduce the cost of imports from the United States to the Brazilian consumer, and would make US exports more competitive with US competitors in Brazil (e.g., China, the European Union, and other Mercosur countries). An FTA could also increase the predictability of US-Brazilian trade for US exporters. Per a 2018 National Trade Estimate Report on Foreign Trade Barriers by the Office of the United States Trade Representative, given the large disparities between bound and applied rates, US exporters face uncertainty in the Brazilian market. The unpredictability makes it difficult for exporters to forecast the costs of doing business. An FTA that would include the elimination or reduction of tariffs and non-tariff barriers would remove this fluctuation.

An agreement on good regulatory practices would support the development of compatible regulatory approaches in the United States and Brazil, and reduce or eliminate unnecessarily burdensome, duplicative, or divergent requirements. An agreement on good regulatory practices would also better enable effective regulatory cooperation. It would increase transparency in the regulatory process, providing a clear rationale for new regulatory actions, as well as encouraging cooperation on minimizing divergence in regulatory outcomes.

Furthermore, an FTA could streamline import licensing for US companies, removing entry barriers for US firms. Opportunities to streamline import-licensing processes via a potential FTA would help US businesses enter Brazilian markets faster and more inexpensively.

Finally, the strengthening of the US-Brazilian economic relationship through an FTA would likely have positive ramifications for the broader US-Brazilian relationships outside of the economy.

An agreement on good regulatory practices would support the development of compatible regulatory approaches in the United States and Brazil, and reduce or eliminate unnecessarily burdensome, duplicative, or divergent requirements.

The Brazil perspective

In recent years, Brazil has been walking more resolutely down the path of greater global trade integration. Negotiations between Mercosur and the European Union have changed gears with the exchange of market offers in May 2016, and gained real traction in 2017. In 2017, Mercosur formally engaged in negotiations with EFTA, and in 2018 launched FTA trade talks with Canada, Singapore, and South Korea.

Argentina under then-President Mauricio Macri and Brazil under then-President Michel Temer and President Bolsonaro initiated a phase of greater political and technical convergence when it came to trade negotiations, which allowed Mercosur to advance on the aforementioned initiatives. The modernization of Mercosur itself also got under way with the adoption of an investment agreement (2017), a public procurement agreement (2018), and revised rules for common technical regulations (2018).

On the bilateral level, Brazil signed its first-ever public procurement agreement in 2016 (Peru), ratified its first investment agreements with several countries in Latin America and Africa, and in 2018 signed a comprehensive FTA with Chile. The bilateral trade treaty with Chile, for the first time in Brazilian history, includes chapters on digital trade, trade and gender, trade facilitation, micro, small, and medium enterprises, the environment, and many others.

In 2017, Brazil formally expressed interest in becoming a member of the OECD, and became an observer to the WTO Government Procurement Agreement (GPA). At the multilateral level, Brazil has been one of the most active sponsors of discussions on investment facilitation and digital trade.

Under President Bolsonaro, the Brazilian transition toward a more ambitious trade policy gained extra momentum. The current Brazilian administration has defined trade integration as a top priority, having successfully concluded negotiations for the milestone trade deals with the European Union and EFTA (2019), and continued progress on formal talks with Canada, Singapore, and South Korea. The country has also begun dialogues with partners such as Japan, Lebanon, Indonesia, and Vietnam. Additionally, in 2020, Brazil expressed its intention to join, as a full member, the WTO GPA.

From the Brazilian perspective, the moment is ripe for laying the groundwork for an FTA discussion with the United States. It is seemingly a top priority for the Brazilian government, fitting perfectly into its current trade-negotiating directives. Taking into consideration the political convergence that exists between the heads of state from both countries, this is the ideal moment to begin paving the road to an FTA.

In his first year in office, President Bolsonaro tweeted at least five times his desire to initiate trade negotiations or address the relevance of stronger trade relations with the United States.²⁷ As 2020 elections in the United States approach, exploring more gradual and agile approaches, such as a multi-chapter trade enhancement agreement could produce relevant results and, at the same time, constitute an incremental step toward a future FTA.

In general, the Brazilian private sector also appears to support the idea that an FTA would generate gains for both sides, being perceived as a win-win initiative. Leading business entities in Brazil—such as the American Chamber of Commerce for Brazil (Amcham Brasil), the National Confederation of Industries (CNI), and the Federation of Industries of the State of São Paulo (FIESP)—have publicly supported an FTA with the United States.

A Focus on Goods

The United States has a low average tariff rate, particularly for industrial goods. According to the USTR, the average trade-weighted import tariff rate for non-agricultural goods is currently 2 percent, and half of those products are imported into the US market duty free.²⁸

From an export perspective, one could say Brazil would not gain much when it comes to reducing tariff barriers on industrial products as a result of an FTA. However, this would be too narrow an analysis.

Several exceptions exist. Apparel and clothing accessories are one good example: average tariffs for knitted or crocheted clothing are 18.7 percent, and for non-knitted or crocheted items are 15.8 percent. Natural wool, yarn, and woven fabrics carry a 13.1-percent duty. Footwear is taxed at 11.8 percent. Import duties for jewelry, gemstones, and precious metals are 5.9 percent, and for furniture and bedding, 5.7 percent.²⁹

The United States is also utilizing measures under Section 232 of the Trade Expansion Act of 1962, based on national security arguments, which lead to unilateral increase in duties or to quantitative restrictions on exports from Brazil.

In 2018, the United States imposed an additional 10-percent duty for Brazilian exports of aluminum, and slapped hard quotas on Brazilian exports of steel, limiting volumes using the average of years 2015–2017 as a reference. Under this same mechanism, there is an investigation under way regarding automobiles and automobile parts, which could affect Brazilian exports.

Tariffs aside, Brazilian industrial goods are subject to technical requirements for being marketed in the United States, which usually entails compliance costs associated with product and process adjustments, testing, and conformity assessment. Intensification of sectorial initiatives of regulatory cooperation and negotiation of rules for avoiding unnecessary technical barriers to trade (TBT) may, therefore, have substantial positive impacts for driving down costs and time in bilateral trade.

Market access for Brazilian agricultural goods in the United States also faces considerable constraints in the form of tariffs and quantitative restrictions. Although they represent only approximately 5 percent of Brazilian exports to the United States (2018), there is considerable potential for their expansion.³⁰

The United States and Brazil are world leaders in producing and exporting agricultural products. They are fierce competitors in the global market, but may complement each other in certain areas, as is the case for ethanol, sugar, and meat. The two countries may also work together to access new international markets and develop common standards for agricultural goods.

Barriers to free trade in the agricultural sector are quite high in both countries. Trade restrictions exist for Brazilian exports of sugar, cotton, soy complex, tobacco, orange juice, and dairy—all which face tariff quotas or high tariffs to enter the United States. In many cases, tariffs imposed outside the quotas are de facto prohibitive. In other instances, Brazilian exports are de jure forbidden from the US market, usually due to certification or sanitary and phytosanitary (SPS) restrictions, as is the case for fresh beef, poultry, avocado, persimmon, fig, and starfruit, among others.³¹

Negotiations on agricultural products tend to be highly sensitive, as they involve deep-rooted political arrangements and special interests. One should expect nothing different if the United States and Brazil decide to engage on these topics as a part of FTA talks, incorporating discussions on building bilateral SPS rules, revisiting SPS restrictions, and eliminating or reducing import-tariff barriers.

Government procurement: A new horizon for Brazil

When it comes to public procurement, Brazil is a new player on the global scene. Brazil signed its first international agreement on public procurement only in 2016, with Peru. Since then, Brazil’s position has grown stronger—Brazil signed a deal within Mercosur in 2017 and with Chile in 2018. In 2019, Mercosur concluded negotiations on agreements with the European Union and the European Free Trade Association, both of which have chapters on public procurement, and the bloc is currently negotiating with Canada, Singapore, and South Korea. Although still not a member, Brazil became an observer to the WTO GPA in 2017, and in 2020 announced its intention to become a full member.

There is a predominantly positive view in Brazil about the aforementioned agreements, as they are seen as mechanisms to add more transparency in public procurement in the country and, above all, to enhance the quality of public spending, considering the Brazilian government faces growing and challenging budgetary restraints. It is unlikely, therefore, that public procurement would be an issue of much contention, at least from the Brazilian government side, if and when it gets to the negotiating table with the United States. This does not mean, however, there will be full endorsement from business sectors directly affected by such an agreement, as they may look to preserve the Brazilian market and for reciprocity within the US market.

On the other hand, some measures comprising the Buy American Act may be subject to special attention from the Brazilian negotiators, as they curtail the possibility of participation of Brazilian companies or demand high thresholds of local content in government procurement in the United States, including, for instance, in infrastructure, defense, and energy projects. The Brazilian government assesses that Brazilian business is potentially affected by US restricting measures in US purchases in the sectors of food, textile, and steel products.³²

A focus on services

The United States is Brazil’s main destination for the export of services. In 2017, the United States represented more than 50 percent of Brazilian foreign sales of services, totaling nearly $16 billion, according to Brazil’s trade statistics. In 2018, exports to the United States dropped to $8.7 billion. The most relevant services exported included technical services, water transportation, app designing, and financial services, among others.

In 2018, the United States was second only to the Netherlands as the country of origin for Brazilian imports of services. The total amount of services purchased from the United States by Brazil was $12.5 billion. Relevant sectors included licensing for producing rights, leasing of machinery and equipment, advertisement services, and licensing for the use of computer software.

It is important to note that, both in export and import flows, US official statistics differ significantly from Brazilian ones. As a reference, 2018 US data indicate US services exports to Brazil totaled $28.2 billion (more than twice the Brazilian data), and US services imports from Brazil reached $6.1 billion.³³ As a consequence, the United States had a services trade surplus of an estimated $22 billion. Explanations to justify such substantial disparities and ensure common understanding regarding bilateral trade statistics must be further explored by both governments.

Irrespective of the differences in figures, the relevance of bilateral trade in services suggests that negotiating a services agreement between Brazil and the United States could generate substantial benefits for both countries. On the Brazilian side, sectors that would benefit from such an agreement could include financial services, legal and accounting services, managerial services, information-technology services, and marketing and recreational services, among others.³⁴

FTA Benefits

According to a done study by Amcham Brasil and Fundação Getulio Vargas, a free trade agreement would increase Brazil’s GDP by up to 1.3 percent (more than $38 billion) by 2030.

Relevant gains for Brazil

An FTA would not only generate potential benefits for exports deriving from the elimination or reduction of tariffs and non-tariff barriers, but also from the market creation and reduction of trade costs that may arise from agreeing on bilateral rules on trade facilitation, TBT, SPS, digital trade, and other areas.

Should the two countries conclude an FTA, one could expect an increase in Brazilian exports of machinery, apparel and clothing, footwear, steel products, granites and ornamental stones, wood flooring and furniture, aircrafts, auto parts, and transport equipment, to name a few examples. Obviously, agricultural goods mentioned in the previous section could also gain a greater share of the US market.

In addition to export gains, an FTA would bring gains in the areas of imports, investments, and overall improvements for the Brazilian economy. On the import side, an FTA would allow Brazil more competitive access to inputs (e.g., plastics and chemicals), capital goods, and technology and consumer products (e.g., pharmaceutical, automobiles, and food products).

An FTA could make production in Brazil—and, subsequently, exporting from Brazil to other countries in Latin America and the world—more competitive, corroborating the “import-to-export” motto and the global trend of higher import content in exports. Such competitiveness gains would be greater if accompanied by crucial domestic reforms to raise productivity and to reduce local production costs, by investment in infrastructure and by investment in workforce training. An FTA would also increase the general welfare of the Brazilian population, who would have cheaper access to consumer durable and non-durable goods.

Likewise, two-way flows of services would largely benefit from a trade agreement that enhances mutual market-access conditions and enables more predictability and legal certainty. For Brazil, considering the prominence of the United Stated as a destination for its exports of services, a more favorable environment created by an FTA would be a welcome development. An ambitious trade agreement could also work as a major driver of more US direct investment to Brazil (not only to cater to the domestic market, but also to gradually use the country as an exporting platform), and could encourage more Brazilian companies to expand or invest in the United States.

Finally, an FTA would generate income and jobs in Brazil. According to a done study by Amcham Brasil and Fundação Getulio Vargas, a free trade agreement would increase Brazil’s GDP by up to 1.3 percent (more than $38 billion) by 2030, generating additional exports of up to $25.7 billion and additional imports of up to $28.1 billion in that period.³⁵

Working toward greater foreign direct investment

The benefits and importance of strengthening bilateral foreign direct investment between Brazil and the United States—specifically in and for the areas of exports, technology, research development, and job creation—are clear, as outlined in the Brazilian Trade and Investment Promotion Agency (Apex-Brasil) Brazil Bilateral Investment Map Brazil/USA.³⁶

But, while the US-Brazil or Brazil-US FDI relationship is one of the mutual benefits, it remains uneven. In 2018, the stock of US direct investment abroad was $5.95 trillion, according to the US Bureau of Economic Analysis (BEA). Brazil accounted for $71 billion, or 1 percent, of this total.³⁷

Per one of the author’s calculations using BEA data, advanced economies accounted for the lion’s share of the stock of US FDI abroad (60 percent in Europe, 15 percent in Asia with the highest focus in Australia, Japan, and Singapore, and 7 percent in Canada, with China at a lower 1.9 percent). Latin America and other Western Hemisphere countries accounted for 16 percent of US investments, mostly concentrated in Caribbean financial centers, including Bermuda, rather than in the two largest economies in the region—with just 1.9 percent in Mexico (the same as China) and 1.1 percent in Brazil). 

Brazil is a leading destination for US investment into Latin America, both in terms of FDI and portfolio investment. This is not only because Brazil is the largest economy in the region, but also because of the breadth of its debt and equity markets.

According to the Brazilian Central Bank data, the stock of FDI in Brazil was $738 billion in 2018 (almost 70 percent of which is equity and the remainder debt-funded). According to the ultimate-investment country calculation method—which looks through the use of intermediary countries, often for tax purposes, to the ultimate controlling investor—the United States is the largest investor in Brazil, accounting for $118 billion in equity-funded FDI. This accounts for 24 percent of total equity-funded (reinvested profits or flows rather than intercompany loans, or debt) FDI in Brazil. The United States also accounts for another $16 billion in debt-related FDI (according to the immediate investor metric). The majority of this significant US FDI in Brazil is in the manufacturing and financial services sectors.³⁸

Brazil is a leading destination for US investment into Latin America, both in terms of FDI and portfolio investment. This is not only because Brazil is the largest economy in the region, but also because of the breadth of its debt and equity markets. Nevertheless, Brazil continues to be a small share of overall US investment. Here, there is room for closer investment ties between the United States and Brazil. 

The moment is ripe to lay the groundwork for greater FDI. The US and Brazilian administrations share a similar philosophy of strengthening private-sector participation in the economy. The Bolsonaro administration has expanded the Investment Partnership Program (PPI) started under the Temer administration, with key roles for public-private partnerships (PPP) and concessions. The Brazilian government estimates this will apply to more than one hundred new projects totaling about 1.3 trillion Brazilian reais. Projects span highways, railroads, ports, airports, energy, oil and gas, and telecommunications. This offers an array of possibilities for US companies. Indeed, while the large global infrastructure players don’t tend to be US companies, opportunities for small to medium-sized companies could follow. 

To generate a faster pace of growth led by investment and broad-based productivity gains, FDI from the United States could enhance Brazilian investment and growth prospects and vice versa. But to open doors for greater investments, be it over the next years or over the next decade, redressing aspects of hindrances to doing business will be key for companies. 

Brazil’s domestic reforms to tax and foreign-exchange systems, and steps taken to reduce the cost of doing business in the country, will all pave the way for a more effective investment environment. From a bilateral perspective, starting conversations on an agreement to avoid double taxation and, in the longer term, negotiating a potential bilateral investment agreement would present the United States and Brazil with new and important opportunities for higher rates of FDI.

Domestic reforms paving the way for greater investment

Brazil’s tax reform

To pave the way for more investments from US businesses and other countries, US investors will look to Brazil to advance reform of its tax system. At present, the complexity of Brazil’s tax system at times slows investment; federal, state, and local taxes that overlap contribute to competition across state lines, with a convoluted system of tax credits. 

According to the World Bank’s Doing Business 2020 report, paying taxes took more than 1,500 hours per year in Brazil, as opposed to about one hundred and forty and two hundred and forty, respectively, in China and Mexico.³⁹ Efforts to make the system simpler with a unified tax declaration system, the use of electronic invoices, and an electronic payment platform system for social security and payroll taxes have begun to simplify the process.

That said, from the US perspective, further reform would alleviate some of the difficulties of investing in Brazil. A broad tax reform is one such opportunity for cooperation and enhancement of economic ties between the two countries.

Brazil’s administration and Congress are discussing various versions of a tax reform, which could move Brazil closer to easing the cost of doing business in the country by simplifying the tax system and reducing incomes tax rates. This is potentially a monumental step for a country that has long talked about the need for tax reform but lacked the political will to move it forward.

The likely tax reform may include simplification of federal taxes by merging three to five taxes (the Program of Social Integration or PIS, the Contribution for the Financing of Social Security or COFINS, the Brazilian Tax on Industrial Products (IPI), the Social Contribution on Net Income tax (CSLL), and the Tax on Financial Operations or (IOF)) into one federal value-added tax (VAT), which would ease the burden on long production chains, and reduction of the corporate income tax rate and introduction of a tax dividend.

The administration is weighing its ideal reform against revenue needs and political practicality. Multiple tax reform proposals have been laid out, and in February 2020, Davi Alcolumbre, president of Brazil’s Senate, announced that a Joint Tax Reform Committee comprising twenty deputies and twenty senators should be created.⁴⁰

Meanwhile, Brazil’s Congress is already discussing potentially more ambitious tax reform proposals that require a constitutional amendment. These entail simplification and merging of the state’s VATs (ICMS) with a federal VAT. This includes PEC 45, a tax on goods, which creates one VAT for all goods and services in Brazil.⁴¹

The government and Rodrigo Maia, head of Brazil’s Chamber of Deputies, foresee that a tax reform will be approved in 2020. However, any potential reform still faces obstacles, including a lack of definition of priority points, competing bills in the Chamber and the Senate, and 2020 municipal elections that are likely to reduce the Brazilian legislature’s working time.

Meaningful progress on the complex tax and distortionary tax fronts, which would simplify Brazil’s tax system, would help foster a more productive investment climate in Brazil by reducing tax hurdles to investment and lowering the costs of paying taxes. The various proposals have the potential to ease litigation costs and free up valuable resources within firms for more productive and efficient investment. Such developments would make the investment climate in Brazil more attractive to US businesses.

Additionally, the risk of tax increases is very low, as all the tax reform proposals presented so far seek to keep the tax burden unchanged.

Reforms to Increase Ease of Doing Business in Brazil

Administrative hurdles in Brazil, such as the costs of starting a business, dealing with construction permits, and registering property also affect US FDI (besides investment in general), particularly for smaller and medium-sized firms.

A high number of days, number of procedures, and monetary costs for starting a business, registering property, and getting construction permits are challenges to investment.

But Brazil made improvements in these areas in 2018 and 2019; the process for registering a new business became faster, the costs of digital certificates were lowered, and electronic property-registration systems improved with online payments and certificates.

That said, regulations still vary across Brazil’s twenty-seven states and more than five thousand municipalities. Previous Brazilian governments put in place a federal system for simplifying and unifying business registration requirements (REDESIM), motivated by streamlining efforts at local-government levels.

But, costs remain high. For US investors, the creation of a “one-stop” shop for opening a business, initiating electronic processes, and a less time-consuming process for obtaining environmental licenses and bidding on government contracts could greatly improve the investment environment. If a one-stop shop is created and the government is able to digitize the process, this would simplify the process of investing in Brazil.

In increasing the ease of doing business in Brazil, it is important to note that the country has made strides in addressing corruption, following recent investigations under operation Lava Jato. Though Brazil is party to a variety of OECD anti-corruption measures—including the Recommendation of the Council for Development Co-operation Actors on Managing the Risk of Corruption, the Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions, the Recommendation of the Council on Tax Measures for Further Combating Bribery of Foreign Public Officials in International Business Transactions, among others—continued progress in the area of anti-corruption would likely contribute to greater investments from the United States into Brazil.

Looking to the Brazilian Real. Brazil is paving the way for greater investment by implementing key domestic reforms, including to its foreign exchange (FX) legislation.

Brazil’s FX Legislation Reform

Modernizing Brazil’s foreign exchange (FX) legislation is a key element of the Central Bank’s BC# agenda under the current Brazilian administration. Fewer restrictions and complexities related to Brazil’s FX regulation could enhance Brazil’s participation in global supply chains and deeper integration in the global economy. This would be attractive to both US financial and non-financial firms.

Current Brazilian FX legislation dates back to the 1920s, and includes more than four hundred rules (some contradictory) contained in some forty-odd pieces of legislation. This reduces efficiency and increases legal uncertainty for foreign investment in and out of Brazil, in addition to trade flows and participation in global supply chains.

In October 2019, the government sent legislation (Bill 5387/2019) to Congress that would simplify, modernize, and increase legal certainty for the FX system and capital flows (both Brazilian flows abroad and foreign-capital inflows). The proposed legislation aims to reduce bureaucracy and align Brazil’s FX regulation with global best practices, consistent with OECD standards, including for money laundering, counterterrorism, and data dissemination.

The legislation would cede authority and flexibility to the National Monetary Council and to the Central Bank to write and change infra-legal rules, which would, in turn, facilitate quicker adaptation to changing global financial markets while preserving commitment to sound risk practices.

The project supports incorporation of new business models such as fintechs, increased convertibility of the real, and more. It could simplify access and improve attractiveness for US and foreign investors in Brazil—for portfolio and foreign direct investment—including for long-term infrastructure projects and concessions.

Proposed legislation, for example, would likely eliminate the asymmetrical burden on clients, more commensurate with the risk profile of a business’s size and industry segment. This would lower costs for US businesses.

Another example of cumbersome FX rules for US companies is the fact that, per existing legislation, every single foreign investment must be registered with the Central Bank, regardless of the size of the transaction. This is generally a costly process for smaller firms in particular. In addition, foreign exchange for every individual trade (import or export) transaction must be documented with and for the relevant financial institution as having occurred, with often-costly fees. Reforms to FX legislation aim to shift to a risk-based approach for these transactions, permitting the financial institution/foreign exchange operator to decide what documentation or registration is needed according to their risk assessments and hence lower costs for firms.

The proposed legislation could also reduce asymmetries associated with international correspondent banking denominated in reais and trade-related finance with easier establishment of custody accounts denominated in reais in Brazil and abroad. The legislation could, over time, lead to development of the real as a fully convertible currency on global capital markets.

US financial—banks and fintech—and non-financial FDI would likely benefit from passage of this legislation and find investment in Brazil more attractive.

The US tax reform

In 2017, the Trump administration passed the Tax Cuts and Jobs Act (TCJA) legislation, one of the more robust changes to the country’s federal tax system since the mid-1980s. In terms of FDI, the US corporate tax reform affected effective tax rates for both domestic investments in the United States and international investments where investors or investees resided in the United States. Per the Tax Foundation, the TCJA reduced the federal corporate income tax rate from 35 percent to 21 percent—it dropped the country’s rate from nearly 40 percent to around 25 percent, putting the United States slightly above the OECD average of 24 percent.⁴²

Though the reforms had a generally positive effect, global FDI fell 19 percent in 2018 to an estimated $1.2 trillion, caused in part by US firms repatriating $300 billion in accumulated earnings to take advantage of the tax break.⁴³

According to Global Trade magazine, “changes to the US corporate tax regime also prompted a 78 percent increase at the end of 2017 in companies reinvesting overseas earnings in the United States.”

Nevertheless, the United States still leads in inbound FDI; foreign investors and businesses have historically designated the United States as one of the safest places in the world to invest.

Investors attribute this designation to several factors, including the size of the US consumer market, its established legal system, defined business regulations, the country’s labor force, its infrastructure, and overall economic stability.⁴⁴

Though the United States is among the simplest and least bureaucratic countries for setting up a business, uncertainties—particularly around immigration and trade—continue to deter investment.

Bilateral pathways for deepening investment

Brazil’s domestic reforms to tax, administrative, and foreign-exchange systems will no doubt improve the country’s investment environment. That said, in addition to the domestic reforms under way, to foster greater FDI, the United States and Brazil can work toward the achievement of two consequential bilateral agreements.

