Brazil in the Era of Trump

We should position Brazil as a third party in the dispute between China and the United States.

South America is Brazil’s greatest priority in foreign relations – that’s how it was, at least, during the first decade of the millennium. Brazil rejected the Free Trade Area of the Americas, created the Union of South American Nations and inserted Venezuela into Mercosul (the Southern Common Market); while Brazil’s ideology has changed, Venezuela remains in it. Everything [Brazil did in foreign relations] demonstrated this priority.

Little was accomplished, however, during the second decade of the millennium. Due to lack of prioritization, the plan to integrate physical infrastructure in the region has remained an unrealized goal even today.

In recent years, the United States has relegated South America to the back burner. However, this could change. Under the new administration, the United States is seeking to distance itself from the its earlier agenda, which sought partners in the region, including Paraguay and Suriname, and pursued multilateral trade agreements, such as the one that exists between countries along the Pacific Ocean. Donald Trump has favored Brazil inasmuch as he stands opposed to multilateral free trade agreements with these aforementioned countries, thus impeding Mexico, Colombia, Peru and Chile’s commercial diplomacy.

Since the turn of the century, China’s clout in regional business affairs has been on the increase; due both to convenience and its long-term national interests, China has seen South America as space in which to expand its international activities. China’s insertion of capital in the region has been felt even as far as strategic sectors like Brazilian engineering. This could lead to a situation in which internal regional linkages favor China, making South America’s natural resources available to it. China will likewise seek to defend free trade and entangle us in this process given our presence within BRICS.* On that point, we have cards to lay on the table.

Looking toward the future, Brazilian diplomacy should take advantage of the result of the recent U.S. election and position the country as a regional third party in the coming dispute between China and the United States for worldwide commercial dominance.

That would be the moment for us to bring about a reorganization not only of the Pacific Alliance but also of Mercosul by merging the two together and giving impetus to an effective common market in Latin America. Such an initiative could serve to resolve Mercosul’s systemic inoperativeness and address the Pacific Alliance’s loss of direction, while also strengthening Brazil’s political and business clout within the region to a large degree. Moving beyond Mercosul and the Union of South American Nations wouldn’t be a bold step but rather a response to the arrival of the age of protectionism heralded by Trump.

As it’s already been noted, Brazil has not acted in a coherent manner vis-à-vis South America since 2010. In Brazil’s absence, the remaining countries in the region have been left exposed to global ambitions. The only way to make our regional policy coherent would be to commit to offering alternative modes of development to our neighbors in the framework of our own national strategy.

Darc Costa is the president of the Federation of South American Chambers of Commerce and Industry.

*Editor’s note: BRICS is an acronym for an association of five major emerging national economies comprising Brazil, Russian, India, China and South Africa.