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US - Brazil Relations: A Strategic Partnership

Christopher McMullen
Deputy Assistant Secretary for Western Hemisphere Affairs
Remarks to the Brazil - U.S. Business Council
Washington, DC
October 17, 2007

U.S. - Brazil Relations: Forging a Strategic Partnership

Good morning. I would first like to recognize Ambassador Patriota, as well as leaders of the U.S. and Brazilian business communities. I am pleased to have the opportunity to participate in this timely discussion of U.S.-Brazilian relations.

Having spent the last two years as Consul General in Sao Paulo, I can attest that now is an exciting time in U.S.-Brazilian relations. Succinctly put, our relationship is broad, it is big, and it is important to both sides. It is also based on a solid foundation of mutual interests, mutual respect, and mutually shared values. As Secretary Rice has said, we view Brazil as a regional leader and global partner.

Brazil is the fifth largest country in the world and the tenth largest economy. It has enormous influence in Latin America. Brazil borders on ten countries and exerts profound economic and political influence on all of them.

More broadly, Brazil is a model for countries in the region aspiring to become true democracies whose governments act responsibly and are responsive to their people. We look to Brazil to exert its leadership to moderate populist and anti-democratic tendencies evident in several governments that are out of step with rest of the hemisphere.

Our Assistant Secretary, Tom Shannon, recently observed that "successful diplomacy in the region is built around positive agendas, cooperation, collaboration, and vibrant multilateralism." In that context, Brazil's long tradition of multilateral engagement and peacekeeping makes it a natural regional leader and global partner. One prime example is in Haiti where Brazil is the leading troop contributor to the United Nations Stabilization Mission (MINUSTAH), and a Brazilian General is the commander. President Lula's administration has shown strong leadership in supporting a 12-month renewal of MINUSTAH's mandate. We agree with Brazil that there must be a concerted effort on security and institution building for a viable, stable and democratic Haiti.

Another example of our collaboration is Brazil's constructive role in advancing a regional agenda based on democratic values. While there has been talk about a shift to the left in Latin America, the truth is that there is broad consensus in the region for democratic governments, reducing poverty, and expanding economic opportunities for all people, especially marginalized sectors. As Secretary Rice said last week, "the exceptions to this {regional consensus} may be noisy, but they are heading in the opposite direction of the hemisphere as a whole." In fact, the friendship and partnership between the United States and Brazil underscores our commitment to working with democratic friends in the region - regardless of where they fall on the political spectrum.

The centerpiece of our strategic partnership, and the area where Brazil's leadership has been decisive, is our cooperation on biofuels. This joint initiative underscores our view of Brazil as not only a regional leader, but also as a global partner.

In March we signed a Memorandum of Understanding to promote greater cooperation on ethanol and biofuels. This agreement has created a partnership to work bilaterally on research and development and university exchanges; regionally to promote local biofuels industries through feasibility studies and technical assistance; and globally to create a world commodity market for biofuels in the future through greater compatibility of standards and codes.

Brazil and the United States account for approximately 70 percent of global production of biofuels. Our two countries can and must lead in these areas.

Initially, the U.S. and Brazil are cooperating with the Dominican Republic, El Salvador, Haiti and St. Kitts and Nevis, to promote capacity for local production and consumption of biofuels.

Our biofuels efforts with Brazil in these Central American and Caribbean nations aim to create local jobs, reduce dependence on fossil fuels, and spur economic development.

Brazil is a leader in energy self-sufficiency. Three-quarters of the cars being produced in Brazil have "flex fuel" engines capable of running on either ethanol or gasoline, or a mixture of the two. If this kind of innovation can be successfully exported to the rest of the world, it will be a powerful catalyst for developing cleaner energy and enhancing energy security.

Beyond biofuels, we look to Brazil as a pivotal player in shaping the agendas and direction of regional organizations such as Mercosur, and as an increasingly influential voice in the United Nations and other international institutions that are grappling with difficult issues such as climate change, terrorism, trafficking of women and children, as well as other transnational challenges. In this regard, Brazil is a member of the International Atomic Energy Agency's Board of Governors and the Nuclear Supplier's Group. As such, Brazil has an important role to play in combating nuclear proliferation.

In seeking to turn these common interests into common causes, the United States and Brazil are also cooperating in several Lusophone countries in West Africa to strengthen good governance and combat malaria.

This new matrix for our expanding engagement with Brazil, has garnered bipartisan support in Congress. On October 9, the House Foreign Affairs Subcommittee on the Western Hemisphere passed House Resolution 651, authored by Chairman Eliot Engel, who said: "the deepening of our energy cooperation with our friends in the hemisphere - particularly Brazil - is helping us to develop a positive agenda that I hope will continue to grow in the coming years."

In looking ahead, there is little doubt that our foreign policy in Latin America and the wider world will be more effective with a close economic and political relationship with Brazil -- that is, a strategic relationship. As a key ally in the region, we are working closely and effectively with Brazil to advance shared political objectives.

At the same time, we are seeking to promote greater two-way trade and investment. We already enjoy a robust commercial relationship with Brazil that is rapidly expanding. Bilateral trade reached $46 billion in 2006, an increase of 15% from the year before. At the end of last year, Brazil ranked as the 13th largest export market for U.S. goods, while we were Brazil's 16th largest export market.

Our trade relations can and will improve even more. As our engagement deepens, we must seek to eliminate trade barriers and explore innovative concepts to improve and streamline trade between our countries. To this end, Commerce Secretary Gutierrez launched our bilateral Commercial Dialogue in June 2006, highlighting the commitment of our governments to identify ways to strengthen economic ties between our two countries. Similarly, the recently launched CEO forum reflects the commitment of our business leaders to develop strategies for improving competitiveness and innovation in both countries, critical qualities in an increasingly globalized world.

I should note that Secretary Gutierrez just returned from Brazil where he headed a high-level delegation to the inaugural U.S.-Brazil CEO Forum.

During my time in Sao Paulo, I learned first hand that Brazil enjoys a tremendous competitive advantage in meeting the challenges of a globalized economy. The quality of its workforce reflects the impressive diversity, creativity, and dynamism of its people. It is no coincidence that Brazil is projecting the power of its private sector globally, with companies such as Embraer, Odebrecht, CVRD, Gerdau Steel and others gaining greater global market share in their highly competitive sectors.

Just as in the United States, the private sector in Brazil will play an increasingly important role in shaping Brazil's place in the world. Our governments must harness these powerful productive forces to advance our common interests in promoting global economic development. Our private sectors can also play a vital role in strengthening democracy in the region and beyond by urging greater transparency and accountability in the countries where they do business.

Finally, I would like to note that we have come a long way working with Brazil in the WTO Doha Round. These negotiations are now at a critical point where Brazilian and U.S. leadership can make a difference in whether these talks succeed or fail. The stakes are high for all countries, but even more so for the poorest countries of the world. Now is the time for our governments and private sectors to work together to ensure a successful outcome. This will require compromise and assuming calculated risks on both sides, but ultimately that is what leadership and strategic partnerships are all about.

Released on October 30, 2007


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