A double taxation agreement

When it comes to attracting FDI, an agreement to avoid double taxation (DTA or tax treaty) is of paramount importance—a point that was reinforced by the US-Brazil CEO Forum recommendations outlined in November 2019, which reflected the priorities and perspectives of both countries’ private sectors.

Tax treaties enhance legal certainty on cross-border investment between countries, with clauses on legal enforcement, exchange of information, and dispute settlement. They also deal with a tangible element of investments, the establishment of rules on the distribution of income tax between residence and source countries, which have practical consequences for companies investing on both sides. In short, double taxation agreements reduce the aggregate tax burden on five crucial operations for cross-border business: profits, dividends, interests, royalties, and services.

According to CNI, and without further examining the exceptions, withholding taxes imposed to foreign persons are: 30 percent in the United States and 0 percent in Brazil on the payments of dividends; 30 percent in the United States and 15 percent in Brazil on interests; 30 percent in the United States and 15 percent in Brazil on royalties; 30 percent in the United States and 15 percent in Brazil on services.⁴⁵ In all these operations, double taxation agreements lead to lower taxation for foreign investors.

Both Brazil and the United States have several agreements to avoid double taxation in force.⁴⁶

However, they have some important differences. The first bilateral negotiations date back to 1949, with no result achieved so far. An agreement was reached in the 1960s, but was later rejected by the US Congress. Currently, the gap between both models is shrinking, due to the fact the Brazil has changed some important clauses, such as the tax-sparing and matching credit.

Although Brazil’s tax-treaties structure is very similar to the OECD, the model diverges from OECD guidelines in some clauses, as opposed to the US practice. Against the recent background of the Brazilian decision and efforts to join the OECD, one can imagine an easier path to the negotiations. This is particularly important for transfer-pricing practices, a hot topic in past discussions. Brazil will have to modify its legislation and move in the direction of the OECD’s rules in order to join the organization. Efforts in this direction have already begun, and may prove decisive in any formal discussions with the United States.

One of the most controversial clauses that sets negotiation positions apart is the tax-sparing and matching credit. Stimulated by the OECD in the past but later rejected, the tax-sparing clause provides for relief from residence taxation on taxes that have not actually been paid, or have been “spared.”⁴⁷ Its rationale is to avoid fiscal incentives aimed precisely at attracting foreign investments becoming ineffective. Its claimed goal is to keep space in developing countries for public policies created to attract investments, even in the face of double taxation agreements signed with developed countries. Without analyzing the disputable results of this type of provision, the fact is that Brazil used to include tax-sparing provisions in many of its agreements, whereas the United States does not adopt them in its treaties.

Nonetheless, recent developments show that this specific clause might no longer be a problem. Brazil signed agreements with Switzerland, Singapore, and the United Arab Emirates that do not contain tax-sparing provisions. Yet to be confirmed as a new policy orientation, this at least shows unprecedented flexibility from the Brazilian authorities on this matter. In addition, Brazil has reduced the level of taxation on interest and services, from 15 percent in most of the previous treaties to 10 percent in those last treaties.

A big opportunity remains in terms of services—their growing importance to value-added products and exports is undisputable.

Brazilian domestic legislation classifies most services as technical services, leading to the taxation of nearly all. In the opposite direction, the OECD model prescribes taxation of services only in the residence country, a practice that is followed by the United States.

In general, the United States only taxes services in the source country in the case of permanent establishment, which is basically understood as physical presence. Brazilian double taxation agreements adopt the concept of permanent establishment, but a narrow interpretation given by domestic legislation makes the application of this rule uncommon.

However, it seems there may be room for convergence here since some of the United States’ treaties bring flexible definitions for “permanent establishment,” as well as differential treatment for “technical services.”

Altogether, a bilateral treaty to avoid double taxation would allow Brazilian companies in the United States to have the same treatment as competitors from other countries that already have agreements with the United States, carrying a lower tax burden in their investments.

In addition to leveling the playing field for Brazilian investors abroad, a bilateral double taxation agreement would also benefit home companies that would be able to import services crucial to their technology and competitiveness.

A bilateral investment agreement

When addressing the opportunities for enhancing bilateral investments between Brazil and the United States, special attention should also be paid to the negotiation of a potential bilateral investment agreement.

According to the United Nations Conference on Trade and Development (UNCTAD), in 2017 there were 3,322 bilateral investment treaties (BITs) and other treaties with investment provisions signed around the world.⁴⁸ While the United States had signed thirty-eight BITs by 2015, most in force, Brazil remained one of very few countries that did not have a single international agreement on investments in force.⁴⁹

Though Brazil had earlier followed the flood of BITs in the 1990s—signing fourteen, mostly with European countries—these agreements were later rejected by the Brazilian Congress, which argued that some provisions were unconstitutional.

Criticism was directed toward investor-state dispute settlement clauses (ISDS), as well as to indirect expropriation. As a consequence, BITs became taboo in Brazil—the country avoided the discussion for years, while the number of international agreements on investments in the world ticked upward.

Brazilian economic growth in the 2000s propelled Brazilian companies to increase their investments abroad. Brazil started to be seen—and also to look at itself—as not only a recipient of FDI, but also as an investor in other countries, especially in Latin America and Africa.⁵⁰ Against this background of being a late comer in exporting capital, the Brazilian government finally started to revisit investment agreements.

The perspective at that time was that Brazil had always been among the top recipients of FDI in the world without having agreements in force, so investment agreements were not needed to attract FDI but rather to foster Brazilian investment abroad. This is fundamental to understanding what would become the innovative Brazilian Agreements on Cooperation and Facilitation of Investments (CFIA). These agreements, signed since 2015 with many countries in Africa, Asia and Latin America, are strongly focused on investment facilitation clauses, institutional governance, prevention of disputes and risk mitigation, as opposed to traditional BITs which are focused on investment protection clauses.

One main feature of the Brazilian model is the establishment of focal points or ombudsmen in each party to act as one-stop-shop facilitators of the relationship between investors and the government. Investment-related issues and problems can be treated directly with the ombudsman, who is responsible for providing appropriate assistance, government support as well as connecting with other relevant authorities if necessary. Besides that, a Joint Committee, composed of government representatives of both parties, also work for dispute prevention and amicable settlement of any issues involving bilateral investments. If a dispute cannot be solved by this prevention framework, it can then be brought to State-State arbitration procedures. ISDS clauses are not included in the Brazilian CFIAs.

In terms of investment facilitation, which is dominant in the CFIAs, there are clauses focused on promotion of investment flows, tackling issues such as visas, licenses and certifications, capacity building, among others. The CFIAs also provide for the negotiation of supplementary issues that are important for investments, bringing a framework than can more easily evolve and adapt according to investors’ needs. The visa case, for instance, is an interesting innovation. The issue is not usually covered by agreements on investments, but as investors are very aware, difficulties in obtaining and renewing business visas can significantly hinder the evolution of projects. CFIAs provide for special conditions for business visas, such as reduced deadlines, multiple entries and extended validity.

Finally, as expected in any agreement on investments, there are also typical protection rules, such as non-discrimination (national treatment and most favored nation), direct expropriation, compensation, international transfers and transparency clauses.

The aforementioned typical protection rules represent the basis of BITs signed by the United States over the years. But the US model is much more comprehensive. US and Brazilian perspectives are indeed quite different, as Brazil does not include ISDS, indirect expropriation, and fair-and-equitable-treatment clauses.

Though differences have made negotiation of a BIT hard to imagine in the past, recent developments today indicate the opposite. A concrete window for bilateral negotiations exists now.

A ship and containers at the Port of Santos, São Paulo, Brazil, September 23, 2019. Addressing the core, collective challenges posed by trade irritants and other barriers to trade and investment will open new doors for US and Brazilian companies.

For one, the United States has started to adopt a different perspective on the most controversial clause that used to set apart the negotiation positions of the United States and Brazil. The recently signed agreement between the United States, Mexico, and Canada (USMCA) no longer provides for ISDS between Canada and the United States, including a sunset clause of only three years.

ISDS can still be used between Mexico and the United States, but only in certain cases. For instance, investors can bring claims about expropriation and non-discrimination, but issues such as fair and equitable treatment cannot be claimed under ISDS in most cases. Above all, even in these situations, investors need to first resort to local remedies and domestic courts. Only if they do not reach a solution does arbitration become an option. There are exceptions for a few sectors with special provisions, such as oil and gas.

Despite not being a determinant per se for FDI attraction, a bilateral investment agreement deals with important issues for investors. When tackling investment facilitation, agreements can lower transaction costs that, if summed together, are indeed burdensome. Altogether, a bilateral investment agreement will undoubtedly help offer a better environment for businesses across the two countries.

All in all, there is a window of opportunity for exploring both a double taxation agreement and a bilateral investment agreement. Against the backdrop of Brazil’s movement toward accession to the OECD, Brazil will have to modify its legislation and move in the direction of OECD’s rules to join the organization. Efforts in this direction have already begun, and may prove decisive in any formal discussions with the United States.

Key recommendations

To lay the groundwork for increased economic integration between the United States and Brazil, this paper proposes the following recommendations for consideration by the US and Brazilian governments. These suggestions aim at addressing the core, collective challenges posed by trade irritants and other barriers to trade and investment, and at creating a mutually beneficial framework to foster the bilateral flow of goods, services, and capital.

Shorter term – 2020

The United States and Brazil should:

1) Conclude a multi-chapter trade enhancement agreement

Brazil and the United States should conclude a trade enhancement agreement on a specific number of areas of interest. Possible chapters include customs administration and trade facilitation, good regulatory practices, technical barriers to trade, digital trade, and anti-corruption. Under a more ambitious approach, the agreement could also encompass the areas of services, investment and public procurement.

A multi-chapter trade enhancement agreement is more likely to produce results in the short term and would narrow the number of issues for any potential free trade agreement negotiation. On the Brazilian side, as long as there are no preferential tariff discussions, this approach could be taken up bilaterally, without the involvement of other Mercosur member countries and without changes to current Mercosur rules.

A trade enhancement agreement would have relevant economic value for both parties: it would create a set of rules and commitments that would facilitate and foster bilateral commerce; it would provide predictability and legal security that would boost two-way investments; and it would serve as a building-block for a potential FTA in the longer term.

2) Start negotiations for an agreement to avoid double taxation

A bilateral Double Taxation Agreement (DTA) would propel foreign direct investment. Along with adding to the business environment, the establishment of rules on income-tax distribution between residence and source countries has practical benefits for companies investing on both sides.

The scenario looks promising, as both the United States and Brazil have been reviewing their DTA models. In particular, Brazil’s decision to accede to the OECD requires that the country modify its transfer-pricing practices. A DTA negotiation would represent an additional political and practical opportunity for Brazil to move in the direction of adhering to the OECD’s rules.

Against this backdrop, the United States and Brazil should launch formal negotiations for an agreement to avoid double taxation as soon as possible, which would send a strong signal about the importance of the issue.

3) Create a high-level mechanism to oversee and strengthen the bilateral relationship

The United States and Brazil should consider the creation of a high-level and comprehensive mechanism to oversee and strengthen bilateral trade and investment, led, ideally, by the vice presidents of each country. Such a mechanism would build a strategic framework to guide the bilateral relationship, enhance the bilateral dialogue and keep both administrations continuously engaged.

Through this mechanism, both governments would meet regularly and track progress on jointly defined goals. Additionally, this body could provide political guidance for further technical work.

This would require: the participation of government representatives at both political and technical levels, and from multiple agencies; the maintenance of a periodic schedule of meetings; a strategic working agenda; systematic monitoring of its scope; and the establishment of a formal channel for the participation of the private sector (including interaction with the reactivated CEO Forum).

The mechanism should work in coordination with the existing dialogues and groups to assure greater coherence and smoother interagency work among them. Such groups include the US-Brazil Commission on Economic and Trade Relations (under the Agreement on Trade and Economic Cooperation), the US-Brazil Commercial Dialogue, the Defense Cooperation Dialogue, and the Infrastructure Development Working Group.

4) Enhance good regulatory practices and sector-specific regulatory cooperation, working closely with the private sector

The United States and Brazil should continue sharing good regulatory practices, with an eye on regulatory impact analysis and public consultation, transparency in regulatory development and implementation, and with a heightened focus on a whole-of-government approach (i.e., a central regulatory coordinating body).

Because the United States and Brazil take different approaches to technical regulations and standards development, as well as to conformity assessment procedures—which can raise costs for businesses looking to trade bilaterally—both countries should identify one or two sectors for enhanced regulatory cooperation. Potential sectors include oil and gas, healthcare, life sciences, crop protection products, chemicals, genome editing, artificial intelligence (AI) and the internet of things (IOT). In choosing any sector, engagement with and the commitment of the private sector of each country is key.

Good regulatory cooperation should include a deeper understanding of each country’s regulatory systems, and the role of regulators in them, exploring the possibility to mutually accept conformity assessment results in order to facilitate reciprocal market access.

In both the good regulatory practices exchange and the enhanced regulatory cooperation, Brazil and the US should encourage and create opportunities for the participation of the private sector. Though the enhancement of good regulatory practice should be prioritized in the short run, technical efforts and engagement with the private sector have to continue over time.

The existing Memorandum of Understanding Regarding Joint Cooperation on Good Regulatory Practices between the Executive Secretariat of the Foreign Trade Council (CAMEX) and the Casa Civil of Brazil and the US International Trade Administration (ITA) and Office of Information and Regulatory Affairs (OIRA), which dates from 2018, should be used as a framework for this effort.

5) Initiate efforts to increase communication and cooperation on standards-development in emerging sectors, working closely with the private sectors of both countries

The two countries should initiate an effort to enhance communication and cooperation on standards development in the areas of AI, IOT, and/or genome editing. These transformational technologies are redefining manufacturing and business, and enabling new consumer products and services. International standards development ensures that customers are able to use technology products and services around the world, regardless of country of origin or market.

Considering that the United States and Brazil traditionally pursue different approaches to standards development, there is risk that “country-unique” standards will serve as a barrier to future innovation, investment, and trade in these critical sectors of the 21^st century.

To fully realize the benefits of these technologies—and address associated challenges— collaboration among the private and public sectors is critical. To that end, this paper urges the United States and Brazil to launch an effort in which both countries participate in consensus-based, industry-led, and global standards development bodies for the benefit of both developers and users of these technologies.

Such an initiative would result in increased and appropriate adoption and use of these cutting-edge technologies, resulting in enhanced competitiveness and enhanced opportunities for trade and investment.

6) Coordinate efforts to ensure the effective initiation of Brazil’s accession to the OECD

Building on the recent announcement by the US government that it would back Brazil as the next country to accede to the OECD, both countries should coordinate efforts before the organization and its membership to have Brazil’s process formally started yet this year.

This would effectively trigger the accession framework, kicking off a review of Brazil’s legislation and public policies. Meanwhile, Brazil should continue its journey to incorporate the OECD “acquis,” expanding its position as the non-member country with the largest number of accepted instruments.

At the same time, Brazil and the United States could cooperate, on a technical basis, on specific issues—such as tax, movement of capital, investments, and good regulatory practices—that will have to be addressed by Brazil along the way to becoming a member.

7) Conclude a Mutual Recognition Agreement between national trusted traders programs

In line with the joint statement issued by Presidents Donald Trump and Jair Bolsonaro in March 2019, the United States and Brazil should prioritize completion of the steps required to mutually approve their national trusted traders or AEO programs. Doing so would ease customs bureaucracy and reduce time and costs in the bilateral exchange of goods.

National AEO programs provide advantages for companies of all sizes and sectors. Exporters benefit from reduced inspections on goods and quicker clearance at the borders. AEO programs also increase efficiency within customs administrations, allowing for better resource allocation, particularly toward inspections of unknown high-risk cargo. As a consequence, it also contributes to increasing trade flows.

Brazil and the United States first committed to mutually recognizing their AEO or trusted traders programs in 2015. Such a measure requires involvement of the Ministry of Economy in Brazil, Receita Federal and of the US Customs Border and Protection to establish a standard set of security requirements that allows each program to recognize the validation findings of the other program.

This agreement would allow that low-risk companies enrolled in the national program from one country be automatically accepted in the other program, extending more agile and less bureaucratic customs procedures to those companies.

8) Adopt electronic phytosanitary certificates in bilateral trade

The United States and Brazil should conclude the adoption of electronic phytosanitary certificates (ePhyto) in lieu of paper documents. The ePhyto is the electronic version of a phytosanitary certificate, comprising all the data contained in a paper phytosanitary certificate.

The adoption of such a standard document in bilateral trade would expedite administrative procedures and reduce red tape and costs in exports of goods subject to phytosanitary certification, ultimately facilitating the exchange of agricultural products. It would also reduce the risk of fraudulent certificates and the number of shipments detained at customs, making the process more secure and reliable.

The exchange of electronic certificates could be done through the ePhyto Hub, developed by the International Plant Protection Convention (IPPC). In line with the 17th Edition of the US-Brazil Commercial Dialogue, which took place in 2019, Brazil is working to fully operationalize its participation in the ePhyto Hub by early 2020.

9) Implement a full-fledged Global Entry Program for Brazilian travelers coming into the United States

In 2019, Presidents Trump and Bolsonaro committed to taking the steps necessary to enable Brazil’s participation in the US Trusted Traveler Global Entry Program. Both countries signed a joint statement in November 2019 listing general criteria for the eligibility of Brazilian citizens and launching a pilot for a group of up to twenty participants of the Brazil-US CEO Forum.

As a next step, both countries should work to enable Brazil to fully participate in the US Global Entry Program by expanding its outreach to all eligible Brazilian citizens. This would make it quicker for pre-approved low-risk Brazilian travelers to enter the US territory, contributing to increased bilateral business and investments.

This recommendation requires further action from the Brazilian executive, specifically, the Policia Federal and Receita Federal, including the development of a simple electronic system to process such requests. This should be done in close cooperation and alignment with US Customs and Border Protection.

10) Increase US-Brazil policy cooperation in third countries and international fora in areas of investment and trade policy coherence

The United States and Brazil have the capacity to influence other governments on a variety of trade, investment, and other policy issues. The two countries should identify and develop an agenda for working together to shape trade and investment rules where they share common interests. By coordinating policy advocacy efforts, the two countries have the opportunity to enhance their influence on critical trade and investment issues.

Possible areas for such cooperation include food security and agriculture trade, trade and investment facilitation, biotechnology, AI, IOT, and/or genome editing.

Medium to long term – 2021 and beyond

The United States and Brazil should:

1) Conclude a comprehensive free trade agreement

An FTA would be the most ambitious bilateral economic achievement, considering its potential to create a comprehensive supporting legal framework to further economic integration between the United States and Brazil. Such an agreement could prove to be a powerful instrument to increase current—and stimulate new—flows of mutual trade and investment.

Although a multi-chapter trade enhancement agreement in the short term could generate important results and make the negotiation process for an FTA less complex, dealing with the remaining topics would be a challenging endeavor, especially with respect to market access.

To reach a successful outcome, both governments will need to engage at the executive-branch and congressional levels. Another fundamental aspect is broad transparency and dialogue with the private sectors of each country. Given the concrete private interests at stake, an open and participatory process will prove decisive for a positive outcome.

2) Conclude an agreement to avoid double taxation

As formal negotiations are launched, Brazil’s Receita Federal and the US Treasury should be prepared for a time-consuming and human-resources-intensive process. Even as current chances for a successful outcome are considerably higher than in the past, challenges cannot be underestimated. Besides transfer pricing, services taxation in Brazil may prove to be one of the most critical issues, given Brazilian fiscal constraints.

In addition to the technical work necessary to resolve differences and find solutions, political support at the highest levels of government will be critical.

3) Coordinate technical and political efforts to conclude Brazil’s accession to the OECD

Brazil’s process of accession to the OECD will not be easy. The country has a long journey as it strives to comply with the proposed accession roadmap and to fully adopt the OECD’s set of decisions and recommendations, going through a series of meetings in OECD committees and negotiation rounds with individual members. Throughout this process, coordination with the United States in terms of technical and political efforts will be key for the accession to be successfully completed.

As of October 2019, Brazil had met more than eighty of the two hundred and fifty-three instruments that form the OECD “acquis.” Brazil continues to advance on adhering to various regulatory best practices in agriculture/food, tax cooperation, BEPS, tax-information sharing for serious crimes, protection of e-commerce, and more. Nearly seventy points are actively being discussed between the Brazilian government and the OECD, and the Bolsonaro administration has already identified the next set of nearly sixty.

This year, the United States formally backed Brazil for OECD membership. In this inherently political process, long-term and continuous US support for Brazil’s accession will be key.

4) Conclude a bilateral investment agreement

Both Brazil and the United States already have a number of investment agreements in force with different countries. A balanced combination of an approach aimed at investment facilitation and traditional protection is desirable and feasible.

More recent international trends in this field highlight the relevance of facilitation provisions.

The conclusion of a bilateral investment agreement could lower transaction costs and add more certainty in the business environment. Interagency technical work will be necessary in order to meet this goal. Congressional approval would be necessary in Brazil and the United States.

Conclusion

As the two largest economies in the Western Hemisphere, the United States and Brazil have a unique opportunity to explore new ways to deepen their bilateral trade and investment relationship. To lay the groundwork for increased economic integration, this paper proposes key opportunities the United States and Brazil can harness in the short term to pave the way for longer-term goals, including that of concluding a free trade agreement—a goal both countries have long discussed.

To create a set of commitments that would facilitate and foster bilateral commerce, Brazil and the United States should explore a trade enhancement agreement on chapters including trade facilitation, good regulatory practices, and digital trade. A multi-chapter trade enhancement agreement concluded over this year would provide predictability and legal security that would boost two-way trade and investment in the short term and serve as a building-block for a potential FTA in the long term.

To propel foreign direct investment, the two countries should engage in conversations on an agreement to avoid double taxation. A DTA would add to the business environment and establish rules on income-tax distribution between residence and source countries, with benefits for investors on both sides.

The United States and Brazil should also consider the creation of a high-level and comprehensive mechanism to oversee and strengthen bilateral trade and investment, ideally led by the vice presidents of each country. Such a mechanism would build a strategic framework to enhance the bilateral dialogue and keep both administrations continuously engaged.

Enhancement of good regulatory practices and sector-specific regulatory cooperation in such sectors as oil and gas, healthcare, life sciences, chemicals, AI and IOT will open a host of doors for both countries. International standards development in emerging technologies also ensures that customers are able to use technology products and services around the world, regardless of country of origin or market.

In 2020, the US government formally affirmed its support for Brazil as the next country to accede to the OECD. As a next step, both countries should coordinate efforts before the organization and its membership to have Brazil’s process formally started yet this year.

Likewise, in line with the Joint Statement issued by Presidents Donald Trump and Jair Bolsonaro in 2019, the United States and Brazil should Conclude a Mutual Recognition Agreement between national trusted traders programs to increase efficiency within customs administrations, allowing for better resource allocation. The two countries also have an opportunity to adopt electronic phytosanitary certificates (ePhyto) to expedite administrative procedures and reduce red tape and costs.

Commerce is facilitated by the ease of movement of people. Presidents Trump and Bolsonaro committed to taking the steps necessary to enable Brazil’s participation in the US Trusted Traveler Global Entry Program in 2019. Following the pilot project, both countries should work to enable Brazil to fully participate in the US Global Entry Program.

And, beyond their own borders, by coordinating policy advocacy efforts with third countries, the United States and Brazil have the opportunity to enhance their influence on critical trade and investment issues.

The aforementioned short-term opportunities pave the way for the conclusion of a more comprehensive FTA, a DTA, and a bilateral investment agreement, which combined would foster far greater trade and foreign direct investment, improving the economic realities of both the United States and Brazil.

The road to a deeper economic relationship between the United States and Brazil has not been and will not be easy. But, with the political will and the support of the private sectors of both countries, the Western Hemisphere’s largest nations have the potential to maximize their commercial benefits.

The United States and Brazil are already important commercial partners. In areas of trade and foreign direct investment, further collaboration among the two countries is a natural next step to prosperity and economic growth.

Acknowledgments

Just as deepening trade and FDI is a bilateral effort by the United States and Brazil, so too were the efforts put forth in this paper. This publication included a host of actors from government and the private sectors of the United States and Brazil.

For their partnership and support, the Atlantic Council’s Adrienne Arsht Latin America Center would like to acknowledge the contributions of its authors, Abrão Neto, Ken Hyatt, Daniel Godinho, Lisa Schineller, and Roberta Braga, and the stakeholders and in-country partners that helped make this publication a reality. A special thank you to Renata Vargas Amaral for lending the paper her legal expertise.

