In an unusual move, Dilma Rousseff, president of Brazil, canceled a state visit to the U.S., citing her discontent with the Obama Administration’s response in the wake of National Security Agency (NSA) spying allegations. This embarrassing snub should force the White House to redress its foreign policy toward the region.
Rousseff is unhappy that NSA agents apparently breached the security of private communications of her and her top aides. In addition, Brazil’s state oil company, Petrobras, had its information compromised by the NSA. The company is set to start accepting bids for an extremely lucrative offshore oil field. Rousseff has asked President Obama, Vice President Joe Biden, and Secretary of State John Kerry for an explanation on numerous occasions and at various international forums (most recently the U.N.)—to no avail.
The visit, intended to take place on October 23, was heralded as an opportunity to improve faltering relations between the two countries by bolstering economic ties. The leaders were set to discuss a host of issues, including energy opportunities for American companies and Brazil’s potential $4 billion purchase of Boeing fighter jets. Moreover, President Obama’s refusal to address Brazil’s allegations of economic espionage could be potentially damaging for American oil companies competing for Petrobras contracts.
These deals may be just the tip of the iceberg of what Brazil could potentially offer to U.S. businesses. Right now, the country is poised to become one of the most important U.S. trading partners in the Western Hemisphere, as it’s projected to be the fifth-largest world economy by 2015, well ahead of Canada and Mexico. Currently, Brazil is the U.S.’s eighth-largest trading partner, taking in a total of $32 billion in U.S. goods and services.
Yet despite growing rates of economic exchanges, Brazil has a relatively closed economy. The annual Index of Economic Freedom, published by The Heritage Foundation and The Wall Street Journal, ranks Brazil as having the 100th-freest global economy with an economic freedom score of 57.7.
Aside from the potential economic costs of a fallout with Brazil, the political costs could be substantial. Brazil is a highly regarded country in a region teeming with anti-Americanism. As part of a small contingent of countries with favorable relations with both the U.S. and leftist heads of state, Brazil could undoubtedly serve to further U.S. interests in Latin America.
As regrettable as the recent turn of events is, this diplomatic setback is not irrecoverable. The Obama Administration needs to assure President Rousseff that the United States respects Brazil’s status as an emerging global power and recognize that increased trade and economic cooperation would benefit both countries.
Mary Moody is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.