The return to power of President Luiz Inácio Lula da Silva in Brazil this year was initially welcomed in Washington after the turmoil under his rightist predecessor, Jair Bolsonaro, and subsequent attempt by Bolsonaro’s supporters to block the transfer of power. President Joseph R. Biden Jr. hailed Lula at the White House in February, declaring that together “we reject political violence, and we put great value in our democratic institutions.”
Today the Biden administration is singing a different tune. Lula has frustrated the administration with his recent three-day visit to China, his absurd declaration that Russia and Ukraine shared responsibility for the war, his belittling of the role of the dollar, and his outdoing President Emmanuel Macron of France in kowtowing to President Xi Jinping.
Lula has reason to placate Russia and China, however. Brazil’s agribusiness sector is highly dependent on imports of fertilizers from Russia, as well as on Chinese demand for its agriculture products, especially soybeans.
Less well understood, perhaps, is that Brazilian agribusiness has close ties with the far-right and remains an ardent supporter of Bolsonaro, who returned home in March after three months of self-imposed exile in Florida. In addition, Lula needs to appease his own Workers’ Party (Partido dos Trabalhadores, or PT), which still holds traditional leftist views about excessive dependence on the United States. Lula needs all parts of his governing coalition to survive politically.
That does not mean that his policy stance is smart. In an attempt to showcase “neutrality” between Russia and China on the one hand, and the United States and Europe on the other, Brazil risks major standoffs with Western economic and trade allies that it cannot afford.
Just as Russia’s foreign minister, Sergey Lavrov, was about to set foot in Brasília in April, Lula set off more fireworks. He stated that both Russia and Ukraine were at fault for the war between the two countries and that peace talks should begin immediately. Earlier, he said in Beijing that the United States had instigated the war in Ukraine and was failing to find a peaceful solution to the conflict. He has explicitly said that Ukraine should cede Crimea to Russia in order to establish peace. His foreign minister, Mauro Vieira, has condemned sanctions on Russia for their alleged negative spillover effects on the global economy.
The Biden administration is now accusing Brazil’s leaders of “parroting Russian and Chinese propaganda.”
Why is Brazil heedlessly antagonizing its Western allies?
It is helpful to remember that Lula’s own political party harbors a nostalgia for the early 2000s, when the so-called BRICs—the alliance with Russia, India, and China—were all the rage in global markets. During Lula’s previous two terms in office (2003-2010) Brazil’s membership in the BRICs was used to build the country’s brand, attracting global praise and foreign investment, particularly to the country’s commodities sector.
Many emerging-market economies perceived Lula and his Workers’ Party’s promotion of South-South trade as a necessary move away from excessive dependence on US and European markets. Although these efforts did not result in an increase in trade between Brazil and its so-called Global South neighbors, they did bring about more dependence on China and, to lesser extent, Russia. That dependence, coupled with a misguided view that a return to the booming early 2000s is possible today—especially with China’s recent economic recovery following the end of its zero-COVID policies—partly explains Lula’s willingness to embrace autocrats in Beijing and Moscow.
Lula is also being politically squeezed between the hostility of Brazil’s far right and the antiquated views of both the Workers’ Party and the Brazilian left more generally. The rise of the Brazilian far right has been swift and relentless, engulfing formerly more moderate parties and politicians alike. The rightist movement is now entrenched in Brazil’s institutions and society, supported by the powerful agribusiness sector, which has experienced extraordinary growth over the past 20 years. Ironically, a large share of that growth was facilitated by Lula’s two previous administrations, which provided ample credit at subsidized rates to agricultural producers, subsidies, and other generous economic incentives. Brazil’s major commodity export product is soybeans, and China is its principal buyer.
Since Russia is Brazil’s main supplier of fertilizers and China is its main buyer of agricultural products, the country’s agribusiness sector relies on those countries. In view of the sector’s connections with the far right, which Lula needs to appease to avoid instability and obstacles to his own ability to govern, the agribusiness sector is a powerful force within Congress.
Lula won the 2022 election only because of the alliance he built with former political adversaries. That alliance never sat comfortably with the more radical factions of the Workers’ Party, forcing Lula into a balancing act to keep his party and governing coalition together. Using the BRICs trademark, he can position the country globally, establishing some distance between Brazil and US “imperialism” while appealing to the Workers’ Party and leftist politics more generally.
But the strong pushback from the United States and the state of current relations with Europe raise questions about the cleverness of Lula’s balancing act.
Brazil’s turbulent internal political environment and its grim growth prospects imply that the country cannot afford to damage its relationship with the West. In particular, he risks jeopardizing a potential EU-Mercosur trade agreement at a time when the EU Council is about to be taken over by Latin American-friendly Spain. Lula could have arguably achieved the same internal political objectives with a more subtle approach. His aggressive tone, however, has given the opposite impression, possibly permanently damaging Brazil’s economic and geopolitical interests.
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