Thank you to those who took part in the consultative roundtables in Washington, DC, and on the sidelines of the Brazil Investment Forum in São Paulo, Brazil. Special recognition goes to Ambassadors Sérgio Amaral and Benoni Belli, who helped cultivate the initial idea for this partnership, as well as to Ambassador Nestor Forster and the Embassy of Brazil in the United States for their partnership and insight.

Thank you also to the many stakeholders who provided their insight and feedback through consultations, including leaders from the energy, defense, agricultural, pharmaceutical, biochemical, and steel industries, industry federation leaders, and others.

Thank you to Adrienne Arsht Latin America Center Director Jason Marczak for his guidance, and to the other Adrienne Arsht Latin America Center Senior Brazil Fellows Ricardo Sennes and André Soares for their valuable insight throughout this process.

Thank you also to Valentina Sader, assistant director at the Adrienne Arsht Latin America Center, and to Sarah Hennessey and Frederico Fróes, who supported research for this publication. As well, thank you to Susan Cavan and the report editor. Thank you also to Donald Partyka and Nikita Kataev for their beautiful report design. 

Finally, the Atlantic Council extends a heartfelt thank you to Apex-Brasil, whose partnership and generous support made possible this comprehensive effort to lay out the practical next steps for strengthening US-Brazil bilateral trade and FDI. In particular, the Atlantic Council would like to thank Apex-Brasil President Sergio Segovia, as well as Augusto Souto Pestana, Igor Isquierdo Celeste, Gustavo Ferreira Ribeiro, Karen Kiyomi Hayashi, and Cintia Marques Faleiro.

About the authors

Abrão Árabe Neto

Abrão Árabe Neto is the executive vice president for Amcham Brasil, a not-for-profit organization that represents more than five thousand companies of various economic sectors, responsible for approximately 33 percent of Brazil’s GDP.

Prior to that position, he served as secretary of foreign trade of Brazil between 2016 and 2018, involved in several trade-and-investment negotiations, trade-and-investment facilitation initiatives, and leading areas in regional integration, trade remedies, and trade statistics, among other areas.

A career foreign trade public servant since 2013, Neto also acted as deputy secretary of foreign trade and director of international negotiations in the Ministry of Industry, Foreign Trade and Services of Brazil. Before serving the government, Neto worked as an international trade lawyer and as coordinator in the foreign trade and international affairs department of the Federation of Industries of the State of São Paulo (FIESP).

In 2008, he joined the Permanent Mission of Brazil to the WTO as part of a capacity-building program for lawyers in WTO issues. In 2017, he was distinguished by the Brazilian government as Commander of the Order of Rio Branco.

He holds a PhD in international law from the University of São Paulo, and a master’s degree in international economics law from the Catholic University of São Paulo. He was also a visiting PhD researcher at Georgetown University.

Ken Hyatt

Ken Hyatt is senior advisor at Albright Stonebridge Group, and a co-founder and partner at CMPartners, where he advises clients of the firm on complex negotiations, trade, and investment matters in international markets.

Prior to joining ASG, Hyatt served in the US Department of Commerce as the acting undersecretary and deputy undersecretary for international trade. He oversaw the strategy and operations of the International Trade Administration (ITA) with an annual budget of approximately $500 million and more than 2,200 employees worldwide. He led ITA, which: contributes to the development of US trade policy; identifies and resolves market-access and compliance issues; promotes US competitiveness and the strength of US companies in the global economy; administers US trade laws; and undertakes a range of trade and investment promotion and trade-advocacy efforts. In this role, he worked with a wide range of US companies, helping them achieve their international objectives, and with foreign governments on the development and implementation of trade and investment policies. He also co-led the creation of SelectUSA, the US government’s investment-attraction agency, led the US government’s support for BrandUSA, the US national tourism-promotion organization, and co-led the development of the US National Travel and Tourism Strategy. In 2017, he was distinguished by the Brazilian government as Commander of the Order of Rio Branco.

Earlier in his career, Hyatt was a principal at Conflict Management Inc. and a management consultant with Bain & Company in its Boston, London, and Munich offices. At Bain, he led teams of consultants analyzing and implementing a variety of strategic and organizational projects at leading US and European multinational corporations, focusing on strategy development, mergers and acquisitions, sales and marketing strategy, and training.

Hyatt holds a juris doctor from Harvard Law School and a bachelor of arts from Yale. He also has been an associate at the Harvard Negotiation Project.

Daniel Marteleto Godinho

Daniel Marteleto Godinho, a nonresident senior fellow at the Adrienne Arsht Latin America Center, currently serves as corporate strategy director at WEG, a global solutions provider of industrial electrical technologies headquartered in Brazil. Prior to that, Godinho built his career in the public service as a foreign trade analyst since 2003, serving in many positions. From 2013 to 2016, Godinho served as the secretary of foreign trade of Brazil. Between 2016 and 2017, he worked as a senior consultant for the Inter-American Development Bank (IDB).

Godinho holds a law degree from the Federal University of Minas Gerais and a bachelor’s degree in international relations from the Catholic University of Minas Gerais. He also holds a post-graduate degree in international business from the Catholic University of Brasília and a master’s degree in international law and economics from the World Trade Institute, an institution connected to the universities of Bern, Fribourg, and Neuchâtel in Switzerland.

Lisa Schineller

Lisa Schineller is managing director for S&P Global Ratings. Schineller is a lead analyst in Sovereign and International Public Finance Ratings for the Americas, and responsible for sovereign analysis covering key credits such as Argentina, Brazil, and Mexico. She also covers a number of multilateral institutions, such as the International Bank for Reconstruction and Development and the International Development Association. She coordinates with analysts, regionally and globally, on government-related entities across the region. Schineller also served as S&P Global Ratings’ chief economist for Latin America, part-time for five years through 2013.

Schineller was an adjunct associate professor at Columbia University’s School of International and Public Affairs from 2006 to 2009. She co-developed and co-taught a course entitled “Problems of Economic Growth in Latin America” for master’s-degree students. She continues to give guest lectures in a number of courses at the School of International and Public Affairs and the Business School.

Before joining S&P Global Ratings in August 1999, Schineller worked in the International Finance Division at the Federal Reserve Board of Governors in Washington, DC, for more than three years as the French desk economist and world oil economist. She was also an economist at Exxon Company International, Corporate Affairs. At Exxon, she analyzed and projected economic and energy developments in Latin America (mainly Brazil) and Europe.

Schineller holds a PhD in economics from Yale University and a BA in economics and Spanish from Wellesley College. Upon completion of her PhD, she was an assistant professor at McGill University, Faculty of Management from 1992–1994.

Roberta Braga

Roberta Braga is an associate director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads projects on Brazil’s economic and political developments, and disinformation and misinformation in Latin America. Over the past four years, Braga has also led work on trade integration, energy, and anti-corruption in the region. During her time at the council, Braga helped launch the center’s #AlertaVenezuela and #ElectionWatch Latin America projects, which focused on exposing disinformation in and about Venezuela and around elections in Brazil, Mexico, and Colombia, respectively; executed projects on USMCA’s impact on energy and Venezuela’s oil crisis; and managed the center’s work on anti-corruption ahead of the 2018 Summit of the Americas. Braga also manages the center’s media and communications strategy and outreach.

Braga previously worked as a strategic communications analyst at the US Department of Homeland Security, and supported corporate affairs and public relations efforts at Promega Corporation, an international biotechnology firm headquartered in Madison, Wisconsin.

Braga frequently provides English-, Portuguese-, and Spanish-language commentary on political and economic issues in Latin America. She has been published in Newsweek and The Hill, and been quoted in The New York Times, The Wall Street Journal, The Financial Times, Axios, Brazil’s O Globo, and Estado de S.Paulo, among others. Originally from Brazil, Braga is a native Portuguese and English speaker, and fluent in Spanish.

She has a master’s degree in global communication and public diplomacy from the George Washington University’s Elliott School of International Affairs, and a bachelor’s degree in journalism and global security from the University of Wisconsin-Madison.

The post US-Brazil trade and FDI: Enhancing the bilateral economic relationship appeared first on Atlantic Council.

The United States’ transformation into a net exporter of energy “has revolutionized our foreign policy, and it frees us to pursue options that we have not had at least in my lifetime,” US Secretary of Energy Dan Brouillette said on February 7.

Speaking at the Atlantic Council, Brouillette argued that “with US energy production now at record levels, the world is no longer subject to the will of countries who seek to do us harm,” such as Russia and Iran, and allows the United States to use energy cooperation and investment as a key tool to advance its foreign policy aims. “Energy remains a critical aspect and a critical component of our national security,” Atlantic Council Executive Chairman Emeritus General James L. Jones Jr. said while introducing Brouillette, adding that “the United States’ role as an energy and energy technology exporter has provided a deeper toolbox of policy options to meet our foreign policy goals.”

Brouillette argued that the boom of US energy production followed “a long struggle between innovation and regulation,” but now “innovation is winning the day,” as the Trump administration has “made innovation the cornerstone of our energy policy.” Brouillette credited new technology and looser regulations with helping the United States become not only “the world’s largest producer of both oil and natural gas,” but also “the world’s second largest generator of wind and solar power.”

The energy secretary added that the United States is also focused on “reviving two of the world’s most reliable, 24/7 generators of electricity—nuclear [energy] and coal.” Brouillette announced that the Trump administration would be releasing $64 million of research and development funds into the Coal FIRST initiative, which will “help us produce more coal-based power more efficiently, and transform it into a near-zero-emissions energy source for not only our country, but the rest of the world.”

Brouillette noted the concern of continuing to rely on carbon-intensive coal for electricity generation amidst global efforts to cut carbon emissions but argued that this effort is intended to find ways to make coal electric power generation cleaner and more efficient. He stressed that developing countries continue to rely on coal and “if we are going to see that product used to generate electricity, we want it to be used as cleanly as possible.” He explained that research would focus on making coal plants smaller and more efficient, as well as integrating more carbon capture and storage technology. Brouillette added the Trump administration also announced $125.5 million on February 5 for solar technology research.

Coal is just one example of how increased US energy production opens up new opportunities for the United States to meet its foreign policy goals abroad. He explained that the Coal FIRST initiative will also help explore ways to export cleaner coal technologies to markets such as Asia and Africa in order to help them limit their carbon emissions and diversify their energy sectors. Boosting all of the United States’ energy sectors “strengthens our energy security [and] improves our economic security,” Brouillette argued. “Costs have fallen, jobs have risen, and opportunity flourishes. It bolsters our national security, by freeing us and our partners from unstable and often unfriendly foreign suppliers.”

The impact of the United States’ new energy resources is already being felt in Europe. Brouillette cited EU figures that “many European countries remain dependent on Russian gas to meet more than 75 percent of their annual gas imports.” This dependence is dangerous, he argued “given Russia’s use of energy to bend other nations to its will,” as Moscow has attempted several times with its neighbor Ukraine. “Those nations must diversify,” Brouillette said, “[and] thankfully, I think the United States is offering a compelling answer.” He reported that US exports of liquified natural gas (LNG) have “risen by nearly 600 percent,” but maintained that more needs to be done. He stressed that “roughly 40 percent of the EU’s LNG regasification capacity cannot be accessed by their neighboring member states.”

The United States supports efforts to help Europe rectify these shortfalls through both the Partnership on Transatlantic Energy Cooperation (PTEC) to help grow infrastructure for US LNG exports to Europe, as well as the Three Seas Initiative to help strengthen intra-European gas transport infrastructure. “Through PTEC and the Three Seas Initiative, the United States will mobilize technical expertise…and help Europe create a better environment to attract what we feel is the investment they need to build new infrastructure,” Brouillette said. “America’s incredible energy success story means the transformation of both sides of the Atlantic—and indeed the world—in truly wonderful ways.”

The energy secretary also highlighted the effect of the energy transformation on US relations with Latin America. Brouillette reported that the Trump administration has “accepted the challenge of developing a Western Hemisphere Energy Strategy, which was launched right here with the Atlantic Council, to give us a modern blueprint for supporting energy projects all across the Americas.” The strategy is already bearing fruit, he explained, as he chaired the first meeting of the US-Brazil Energy Forum in Rio de Janeiro on February 3. Launched by US President Donald J. Trump and Brazilian President Jair Bolsonaro in March 2019, the Forum “exemplifies the bold new frontier for our own hemisphere’s integration, its independence, and ultimately its prosperity,” according to Brouillette. “From oil and gas to civil nuclear energy to power and energy efficiency, the dialogue we had was both extensive and illuminating.”

Brouillette said the United States remains committed to engaging with the entire Western Hemisphere on energy cooperation to help further prosperity. “From the pre-salt drilling in Brazil to unconventional gas projects in Argentina, to the potential deployment of renewables in Colombia and Chile, the Americas present incredible opportunities for nations to work together and to develop energy resources,” he said. “We can work together to achieve energy security and work together to foster economic growth.”

For the United States, energy can provide another critical tool to help further the United States’ vision of a free and peaceful world. “We believe that in order to have a more secure and a more prosperous world, we must encourage more free, transparent, rules-based markets within countries, and to replicate these fundamental values around the globe to enhance commerce among these countries,” Brouillette said. As the United States enters a new age of energy abundance, these new resources can drive US action to bring about that new world.

David A. Wemer is associate director, editorial at the Atlantic Council. Follow him on Twitter @DavidAWemer.

Further reading

New Atlanticist Feb 3, 2020

What will Brexit mean for energy markets?

By Global Energy Center

“Initial indications are that post-Brexit Britain will pay less attention to issues concerning climate change despite the fact that it is to hold COP 26 in Glasgow in November,” John Roberts says.

Climate Change & Climate Action Energy Markets & Governance

Global Energy Forum Jan 12, 2020

Energy markets underestimate Middle East supply vulnerability

By Adal Mirza

Buoyed by ample supply, global energy markets continue to underestimate risks to output from the Middle East, despite the recent escalation in tensions between the United States and Iran.

Energy Markets & Governance Geopolitics & Energy Security

Global Energy Forum Jan 9, 2020

European energy diversification: How alternative sources, routes, and clean technologies can bolster energy security and decarbonization

By Richard L. Morningstar, András Simonyi, Olga Khakova, Irina Markina

The European Union’s efforts to achieve a carbon-neutral economy present a unique and timely opportunity to strengthen European energy security. What is the EU currently doing to meet its decarbonization goals, address the role of natural gas in Europe’s low-carbon future, and explain the potential for new gas sources, alternative gas routes, and clean energy technologies to reduce carbon emissions? And how can this be done while simultaneously increasing European energy security and opportunities for transatlantic cooperation?

Energy Markets & Governance Energy Transitions

The post US will use energy revolution to transform its foreign policy, energy secretary says appeared first on Atlantic Council.

To kick off the conversation, Jason Marczak, director of the Adrienne Arsht Latin America Center, andRenata Vargas Amaral, founder of Women Inside Trade, senior adviser for BMJ Consultores Associados, and director of American University’s summer program on US and international trade law and policy, contextualized these tariffs by the numbers. In 2018, trade between the United States and Brazil amounted to $130 billion in goods and services. And Brazil is, in fact, the largest and second-largest supplier of semi-finished steel and unfinished steel to the United States, respectively. “When you actually dig a little bit deeper behind these numbers, you see the importance of the Brazil steel industry to the United States and also the importance of the United States to the Brazil steel industry,” summarized Marczak.

Touching on United States-Argentina trade, Shunko Rojas, former undersecretary of trade of Argentina and partner at Quipu,pointed out that Argentina exported $700 million in steel and aluminum to the United States in 2018. Although the tariffs will directly impact the country’s metallurgical industry, these exports only make up 1 percent of Argentina’s total, meaning the country’s trade balance will be mostly unaffected.

Listen to the call

As surprising as this announcement may have been, Thiago de Aragão, director for strategy at Arko Advice and editor of Sinológico podcast, added that “the investors that I speak with in New York… understand the modus operandi of President Trump,” and were perhaps better prepared for the turbulence than those in Latin America. 

But, for de Aragão the real question is whether the personal relationships between Latin American leaders and Trump will protect their countries from US trade policies. “Bolsonaro has demonstrated that he really gets involved [in] personal relationships with the leaders that he deals with,” he added. 

Observers have been skeptical of the Trump-Bolsonaro relationship of late given Trump’s tactics —first by not opening US markets to Brazilian beef, and later declining to recommend it for accession to the Organization for Economic Cooperation and Development. It seems as though Bolsonaro may have miscalculated the depth of his relationship with Trump. 

Despite Bolsonaro’s initial reservation towards China during his presidential campaign, the Chinese have taken a strategic stance towards Brazil, supporting the country during the Amazon fires and participating in Brazil’s oil auction. And after a visiting President Xi Jinping, the Bolsonaro administration shifted its approach to China, which may give Beijing room to strengthen its relationship with Brazil. 

Atlantic Council experts weigh in on Trump's tariff announcement

The December 2 announcement came as a surprise to both the Brazilian and Argentine governments, especially for President of Brazil Jair Bolsonaro, who has enjoyed a close relationship with Trump since coming into office in January of this year. The announcement also came at an inopportune time for Argentina as President-Elect Alberto Fernández is set to assume office on December 10.

For Trump “it’s not about steel and aluminum, [and] it’s not about currency manipulation in Argentina and Brazil; it’s a message for the farmers,” added Rojas, also warning that the Argentine government should first wait for a formal resolution from the US government, as the Trump administration will have difficulty justifying the tariffs on the grounds of national security as they did a year ago.

Looking toward possible responses, Amaral believes Brazil should not, and will not, impose their own counter-tariffs because “there is no interest in retaliating against the United States, and there are no mechanisms like [those that] Canada and Mexico have in the USMCA (United States-Mexico-Canada Agreement).” Rojas noted that the tariffs could be challenged at the World Trade Organization, but suggested that the United States and Argentina engage in bilateral discussions. 

Though the economic consequences of the tariffs will likely be muted in Brazil and Argentina, Trump’s announcement might damage the US’ relationship with, and influence in, the region. 

Frederico Fróes is an intern with the Atlantic Council’s Adrienne Arsht Latin America Center.

The post Rapid reaction call: Steel and aluminum tariffs on Brazil and Argentina appeared first on Atlantic Council.

Brazil and Argentina have seen their economies stagnate over the past year against the backdrop of a strong US economy and dollar, yet there is no evidence to suggest either country engaged in currency manipulation.

Trump first announced broad tariffs on steel and aluminum in March 2018, yet until this month, Brazil and Argentina had been exempt from the tariffs with self-imposed export caps to the United States.

The December 2 announcement came as a surprise to both the Brazilian and Argentine governments, especially for President of Brazil Jair Bolsonaro, who has enjoyed a close relationship with Trump since coming into office in January of this year. The announcement also came at an inopportune time for Argentina as President-Elect Alberto Fernández is set to assume office on December 10. 

 Jasper Gilardi from the Adrienne Arsht Latin America Center asked Atlantic Council experts how the imposition of new tariffs could affect bilateral relations and the political and economic climates in Brazil and Argentina.

Gilardi: The imposition of the tariffs comes just a week before the inauguration of President-Elect of Argentina Alberto Fernández and amid protests in Buenos Aires over the economic condition of Argentina. How will President Trump’s announcement affect the new Argentine administration’s priorities?

Jason Marczak, director of the Atlantic Council’s Adrienne Arsht Latin America Center

“President Trump’s decision to impose steel and aluminum tariffs on Brazil and Argentina could not have come at a worse time for both countries, particularly Argentina. President-Elect Alberto Fernández assumes office on December 10 at a time of great concern about the state of the Argentine economy, and as Argentines reel from increased unemployment and increased poverty. President Trump’s decision unfortunately does not send the message of partnership that is so needed as a new president assumes office. This is an unexpected blow to the bilateral relationship at a critical time for Argentina, and a critical time for the United States to show its solidarity with Argentina, an important ally of the United States.

“Furthermore, in 2017, Argentine exports of raw soy to China totaled 2.4 billion dollars. Those exports have since tripled, and in September of this year the two countries finalized an agreement to begin allowing the import of Argentine soymeal—a processed form of soy—to China, an agreement that Argentina has sought for decades. The growing trade and the recent soymeal import agreement were likely factors in President Trump’s announcement since Argentina’s increased soy exports to China have come as US soy farmers continue to suffer due to the ongoing trade war with China.

“It is my hope that we find a quick resolution to the decision to impose tariffs so that it does not affect the bilateral relationship or the policy priorities and direction of the incoming Fernández administration.”

Gilardi: Prior to President Trump’s announcement, what was the status of the trade relationship between Brazil and the United States? And what harm will these tariffs cause to both countries’ economies?

Roberta Braga, associate director and Brazil lead, Adrienne Arsht Latin America Center:

“The United States and Brazil have a longstanding trade and commercial relationship, and one that has benefited both countries over the years. Though this is not the first time President Trump has accused a major partner of manipulating its currency, a tit-for-tat move like this one detracts from the progress the United States and Brazil have made on the trade and investment front. If imposed, these tariffs could do major damage to Brazil’s economy at a time when its growth remains precarious.

“It is important to note that only a few weeks ago, on November 25, CEOs of major Brazil and US companies came together to discuss ways for deepening bilateral business ties at the relaunch of the US-Brazil CEO Forum. There was no hint of a re-imposition of tariffs on Brazil at that time. In fact, the Forum, co-chaired by US Commerce Secretary Wilbur Ross and Brazilian Minister of Economy Paulo Guedes, among others, recommended measures to advance discussions toward the long-term goal of a free trade agreement and Brazil’s entry into the Organization for Economic Cooperation and Development (OECD).

“Going forward, the United States and Brazil must continue productive conversations toward strengthening the bilateral trade relationship. This announcement is an escalation by Trump that will amplify a global trade war that will not benefit the United States in the long run.” 

 Gilardi:The economies of Brazil and Argentina are projected to face declining growth in the coming months, meanwhile the US economy, and thus the US dollar, continues to strengthen against them. Is the US president right to attribute the currency devaluation to manipulation or is likely a product of wider economic declines in Brazil and Argentina?

Bart Oosterveld, Atlantic Council C. Boyden Gray fellow on global finance and growth and director of the Global Business & Economics Program:

“There is no evidence whatsoever that there is deliberate currency manipulation from either country. The president may be attempting to distract from other news, or address concerns related to rising agriculture exports from especially Brazil to China in this way. The economic impact is likely relatively muted in either case.”

Jasper Gilardi is a program assistant for the Adrienne Arsht Latin America Center at the Atlantic Council. Follow him on Twitter @gilardi_jasper.

Rapid Reaction Call

On December 3, one day after President Trump’s announcement, the Adrienne Arsht Latin America Center hosted a conference call with leading experts in this space. Listen to the recording of the call and read the summary.

The post Brazil and Argentina surprised by tariff announcement: What comes next? appeared first on Atlantic Council.

On November 10, 2019, Pepe Zhang was quoted in O Globo’s article, “China age com pragmatismo econômico quando pensa no Brasil” (“China acts with economic pragmatism when it thinks about Brazil”).

Zhang’s remarks, relayed in Portuguese, translate as follows: “Brazil is a large country that is interested in maintaining a long-term relationship with China. And the Belt and Road (“BRI”) is definitely happening in Latin America, but some of the largest economies in the region have not yet joined. This does not necessarily mean that these countries aren’t taking the BRI initiative seriously, just the opposite in fact. Something I want to make clear is that Brazil, even not having officially signed a BRI partnership, is using the BRI context as a tool to advance in relations with China.”

More about our experts

Staff

Pepe Zhang

Senior Fellow

Adrienne Arsht Latin America Center

China Coronavirus

The post Pepe Zhang in O Globo: “China age com pragmatismo econômico quando pensa no Brasil” appeared first on Atlantic Council.

Authored by Former Minister of National Women’s Affairs of Chile and Adrienne Arsht Latin America Center Non-Resident Senior Fellow Laura Albornoz Pollmann, the spotlight “Chile Against Corruption: What Can the Region Learn?” analyses the country’s experience with corruption and the lessons it can offer Latin America.

Maria Fernanda Perez Arguello, associate director at the Adrienne Arsht Latin America Center, opened the conversation stating that “anti-corruption efforts have been vague in the region in the last five years, ever since the Lava Jato investigation became known to the public.” Perez Arguello emphasized that though there have been successes to be celebrated, much remains to be done. Countries like Chile can offer valuable lessons and best practices.

Albornoz Pollmann highlighted that over the past twenty years, Chile has reformed public institutions, with the goal of increasing transparency and accountability. One of these developments, Albornoz Pollmann added, are the antitrust laws that have been introduced in Chile, which “have enabled the penal code to impede certain actors from limiting the actions of financial regulators” aimed at guaranteeing free and fair competition in the marketplace. She made the case each country should be cautious of the reforms they push for, given that “everything is highly dependent on the political context of each country.”

