With the suspension of President Dilma Rousseff and the appointment of José Serra for the Ministry of Foreign Affairs, Brazil’s foreign policy suffers direction changes
By Wagner de Alcântara Aragão
Within weeks, the interim Brazil’s President Michel Temer and his team of ministers gave clear statements indicating they intend to put into practice a very different government program than the one that elected President Dilma Rousseff, removed from office as a result of impeachment proceedings. Among the areas in which occur the most significant changes is the foreign policy. The choice of José Serra for the Ministry of Foreign Affairs is a clear sign of the new paths to be taken in this field.
Serra took office on 18 May in a ceremony at the Itamaraty Palace. In his speech, although with references to the importance of Mercosur and the BRICS (Brazil, Russia, China, India and South Africa), he made it clear he intends to give priority to relations with the United States, Europe and Japan. As his party (Brazilian Social Democracy) did in the last three presidential campaigns (2006, 2010 and 2014), the new foreign minister rejected the option of Lula and Dilma governments for greater integration with emerging countries, especially in the Southern Hemisphere.
Before that, however, the new minister embraced an arduous mission: to achieve the international community’s recognition of Michel Temer government. Brazilian embassies around the world received the Foreign Ministry circular which calls for “actively combat” the allegations that the interim government is actually the result of a political coup.
REGIONAL LEADERSHIP UNDERMINED
Inconsistencies in the process that led to the suspension of President Dilma Rousseff have not only been seen as wrong by foreign press, but have also led leaders and international bodies to question the legitimacy of the new government. Evidences that the elected president is being judged primarily by political and partisan criteria – not for constitutional reasons – pose a threat to internal democracy and, by extension, raise questions about the legal and institutional stability of the country.
That’s the opinion of the geographer Zeno Crocetti, post-graduated in Geopolitics and professor at the University of Latin American Integration (Unila). “All the casuistry, the mess and manipulations [of the impeachment process] strengthened the sense of political coup. Only Argentina expressed its ‘respect’. Venezuela, Cuba, Ecuador, Bolivia, Nicaragua, El Salvador, Uruguay and Chile gave the expected answer: qualified the Brazilian situation as a coup. In the eyes of the diplomatic game the most important reaction so far was the silence of the United States and Colombia,” said the professor to the Brasil Observer.
The Organization of American States (OAS), through its Secretary General, Luis Almagro, and the Union of South American Nations (Unasur), also through its Secretary General, Ernesto Samper, have shown resistance to accept the interim government of Michel Temer.
For the professor and political scientist Anthony Pereira, director of the Brazil Institute at King’s College London, these reactions will make it more difficult for the country to exercise its regional leadership in South America. He added to the Brasil Observer, however, that “the impeachment process against Dilma has not been so obviously unconstitutional as to trigger the official condemnation or suspension of Brazil from bodies such as Mercosur, Unasur or the OAS.”
FOCUS ON TRADE AGREEMENTS
Judging by José Serra inaugural speech as foreign minister, bilateral free trade agreements will be the priority. The new minister condemned the multilateralism that guided the foreign policy of Lula and Dilma administrations. “Brazil, clinging exclusively to them [multilateral negotiations], remained on the margins of the bilateral free trade agreements. We need to recover lost opportunities,” he said.
For political scientist Lucas de Aragão, a partner and director of Arko Advice, “Brazilian diplomacy is back to the Foreign Ministry after spending years in the Planalto Palace [official workplace of the President of Brazil].” To the Brazil Observer, he said that “Serra will drive a foreign policy focused on trade and business, leaving aside the ideological foreign policy of the previous governments.” And that “support for the so-called Bolivarian governments will certainly be reduced very strongly.”
A similar opinion was given by Rodrigo Scaff, a founding partner of Suriana. “In the past 13 years, the focus of Brazil on the conclusion of new trade agreements was in countries with less representation in the global context, then I see with optimism the possibility of return to put energy in markets with greater potential for collaboration, such as the European Union and the United States,” he said to this report.
