Lula and Obama: "Chemistry" and Banks

President Luiz Inácio Lula da Silva bets that he will have “good chemistry” with his American colleague, Barack Obama, in their meeting this Saturday in Washington. It will be their first personal meeting, although they have already spoken on the phone.

More important than concrete, administrative topics, Lula is interested in making a good first impression on Obama. It was the same way with George W. Bush at the end of 2002 when the then President-Elect of Brazil met the most powerful man in the world.

Lula and his main assistants believe there is a great chance of having a personal relationship with Obama that is even better than his relationship with Bush. Washington is interested in strengthening Brazil’s moderate leadership in the Americas, a region of the planet with a strong anti-U.S. sentiment.

Lula’s advisers and counselors say that there are common symbolic aspects in both of their careers. Lula is from a region in the Northeast of Brazil where he experienced poverty on a personal level. He worked in labor unions and became president after losing three consecutive times. The American is the first black man to be president of the United States. Lula and Obama are both charismatic and make speeches directly to the people to promote their political projects.

A first meeting always has more symbolic importance than practical. Administrative topics require multiple meetings between presidents and their staff before they begin to bear any fruit. The first meeting just shows if there is good chemistry or not.

From a practical point of view, Lula wants to present a simple agenda to Obama. It should propose that he will commit to end the Doha Development Round and avoid protectionist measures against the biggest economy in the world in a time of serious crisis.

Lula also wants the American to be bolder in remedying the problems facing U.S. banks. From Brazil’s perspective, Obama should not scrap the idea of possible temporary nationalization, following the footsteps of Gordon Brown, the British Prime Minister that used this method. Whatever he does, Lula thinks that Obama needs to show the world that he can solve the U.S. bank problems. These institutions are suffering major losses in the crisis and could fail.

Lula will also talk about ethanol, a topic discussed many times with the Bush administration. Brazil wants to reduce the U.S. import restrictions on alcohol fuel. For now, the Brazilian government will keep the stance that they do not have to substitute Venezuela as the supplier of crude oil to the United States. Brazil doesn’t have a relevant surplus to export right now. Pre-salt oil will still continue to be refined on a large scale and the priority is to increase value, to refine here in Brazil and create an oil industry.

The third point of the agenda will be Latin America. Hugo Chávez, President of Venezuela, asked the PT to help improve relations with the U.S. and create a close relationship with Obama. Lula intends to do this, but in the larger context of “conciliation” with Latin America. He will say, for example, what some positive steps would be to alleviate or end the U.S. blockade of Cuba.