Rodrigo Janot Monteiro de Barros, former prosecutor general of Brazil from 2013 to 2017, when the bulk of Car Wash investigations took place, added that combatting corruption is a holistic process that involves not only the judiciary, but also civil society, a free press, and political parties. Janot believes the region could learn from Brazil on how to tackle corruption in a transnational way and how to cooperate with other countries. He emphasized the duty to combat corruption internationally, stating that “if we only tackle corruption domestically, instead of eradicating it, we only end up exporting it to other countries that do not have the institutional capabilities to properly combat corruption.”

Albornoz Pollmann agreed that, usually, corruption cases are cross-border crimes with regional impact. She stressed that to combat corruption more effectively, strategic alliances between governments, the private sector, and international institutions “can raise awareness about best practices to tackle the evils that reside in our democracies.”

For Albornoz Pollmann, one of the main challenges in the fight against corruption is that “corruption acts mutate over time, so what appeared to be corruption in the past, which was an explicit lobby, today is covered up in other different ways of conduct.”

She added that beyond laws, “we need a more horizontal democratic system. As democracy advances, it should enable actors to punish such acts more publicly.” Perez Arguello added that “[corruption] can move at a faster speed than legislators and laws can,” and that the fight against corruption is, in nature, never-ending.

Janot raised Chile’s successful centralization of authority within the Attorney’s General office over all treaties of a penal nature as a successful component of the fight against corruption. He noted this has not taken place in Brazil. For Albornoz Pollmann, while Chile has made strides in its fight against corruption, the power to investigate resides in a public entity dependent on political power, and this relationship has limited the investigations Chile’s Public Ministry can advance.

Beyond the need to guarantee the necessary autonomy of the judiciary and its investigative institutions, both Janot and Albornoz Pollmann drew attention to the importance of a more democratic penal justice system that would guarantee laws are enforced equally, regardless of socioeconomic status. Janot concluded that the recent arrests of former presidents across the region showcase that “justice is for all. A signal of the democratization of the penal justice system.”

The post Chile Against Corruption: What Can the Region Learn? appeared first on Atlantic Council.

A byproduct of two decades of discussions and forty rounds of negotiations, the deal is the largest for the European Union (EU) in terms of population and the first for Mercosur since the four-nation bloc, which includes Argentina, Brazil, Paraguay, and Uruguay, was established in 1991. The agreement covers a population of nearly eight hundred million people and will result in over four billion euros in tariff savings for the European Union.

Jason Marczak, director of the Adrienne Arsht Latin America Center, started off the discussion, stating that “the word historic is sometimes overused, but not in the case of the recently announced” Mercosur-EU agreement. Marczak emphasized that this trade deal reaffirms the EU’s commitment to multilateralism and represents Mercosur’s eagerness to engage in the interdependent economy of the twenty-first century.

Marcos Troyjo, deputy minister of Foreign Trade and International Affairs for the Brazilian Ministry of Economy participated in the final rounds of discussion in Brussels. He shared that a willingness to find common ground culminated in this positive agreement that will foster Mercosur to modernize its ideological views. Troyjo noted that the agreement highlights President Jair Bolsonaro’s pursuit of trade with all corners of the globe, and Argentine President Mauricio Macri’s eagerness to change regional development patterns. For him, “all boats are lifted by this beautiful tide of trade,” endorsing the trade agreement as a “win-win” for all parties involved.

Tomas Baert, head of the Trade and Agriculture Section at the EU Delegation to the United States, and his colleague, Owen Jones, minister counselor at the same division, underscored the agreement’s importance for the EU’s commitment to open, rules-based trade along with its desire to export EU values and standards in addition to goods.

The conversation also considered how this trade agreement produces new possibilities for advancement within Mercosur. Daniel Godinho, director of Corporate Strategies at WEG Brazil and a nonresident senior fellow at the Adrienne Arsht Latin America Center, referring to the possible benefits of the trade deal to Brazil, stated that “this opportunity will be proportional to the speed and deepness of domestic reforms in Brazil.” Regionally, he hopes the agreement will foster greater integration, beyond Mercosur boundaries. On a bilateral level, Troyjo identified this deal as an opportunity for Brazil to harness momentum to better US-Brazil relations.

Shunko Rojas, former undersecretary of International Trade for President Macri and a partner at Quipu, believes the Mercosur-EU agreement will undoubtedly play a role in the run up to Argentina’s October presidential elections. However, he emphasized that the efforts of negotiators from across the political spectrum made this trade agreement an impressive accomplishment. Given the cross-administration work on negotiations, this deal will likely not be a point of contention in the elections.

Regarding the possible impacts of the deal and the ratification process on both sides of the Atlantic, Troyjo characterized the agreement as a major win for Brazilian industries, such as beef, poultry, and sugar. He also highlighted that the deal will both add value to Brazilian firms and change the nature of foreign direct investment in the country. He expects a smooth approval process in the Brazilian Congress, as legislators seek to capitalize on the agreement’s potential to benefit different economic sectors.

For Argentina, Rojas noted that political “voices of rejection” directed at the Mercosur-EU trade deal in the coming weeks will be the result of “ignorance” as most Argentinians have not witnessed a trade agreement in their lifetimes. He commented that pursuit of a similar trade agreement by earlier, left-wing administrations ensures that Argentina will ratify the agreement regardless of its election results.

On the EU front, Jones reaffirmed that EU food standards would not drop due to the agreement. He added that the EU does not recognize figures used by European agricultural sectors that predict a great negative impact of the deal. With regards to the implementation process, Baert confirmed the agreement must be signed and ratified by all EU member states and that, once submitted to the EU for ratification, it will be provisionally applied throughout the bloc. This process could take between one and two years.

The post 20 Years in the making: Mercosur-European Union reach trade deal appeared first on Atlantic Council.

Recommendations: Disinformation in democracies (English PDF)

Key findings: Disinformation in democracies (English PDF)

Recomendações: Desinformação em democracias (Português PDF)

Principais conclusões: Desinformação em democracias (Português PDF)

Recomendaciones: Desinformación en las democracias (Español PDF)

Resultados clave: Desinformación en las democracias (Español PDF)

The post INFOGRAPHICS – Disinformation in democracies: Strengthening digital resilience in Latin America appeared first on Atlantic Council.

Luiza Duarte, Asia correspondent at Globo News, who was in Beijing for the visit, kicked off the conversation by highlighting the relevance of the visit, particularly in the context of current trade wars. She stated that the visit flagged to the Chinese government and to investors that Brazil is open for business and to propositions of the Belt and Road Initiative.

On this regard, Ricardo Sennes, partner at Prospectiva Consulting and a nonresident senior fellow at the Adrienne Arsht Latin America Center, forecasted that Vice President Mourão’s visit served to cultivate the bilateral relation for future partnerships in areas such as agribusiness. For Larissa Wachholz, partner at Vallya and an expert on Brazil-China relations, Brazil must take a stance and be firm on its position to join the Belt and Road. She believes Brazil has nothing to lose from partnering with China.

Wachholz believes Brazil must take initiative and drive discussions toward Chinese investments and how they might help the country diversify its exports away from commodities and into infrastructure investment. She adds that Brazil must become more competitive to become more attractive to the Chinese market in comparison to other countries. Zhang added that “the conversation on the Belt and Road Initiative has happened on a broad, regional level. There is a need for more country-specific strategies.”

In the context of the BRICS, its development bank and the opening of its São Paulo branch, Duarte stated that things are not running as forecasted. She explains that there is still no set date for the development bank to open in São Paulo and the BRICS have not been a priority for President Bolsonaro, especially since the development bank focuses on green and blue projects – also not a priority for the federal government. Nonetheless, Sennes added that since financial crises freeze money for investment, the BRICS bank might be a good alternative, especially considering that funding from the US might not be constant, as Wachholz stated.

Having mentioned the role of the United States, Wachholz highlighted “Brazil has been one of the few developing countries that has sustained a good relationship with all major economies in the world: the US, China, and the European Union. We should continue this position in the future.” She believes that despite the change in rhetoric from President Bolsonaro’s administration toward China, there have been no substantial changes in Brazil’s relationship with either the US or China and thus no need to choose to partner with one or the other. For Sennes, “barriers in US-Brazil trade and investment relationship are largely concentrated in specific sectors. There are sensitive issues, but in general the tenor of the relationship is positive.” With regards to the trade relation with China, he considers it to be more balanced, yet believes Brazil could expand its currently limited export portfolio. Agreeing, Wachholz defended that Brazil could become a better negotiator and clearly communicate its desire of diversifying exports since China heavily relies on Brazil for food security. Duarte mentions that “there is an increasing movement of Brazilian states to conduct business with China on their own. A key emerging dynamic to watch in Brazil-China relationship.”

The conversation concluded with a brief discussion on the Chinese company Huawei. Duarte stated that Vice President Mourão was evasive when asked to address Brazil’s position towards recent allegations against the telecom company. Nonetheless, she stated that the government has hosted Huawei representatives and has always spoken favorably about the company. She believes it is too soon for the Brazilian government to choose a side. Wachholz added that Huawei’s operations in Brazil have always complied with Brazilian law, defending that the upcoming public bid for 5G in the country should welcome all companies compliant with Brazil’s requirements.

Overall, Vice President Mourão’s trip to China was a positive one. His visit re-launched COSBAN, setting the stage for greater cooperation between Brazil and China and a successful visit later this year by President Jair Bolsonaro.

The post Brazilian VP in China: A turning point for Brazil-China relations? appeared first on Atlantic Council.

In this Spotlight, we ask: In what five key ways can the United States and Brazil work more effectively together to strengthen bilateral trade and foreign direct investment?

The post Spotlight: Five key economic avenues for strengthening US-Brazil trade and FDI appeared first on Atlantic Council.

Graham Brookie, director and managing editor of the Atlantic Council’s DFRLab kicked off the event by painting a picture of the global nature of disinformation and its repercussions. “The challenges of disinformation will continue to evolve in ways we can’t fully predict. And as they do, the more people working on this issue, the better the chances for addressing the risks to democracies and fact-based discourse,” Brookie stated.

In laying the groundwork for the day’s discussions, Andrew Sollinger, publisher at Foreign Policy, pointed to the dangers of disinformation not only around elections in Latin America, but globally, emphasizing the important role media can and should play in combatting the spread of disinformation. As elections in countries such as India and Argentina approach, takeaways from the 2018 elections in Brazil, Mexico, and Colombia can assist with fact-checking and debunking of disinformation, Sollinger noted.

To dive deeper into the role of polarization, disinformation, and automation in Latin America around the 2018 elections, Roberta Braga, associate director at the Adrienne Arsht Latin America Center, moderated a conversation with leading experts from the region.

Gerardo de Icaza, director of the department of electoral cooperation and observation at the Organization of American States (OAS) explained the characteristic widespread distrust in institutions and electoral process of these elections. He noted that “from a political party perspective, it works to question the establishment, it works to have conspiracy theories, it works to say the system is rigged unless I win. And even if I win, it was rigged but I won anyway,” which hits trust at its core. He explained the phenomenon of widespread mistrust in terms of the essence, incompetence, and failure to adapt by electoral management bodies. In terms of electoral regulatory bodies, de Icaza explains essence as the ability to point out the wrongdoing without being called biased. Incompetence is the failure of electoral bodies to realize their out dated communications approach, especially in the context of social media, where political candidates have millions of followers and an exclusive communications team. Electoral bodies, thus, fail to adapt, because, in many instances, they believe to be above social media and this kind of discourse.

For Tania Montalvo, executive editor at Animal Politico and coordinator of Verificado 2018, the main challenge when combatting disinformation in Mexico is disinformation from within the government. Montalvo defended “innovative forms of investigative journalism with citizens at its core, and collaboration” as mechanisms to effectively combat disinformation.

Carlos Cortés, co-founder of Linterna Verde layed out the challenges ahead for Colombia in this realm. He emphasized that first, civil society must leverage their effort to better understand the scope of the issue and develop best tools to combat it. Secondly, the media must better assess their fact-checking efforts. Lastly, incentivizing the ongoing process of building digital literacy among users of social media platforms.

Amaro Grassi, lead coordinator of the Digital Democracy Room at the Department of Public Policy Analysis at Fundação Getulio Vargas (DAPP/FGV) agrees with other panelists that a “coalition-like approach to solve the issue of disinformation in all its complexity” is the only viable approach. He argues that the government, represented by the electoral body, and media must equip themselves to identify and combat disinformation. He adds the role of tech companies to assist with data management as support to the work of fact-checkers.

The director at InternetLab, Francisco Brito Cruz, defended the need to avoid a technocratic approach of blaming technological advancements and broader access to technology as causes of widespread disinformation. In the case of Brazil, “for the first time in 30 years, we [had] real grassroots, robust right-wing or conservative activism,” which was a major shift in the country, affecting how media functions.

Montalvo attributed the success of Verificado 2018 in setting the political agenda during the elections in Mexico to multidisciplinary collaboration, diversification of sources, prioritizing citizens’ needs, and the unification of partnerships under one single brand: Verificado 2018, in this case.

Moltalvo focused on the importance of explaining rather than accusing the source of disinformation, to which Cortés added the importance of emphasizing the need to bring awareness to the effects of amplification. As Grassi explains, not every piece of information can go through the fact-checking process. For him, during elections, civil society and electoral bodies must be in alignment to understand what types of information should be checked, based on the detriment it may bring to the democratic process itself.

The question of the day was regulation. There is no doubt that there must be an institutionalized mechanism to hold actors accountable in the digital space without threatening freedom of speech. De Icaza brought to the discussion the issue of a “black market” in campaign funding with regards to disinformation. The hiring and use of bots, for example, is not accounted for in campaign finances. Brito Cruz pushed for analysis and changes to compliance and liability regulations on social media, including third party posts.

Moderated by Graham Brookie, director and managing editor at the Atlantic Council’s Digital Forensic Research Lab (DFRLab), the second panel discussed the possibilities of fostering digital resilience in a hyperconnected world.

Katie Harbath, public policy director for global elections at Facebook, outlined the five approaches the company has taken to protecting the integrity of elections in the platform, while still protecting good civic engagement. Their efforts have included: cracking down on fake accounts; reducing false news by controlling their reach and partnering with fact-checkers; advocating for more transparency around political advertisement through improved regulations; disrupting bad actors both foreign and domestically, by differentiating between perceived truths and facts; and civic engagement through information about participating in the democratic process.

Both Harbath and Carl Woog, director and head of communications at WhatsApp, noted the importance of accounting for differences in design of each platform. Woog explained the challenges of the platform, having privacy at its core. Still, in Brazil, one of its largest markets, WhatsApp was able to ban thousands of accounts that presented abnormal activities in the election period. WhatsApp generally bans around 2 million accounts per month related to automation.

Describing the Lie Detector project by La Silla Vacia in Colombia, Woog says “the presence of a fact-checking initiative on WhatsApp, even if it doesn’t reach every single person, is contributing to a conversation about misinformation in society, raising our awareness to disinformation on WhatsApp.”

Looking ahead, the upcoming elections in various parts of the world are the next challenge for building digital resilience.

The post Digital resilience in Latin America: Automation, disinformation, and polarization in elections appeared first on Atlantic Council.

The three high-profile elections in Latin America made up “one of our very first big test cases” for new measures meant to limit the spread of false information on Facebook, Harbath said at the Atlantic Council in Washington on March 28. But while Facebook has had some success in limiting harmful activity on its platform, Harbath explained “we have to have different solutions for all of our different platforms.”

Harbath was joined at the Atlantic Council by WhatsApp Director and Head of Communications Carl Woog for an event looking back at 2018’s elections in Latin America. While Facebook is used throughout the region, WhatsApp use is far more ubiquitous and presented unique problems for counter-disinformation efforts.

“Encryption is a headline feature of what we do,” Woog explained, “which means that we can’t see the messages that people send.” The widespread use of WhatsApp during all three electoral contests last year presents an issue for “a digital version of a private space that is much more like a living room than it is a town square,” Woog said.

The event was held to mark the launch of a new report by the Atlantic Council’s Adrienne Arsht Latin America Center and Digital Forensic Research Lab outlining the polarization, automation, and disinformation online during the 2018 elections and presenting a vision for fostering digital resilience in future elections.

Harbath and Woog both reported on how their companies are making tangible changes to their platforms to prevent their misuse in the future. “Even though we can’t see the content that people are sharing,” Woog said, WhatsApp “can look at an account to see if it is acting in an abnormal fashion,” such as sending thousands of messages per minute. Once abnormal accounts are identified they can then be banned. Woog said that during the Brazilian election WhatsApp banned almost 2 million accounts per month. Woog also said that WhatsApp has limited the ability to mass forward messages in order to stop the viral spread of messages on a platform that is primarily designed for one-to-one messages and small groups. With new features, Woog said, “as soon as you get a message from someone who is not in your contacts, you get a warning that pops up.”

Harbath said that Facebook is also targeting clearly automated accounts and is focusing on giving “people additional context about who they are seeing this information from.” The company also made a conscious decision last year to change its feed algorithm to prioritize content from family and friends in user feeds. The decision has hurt the ability for business and other pages to grab attention, Harbath conceded, but she argued it was based on the actual preferences of users and the desire to limit the spread of disinformation by bad actors.

Harbath warned that Facebook’s initial attempts to mark potentially fake information had largely backfired on the platform as “it made people believe it even more” by drawing attention to it.

Graham Brookie, director and managing editor of the Digital Forensic Research Lab, explained that “disinformation is an emotional problem” and that marking disinformation as overtly fake often makes people have “a visceral reaction.” He warned that if platforms or fact-checkers get bogged down in “an extended conversation about who is right and who is wrong, then you have already lost. Those who are trying to spread disinformation have already won.”

Harbath said Facebook now is including relevant links below potentially fake content and focusing on putting the source of the information in the proper context.

Both Harbath and Woog stressed the importance of factcheckers from civil society and the media in helping social media companies identify and then counter disinformation online, an idea shared by a collection of Latin American disinformation experts who also spoke at the Atlantic Council on March 28. Francisco Brito Cruz, director of the InternetLab in Brazil, pushed back on the instinct to blame social media platforms themselves for the promotion of disinformation. “We need to stop thinking that the problem is technology,” he said, but focus instead on how this technology is interacting with “the social and political environment.”

Tania Montalvo, executive editor of Animal Politico in Mexico and coordinator of the Verificado 2018 election reporting and fact-checking initiative, argued that journalists and media companies can play a huge role in pushing back disinformation, especially if media outlets “put into the center of our work as journalists, the citizen” rather than making money or trying to affect political outcomes.

Andrew Sollinger, publisher of Foreign Policy magazine, on the other hand argued that media companies can only play a limited role in pushing back, especially on platforms such as WhatsApp where “it is very difficult for media organizations—trusted media organizations—to publish premium content on that vehicle.” As media companies double down on subscription services in an effort to stay financially solvent, Sollinger said, “information is becoming a luxury commodity… [and] folks living in favelas don’t have not just the presence of mind but also the wallet” to consume quality news.

Carlos Cortés, co-founder of Linterna Verde in Colombia agreed, saying that fact-checking initiatives by news outlets and social media companies “need to be assessed critically [to see] if they are really working, if they are really having an impact.”

What both Harbath and Woog want to avoid is becoming “arbiters of truth” on their platforms, deciding what type of content to allow or not to allow. Harbath argued that she sees content moderation as following the rule that a user “has the right to say that the sun rises in the West, but he doesn’t have the right for us to amplify it.”

Woog worried that overreaction from policy makers could threaten the very benefits that an open and free Internet provides, especially if it threatens the privacy of the user. “Once you lose privacy, it is very hard to get it back,” he said.

David A. Wemer is assistant director, editorial, at the Atlantic Council. Follow him on Twitter @DavidAWemer.

The post Has progress been made in containing disinformation? appeared first on Atlantic Council.

Bolsonaro was joined on his March 18-19 visit by six of his twenty-two ministers, including Economy Minister Paulo Guedes, Justice Minister Sérgio Moro, and Foreign Minister Ernesto Araújo. The Brazilians had a clear agenda: expand and deepen the areas of cooperation between the two largest economies in the Western hemisphere and gain the support Brazil needs to further attract trade and foreign direct investment.

Brazil’s accession to the OECD

At a joint press conference in the White House Rose Garden on March 19, Trump offered verbal support for Brazil’s accession to the Organisation for Economic Co-Operation and Development (OECD), a move particularly important to Brazil which is undergoing significant structural reforms that are key to its economic prosperity. While OECD membership would impose strict economic rules and standards on Brazil, effectively placing it on the same playing field as other OECD members, it would also provide legal certainty that would make the country more attractive to foreign investors. However, Brazil still faces lengthy OECD procedures of accession and must fulfill the standards needed for full membership.

Agreement for US space launches from Brazil

While in Washington, Brazilian Minister of Science and Technology Marcos Pontes and Araújo signed an agreement that allows US spacecraft to be launched from Brazil. This agreement is part of an effort to expand bilateral cooperation beyond trade, in areas of mutual interest. Launches from Brazil’s Alcântara Base are more cost effective for the United States. The agreement, if passed by Brazilian Congress, will allow for US-Brazil cooperation in the development of technologies for space launches and would help fund segments of Brazil’s space program.

Removal of Brazil’s visa restrictions on US citizens

Bolsonaro announced US citizens, along with citizens from Japan, Canada, and Australia, would no longer need visas to enter Brazil. Although the effects of lifting visa requirements on tourism and business are hard to measure, the move serves as a clear signal that Brazil is open to the rest of the world.

Cooperation on Venezuela

Both Trump and Bolsonaro reiterated their support for the interim government of Venezuela and condemned the Nicolás Maduro’s regime. Trump announced that the United States could impose tougher sanctions against Venezuela and affirmed that all options are being considered. Bolsonaro stood by Brazil’s more diplomatic stance. Brazil maintains communication with the Venezuelan military in an effort to convince it to end its support for Maduro.

Conclusion

Bolsonaro’s visit to Washington represents the beginning of a closer relationship between the United States and Brazil—one of the Brazilian president’s top campaign promises. The Brazilian government was successful in beginning discussions on expanding areas of cooperation with the United States and demonstrating to US companies that Brazil is open for business. Concrete outcomes from the US-Brazil relationship remain to be seen and could be overshadowed when Bolsonaro visits China later this year.

Overall, it was a positive visit, consistent with expectations and with minimal fireworks.

Valentina Sader is a project assistant in the Atlantic Council’s Adrienne Arsht Latin America Center. Follow her on Twitter @valentinasader.

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Brazil and the United States have long been allies, despite moments of tension. As President Jair Bolsonaro and his administration work to propose reforms to strengthen Brazil’s economy, the bilateral relationship will open new doors for growth and prosperity.

Corruption was considered an impediment to further trade and investment in Brazil. Amaral argues that Minister Sergio Moro’s anti-corruption measures “respond much more to civil society,” despite having a good reception by the market. Similarly, Amaral added that though the market received the pension reform with enthusiasm, “Congress will not approve [it at] the pace the market would like.” De Aragão added bureaucracy and taxes to the list of domestic reforms the government should pursue to guarantee a more prosperous environment for businesses.

The economic forecast seems promising. For de Aragão, Brazil is a much more open economy for business, assuring a potential $100 billion USD in foreign capital will enter Brazil in 2019 due to privatization, public-private partnerships, and investment. Amaral also noted the multiple announcements of public-private partnerships, highlighting that “Brazil has been historically a country that attracts a lot of investment worldwide, and the US has been historically a great investor in Brazil.” She believes, however, that the government’s economic agenda might face resistance at its current configuration, giving the example of the agricultural sector which, despite being supportive of Bolsonaro, has been affected by the government’s trade policies toward the dairy market.

In touching on opportunities for key sectors as the two countries strengthen the bilateral relationship, Harrington noted that Embraer is an example of what businesses can do in a value added, advanced manufacturing environment. For Amaral, the agricultural sector might face some challenges as the United States and Brazil debate closer economic ties amid an ongoing conversation with China, but the South America nation is prepared with subsidies comparable to the levels of Japan, the European Union, and the United States.

Ambassador Harrington considers that “there is more will on both sides [Brazil and the United States] than we have seen perhaps forever” to strengthening bilateral trade relations. Given the recent trade talks between China and the United States, Amaral warned for the possible effects to the Brazilian agricultural sector, as they include China importing $30 billion USD of soy beans, beef, and poultry from the United States, – products that China currently imports from Brazil. For Amaral, the question remaining is whether Brazil can play this trade game at this level.