“Brazil will continue fighting for a greater integration of its products in foreign markets. There is always the priority in breaking down tariff barriers, especially in agribusiness, but at the same time, the only solid way to gain international competitiveness is to approach structural issues that make our cost to produce very high. We need better infrastructure, more labour flexibility and a more rational tax system, which does not encumber products made in Brazil,” added Rodrigo Scaff.
In this sense, the new role of the Brazilian Trade and Investment Promotion Agency (Apex-Brazil) seems essential. “By taking the Apex from the Ministry of Development, Industry and Foreign Trade (MDIC) and putting it into Itamaraty, the new government seems to be signalling that bilateral trade agreements will be a priority,” said Anthony Pereira.
At the time of writing, information indicated that the new president of Apex will be the ambassador Roberto Jaguaribe, who has served in the UK and currently holds the position of Brazilian ambassador to China.
MERCOSUR-EUROPEAN UNION
In his inaugural speech, José Serra also advocated the implementation of a trade agreement between Mercosur and the European Union. For Professor Zeno Crocetti, the political and economic situation in South America does not favour the formalization of this agreement. “We had a fragmented and complicated advance of popular governments. With the return of unemployment and inflation, these models began to fall apart, and then began gradual return of reactionary forces to power. If there are no changes in this scenario in the short term I do not see concrete conditions for an EU-Mercosur agreement,” he said.
In the opinion of Professor Anthony Pereira, “the hope of the Temer government will be that the new proximity to Argentina will allow Brazil and Argentina to negotiate together and try to finish the long-delayed trade negotiations between the EU and Mercosur.” The last meeting between Mercosur and the European Union took place on 11 May, when the first exchange of tariff offers was carried out, which mainly affects the agricultural products. Anthony Pereira pointed out, however, that “these negotiations have stalled for reasons that go beyond differences between Argentina and Brazil – for example, French interests in protecting their small farmers is still a formidable obstacle to an agreement. So it is not clear whether even now an agreement can be reached.”
Undermining Brazilian ambitions, a group of 34 MEPs asked the Commissioner of the European Union’s Foreign Policy, Federica Mogherini, to suspend the negotiations on the agreement with Mercosur. For members of the European Parliament, the trade pact cannot be negotiated by a government without democratic legitimacy, referring to the interim administration of Michel Temer. Until the time of writing, neither Federica Mogherini nor Brazil’s Foreign Ministry had commented.
PRE-SALT FUTURE
The appointment of José Serra for the Ministry of Foreign Affairs has rekindled expectations of opening the exploitation of oil reserves in the pre-salt layer to international players. After all, it is authored by Serra himself the bill approved by the Senate in February, which takes from Petrobras the obligation to participate in all exploration as single operator – and with 30% minimum participation. The proposal still needs to be approved by the lower House of Congress, the Chamber of Deputies.
For James Green, professor of Latin American history and director of the Initiative Brazil at Brown University in the United States, “it is very clear that the forces that are in favour of impeachment [of Dilma Rousseff] are interested in renegotiating the agreements surrounding the use of the pre-salt royalties that were to be dedicated to education.” “One can only expect that the proposal that Serra presented in the Senate last year regarding the partnerships between Petrobras and foreign companies will reduce Petrobras’ share and increase the possibilities of foreign exploration of Brazilian oil”, he added to the Brazil Observer.
Local content rules in the oil and gas sector are also likely to be changed. These laws have already been liberalized in practice somewhat, but this government could go farther. These national content laws are unpopular with multinational corporations that do business in Brazil, because they force the multinationals to find Brazilian partners and order inputs from Brazilian suppliers, thus developing the national industry.
As Professor James Green commented, “it’s amazing how an interim government, which may or may not be permanent, has already tried to entirely change Brazil’s foreign policy”.