In this context and emphasizing the expectations around Bolsonaro’s upcoming visit to the United States, Murillo de Aragão affirmed the primary goal of the visit will be to show that Brazil is a country ready for increased investments. Renata Amaral added that although chances of a free trade agreement between the two largest nations in the hemisphere are slim in the short term, the dialogue on the economic and trade front will deepen during the upcoming visit. President Bolsonaro is also expected to emphasize Brazil’s membership at the Organization for Economic Co-operation and Development (OECD) as a priority during his time in the United States.

Brazil is the OECD’s most active non-member. The country’s acceptance into the OECD’s Competitive Committee just last week signals that “Brazilian practice in regard to competitiveness is aligned to [that of the organization],” Amaral affirmed, and that the country is committed to domestic reforms with long-term implications to businesses and investment. The support of the United States for Brazil’s membership at the OECD would signify “an impetus for further reform, and in the long term, make […] Brazil’s economy and business community a more competitive factor in the world business stage,” added Amb. Harrington.

The post Open for business: A new chapter for US-Brazil relations? appeared first on Atlantic Council.

In this Spotlight, we ask: What are the five most important areas Brazil’s new administration must focus on to effectively fight corruption?

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In one of the most consequential presidential elections in the country’s recent history, Brazilians elected Jair Messias Bolsonaro their next president on October 28, 2018, after two highly contested rounds of voting that left Brazilians deeply divided.

In this Spotlight, we ask: What are the four of the top action items President Bolsonaro might prioritize in his first one hundred days in office?

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An ongoing byproduct of a hyper-connected world, social media shook elections at their core in 2018—throwing into question traditional components of campaign execution and information consumption as voters increasingly turned to Facebook, Twitter, and WhatsApp for election-related news and discussions. Particularly in Brazil, television and radio air time and campaign financing—well known for contributing to victories in past elections—gave way to conversations conducted online and on messaging applications. The most popular of all candidates on social media, with more than eight million followers on Facebook, Bolsonaro built a direct bridge between his campaign and his electorate with social media. This strategy helped him win the election in October.

In Mexico and Colombia, social media also served as a platform for debate and information-sharing among voters. Though not the only catalyst for electoral success, the increasing significance of social media platforms in elections and the public policy sphere represent a pattern seen around the world: with US President Donald J. Trump and his tweets, with Indian Prime Minister Narendra Modi and his Twitter presence, Canadian Prime Minister Justin Trudeau’s strong presence on Twitter, and now, Bolsonaro on Facebook and WhatsApp in Brazil. Candidates vying for leadership positions in Latin America are sure to continue to capitalize on this recent and evolving trend as they aspire to connect with voters.

2.     Disinformation’s potential to skew election discussions

The exponential role of social media as a tool for candidates to speak directly with their constituents has also generated new challenges. While social media has been a source of information for its users, it has also opened doors for the sharing of untruthful, exaggerated, or out-of-context information. With distrust in traditional and established media at an all-time high in Latin America, disinformation jeopardizes the ability of users—and voters—to make informed, conscientious decisions. With the objective of forging digital resilience in the lead up to and during critical presidential elections in three of Latin America’s most connected and geopolitically important democracies, the Atlantic Council’s Adrienne Arsht Latin America Center and Digital Forensic Research Lab focused on identifying and explaining cases of disinformation in Colombia, Mexico, and Brazil during this year’s election cycles. Into 2019, we will continue to advance efforts to combat disinformation and create digital resilience in Latin America and other regions.

3.     Voter rejection of the traditional political establishment

All three new leaders—AMLO, Duque, and Bolsonaro—represented an anti-establishment movement in their countries. Each voiced the dissatisfaction and distrust of the population by espousing discourses against the status quo, effectively portraying themselves as outsiders. AMLO referred to the “power mafia” in reference to the traditional PAN and PRI parties’ politicians and promised to “end the corruption, the impunity, and the privileges enjoyed by a small elite,” so “leaders of [Mexico] can recover their moral and political authority.” Duque won with the promise of “a new generation” of leadership for a country dominated by a long-established elite and still emerging from half a century of civil conflict, according to the Financial Times. Bolsonaro advanced a narrative against “Brazil’s corrupt politicians” and criticized traditional media, appealing to his electorate against traditional news outlets, including Folha de S. Paulo, one of Brazil’s largest newspapers.

4.     A nationwide discourse against corruption

AMLO, Duque, and Bolsonaro advanced a platform against corruption as one of the major pillars of their campaigns. Bolsonaro praised himself as one of the few politicians in Brazil not embroiled in a corruption case. AMLO tied corruption as a contributing factor to the security issues in Mexico, saying “this evil is the main cause of social and economic inequality, and also that corruption is to blame for the violence in our country.” Duque’s stance focused on impunity, as he stated his administration would “take back the last peso stolen by the corrupt. Impunity will not reign anymore” in Colombia.

Such renewed focus on anti-corruption representation and efforts is a trend expected to become even stronger throughout Latin America, as the Lava Jato investigation uncovered cases of corruption beyond Brazil’s borders, raising awareness to this structural issue across the region.

5.     Security as the number one concern

Security was the hot topic of these presidential elections, and all three candidates offered specific innovative agendas to address the issue of insecurity and violence. In Colombia, Duque proposed changes to the peace accord with the FARC to enforce the rule of law and to tackle criminal drug gangs, the ELN guerrilla, and the rise in illicit crops. In Mexico, AMLO said he would “reformulate the security policy that is almost exclusively based on the use of force,” arguing against fighting violence with violence. In Brazil, Bolsonaro, who was widely considered to be the “law-and-order” candidate, offered a range of proposals, including changes to gun control policies, less resistance to police use of deadly force, and lowering the legal age of criminal responsibility. The success of these new approaches to security policies will surely affect the popularity and governability of the new administrations.

Conclusion

The newly elected presidents and their innovative points of view are an opportunity for further dialogue between the government and opposition; greater political involvement of the population, civil society, and media, beyond the election period; and a stronger set of institutions to hold the executive and the legislative branches, as well as other organizations accountable and aligned with democratic principles. The next four years are an opportunity for each government to implement reforms necessary for the growth and development of the region’s three largest democracies.

Valentina Sader is a project assistant with the Atlantic Council’s Adrienne Arsht Latin America Center. Follow her on Twitter @ValentinaSader.

The Atlantic Council’s Adrienne Arsht Latin America Center focuses on the region’s strategic role in a global context. The Think Five Blog Series, launched to mark the Center’s fifth anniversary, reflects on major transformations set to redefine the trajectory of the region now and in the years ahead.

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Brazil is Iran’s seventh-largest trade partner and by far its most important economic interlocutor in South America. On November 15, a Brazilian vessel arrived at Chabahar, Iran’s only ocean port, carrying 72,000 tons of bulk corn from Brazil.  A year ago, a Brazilian ship, the Living, carried 66,000 tons of sugar into Chabahar.

According to Behrouz Aghaie, director of the Sistan-Baluchestan Ports and Maritime Organization, the latest shipment was the largest to dock at this strategic southern Iranian port.The port, which was developed by India, has been exempted from USsanctions, primarily because of its importance to Afghanistan as an outlet for trade.

On November 10, Fernando Collor de Mello, a senator and Brazil’s former president, told Iranian Parliament Speaker Ali Larijani in Tehran that Brazil and the other BRICS states—Russia, India, China and South Africa—would stand with Iran in the face of US sanctions. Currently the head of the Committee of Foreign Affairs and National Defense at Brazil’s Federal Senate, de Mello referred to US sanctions against other Latin American countries such as Cuba and Venezuela and stated that such measures would never resolve problems.

TheBrazilian ambassador to Iran, Rodrigo de Azeredo Santos, announced in September 2018 that his country plans to allocate a $1.2 billion loan to Brazilian companies doing business with Iran. This is even more generous than a European Union plan to boost European commerce with Iran through an €18 million aid package. But the fate of the Brazilian credit line, which was to be opened by the Brazilian Development Bank, is not assured under the incoming Bolsonaro administration.

The Iranian government congratulated Bolsonaro on his victory in October, expressing hope that relations between Tehran and Brasilia “will continue to expand and flourish in all economic and political fields.” But how could Bolsonaro’s administration change the course of this relationship?

Brazil exported more than $2 billion worth of products to Iran in 2017. That put Brazil after only China, India and Russia as a top trading partner in the last Iranian fiscal year.

In the second half of 2018, Iran began negotiating with a number of countries, including Brazil, over the importation of raw materials for pharmaceuticals. In addition, there were talks about possible Brazilian investment in Iran’s oil industry.

During the 2011 – 2014 term of former President Dilma Rousseff, the Iran-Brazil economic partnership waned due to international sanctions imposed on Iran. Internal changes in Brazil and human rights abuses in Iran were also cited as reasons for the decline. The relationship changed dramatically, however, after the Iranian nuclear deal in 2015, and trade reached $2.2 billion in 2016.

Politically, Brazil has attempted to play a constructive role in Iran’s nuclear dispute by negotiating the “Tehran Nuclear Declaration” in 2010 that sought to address concerns about Iran’s nuclear program by sending out much of Iran’s stockpile of low-enriched uranium to Turkey in return for fuel for a reactor that produces medical isotopes. The 2010 proposal, however, was rejected by the Obama administration, which had initially encouraged the Turkish-Brazilian effort but regarded the result as too little, too late.

With the election of Bolsonaro, it seems likely that Brazil will revert to a position of hostility toward Iran. The new Brazilian president is a “likeminded” leader with the Trump administration, White House national security advisor John Bolton said recently. Bolsanaro’s choice forforeign minister, Ernesto Araújo, described Iran’s regime as “horrible Islamic fundamentalism that has come to contaminate the Middle East.”

Eduardo Bolsonaro, the president-elect’s son, stated before the election that his father’s win would mean an end to friendly Iranian-Brazilian ties.

The new administration is not only alienating Tehran. By announcing plans to move Brazil’s embassy in Israel to Jerusalem from Tel Aviv, Bolsonaro could also anger many of Brazil’s traditional Arab friends and undermine multibillion-dollar sales of poultry and halal meat to Muslim countries. Brazil’s exports to the Middle East alone amount to $16 billion annually of which only 3 percent goes to Israel. The embassy move, which probably was intended to win the support of the growing Evangelical population in Brazil, may not actually take place as the new administration cannot afford losing the backing of Brazil’s agricultural sector. Such a shift would also anger Brazil’s Muslim community, the largest Muslim population in Latin America.

So far, Brazil’s largest trading partner, Egypt, has expressed dismay at the move. A planned visit by a large Brazilian delegation to Egypt, which included a meeting with Egyptian president Abdel Fattah al-Sisi, was cancelled last month, probably in response to the announced embassy transfer.

Bolsonaro’s victory was partly due to the support he received from the business community, but it is not completely clear how he can retain this backing. According to World Bank data, Brazil could fall into crisis again if it doesn’t cut its budget deficit. No wonder Brazil’s economy has been the center of attention of many governments over the last three decades.

Bolton said at a November 27 press briefing that he thinks Bolsonaro and Trump have developed a personal relationship“even if remotely.” This may not be sufficient to resolve the issue of the tariffs that the Trump administration recently levied on Brazilian aluminum and steel.

Populist leaders sometimes change their positions once in power. If improving the Brazilian economy requires staying the course with Iran, Bolsanaro may also alter his views—especially if Brazil can take advantage of Iran’s current difficult situation.

One possible scenario is that the new Brazilian administration would limit political relations with Iran but continue its current level of trade.

Rubens Ricupero, a former finance and environment minister, claimed recently that Bolsonaro could backtrack on his most radical foreign policy positions. “If Bolsonaro does what he says,” Ricupero noted, “Brazil will quickly become a pariah in the global community.”

Brazil’s incoming deputy president, General Hamilton Mourao, stated recently that “Sometimes [Bolsonaro] has rhetoric that does not go along with reality.”Mourao added, “Brazilian foreign policy has traditionally been pragmatic.We have to keep it in balance.”

In response to concerns over the planned embassy move and possible backlash, Bolsonaro said he would keep Brazil’s relations with the Middle East in good shape. It is not clear, however, whether he considers Iran to be part of the Middle East.

Fatemeh Aman is a nonresident senior fellow at Atlantic Council’s South Asia Center.  

Sam Aman, a communications consultant at Media Theory specializing in Latin America, contributed to this piece.

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Lisa Schineller, managing director of sovereign ratings at S&P Global Ratings, started the panel conversation by addressing the fiscal challenges ahead for the new administration. With Brazil’s debt at about 60 percent of GDP and deficits up to 7 percent, Brazil will need to prioritize not only pension reforms, it will also have to contain spending and potentially restructure taxes, she argued.

Mauricio Mesquita Moreira, principal economic advisor at the Integration and Trade Sector of the Inter-American Development Bank, noted the new administration will also have to address Brazil’s fiscal imbalance before it can discuss and analyze any long-term solutions and prospects for the Brazilian economy. Yet further progress on structural, corrective fiscal policy is expected to be slow, independent of election outcomes.

Ricardo Senra, Washington correspondent for BBC World Service and BBC Brasil, emphasized the importance of governability for the implementation of such economic reforms. With a Congress comprising more than 30 parties, the next administration faces an uphill battle in addressing the economic setbacks described by Schneller and Mesquita Moreira. Particularly for President-elect Bolsonaro, Senra argues a concrete dialogue with Brazilians that did not vote for him, particularly the 42 million that did not vote for either candidate, will be imperative. And although Paulo Guedes, Bolsonaro’s chief economic advisor and future super minister of the economy, was a bridge between Bolsonaro’s campaign and the international trade and investment community, the two differ on many areas, and the success of the relationship remains uncertain.

Reforming Brazil’s pension system — which Mesquita pointed out represents 40 percent of the budget and is forecast to comprise 80 percent in 10 years — will be one of the new administration’s first tasks. Additional reforms will need to happen also on the subnational levels – per Schineller, local governments’ budgets are suffering from the same rigidities in terms of payroll and pensions.

Bolsonaro has also proposed reducing the number of ministries to a record-low of 15 and advancing on privatizations of key state-owned enterprises. Mesquita Moreira highlights the importance of investing in institutions and independent regulatory agencies to strengthen oversight and checks and balances, cautioning against relying solely on a reduction in the size of the state. On privatizations, Schineller pointed out Brazilians will be more inclined to back efficient state presence and ownership rather than the privatizations of all state-owned enterprises.

Regarding the future of trade and US-Brazil economic relations, Mesquita describes Brazil’s historical reliance on commodity exports. “If you add all the other incentives to produce for the domestic market, you are not bound to see much of an export boom in things other than commodities,” he noted. Mesquita sees Brazil’s foreign policy under Bolsonaro breaking from that of past administrations and being strategic for Brazil’s commercial interests. If that is the case, Mesquita is not confident of a Brazil-US trade deal, especially considering China, Brazil’s main trade partner.

Schneller notes that although Brazil is not on top of the US trade agenda, given these countries’ strong foreign direct investment ties, trade will be a route of increased partnership. Mauricio Mesquita considers that in trying to diverge from the former administrations’ foreign policy, Bolsonaro may increasingly approach trade in a pragmatic way. As China will continue to be an important partner for Brazil, Mesquita hopes Bolsonaro will adopt a realistic approach.

When asked about the challenging costs to do business in Brazil, Senra quoted former US ambassador to Brazil, Thomas Shannon, who said, in reference to Tom Jobim, “Brazil is not for beginners. Brazil is not for the ones in a hurry,” improvements remain to be seen.

Bart Oosterveld, director of the Atlantic Council’s Global Business and Economic Program, closed the conversation emphasizing the importance of Brazil to the global economy. Oosterveld noted “what Brazil probably cannot have, given the current US administration, is a deep economic integration with China and the United States at the same time.” Nevertheless, Oosterveld noted the incoming administration seems to be focusing on the corrective issues necessary to address the challenges for the Brazilian economy.

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JASON MARCZAK: Well, good afternoon, everyone. I’m Jason Marczak, I am the Director of the Adrienne Arsht Latin America Center here at the Atlantic Council, and thank you all for joining us for this rapid reaction on the record Atlantic Council members and press call on Jair Bolsonaro’s win yesterday in the second round of Brazil’s Presidential election.

As we like to do with the Atlantic Council and, particularly, the Adrienne Arsht Latin America Center is provide rapid reaction to critical development across the hemisphere. And Jair Bolsonaro’s win yesterday is definitely top among that. Over the next half hour, we will discuss what Bolsonaro’s presidency means for the future of Brazil, changes that should be expected in Brazilian foreign policy and also what does it mean for Brazil’s relations with the United States? 

I’m joined here by two colleagues. Each joining actually from Brazil, Roberta Braga. Roberta is the Associate Director of the Atlantic Council Adrienne Arsht Latin America Center. And among other things, Roberta leads our Brazil portfolio. Roberta’s originally from Belo Horizonte, Brazil, where she joined the center over two years ago. And (has been) in Brazil over the last week as part of our joint work with the Digital Forensics Research Lab of the Atlantic Council and Roberta’s calling in today from Rio. Hi, Roberta, how are you? 

ROBERTA BRAGA: Hi, Jason, I’m well. How are you? 

MARCZAK: Great. I’m also here with Ricardo Sennes. Ricardo is a Senior Fellow in the Adrienne Arsht Latin America Center. A position that Ricardo, I believe, has held for almost the entire five years of the Center’s existence. Ricardo is also a partner Director at Prospectiva, a consulting firm on public policies and international business. Ricardo is a well-known and highly sought after political commentator on all issues in Brazil and is calling in from São Paulo today. Hi Ricardo, how are you? 

RICARDO SENNES: Hi Jason, it’s a pleasure all – it’s a pleasure to be back to this discussion. Thank you. 

MARCZAK: Well, it’s a pleasure to have you. So let me start off. The results yesterday, I think were not a surprise for anybody who’s been following Brazil recently, especially after the first round, just a few weeks ago. Our callers today know the results. Bolsonaro won 55 percent of the votes against about 45 percent for Fernando Haddad of the Workers’ Party. Interesting yesterday as well, you have about 21 percent of voters that did not vote while about two percent voted blank, and about seven percent voted nule.  These are important results. 

What you also saw yesterday was the – was the Worker’s Party candidate, Fernando Haddad, winning in all nine states of the Northeast of Brazil, for the PT has advantage. But Bolsonaro won in all 15 others, as well as the Federal District. Bolsonaro’s win yesterday with 55 percent of the votes is an increase from the 46 percent he received in the first round. But Fernando Haddad’s 44 percent was an even more sizeable increase than this – about 30 percent, 29 percent that he received in the first round. These results are not a surprise. Jair Bolsonaro throughout his campaign has campaigned as the law and order candidate. 

He has campaigned as somebody who will help Brazil to get out of the high rates of crime and violence that had been – the uptick in crime and violence that we’ve seen in recent years. There’s a general discontent in Brazil with the corruption that pervades among the political class and the business class, as well as the weak economic growth. And Jair Bolsonaro campaigned with what the answer he sees for those issues. Most particularly violence and security and on the economy. 

Now, of course, there’s a lot of concern as well on what a Jair Bolsonaro Presidency will mean. His comments throughout the campaign toward various social classes, towards women, and others were repudiated by many. But in the end, Brazilians voted for him because he provided, throughout the campaign, the answers on some of the top concerns, specifically security and the economy among others.Roberta, you’ve been in Brazil monitoring disinformation over the last week as part of our joint project with the Atlantic Council of Digital Forensics Research Lab. What have you seen leading up to the election in the disinformation space? And actually on election day as well? 

Roberta, you’ve been in Brazil monitoring disinformation over the last week as part of our joint project with the Atlantic Council of Digital Forensics Research Lab. What have you seen leading up to the election in the disinformation space? And actually on election day as well? 

BRAGA: Thank you so much, Jason. I’m very happy to be calling in from Rio today where I had the opportunity to work with Brazilians and to be with Brazilians who’ve been very engaged leading up to this election. As we know, this has been a very politically polarized election, so very difficult discussions for Brazilians and of course a polarization that dates back to 2013. And it’s the cause of a host of different issues that Brazil has faced for a long time: unemployment, difficult economic downturn, a lot of issues with corruption and some necessary reforms ahead. 

Ahead of the second round, many Brazilians had a difficult decision to make. Some said that they felt neither candidate represented them. Some absolutely did not want to see another Workers’ Party President because of Luiz Inácio Lula da Silva, and the corruption and mismanagement associated with the PT government that governed Brazil for nearly 13 years. Others couldn’t bring themselves to support Jair Bolsonaro, who to them represented some challenge to the democratic process and who suggested that his hardline policies, like the liberalization of gun laws for example, were too hard handed. It was a division that was reflected in different priorities for different communities. 

For example, Bolsonaro, he won in 97 percent of the richest states and Haddad won in the 98 percent of the poorest states. So that really showed you the extreme polarization and also the inequality that Brazil still faces. This polarization is what really open…

MARCZAK: This adequately mute line links to a Brazilian telecommunications issue that needs to be fixed as well in the next term. 

You know, Ricardo, as Roberta was saying there, the election really did reflect extreme polarization in Brazil and the divisions that have been seen in the streets, that have been seeing throughout the campaigns, are going to be a very big challenge for Bolsonaro to overcome in his Presidency. How much – Ricardo, how much of a sea change is Bolsonaro for Brazil? 

SENNES: Well, Jason, I think you have such a very important element. And I think Roberta gave some information about this polarization process. So, I think it’s worth to mention that the actual polarization, the extreme polarization in Brazil in elections was specific for the presidential election itself. In order that it is not the same what happened for the other elections. Let me explain myself. 

If you take in consideration the whole election, not just the presidential election, you see a very important contrast, a differentiation between the presidential election and the other elections, like the election for the Senate election, for the Lower House, election for the state governors, etc. In these other elections, the level of polarization is much less notable, much less polarized in the sense that the predominance of the candidates and the winners was from the traditional political parties. So this, I think, give us a very important, I think, element to think about your question: “How Bolsonaro will manage to really bring some new agenda or new political dynamics to the Brazilian political system.” 

In such a scenario in which he has, I think, brought a lot of energy and has been fighting very deeply against the Workers’Party. What he calls as the “extreme leftist politicians.” And he brought to the election this very strong polarization debate. But it’s not this is exactly what happened for the other elections. So, for him in order to really implement the changes that he’s mentioned to or defending to be implemented, he will need to really deal with this huge differentiation. He will need to establish bridges, establish coalitions, or try to actually to operate in a more normalized political and decision-making process. 

So, I think this is the key question: Will he be able to define a political strategy that really will be successful in certain scenarios? So, I think this is still a question, but I think it’s clear that he’s pushing for a new agenda, for new values for the politics, in general, etc, but is not clear if he will really be able to define a completely new political strategy to implement that. 

MARCZAK: Well, I mean, Ricardo on that point, that the Bolsonaro’s political party that he joined, the PSL, the Social Liberal Party, for the Presidential race, really carried no weight in Brazilian politics before this election. I mean, back in 2014, it had no representation in the Senate, just one Federal Deputy and now the PSL’s profile has risen and now will be the second most represented Party in the Lower Chamber. So maybe the sea change is not seen across all of Brazil but, at least, at the Federal level with Bolsonaro’s election and, obviously, his party. The PSL will need to form coalitions to be able to move forward some of Bolsonaro’s policies but the party has really risen in its stature, just in this last election. 

SENNES: Well I think that if we have something really new on the Lower House is the PSL caucus. As it said, the PSL is a completely new party in a sense, actually a new player. Actually, it has been operating as a political party for several years but with no real representation. I think the PSL doesn’t have a clear platform. They have been combining different candidates from different areas. We can say with different agendas. 

We have, for instance, an important portion of the PSL caucus are retired people from the Army Forces. They have on a specific agenda focused on security, focused on some issues related to the Brazilian nationalist development, etc. But PSL also has another group of representatives that has a different agenda.  For instance, they have a group of politicians, from this caucus, that are defending, for instance, issues like the family values, issues against the gender agenda, against the same-gender marriage. So this is not exactly the same, I think, interests that the other groups have been presenting. 

So, even though they are a new political party, they don’t have actually a single agenda and a strong agenda but they do have a kind of fragmentation within the party. But for sure as the second most important party in the Congress, they will play an important role. Basically, they will be the platform for Bolsonaro to try to build a broader coalition. PSL will be in the center of this coalition, but not necessary, who will represent the majority of them. They will need another, at least, 200 representatives more than the PSL by itself in order to build such a majority. 

MARCZAK: Great. Great. You know, Ricardo, that takeaway from your point is that Bolsonaro’s party has representation now in Congress, has a decent amount of representation, especially in the chamber but it’s still going to be in a uphill battle to form the coalitions and move forward the policy reforms that Bolsonaro campaign that especially some of the, I think, very far-reaching reforms that he’s talked about on increased gun ownership, on greater liberty, given to police and security forces, free mining taxes, wholesale changes to the security apparatus and the economic sovereignty of the country will require coalition building. 

Roberta, you were talking about disinformation. I think there’s probably no coincidence that your line was cut, as you were about to talk about disinformation. So let me go back, we’ve been monitoring disinformation in Brazil. You’ve been there for the last week. What did you see leading up to the election? 

BRAGA: So going back to what I was saying before, and something that Ricardo even showed is that the polarization opened doors for disinformation. Many Brazilians are connected primarily through WhatsApp. And so we just seen quite a lot of distorted news, rumors circulating on WhatsApp after the first round and leading up to the first and second round.  We saw a lot of claims of electoral fraud. We saw a lot of migration of right-wing actors to other social networks like Gab, and again, a lot of distortion around certain candidates’ position, solutions. We saw some false videos circulating. So, in general, there was quite a bit of a spread of disinformation and misinformation, both with the intent to defy and without it. And this would sort of amplified on social networks, including Facebook, Twitter, and WhatsApp.   

But on the positive side, I also – as I was here – met with over 20 organizations working to combat disinformation in the election. So, I think more than any other country we have seen, Brazilians are really at a large scale mobilizing to address this problem, and they’re working for a stronger democracy. Journalists are working with a changing information environment, trying to analyze deeper issues, civil society doing the same thing, working in support of human rights, creating safe spaces for discussion. So I do think that that’s a – that’s a positive turn. That we’re seeing Brazilian organizations and actors really working together to address the issue of disinformation here. 

MARCZAK: Great. Thank you, Roberta. I want to move on to a foreign policy. And specifically, what does Bolsanaro would mean for the US and for the world at large. 

You know, last night, President Trump calls Jair Bolsonaro to congratulate him on the election. Bolsonaro has spoken very openly of his admiration of President Trump and of the Trump administration. There’s a lot of expectations that there will be common ground found, probably like we haven’t seen to these this level. But this type of potential common ground between the US administration and the Bolsanaro administration, which he will take office on January 1^st.

One of the main issues that are confronting the hemisphere, perhaps, I think, the main issue is the political, economic and humanitarian crisis in Venezuela and the outpouring of thus, at this point, 2.3 million migrants and refugees from Venezuela. Bolsonaro even more so – much more so than the current Brazilian government has been openly critical, very critical of the Maduro regime in Venezuela. I think we could expect between him and President Duque in Columbia, both of Venezuela’s neighbors, much more concerted action with regards to trying to find a solution to the crisis in Venezuela. 

Another issue, the Paris Agreement. Bolsonaro had talked about removing Brazil from the Paris Agreement during his campaign. But about a week ago, he changed his mind and affirm that Brazil will be maintained part of the agreement. 

I think one issue in which there will also be common ground between the United States and Brazil are on the issues of China. Bolsonaro recently said that China is not buying in Brazil, it is buying Brazil. And then asked the question of, “Are you going to put Brazil in Chinese hands?” And this is important because China became – as all the work we’ve done here at the Adrienne Arsht Latin America Center on China-Latin America, – China became Brazil’s largest commercial partner six or so years ago, and Bolsonaro has expressed a fear that you’ve seen in many other parts of the world about being too heavily dependent upon the Chinese. 

And so I think there is – especially on Venezuela and China, and I think a number of other bilateral issues, there could be room for a high degree of cooperation with the US administration. 

Roberta, there’s also been a question. A new name for the Ministry of Foreign Relations is yet to be announced. But Bolsonaro has also indicated some other changes in Brazilian foreign policy. What do you see his leadership meaning moving forward, especially with some of the wholesale changes he’s talked about making to the Foreign Ministry? 

BRAGA: Thank you, Jason. I think, as you said, it really will depend on who’s leading the Foreign Ministry. We will know more, of course, when that person is announced. And while Bolsonaro’s agenda is heavily turned towards the domestic policy, I do foresee a stronger bilateral relationship, like you mentioned, between the two countries, especially in the areas of security and defense.  But I do also see for Brazil’s leadership, a pull back from regional convergence issues, at a time when Brazil’s leadership was front and center in tops of the European Union and the Pacific Alliance on possible convergence scenarios. Brazil is the largest democracy in the hemisphere. And I do think that as it moves forward it should continue working with its allies in the regions to advance open commerce, open borders, and really fulfill its position as the regional leader that it can be. 

MARCZAK: Ricardo, how do you see Brazil foreign policy changing? As Roberta said, Bolsonaro was elected on a “Brazil-first” agenda but how do you see his relations with the rest of the world changing? 

SENNES: Well, just to complement, to complete part of Roberta’s answer. I think there are few topics in which the Trump administration and, potentially, Bolsonaro’s foreign policy will be convergent, will be base it on the same perspective. 

I think that both of them have a very skeptic vision about multilateralism, the global forums, regional forums. I think both of them has a very critical vision about these kind of forums. Bolsonaro share this kind of vision. He has been very critical about Mercosur and Unasur regional forums. They think this doesn’t work. Actually, these forums, for them, are just working for the leftist, etc. And they probably will decrease the importance of these forums for Brazil foreign policy, in general. We may see, for instance, Bolsonaro trying to have bilateral agreements or bilateral conversations with the US, with some countries like Israel, or Japan, or even Germany, etc. And trying to foster these bilateral agreements rather than agreements that will combine more diversity and countries. 

So as you said, I think they also have a very, I think, pragmatic view about trade. And by pragmatic view, I mean not basing on long-term perspectives but short-term gains. So we may see also some kind of very specific trade agreements focused on specific demands. And from Brazil perspective, the agribusiness demand, probably will be in the top of the Bolsonaro administration’s list of priorities. 

At the same time, as Roberta said, he has a very, I think, negative approach to the climate change agenda or any kind of environment agenda. As Trump has done, Bolsonaro may not actually leave these forums, but will restrain a lot the participation of Brazilian entities, Brazilian diplomats on these environmental agreements and environmental forums.

And finally, I think, Venezuela is back to the agenda after, I think, two administrations, Dilma and Temer administrations, in which Venezuela wasn’t exactly a key part of the agenda. They are basically trying to manage the Venezuelan crisis, but not putting Venezuela as a critical point. Bolsonaro may include Venezuela back to the agenda and there is information that part of the Bolsonaro team has already contacted people in Colombia, people in Chile, in order to check if there is a willingness for a stronger engagement on Venezuela. It’s not a confirmed information but we have been listening some people say that this may be a strong agenda for Bolsonaro. 

MARCZAK: As a sea change, Brazil a couple of years ago invited Venezuela into Mercosur. And now, we see that the stronger actions that are likely under the Bolsonaro government. 

I sense that the participants on the call are a little shy today. So, given that, I will ask a last question or talk to a last question, which I think is in everyone’s mind, which is what is the Bolsonaro presidency mean for the checks and balances in Brazil?

As we talked about at the outset, Bolsonaro’s campaign has promises, pledges, that he is, I think, fully committed to trying to deliver as much as he can.  Involved dramatic remaking of the country and of laws governing everything from security to the economy. And there’s some concern about whether Bolsonaro, who has a military background and has spoken on high praise of the military government that ruled in Brazil. There are concerns about how well Brazilian institutions will be able to have the checks and balances that will be necessary in the years ahead. And Brazil, as is required in any other democracy. 

We will start off with you, Ricardo. Where do you see that going? How strong do you see the Brazilian institutions? I see them as very strong. I see, I think, especially in the last couple years, the Lava Jato corruption investigation really shown the independence and the strength of the Brazilian judiciary. Ricardo, what are your thoughts on the strength of the Brazilian institutions at a time when there’s a lot of discussion on the importance of those checks and balances in the years ahead? 

SENNES: Jason, I think I agree with you. I think the Brazilian institutions are very strong. Actually, they have been proven to be strong in the last 10 years, in which the judiciary branch has been operating in a very independently way. The public prosecutor office has been pushing very strongly against the corruption in the political system but also in the private sector relationships with governments. We have, I think, the Federal Police being very independent to actually investigate even the Presidential Cabinet. So I think they have been reaching a very, I think, important degree of independence and professionalism, etc, that gives to them, I think, a very important legitimacy to really contribute to the society.

But, actually, at the same time, we have this, I think, very strong institutional environment in Brazil. But at the same time, we have a public opinion that has been increasingly critical of the role of some of the institutions, mainly of the Congress. The Congress has been actually very, I think, criticized, having a bad assessment from the public opinion, have been involved in several corruption scandals. And I think Bolsonaro has been taken the advantage of this mood, this general mood on Brazilian public opinion against some of the political institutions in Brazil. 

He has been surfing this wave and adding some, I would say, some strong statements to these general and more, I think, general negative mood against the institutions. The specific statement that he has been giving, as you mentioned, Jason, is that he has been attacking, for instance, the electronic voting system in Brazil. He has been mentioning that this voting system is fragile. That the opposition can fraud these systems. He has also been very critical concerning the Supreme Court in Brazil and this is not actually usual for the traditional politician in Brazil that has been very respectful to the Supreme Court. 

MARCZAK: Ricardo, I want, in the interest of time, give it to Roberta for the last one.  Then I’ll wrap it up. Roberta, your thoughts. Do you agree with Ricardo and I?  How do you – how do you see the strength of institutions moving forward? 

BRAGA: Yes, absolutely. I’ll just add to what you Ricardo said with a comment on the divide that has been created and how leadership will sort of react and engage with public opinion on this. I think that unifying Brazil is one of the most significant challenges going forward and addressing this divide really needs to start at the top, with the President-elect reaffirming trust in institutions and commitment to democratic norms and processes.

We will need to see a move away from simplifying Brazil’s problems or claiming they are the fault of one group or another. We all know Brazil’s historical context is a very complicated one. And solutions really that our sustainable need to come from an open and honest conversational of multiple actors and the public. And so you need not only to address this by moving the needle on the core issues that we’ve already discussed and really bringing back some questions and negotiating effectively, but we also need to see renewed trust in the media. And we need to see a move away from disinformation and misinformation online so that we can have a really fast-paced narrative and discussion going with the public on these issues. 

MARCZAK: Great. Thank you very much, Roberta. For those on the call who are in the Washington area. Please join us on Thursday. We will be having an event here that will look specifically at the post-election outlook, with regards to the Brazilian economy. That’s an event that the Adrienne Arsht Latin America Center will be doing in conjunction with the Atlantic Council’s Global Business and Economic Program. Myself and the head of our Global Business Economic Program will be among the speakers, as well as Marcus Troyo from Columbia University; Lisa Schineller from S&P Global Ratings; Mauricio Mesquita Moreira from the Inter-American Development Bank; and Ricardo Senra from BBC World Service and BBC Brazil.  

If you’re not in the Washington area, you can also join us. But we just will not be able to offer you breakfast. With that, please join me again in thanking everyone for the comments today. We will continue to follow the development in Brazil, as they move forward in this critical period between now and Jair Bolsonaro’s inauguration on January 1st and the months and years ahead of that. With that, we will conclude. 

BRAGA: Thank you so much, Jason, Ricardo.

SENNES: Thank you. Thank you too. 

(END)

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For the first time since the early 2000s, Brazilians have elected a president that does not belong to the Workers’ Party (PT).

On October 28, Brazilians elected as their president Jair Bolsonaro, a populist former army captain who has served as a member of the Chamber of Deputies representing the state of Rio de Janeiro since 1991. Bolsonaro, who belongs to the Social Liberal Party (PSL), defeated his PT rival, Fernando Haddad, in a runoff election after a highly contested election. Bolsonaro won 55.1 percent of the votes against 44.9 percent for Haddad.

Bolsonaro’s election is likely to mark a dramatic political shift in Brazil, Latin America’s largest democracy.

“Together we will change the destiny of Brazil,” Bolsonaro said in a video posted on his Facebook page shortly after the election was called on October 28 night.

“The convincing election of Jair Bolsonaro today shows Brazilians’ rejection of the status quo. His election reflects voter disenchantment with corruption, insecurity, and anemic economic growth,” said Jason Marczak, director of the Atlantic Council’s Adrienne Arsht Latin America Center.

“President-elect Bolsonaro will be tasked with trying to bring Brazil in a new direction. Questions remain, however. Jair Bolsonaro must show from the get go that he is a leader who will govern for all of Brazil, and must continue to move Brazil forward in the positive trajectory Brazil is destined for in the years to come. And, at a time of much uncertainty in the hemisphere, most notably the crisis in Venezuela, Bolsonaro must seize an opportunity to work with leaders in the hemisphere on an issue that is going to define the future of security the hemisphere,” he added.

Bolsonaro, 63, is a controversial figure. He has a history of making incendiary remarks about women, minorities, and gays; but he has also promised to get tough on crime and corruption in a country that is plagued by both.

Crime, corruption, and the economy

“Brazilians are hoping Bolsonaro’s victory will mean a change in at least two key areas: security and the economy being at the top of this list,” said Roberta Braga, an associate director in the Adrienne Arsht Latin America Center.

Pointing to the high levels of violent (and often deadly) crime in Brazil, Braga said: “A lot of Brazilians look to Bolsonaro to bring some degree of order to the country. This means many are willing to accept, and at times overlook, the heavy-handed approach he has advocated to addressing the problem.”

Bolsonaro, who survived a stabbing on September 7, has advocated violent retribution against criminals. He is in favor of relaxing gun ownership laws, described torture as a legitimate practice, and wants to restore the death penalty.

Besides a skyrocketing crime rate, Brazil also has a high rate of unemployment. “Bolsonaro will be expected to implement policies that are different from what the Workers’ Party implemented in the over one decade in which they have governed the country,” said Braga.

Bolsonaro has entrusted his economic policies to Paulo Guedes, a liberal economist. “People are hopeful that with Paulo Guedes at the helm, Bolsonaro will be able to implement policies to curb unemployment and pass very necessary reforms, like pension reform,” said Braga.

But first, Bolsonaro will have to create alliances. “His administration will have to form key coalitions in Congress, including with the PSDB and MDB, and make certain concessions if he hopes to make good on his promises. His political capital will not be infinite,” Braga said. On the campaign trail, Bolsonaro often railed against center-left and center-right parties. While defeated in the presidential vote, the PT still dominates Congress.

The PT factor

Dissatisfaction with the PT was a significant factor in Brazil’s 2018 election.

In the first round of elections on October 7, Bolsonaro won just under 47 percent of the vote—not enough to avoid a runoff. Haddad, his nearest rival, trailed at 28 percent.

Bolsonaro rode a wave of public anger toward the PT—a party that has seen many of its leaders embroiled in a massive corruption scandal. The PT’s original presidential candidate, Luiz Inácio Lula da Silva, a former president of Brazil, has been in jail since April after he was sentenced to twelve years for corruption and money laundering in the Operation Lava Jato (Car Wash) criminal investigation. He dropped out of the race in September after the courts ruled he was ineligible to run. Lula’s departure put the PT’s fate in the hands of Haddad, a former mayor of São Paulo.

“The PT was absolutely a factor in this election,” said Braga. “A lot people went to the polls to vote against the PT. They didn’t want to see another PT president leading Brazil.”

Implications for the US-Brazil relationship

Brazil’s president-elect and the US President Donald J. Trump have similar outlooks on a number of issues. Bolsonaro has mentioned he would shift the Brazilian Embassy from Tel Aviv to Jerusalem, Trump shifted the US Embassy to Jerusalem in May; Bolsonaro is determined to curb Chinese influence in Brazil, Trump is engaged in a trade war with China; Bolsonaro has said he would prioritize bilateral trade agreements over multilateral ones, as Trump has. And just as Trump pulled the United States out of the Paris climate accord in June 2017, Bolsonaro initially claimed he would pull Brazil out of the agreement, until he backtracked days before the election.

While all this may sound like the perfect ingredients for a closer relationship between Trump and Bolsonaro, Braga said both leaders are likely to remain “inwardly focused.”

“It will likely be Brazil first for Bolsonaro just as it is America first for Trump,” she said.

Trump called Bolsonaro to congratulate him soon after the results were declared.

“Had a very good conversation with the newly elected President of Brazil, Jair Bolsonaro, who won his race by a substantial margin. We agreed that Brazil and the United States will work closely together on Trade, Military and everything else! Excellent call, wished him congrats!” Trump tweeted on October 29.

Tracking disinformation

Groups, including the Atlantic Council’s Digital Forensic Research Lab (DFRLab) and Adrienne Arsht Latin America Center, closely monitored disinformation around the election. The Atlantic Council’s #ElectionWatch Latin America initiative has identified, exposed, and explained disinformation and the spread of misinformation in elections in Colombia, Mexico, and Brazil this year. In Brazil, the initiative found disinformation and misinformation as voters headed to the polls in an extremely polarized environment.

Ashish Kumar Sen is deputy director of communications, editorial, at the Atlantic Council. Follow him on Twitter @AshishSen.

The post Brazil Swings right with election of Jair Bolsonaro as President appeared first on Atlantic Council.

Brazil – October 28

Brazil is poised to elect a populist as its next president. If Jair Bolsonaro of the Social Liberal Party (PSL) defeats Fernando Haddad of the Workers’ Party (PT) in a runoff vote on October 28 it will be the first time since 2002 that the PT has lost a presidential election.

Bolsonaro is the odds on favorite going into the vote. In the first round on October 7, he won more than 46 percent of the vote, just shy of the overall majority needed to avoid a run-off. Haddad was a distant second with just short of 30 percent.

Bolsonaro’s potential election is seen as a sign of Brazilian dissatisfaction with the political establishment and hyper polarization. He survived a stabbing on September 7, which hobbled his ability to campaign in the late stages of the first round. Haddad has suffered from growing dissatisfaction with his PT, which has been blamed for economic mismanagement and whose former leader—Luiz Inácio Lula da Silva—has been ensnared in a corruption scandal.

“Many, if not most, Brazilians will choose to abstain from voting rather than vote for either candidate in the second round, and many more will vote for Bolsonaro simply to keep the PT away from power,” according to Roberta Braga, an associate director in the Adrienne Arsht Latin America Center.

Hesse (Germany) – October 28

Normally a state election would not turn too many heads, especially in Germany where Chancellor Angela Merkel has governed for thirteen years. Following a dismal showing by her Christian Democratic Union (CDU) party’s sister party, the Christian Social Union (CSU), in Bavarian state elections on October 14, however, eyes are fixed on Hesse with concerns that another poor result could throw Merkel’s coalition into question.

In addition to CSU’s poor result, the Social Democrats (SPD), who are in a governing coalition with Merkel, also lost significant support in Bavaria, falling all the way down to fifth in total seats. Polls in Hesse currently show SPD tied with the Greens at 21 percent, a result that could cause infighting within the SPD and potentially force SPD leaders to withdraw from the governing coalition in Berlin.

Perhaps more worryingly for Merkel, her CDU party has its party congress in December and another poor result for her party in Hesse (polls predict it could be a double-digit percentage drop) could spark calls for her to step aside.

Georgia – October 28

Voters in the Caucasus nation will go to the polls for the final time to elect a president on October 28. Following a constitutional change last year, Georgia will begin moving toward a parliamentary system of government, with the office of president becoming largely symbolic and, beginning in 2024, elected by members of parliament and government officials, rather than the whole electorate.

The top contenders include Salome Zuravbishvili, a former foreign minister who would be the first woman to hold the post; Grigol Vashadze, another former foreign minister; and Davit Bakradze, a former speaker of parliament and presidential candidate in 2013. Polls show a close race and it is likely that no candidate will reach the majority needed to avoid a run-off.

Making history: Ethiopia got its first-ever female president this week. Ethiopian members of parliament elected Sahle-Work Zewde, an experienced diplomat, to the largely ceremonial position.

David A. Wemer is assistant director, editorial at the Atlantic Council. Follow him on Twitter @DavidAWemer.

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On October 7, a few hours after the polls closed in Brazil and a runoff between the far-right candidate Jair Bolsonaro and leftist Fernando Haddad was announced, capoeira master Moa do Katende was stabbed to death in a bar.

The murder received extensive attention because it was reported as an example of the increasing electoral violence in the country. The victim was a Worker’s Party (PT) supporter, while the suspect was an alleged Bolsonaro supporter.

The post #ElectionWatch: Partisan Debate and Electoral Violence in Brazil appeared first on Atlantic Council.

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Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Center for Scholars, kicked off the call with opening remarks, and Renata Vasconcellos, senior director of the Brazil-US Business Council, moderated the discussion between Ricardo Sennes, nonresident senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center, and Monica de Bolle, director of the Latin American Studies and Emerging Markets Department at Johns Hopkins University (SAIS).

Sotero began the discussion by highlighting electoral results that saw an end to the Rousseff-Temer leadership and brought a larger than expected rate of renewal in Congress. Vasconcellos commented on the remarkable percent difference between Partido Social Liberal (PSL) candidate Jair Bolsonaro, who received around 46 percent of the votes, and Workers’ Party (PT) candidate Fernando Haddad, who received over 29 percent. This difference, she noted, was surprising even in Brazil, where presidential elections tend to head to a runoff.

The numbers indicated Brazilians voted in large part against the main political parties, a push against the perceived establishment in the country. Ricardo Sennes referred to Bolsonaro’s high rate of support as a ‘phenomenon.’ He noted Bolsonaro’s popularity is reflective of a new balance of power in the Brazilian system, where for the first time since 1989 the Partido da Social Democracia Brasileira (PSDB) did not represent the right in the political ideological spectrum.

With Geraldo Alckmin, the PSDB presidential candidate, only receiving 4.76 percent of the votes, Sennes noted Bolsonaro effectively captured the center and center-right votes as Brazilians pushed against a Workers’ Party victory. Votes cast in terms of runoff predictions increased Bolsonaro’s support from around thirty five percent to the forty six percent he received in the first round, he noted.

At the subnational level, the Brazilian Congress welcomed a variety of new candidates into the fold. Many politicians in office during the past administrations were not reelected, including former President Dilma Rousseff, who ran for a Senate seat in the state of Minas Gerais. Presidential frontrunner Jair Bolsonaro’s party, the Partido Social Liberal (PSL), gained new representation in Congress, as did new parties like the Partido Novo. With new parties voted into Congress, Sennes noted that Congressional fragmentation will likely make it more difficult for Brazil’s next president to build coalitions and effectively govern.

Pivoting the discussion to the impact of first-round results on Brazil’s economic outlook, de Bolle emphasized that neither Bolsonaro nor Haddad have feasible and detailed economic plans. She argued both plans will need greater coherence and clarity. As markets reacted in favor of Bolsonaro following the Sunday vote, de Bolle expressed surprise, arguing market confidence in Paulo Guedes, Bolsonaro’s chief economic advisor, is misplaced if the Bolsonaro campaign is not able to provide a more detailed economic position.

In wrapping up the conversation, Ricardo Sennes commented that social media, in particular the spread of disinformation, as well as the engagement of the evangelic church and the active participation of judiciary agencies in the elections represented new trends in the Brazilian electoral process.

As we look ahead to the second round of voting, other presidential candidates that did not make it to the second round will have valuable influence, as voters are still unsure about how to cast their ballots.

The post Brazilian elections: Results and expectations appeared first on Atlantic Council.

Bolsonaro belongs to the Social Liberal Party (PSL). He has a history of making incendiary remarks about women, minorities, and gays; he has also promised to get tough on crime and corruption. He won just under 47 percent of the vote, his closest competitor, Haddad, got 28 percent.

“Bolsonaro’s near victory in the first round shows Brazilians are fed up with insecurity and corruption, and desperately want their economic fortunes reversed,” said Jason Marczak, director of the Atlantic Council’s Adrienne Arsht Latin America Center.

“Bolsonaro’s numbers clearly indicate the Brazilian system of years past is out the window and that the traditional political parties—as we have seen in other countries, most recently in Mexico—have lost the trust of the Brazilian electorate,” he added.

In Mexico, Andrés Manuel López Obrador, popularly known as AMLO, won Mexico’s July 1 presidential election by a landslide picking up more than 50 percent of the vote. AMLO was a member of PRD—the Democratic Revolution Party—before splitting from the party and forming Morena.

Bolsonaro has stirred passions in Brazil. In a 1993 congressional speech he declared he was in favor of dictatorship. He survived a stabbing on September 7 and was forced to campaign from his hospital bed. His opponents have rallied against him with the social media campaign #EleNão or #NotHim.

“Up against hyper polarization and extreme dissatisfaction, Brazilians voted out the country’s political establishment on October 7,” said Roberta Braga, an associate director in the Adrienne Arsht Latin America Center.

The fact that Bolsonaro fared as well as he did in the first round is at least in part an indication of the poor opinion many Brazilians have of Haddad and the PT because of the party’s history of corruption and mismanagement of the Brazilian economy. “Many, if not most, Brazilians will choose to abstain from voting rather than vote for either candidate in the second round, and many more will vote for Bolsonaro simply to keep the PT away from power,” said Braga.

Brazilians are also voting for all of the country’s state governors, two-thirds of the senators, all lawmakers in the chamber of deputies, and more than 1,000 seats in state legislatures.

“The first round of Brazilian elections saw the rise of fringe political parties like Jair Bolsonaro’s PSL and the fall of more established parties, including the Workers’ Party, at almost all levels of government,” said Braga. “In Congress, new representatives will come into office in a clear and strong push against the status quo. But in a country calling for political reform, fragmentation in Congress will remain.”

Marczak said the next Brazilian government will be hard pressed to quickly deliver results for the Brazilian people. “What will be critical will be that democratic institutions in Brazil continue to be as strong and robust,” he said.

Bolsonaro’s victory marks the first time since 2002 that the Workers’ Party has not won a presidential election. Former Brazilian President Luiz Inácio Lula da Silva, who was the front-runner for much of the past year, was knocked out of the running after an appeals court early this year upheld a corruption and money laundering conviction against him in the Operation Lava Jato (Car Wash) criminal investigation.

With Lula out, the Workers’ Party picked Haddad as its presidential candidate. Popular support for Lula, however, has not automatically transferred to Haddad, a former mayor of São Paulo.

Groups, including the Atlantic Council’s Digital Forensic Research Lab, have been closely monitoring disinformation around the election.

“In an extremely polarized election year, social media has played a crucial role and has had a big impact on voters’ choices. In particular, disinformation spread through social media platforms has had an increasingly worrying effect,” said Luiza Bandeira, digital forensic researcher at the Atlantic Council.

“This has become more true in the final week and on the very same day of the vote, when a great amount of false claims about fraud were spread. This is very dangerous since it can erode trust in institutions and democracy,” Bandeira added.

Braga warned: “With disinformation peppering discussions on WhatsApp and social media across the board, Brazilians must approach round two on high alert.”

Haddad faces what Braga said was a “an impossible uphill battle to turn things around, especially as the rate of abstentions, null votes, and blank votes exceeded the votes that went to Haddad in this round.”

Braga said a Bolsonaro victory in the second round is “almost certain.”

Ashish Kumar Sen is deputy director of communications, editorial, at the Atlantic Council. Follow him on Twitter @AshishSen.

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Ahead of Brazil’s presidential election on October 7 vote, false narratives about electronic voting fraud have spiked and deepened mistrust as citizens head to the polls.

The narrative has been amplified by the far-right frontrunner Jair Bolsonaro, who claimed the voting system is rigged in favor of the leftist Worker’s Party (PT).

The post #ElectionWatch: Claims of Electronic Voting Fraud Circulate in Brazil appeared first on Atlantic Council.

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A significant number of Brazilians joined the social network Gab.ai after Twitter suspended accounts associated with the far-right in the country.

Users from the country have since become one of the largest groups to access the Gab website, second only to the United States. Gab is well-documented as a fertile environment for the spread of conspiracy theories and hate speech.

The post #ElectionWatch: Migration to Gab in Brazil appeared first on Atlantic Council.

Amid a deep political crisis, Brazil will elect a new president, new state governors, and a new Congress in two rounds of voting  —  the first on October 7 and the second on October 28. The stakes are high, and misinformation or disinformation have the potential to influence the electoral process. Any accusations of large-scale falsehood could cast into question the legitimacy of the process, or the results.

The post #ElectionWatch: Fast and False in Brazil appeared first on Atlantic Council.

A conspiracy theory that began as a throwaway joke in 2001 was amplified on YouTube and ended up being seriously quoted in a debate between Brazil’s presidential candidates on August 9.

YouTube played an important role in the spread of the ­­United Socialist Republics of Latin America (URSAL) conspiracy theory in Brazil. YouTube algorithms consistently expose viewers who watch URSAL-related content to recommendations for other conspiracy-prone topics, making the theory an entryway into further online disinformation and potential radicalization.

The acronym “URSAL” was coined as a throwaway comment in an article 17 years ago. It was subsequently taken up by far-right supporters who took it seriously and later resurfaced on YouTube, finally being denounced as a genuine Communist conspiracy by a candidate during the first presidential debate in Brazil.

The incident shows the audience impact on YouTube, and the danger its algorithms pose in steering viewers toward content promoting fictitious conspiracy theories.

The post #ElectionWatch: URSAL, Illuminati, and Brazil’s YouTube Subculture appeared first on Atlantic Council.

The first presidential debate ahead of Brazil’s October election took place on Thursday, August 10. An analysis of online engagement around the televised event concluded that automated profiles comprised only around 3 percent of total interactions and that statements classified as “fake” by fact-checking agency Lupa (a partner of FGV DAPP’s Digital Democracy Room) had little impact on broader conversations. Yet for the first time since the pre-campaign period began, one piece of unverifiable news appeared among the top ten trending articles on social media. The piece, published by the website República de Curitiba, claimed Twitter “removed” mentions of right-wing candidate Jair Bolsonaro from the platform during the debate.

The post #ElectionWatch: Bots Around Brazil’s First Presidential Debate appeared first on Atlantic Council.

Braga kicked off the call by highlighting how the first-round vote on October 7 comes during a period of uncertainty and increased polarization in the political landscape. According to Sennes, the general mood is critical for three reasons, namely: a slow economic recovery has fueled unemployment; a sequence of corruption scandals with widespread and continuing implications has rocked the country; and high rates of violence are increasingly a central concern for Brazilians. The combination of these factors has fueled strong anti-establishment perceptions and a negative mood around the election. Sennes explained, “This environment has pushed voters toward more simplistic and populist answers for these very complex questions and problems that we have in Brazil.” Despite fragmentation across the political landscape, Braga concluded on an optimistic note, posturing that the election is an inflection point that will offer the incoming administration opportunities for future economic growth, political reform, and citizen security.

Teixeira da Costa and Rzezinski agreed that the incoming administration must address the fiscal situation through much-needed reforms. To alleviate the 13 percent unemployment rate, Rzezinski proposed increased government investment in construction, specifically housing and infrastructure projects. Both speakers emphasized the need to build public confidence and strengthen the rule of law to attract investment.

Although Brazil has historically been closed off to trade and investment, both Teixeira da Costa and Rzezinski argued that these views are changing due to a better understanding of the relationship between free trade and competitiveness. Teixeira da Costa affirmed he cannot foresee a circumstance in which a president would deny the need for further integration and trade, specifically with Mercosur and the Pacific Alliance.

Rzezinski added that “the next administration should prioritize the opening of free trade agreements negotiations, especially in our region but obviously as well in Europe, Asia, and Africa.” He also noted that fostering relations between the United States and Brazil in terms of trade, defense, and energy is essential for future growth.

Shifting to the issue of political reform, Sennes noted that some resolutions have been passed, such as raising the threshold for political parties and limiting corporate funding of campaigns. But he argued more reforms are necessary, primarily with regard to election procedures. He outlined two options under consideration: voting for representatives by district rather than state; or, a mixed electoral system that combines district voting and closed lists by political parties.

Building on this, Teixeira da Costa emphasized the importance of incorporating new political voices into Congress: “The quality of the Congress is very important to bring changes. The great difficulty for political changes is that the Congress has to change itself.”

With a record number of homicides reported in 2017 and an increase in petty crime in Brazil’s largest cities, public safety and citizen security have risen to the top priority for many voters. Teixeira da Costa explained that a simple solution to the problem does not exist but rather combatting these statistics requires an integrated, national policy. Effective measures must include actors from the private sector to ensure the changes necessary for education, civil responsibility, and employment to reduce violence. Security requires the full participation of the President, Congress, and Judiciary and cannot be left to state discretion, he added.

With polls currently showing approximately 30 percent of voters undecided or considering abstention, Rzezinski pointed to these statistics optimistically, suggesting they are indicative of voters thinking critically about their options and how to solve the very difficult problems facing the country. He noted, “the elections will obviously be an important test to see how much Brazilian society has matured and learned in electing better representatives in Congress.”

For more information on the implications of potential political and economic reform, read the latest Adrienne Arsht Latin America Center Spotlight, authored by Ricardo Sennes, breaking down the potential impact of leading nominees’ proposals for economic and political reform, foreign direct investment, and security here.

here

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The first round of the presidential election in Brazil will be held on October 7, with an expected run-off on October 28. The current front runner in opinion polls, former President Luiz Inácio Lula da Silva, is currently in jail on a twelve-year sentence for corruption, having been indicted as part of the “Car Wash” corruption scandal that has rocked Latin America’s largest country.

The Workers’ Party (PT) has nominated Lula as their candidate, despite a pending confirmation by Brazil’s electoral court on his eligibility to run while imprisoned—an unlikely scenario. On August 6, the PT announced they would run Fernando Haddad, a former minister under both former President Dilma Rousseff and Lula, as their candidate should Lula be disqualified from the ballot. Despite acknowledging this possibility, many PT leaders and activists have stressed that they will not view the election as legitimate if Lula, who they believe was unfairly targeted and scapegoated by authorities in the corruption scandal, is not allowed to run.

Current President Michel Temer is not running in October, despite leading the country for two years after replacing the impeached Rousseff. Temer struggled in his term to gain a sense of legitimacy and had to fight off serious allegations of his own misconduct during a corruption investigation. His primary successes, a new labor law and a constitutional amendment to limit public spending, have helped to stabilize Brazil’s faltering economy, but the reforms remain deeply unpopular with many Brazilians.

Although the field remains divided, Lula or Haddad’s primary rival will be right-leaning Army Reserve Captain Jair Bolsonaro, who has gained notoriety for a string of controversial remarks and tough measures proposed to address Brazil’s security concerns. Other leading candidates include former São Paulo State Governor Geraldo Alckmin of the Brazilian Social Democratic Party (PSDB), former Minister of the Environment Marina Silva of the Sustainability Network Party (REDE), and Ciro Gomes, former minister of finance and member of the Democratic Labor Party (PDT).

According to Henrique Rzezinksi, a member of the Board of Trustees at the Brazilian Center for International Relations (CEBRI), “unemployment [will be] one of the main drivers of the election,” as the jobless rate continues to be stuck around 12 percent in Brazil. Brazil’s economy has recovered mildly from the dark days of recession in 2015 and 2016, but danger remains. Lingering labor disputes still threaten to hobble the country, such as the trucker strike in May that sent ripples throughout the Brazilian economy.

Thanks to increasing yields in other developed countries, investors have been pulling money out of Brazil, causing the real to drop almost 20 percent this year. The decline in the real is further exacerbating Brasilia’s budgetary woes, which Roberto Teixeira da Costa, a member of CEBRI’s Board of Trustees and president of the Market Arbitration Chamber at B3 exchange, noted is “the most vulnerable point of the Brazilian financial situation.”

Frustration in Brazil’s ruling elites, specifically after the “Car Wash” revelations, has bred deeper political polarization and raised the profiles of smaller party candidates such as Bolsonaro. There is a “very strong anti-establishment” sentiment in the country right now, which is “pushing the voters toward more simplistic and populist answers,” according to Sennes. “The changes are not coming,” said da Costa, adding, “the people are disillusioned.” Da Costa stressed the importance of the concurrent elections for Congress, which needs “a renewal and new blood.” In years past, Congress could normally be relied upon to go along with the reform program of a new president, but current polarization makes that far from certain.

According to Sennes, the candidate who is able to deliver on two central issues, the economy and security, will be successful in October. Opinion polls indicate that almost 30 percent of the electorate is still undecided and “if the candidates present themselves as trustworthy and able to make tangible progress on these two agendas, he or she will be very appealing to the voters,” Sennes said.

“Like it or not,” Adrienne Arsht Latin America Center Associate Director Roberta Braga said, “Brazil finds itself at an inflection point.” While the challenges remain great and politics continue to prove divisive, she argued, “this is also a moment of opportunity for Latin America’s largest democracy. The next president will have opportunities to work toward increased investment, regional cooperation, and new levels of leadership in the region….” Brazilians must now take the time to determine who out of the crowded field is best positioned to seize on these new opportunities.

David A. Wemer is assistant director, editorial at the Atlantic Council. You can follow him on Twitter @DavidAWemer.

Ahead of the first presidential debate on August 9, the Adrienne Arsht Latin America Center released a Spotlight publication outlining the potential impacts the leading candidates’ positions may have on economic and political reforms, foreign direct investment, and security. Read the Spotlight here.

The post Brazil readies for contentious Presidential campaign appeared first on Atlantic Council.

In this Spotlight, we ask: With Brazil’s presidential campaign set to officially kick off, what could an October win for one of the top contenders mean for political and economic reforms, foreign direct investment (FDI), and security?

The post SPOTLIGHT: 2018 Election Series – Brazil appeared first on Atlantic Council.

Ahead of Brazil’s presidential elections, a group of apparently young Brazilians is running a network of Twitter, Instagram, and Facebook accounts to trade engagement  —  likes, followers, and pages  —  for cash.

The network was involved in boosting partisan, election-related content in Mexico. With Brazil’s own election due on October 7, this network has the potential to reproduce its Mexican operations much closer to home.

The post #ElectionWatch: Loves For Sale In Brazil appeared first on Atlantic Council.

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Stronger Ties Between Mercosur and the Pacific Alliance are Viable, and the International Scene Favors Them

This article was originally published in Portuguese in O Estado de S.Paulo on July 21.

The first meeting of presidents of Mercosur and the Pacific Alliance countries, in Mexico, on July 24, is not just another presidential summit in which much is said and little is decided. First, this meeting represents the culmination of an intense, four-year effort to bring the two sub-regional blocs closer. Second, the uncertainty, rifts and conflicts that plague the international scene create favorable conditions for convergence in Latin America. The summit could, thus, signal a turning point in the sequence of efforts begun in the 1960s – with the founding of the Latin American Free Trade Association (LAFTA) – to promote, if not regional integration, at least free-trade agreements or preferential trade zones, which have so far achieved relatively modest results.

Instead of relying on the signing of treaties that are both too ambitious and unrealistic, the on-going convergence starts from what has already been achieved in the region and moves further ahead or in a better direction. This is probably the greatest difference between what has been done in the past and what is happening today.

In fact, much has already been done in each of the sub-regional groups. Despite exception lists and other obstacles along the way, Mercosur, which includes Argentina, Brazil, Paraguay, Uruguay, and Venezuela (currently suspended), was finally established in 1991. It has consolidated a free trade zone, adopted a common external tariff (albeit imperfect), promoted partial regulatory harmonization, and concluded trade agreements, although limited, with countries outside the continent. Brazil set the example by unilaterally lowering its import tariffs to zero, not only for Mercosur members, but also for other South American countries.

Although established more recently, the Pacific Alliance has, in some areas, moved forward more quickly.  Created in 2011, the alliance that includes Chile, Peru, Colombia, and Mexico has set more ambitious goals for itself in the form of greater integration that assures the free movement of goods, services, capital, and people. Besides reducing and eliminating tariffs, the alliance has set out to negotiate complex matters, such as rules of origin, technical barriers to trade and expanding regional value chains. It has not, however, been able to negotiate bilateral concessions under a universally-valid umbrella agreement.  Paradoxically, the level of trade between Pacific Alliance members and Mercosur – especially Brazil – is several times bigger than the level of trade among the Alliance’s members. 

Developments on the world stage have created additional incentives for the two blocs to converge. Globalization brought prosperity and unprecedented advances in knowledge. However, it has also given rise to imbalances, uncertainty and brought back nationalism in the form of protectionism and anti-immigrant sentiment. Furthermore, globalization has gone as far as to call into question the very foundations of liberal democracy. Traditional political parties have been challenged and the specter of populism has been resurrected. The post-Cold War liberal order and multilateralism have given way to a resurgent geopolitical scene marked by competition among the great powers, or even by conflicts. With regard to trade, the scenario is that of a weaker World Trade Organization (WTO) coupled with the apparent decision by the European Union not to move ahead with an agreement with Mercosur – a decision that, if carried out, could prove to be a strategic mistake.

Our region seems to have managed to protect itself from several of these destabilizing developments, although it might suffer indirect effects from some of them. Brazil’s case illustrates it well: we have not globalized our economy too much, but too little. We are not motivated by protectionism; rather, we need to move towards a more open economy. The recent series of crises that afflicted the country showed the strength of our democratic institutions and confirmed our commitment to freedom of opinion. Something similar is happening in many of our neighboring countries. Free elections are now the rule – not the exception. The number of democracies in the region has risen markedly. Mistrust of parties and leaders – which seems to be a universal phenomenon – has not affected our commitment to democracy. We affirm our long-standing support for multilateralism, and we do not want our region to become a stage where the great powers compete for markets and spheres of influence.

We have, then, good reasons to engage in an effort to achieve a Mercosur-Pacific Alliance convergence, as well as economic harmonization based on free trade and investment that benefits consumers and creates jobs. Together, the two blocs account for approximately 80 percent of Latin America’s GDP, population and territory. The eight countries that make up these blocs form a constellation of democracies and market-oriented economies prompting the region to convergences in a fruitful dialogue on topics of common interest. Finally, harmonizing our rules and trade practices will not disadvantage potential partners outside our region. Rather, potential partners will benefit from the dissemination of similar regulatory frameworks in several countries of the continent.

There is still time to erase a new Tordesillas line that was being drawn to separate countries in the Atlantic coast from those in the Pacific coast, as in the colonial era. President Donald Trump’s decision to withdraw the U.S. from the Transpacific Partnership and renegotiate NAFTA could favor hopes for a greater convergence in Latin America.

The next stages have already been outlined by Chile, in a draft itinerary, further developed by Brazil, and now consolidated by Mexico, the host of the Summit meeting in Puerto Vallarta.

The course is set, the project is viable, and the international scene provides momentum.

Sergio Amaral is the Brazilian Ambassador to the United States.

The post A Strategic Opportunity appeared first on Atlantic Council.

Any company or organization around the world that collects or processes data of EU residents must comply with GDPR. The European Commissioner for Justice, Věra Jourová, outlined the EU’s ambitions on data privacy by stating “We want to set the global standard.” This edition of the EconoGraphic assesses how the EU is applying a “carrot and stick” strategy to countries and tech giants to broaden GDPR’s global reach and what this means for the United States.

 

With the recognition that data is set to become the most valuable commodity of the 21^stcentury, the EU is making a concerted effort to define data protection and privacy rules around the world. European officials are using access to the EU’s internal market’s 500 million consumers as a bargaining chip to convince other countries to enact domestic data protection laws that mirror the GDPR. To enter into free-trade agreements (FTAs) with the EU, many countries must now commit to developing data privacy frameworks that afford consumers protections on par with GDPR. Japan, which has finalized its negotiations with the EU about a FTA, and Brazil, which hopes to sign a trade agreement with the EU, are both currently updating their data privacy laws to satisfy the EU’s data protection rules. Israel, New Zealand, and the United States are part of a group of twelve countries that already fulfill the GDPR’s adequacy requirements. Corporations from these countries can transfer EU individuals’ data from the EU because their domestic data privacy regulations are deemed to offer the same level of protections as the GDPR.

The current US administration criticized the implementation of GDPR. Commerce Secretary Wilbur Ross warned that GDPR “could significantly interrupt transatlantic co-operation and create unnecessary barriers to trade.” US compliance with GDPR is limited to data flows governed by the EU-US Privacy Shield framework, which allows Europeans’ data to be transferred to the US for commercial use. However, according to the Congressional Research Service, GDPR might render the Privacy Shield obsoletebecause most US companies must comply with its strict data protection rules. This in turn could reduce US companies’ compliance burden and costs. The upcoming US midterm elections might change the US stance vis-à-vis GDPR. Democrats in the US Senate have already signaled their intent to extend GDPR privacy rules to US citizens, should they win both Houses of Congress in November.

To ensure compliance by small and large companies around the world, GDPR has real teeth. For violations of technical requirements, such as a failure to report a data breach, companies and organizations can receive a fine of up to €10 million or 2 percent of global annual revenue (whichever is greater). Offenses that violate one or more of GDPR’s core pillars, for example processing EU residents’ data without sufficient consent or transferring data to countries that do not fulfill GDPR’s adequacy requirements, can result in fines up €20 million or 4 percent of global annual revenue(whichever is greater). Multinational companies’ tendency to adopt the most stringent regulations they encounter and implement them globally to minimize costs, dubbed the Brussels effect, will likely act as a catalyst to expand GDPR’s global reach. Surely also because of reputational effects, Microsoft has already committed itself to adopt GDPR’s privacy protections for all of its global customers. Similarly, Facebook’s Mark Zuckerberg said that his company would extend the GDPR’s protections “in spirit” to all its users around the world.

The EU’s economic soft power paired with the absence of meaningful US data privacy regulations or legislation, and a global desire to regulate US tech giants, might in fact result in GDPR setting the global standard for privacy protections. The question remains, however, whether national European regulatory authorities are up to the task of enforcing GDPR across the EU and the world.

The post GDPR’s Quest for World Domination appeared first on Atlantic Council.

]]> https://www.atlanticcouncil.org/commentary/event-recap/brazil-the-phoenix-economy-a-conversation-with-dr-tiago-berriel-deputy-governor-of-the-brazilian-central-bank/ Wed, 18 Apr 2018 19:43:55 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/brazil-the-phoenix-economy-a-conversation-with-dr-tiago-berriel-deputy-governor-of-the-brazilian-central-bank/ On Wednesday, March 18, 2018, the Atlantic Council’s Global Business and Economics program, together with the Adrienne Arsht Latin American Center, hosted a private roundtable discussion with Dr. Tiago Couto Berriel, Deputy Governor of the Brazilian Central Bank.

The post Brazil – The Phoenix Economy? A conversation with Dr. Tiago Berriel, Deputy Governor of the Brazilian Central Bank appeared first on Atlantic Council.

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On Wednesday, March 18, 2018, the Atlantic Council’s Global Business and Economics program, together with the Adrienne Arsht Latin American Center, hosted a private roundtable discussion with Dr. Tiago Couto Berriel, Deputy Governor of the Brazilian Central Bank.

Mr. Jason Marczak, Director of the Adrienne Arsht Latin American Center, opened up the discussion stressing the key juncture in which Brazil finds itself, with upcoming general elections later this year. The discussion was then moderated by Bart Oosterveld, Director of the Global Business and Economics Program.

The discussion was centered around the current state of the Brazilian economy, which has seen an improvement in recent months amongst continued downward inflation. Dr. Tiago described the challenges that the Brazilian Central Bank has faced in the last few years, and the challenges they expect to tackle in the future. Particular attention was devoted to international financial and trade issues.

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]]> https://www.atlanticcouncil.org/insight-impact/in-the-news/marczak-quoted-in-financial-times-on-brazil-s-ex-president-s-arrest/ Fri, 06 Apr 2018 20:38:57 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/marczak-quoted-in-financial-times-on-brazil-s-ex-president-s-arrest/ Read the full article here

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]]> https://www.atlanticcouncil.org/blogs/new-atlanticist/a-beginner-s-guide-to-battling-fake-news-three-approaches-to-consider-before-sharing/ Thu, 08 Mar 2018 18:25:46 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/a-beginner-s-guide-to-battling-fake-news-three-approaches-to-consider-before-sharing/ While the influence of Russian disinformation in democratic processes featured prominently in conversations surrounding major election cycles in Europe throughout 2017-2018, another region, further from the Kremlin’s backyard, now faces its own fight against false narratives. In Latin America, a region that will see three major elections in 2018, the concept of fake news has […]

The post A Beginner’s Guide to Battling Fake News: Three Approaches to Consider Before ‘Sharing’ appeared first on Atlantic Council.

]]> While the influence of Russian disinformation in democratic processes featured prominently in conversations surrounding major election cycles in Europe throughout 2017-2018, another region, further from the Kremlin’s backyard, now faces its own fight against false narratives.

In Latin America, a region that will see three major elections in 2018, the concept of fake news has become a significant concern for policymakers and civil society groups alike. Ahead of elections in Brazil, Colombia, and Mexico, false narratives spread in the news and on social media are now constructed for two purposes: 1) to disseminate lies and 2) to create deep uncertainty or suspicion.

As was seen in the build-up to European elections, these narratives are designed by malign actors to influence the outcome of an election in such a way as sews discord and damages faith in democracy. 

Though disinformation is an issue with a long history, merely two years ago, “disinformation” and “misinformation” barely skimmed headlines in the Western hemisphere. While the study of strategic narratives—both how they are formed and how they are projected in international affairs—had been core to the understanding and execution of public diplomacy at embassies and political strategies everywhere, the concept of “fake news” had not yet reached the eyes and ears of the public.

Today, with the Italian elections heavily impacted by disinformation and looming concerns over Russian interference in US midterm elections, discussions of false narratives, disinformation, and misinformation have come to the forefront of policy debates.

Particularly in Latin America, Whatsapp has become a primary platform for the spread of disinformation. This is a particularly effective medium because nearly two-thirds of Brazilian voters have a Whatsapp account.

In Brazil, fake videos, social media accounts, images, articles, and infographics have begun to influence mainstream media and public conversations. While distortion and framing have always been a part of political rhetoric, new technologies have made the use of targeted, false information designed to influence public perceptions easier and more accessible than ever before.

Further, the desire to consume information quickly means there is little to no attention paid to double-checking sources or facts. The prevalence and ease of messaging platforms like Whatsapp creates shortcuts for disseminating misinformation quickly and with an additional element of trust, as most pay heed to who shared the news, rather than where it originated.  

Such methods have become increasingly prominent in Colombia and Mexico as well. In Colombia, fake narratives distort facts around the peace agreement between the government and rebels, creating distrust against those that advocate for peace implementation. Meanwhile in Mexico, disinformation continues to influence heated electoral debates, shifting public opinion to certain candidates that may be more polarizing.

How can the public begin to address the spread of fake news? While governments and the private sector in Latin America begin to grapple with new regulations and processes designed to counter disinformation on a structural scale, individuals can take important steps as well to implement bottom-up solutions.

However, in order to do so, some understanding of narratives—what they are and what they do—is necessary for any consumer of information.

As written in Strategic Narratives: Communication Power and the New World Order: “Narratives to do not just present information to us about a problem, a cast of actors, a causal transformation required to overcome a problem, and a desired end state. Narratives ask us to judge the nature and gravity of the problem, the character of the actors involved, and what kind of future would be preferable. Narratives engage us on an emotional level.”

Narratives are not neutral, but designed to sway the opinion of readers. When malign actors deploy false narratives designed to shift public opinion and interfere in electoral processes, democracy suffers as a result.

With major elections looming, citizens in Latin America must work toward becoming informed and critical consumers of information. The following three lessons can guide individual steps to combat fake news:

1. Understand the Master Narrative for Context
Master narratives help explain the shared meaning of the past, present, and future of international politics. They are a story that a group can understand and identify with their own lives. However, these narratives are also the means for political actors to shape the behavior of domestic and international audiences. As individuals, having an eye for society’s master narratives can provide context to help decipher conversations.

2. Double-Check Sources:
Journalists are taught to verify their facts through at least three sources before publishing—individuals should try taking a second look at information as well. By asking one or two questions about the source and bias of information, individuals take a pause and may just find out the viral article or social media post is untrue. Is the source an established organization or an individual? What is the organization’s mission? Chances are, if the image or article came from a website that has “conspiracy” in the address, it is not. Is the source linked to, or funded by, a specific country? If so, think about what that actor may want to achieve. It takes one minute to verify and think twice before sharing.

3. Take a Second Look at the Text, Line by Line:
The concept of critical discourse analysis (CDA) refers to the ways one can analyze text or speeches deemed to be politically or culturally influential. When reading an article, keep an eye out for some key elements of CDA, including:

• The Agent-Patient relationship: Who is doing what to whom? Many articles will constantly depict certain groups or people as initiating an action (exerting power), while others are constantly receiving those actions (being passive). Look for signs of this in the text to better understand how the author intends for the reader to perceive the information.
• Propositions: Look at how the sentence is structured. Is there an “us” vs. “them” relationship front and center? If so, does the “us” group do most of the good, and the “them” group do most of the bad? Are the “us” group’s negative actions excused, while the “them” group’s positive actions are hidden? This can help you understand the suspicions they author may be trying to raise.
• Omission: Spotting what is not included is a difficult thing to do, but factual omissions help reveal the point the author is trying to make.
• Imagery: Was an image included? What message does it send? Is it a fair and accurate image, or a snapshot taken out of context? What kinds of other photos could have depicted the same action? On a practical level, is the image edited?

Awareness is the first step in understanding how to combat disinformation and fake news, and a basic understanding of how to analyze narratives can help. As the information overload increases into 2018, and as election rhetoric unfolds, individuals will be the first barriers to the spread of fake or distorted narratives.

Roberta Braga is an assistant director in the Adrienne Arsht Latin America Center of the Atlantic Council. You can follow her on Twitter @RobertaSBraga

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]]> https://www.atlanticcouncil.org/insight-impact/in-the-news/braga-quoted-in-estado-de-minas-on-the-upcoming-brazil-presidential-elections/ Mon, 05 Mar 2018 21:04:56 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/braga-quoted-in-estado-de-minas-on-the-upcoming-brazil-presidential-elections/ Read the full article here

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]]> Read the full article here

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]]> https://www.atlanticcouncil.org/commentary/event-recap/lula-appeal/ Thu, 25 Jan 2018 20:52:18 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/lula-appeal/ On January 25, 2018, less than twenty-four hours after Brazil’s Fourth Regional Court of Porto Alegre voted 3-0 to uphold former President Luiz Inácio Lula da Silva’s conviction for corruption and money laundering, the Atlantic Council’s Adrienne Arsht Latin American Center hosted a conference call to discuss the political and economic implications for Brazil and […]

The post Conference Call: What Does the Lula Appeal Decision Mean for Brazil? appeared first on Atlantic Council.

]]> On January 25, 2018, less than twenty-four hours after Brazil’s Fourth Regional Court of Porto Alegre voted 3-0 to uphold former President Luiz Inácio Lula da Silva’s conviction for corruption and money laundering, the Atlantic Council’s Adrienne Arsht Latin American Center hosted a conference call to discuss the political and economic implications for Brazil and across the hemisphere. The historic decision, coupled with the extension of his sentence from nine and a half to twelve years and one month, throws a wrench into Lula’s his political aspirations, and makes probable the former president’s incarceration. It adds an additional layer of complexity into one of the most important elections in recent decades. Lula, for his part, has refused to withdraw his candidacy and has vowed to continue contesting the court’s decision.

Jason Marczak, director of the Adrienne Arsht Latin America Center, began the conversation by introducing Joseph Leahy, Brazil bureau chief for the Financial Times; Lisa Schineller, managing director for sovereign analysis in the Americas at S&P; and Marcos Troyjo, co-director of the BRICs Lab at Columbia University.

Mr. Leahy outlined reactions on the ground. “There are still a number of variables that are uncertain, and in fact this decision creates a lot of uncertainty around an election that is one of the most unpredictable in recent history.” He noted the decision will likely mean larger partisan fragmentation, making it harder for a stronger governing coalition to form in October. Mr. Troyjo noted Lula will have a difficult time appointing an electorally viable successor. “The populists share of Lula’s personality will end up being absorbed by other candidates, some that are to be found on the other side of the spectrum, including by Jair Bolsonaro” he suggested.

From the market side, Lisa Schineller questioned the significance of the market’s short-term reaction to the decision, and argued that it is too early to make an adequate estimation on the market’s prospects over the medium-term. In the nearer term, Ms. Schineller expects “a little above 2 percent [GDP growth] when considering the current monetary policy easing, but because of the uncertainty we are not at the higher end of the spectrum.”

She noted that although the market continues to pull itself up from a debilitating recession, “it will be progress on turning around the fiscal deterioration and whether or not you continue to advance with the strong microeconomic agenda that is put in place that will determine at the end of the day market outcomes and the growth trajectory.”

The panelists noted the decision highlights the country’s strengthening institutions, with Mr. Troyjo taking notice of how this continues to strengthen Brazil’s image and soft power abroad. In regard to domestic perceptions, he emphasized that although an opinion divide does exist, it is “by no means fifty-fifty,” and that “a majority of Brazilians are happy with the way institutions [the judicial system and the federal police] have proceeded.”

The economic benefits of Brazil’s institutional strengths, however, might be overshadowed by the political incapacity to pass meaningful reform. As an example, Ms. Schineller explained S&P’s recent downgrading of Brazil’s credit rating as being caused “by the slowness of policy making, slowness in following through on fiscal policy legislation, given order of magnitude of fiscal burden.”

Turning the conversation to the future, the panelists weighed in on what comes next. The consensus was one of uncertainty around how Lula will handle the process of appeals; around the prospect of a divisive election; and about the ability of a new administration to form a coalition broad enough to pass the deep fiscal reforms Brazil needs for sustainable growth. Without a doubt, the next year will be one of crucial importance for Latin America’s biggest economy and largest democracy.

The post Conference Call: What Does the Lula Appeal Decision Mean for Brazil? appeared first on Atlantic Council.

]]> https://www.atlanticcouncil.org/blogs/new-atlanticist/brazil-s-lula-suffers-a-setback/ Wed, 24 Jan 2018 19:38:45 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/brazil-s-lula-suffers-a-setback/ An appeals court in Brazil on January 24 upheld the conviction of the country’s former president, Luiz Inácio Lula da Silva, on charges of corruption and money laundering. The court’s ruling complicates Lula’s plans to run for a third term in office in the election on October 7. Lula was an early favorite, according to […]

The post Brazil’s Lula Suffers a Setback appeared first on Atlantic Council.

]]> An appeals court in Brazil on January 24 upheld the conviction of the country’s former president, Luiz Inácio Lula da Silva, on charges of corruption and money laundering.

The court’s ruling complicates Lula’s plans to run for a third term in office in the election on October 7. Lula was an early favorite, according to pollster Datafolha, which found that thirty-six percent of surveyed voters preferred the ex-president.

A lower court ruled in 2017 that Lula had accepted millions in bribes from a construction firm in exchange for government contracts. Lula is among dozens of politicians and businessmen who have been caught up in the Petrobras scandal.

Lula still has a range of legal options to appeal the ruling.

Our take:  

Jason Marczak, director, Adrienne Arsht Latin America Center. Follow him on Twitter @jmarczak.

“Today’s decision is a corner turned for Brazil. It shows the strength and resiliency of the Brazilian judiciary following years of corruption investigations. Even a popular former president is not above the rule of law.

“Markets are reacting quickly to today’s decision to not only uphold but actually extend Lula’s conviction —the frontrunner in pre-election polls. Any way you cut it, a 3-0 decision against Lula severely limits the possibility that—if he decides to run—he will be a viable candidate.”

Roberta S. Braga, assistant director, Adrienne Arsht Latin America Center. Follow her on Twitter @RobertaSBraga.

“The three judges’ decisions to uphold Lula’s conviction—and to increase his sentence from nine years and six months to twelve years and one month—is historic for Brazilians longing for justice.

“With little legal recourse at his disposal, this is a worst-case scenario for the former president. What is certain is that this is an unprecedented scenario for the country.

“Brazilians will continue to closely follow Lula’s fate in the coming weeks and months, especially if he continues to campaign for an office he may ultimately be unable to occupy.”

Ashish Kumar Sen is deputy director of communications at the Atlantic Council. Follow him on Twitter @AshishSen.

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]]> https://www.atlanticcouncil.org/commentary/event-recap/what-s-next-for-the-brazilian-economy-a-conversation-with-the-president-of-brazil-s-central-bank/ Thu, 12 Oct 2017 20:55:49 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/what-s-next-for-the-brazilian-economy-a-conversation-with-the-president-of-brazil-s-central-bank/ On October 12, the Atlantic Council’s Global Business & Economics Program hosted a private roundtable discussion with H.E. Ilan Goldfajn, President of the Brazilian Central Bank.

The post What’s next for the Brazilian Economy? A Conversation with the President of Brazil’s Central Bank appeared first on Atlantic Council.

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On October 12, the Atlantic Council’s Global Business & Economics Program hosted a private roundtable discussion with H.E. Ilan Goldfajn, President of the Brazilian Central Bank. 

The discussion centered on the current issues facing Brazil. Ahead of the Annual Meetings of the International Monetary Fund and the World Bank, Dr. Goldfajn discussed recent developments in the Brazilian economy, with a focus on inflation expectatives, the return to growth after a severe depression, the political landscape and needed reforms for the economy.

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]]> https://www.atlanticcouncil.org/insight-impact/in-the-news/insight-crime-features-adrienne-arsht-latin-america-center-event-on-brazil/ Fri, 21 Jul 2017 14:23:51 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/insight-crime-features-adrienne-arsht-latin-america-center-event-on-brazil/ Read the full article here.

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]]> Read the full article here.

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]]> https://www.atlanticcouncil.org/blogs/new-atlanticist/brazil-s-prosecutor-general-touts-impartiality-of-corruption-probe/ Thu, 20 Jul 2017 20:01:44 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/brazil-s-prosecutor-general-touts-impartiality-of-corruption-probe/ Former Brazilian President Luiz Inácio Lula da Silva’s conviction on corruption charges is not a political statement, but an enforcement of the law demonstrative of Brazil’s commitment to combat corruption at the highest levels of society, Brazilian Prosecutor-General Rodrigo Janot said at the Atlantic Council on July 19. “What we do is to apply criminal […]

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]]> Former Brazilian President Luiz Inácio Lula da Silva’s conviction on corruption charges is not a political statement, but an enforcement of the law demonstrative of Brazil’s commitment to combat corruption at the highest levels of society, Brazilian Prosecutor-General Rodrigo Janot said at the Atlantic Council on July 19.

“What we do is to apply criminal law… and look for the criminals despite the fact that they have political mandates,” said Janot in a keynote address. An investigation such as Operation Car Wash, a sprawling anti-corruption probe that has garnered a great deal of international attention for its scope and efficacy, is “not a political action, but applying the law, enforcing the law,” he insisted.

“The law that exists is to be applied to everyone regardless of their religion, their race, or their status,” said Janot.

Started in 2014, Operation Car Wash investigates money laundering schemes tied to government oil contracts, and has continued to grow, launching investigations into the affairs of powerful businessmen and government officials. On July 12, Brazil’s former president, popularly known as Lula, was convicted of corruption and money laundering tied to Car Wash. Current Brazilian President Michel Temer also faces charges in the investigation.

“Brazilian prosecutors and law enforcement have been at the forefront of the anti-corruption fight over the last few years,” US Acting Assistant Attorney General Kenneth Blanco said in a keynote address. Operation Car Wash, especially the guilty verdict levelled at Lula, “put Brazil at the forefront of countries that are working to fight corruption both at home and abroad,” Blanco said.

However, “without international legal cooperation, it would be impossible to do what we have been doing,” said Janot.

According to Blanco, in an increasingly globalized world, where crime is transnational, combatting corruption at the highest levels requires international cooperation, such as that exhibited between the United States and Brazil.

“Economies now are global… they become more global every day. In that as well [so] do the criminal enterprises; they are global,” said Blanco. “They do not respect borders,” he added. Consequently, countries, while keeping in mind respect for each other’s sovereignties, must work together. According to Blanco, “our biggest investigations are increasingly transnational.”

“The criminals we seek to identify and bring to justice move quickly, and it’s imperative that we do the same,” he said, adding: “To succeed in this commitment, we will always seek, when appropriate, cooperation with countries like Brazil.”

Janot described how international cooperation, namely close coordination between legal and law enforcement counterparts in all countries involved in the investigation, has played an essential role in the advances made toward prosecuting corrupt officials and companies around the world.

By sharing evidence through secure channels and close collaboration between US and Brazilian counterparts, the criminal fraud divisions in both countries have closed on major transnational cases, namely, the Odebrecht case. The largest construction conglomerate in Latin America, Odebrecht was investigated by Brazil, the United States, and Switzerland for corruption. The case ended with nearly seventy-seven officials convicted in Brazil, and $2.6 billion paid in fines.

Following their keynote remarks, Blanco and Janot participated in a discussion on their collaborative efforts toward eradicating corruption. Andrea Murta, deputy director of the Atlantic Council’s Adrienne Arsht Latin America Center, moderated the conversation.

In transnational cases it is essential that participating countries and their law enforcement and investigative bodies come to a consensus on exactly what is considered corruption and how they must fight it, said Blanco. “We all agree, at least generally speaking, logically what it might be,” he said. According to Blanco, corruption “undermines the rule of law, threatens the national security of countries, puts honest companies at a disadvantage, and breaks down the structure of society.”

“When we shed a light on corruption, it’s the best way to clean everything,” said Janot. “Brazilian people are really tired of corruption,” he added, saying: “It steals the hope and the future of a people.” Throughout Brazil, and the United States as well, Blanco described a widespread frustration among people who are suffering from a lack of security resulting from corruption in the government. As a result, he said, “people feel like they can’t advance. They are demanding action. They are no longer silent.”

Janot described how it is pressure from civil society and the free press which has not only driven the efforts of Operation Car Wash, but ensured the proceedings remain transparent and accessible to the public. In light of increasing public frustration and the gains made in Operation Car Wash, Janot said: “I don’t know if the system is completely changed, but the ways and the steps taken are irreversible.”

“I don’t believe the Brazilian society will accept to go back to a system like it was before this investigation,” said Janot, adding: “We still have a long way to go, but with what we are doing right now, I don’t think we can go back.”

In the event’s second panel, Fernando Mello, partner and senior political analyst at Jota Business, lauded the “long walk of Brazil toward accountability and the rule of law.” He noted that until 2001, Brazil’s constitution stipulated that politicians could be not be investigated. The investigation into Temer’s activities marks Brazil’s first criminal investigation of a sitting president. Though this constitutes a historic development, according to polls conducted by Jota last week, 52 percent of Brazilian congressmen believe that Temer will complete his term.

Mello joined Patrick Stokes, partner at Gibson, Dunn & Crutcher, LLP; Mauricio Valeixo, director of the division of investigations and organized crime operations of the Brazilian Federal Police; and Alana Rizzo, director of Abraji and journalist-in-residence at the University of Chicago’s Booth School of Business. Murta moderated the panel.

Different countries seeking to combat corruption occupy different spaces in terms of development, willpower, and tools for investigation, however, “Brazil jumped… from the beginning of that spectrum to the end of that spectrum as quickly as any country I’ve ever seen,” said Stokes, who formerly served as senior prosecutor and chief of the Foreign Corrupt Practices Act Unit at the US Department of Justice.

According to Stokes, adapting their systems and increasing international cooperation has allowed Brazil to optimize its legal system, thereby putting cases together much more quickly and effectively, as has been seen in Operation Car Wash.

In addition, civil society controls what prosecutors do on a daily basis, said Mello. Consequently, “Car Wash was one of the investigations where pretty much everything was made public,” said Rizzo, adding: “The media in this case had a secondary role.”

“It’s not going to be one institution to overturn this situation in Brazil,” said Valeixo. “It’s in the hands of Brazilian society that’s… been the victim of this corruption,” suffering with low-quality schools and hospitals. According to Valeixo, “Brazilian society has to take responsibility to forge ahead and make demands of its government.”

Rachel Ansley is an editorial assistant at the Atlantic Council.

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]]> https://www.atlanticcouncil.org/commentary/event-recap/lessons-from-brazil-crisis-corruption-and-global-cooperation/ Wed, 19 Jul 2017 18:03:40 +0000 http://live-atlanticcouncil-wr.pantheonsite.io/lessons-from-brazil-crisis-corruption-and-global-cooperation/ Corruption scandals continue to shake Latin America´s political landscape, but several institutions and anti-corruption movements have risen to the challenge. Across the region, vigorous investigations have implicated elite circles of business and politics –deemed untouchable– in major graft cases. Unprecedented in scale and impact, Brazil´s Lava Jato probe stands as the centerpiece of this new […]

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]]> Corruption scandals continue to shake Latin America´s political landscape, but several institutions and anti-corruption movements have risen to the challenge. Across the region, vigorous investigations have implicated elite circles of business and politics –deemed untouchable– in major graft cases. Unprecedented in scale and impact, Brazil´s Lava Jato probe stands as the centerpiece of this new anti-corruption wave. As the fight against corruption gains momentum, the Brazilian experience leaves key lessons to share regarding Latin America´s judicial institutions and cooperation. 

Rodrigo Janot, Prosecutor General of Brazil, calls for international legal cooperation in the fight against corruption.”

On July 19, the Adrienne Arsht Latin America Center, the Inter-American Dialogue, and Brazilian news service Jota hosted a conversation with Rodrigo Janot, prosecutor general of Brazil, and Kenneth Blanco, acting assistant attorney general of the United States. The event also brought together a panel with Fernando Mello, partner and senior political analyst at Jota, Alana Rizzo, director of the Brazilian Investigative Journalism Association (Abraji), Patrick Stokes, former senior prosecutor and chief of the Foreign Corrupt Practices Act Unit of the United States Department of Justice, and Maurício Valeixo, director of the Brazilian Federal Police´s Division of Investigations and Organized Crime Operations. Adrienne Arsht Latin America Center Deputy Director Andrea Murta moderated the conversation and the panel. 

After offering opening remarks, Janot and Blanco stressed the importance of international cooperation in probing corruption and ensuring asset recovery. Blanco stated that corruptors “don´t have borders. We [prosecutors] do. And we need to respect each other’s sovereign laws. But we also need to be nimble in how we do it.”

Janot, whose office spearheads investigations of Brazil´s former and current heads of state and its most prominent business leaders, pointed to the region´s institutional transformation. “Forty-five years ago, Latin America was known for the number of its generals, today it is known for the number of its judges and prosecutors.” A mobilized and vigilant civil society has been a driving force in this transformation, not only in Brazil, but globally. “They are demanding action, they are no longer silent,” added Blanco.

Despite a deteriorating political crisis in Brazil, “The steps taken [in the fight against corruption] are irreversible. I don´t believe that Brazilian society will accept going back to the past system,” concluded Janot.

In the panel discussion, speakers highlighted that Brazil´s flexibility, the adaptation of cooperative prosecution, the specialization of civil servants´ functions, and the sharing of information are key elements bringing corruption acts to light. 

(from left) Andrea Murta, deputy director of the Adrienne Arsht Latin America Center, moderated a panel with Mauricio Valeixo, director of the division of investigations and organized crime operations of the Brazilian Federal Police; Patrick Stokes, partner at Gibson, Dunn & Crutcher, LLP; Alana Rizzo, director of Abraji; and Fernando Mello, partner and senior political analyst at Jota Business.

Although Brazil has showcased institutional capacity in recent graft probes, Valeixo claimed the fight against corruption is ultimately “in the hands of Brazilian society.” Multiple institutions must continue to work jointly in the fight against corruption, as they have in Brazil, but Valeixo added “there are improvements that can still be made. We [the Federal Police] can enjoy a lot more autonomy, especially financial autonomy.”

Brazil has rapidly strengthened its legal system, and international cooperation has enhanced its investigation processes and tools. There are obstacles to global cooperation and centralizing authority in the fight against corruption, however. “Law enforcement is extremely territorial,” Stokes noted.  “[Lessons learned from Lava Jato are] making sure that foreign authorities are working cooperatively not to double punish companies, not to unnecessarily investigate or step over each other in investigations.”

Rizzo argued that the Lava Jato investigation also fostered international collaboration in journalism. The investigation was remarkably transparent, and while all the public information kept the press from doing some of their own digging, it incentivized cooperation. “There is a group of journalists from six countries working on stories together. I think that´s something we need to encourage, that we didn´t do at the beginning of the investigation,” she stated.

Lava Jato, which has implicated some of the major parties in Brazil, has left politicians and prosecutors at odds. Amid political turmoil, elected officials are looking to shield themselves against ongoing investigations.

A recent survey conducted by Jota in the Brazilian Congress indicates that Congress’s current view of the judiciary is highly negative. President Temer´s relationship with the Congress, while notably better than his predecessor´s, is on a downward trajectory. The Abuse of Authority project, which would give Congress power to block prosecutors if investigations are deemed “abusive” has considerable legislative support. “This is a signaling that politicians might be trying to get back to the investigators,” Mello argued. There is also strong support for political reform, but officials could be backing reform solely to gain benefits. “The question is, what kind of change in the political system are they thinking about?”  He later added, “This [political reform] might go in the wrong direction and actually decrease accountability.” 

Transparent judicial processes, independent government institutions, a free and active press, and a mobilized civil society will safeguard Latin America’s course in the fight against corruption. Whether these lessons from Brazil can inspire deeper, region-wide reform remains to be seen.

First Panel

Second Panel

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