New York, NY – Are there hidden tensions which stand to undermine the important diplomatic relationship between Washington and rising star Brazil? During a recent meeting at the White House, Obama and Brazilian President Dilma Rousseff sought to put on a good face. Brazil had made “extraordinary progress” under Rousseff, Obama declared effusively. Returning the praise, Rousseff called for greater Brazilian-US economic cooperation.

The meeting built upon a flurry of back and forth visits intended to solidify greater ties: in March, the US deputy secretary of state travelled to Brasilia, where he lobbied for greater joint trade and investment. On the defence front, too, the two nations recently signed an important cooperation agreement. Officially then, the US and Brazil enjoy cordial relations.

Look below the surface, however, and all is not well. Washington, which is used to calling the shots in South America, is wary of Brasilia’s intentions, and has been slow to accommodate the region’s newest up and coming player. In Brazil, many commentators claimed that Obama snubbed Rousseff in Washington by not granting her leader the honour of a full White House dinner.

Such slights were not lost on the likes of Caio Blinder, a columnist for Brazilian magazine Veja, who declared that Obama had intentionally “downgraded” Rousseff’s visit. Going yet further, the Veja writer lamented the “considerable lack of mutual respect” between the US and Brazil.

A growing rivalry?

For some time, the Brazilians have coveted a permanent seat on the United Nations Security Council, yet in Washington Obama failed to recognise the South American giant’s wider aspirations, choosing to simply remark, rather blandly and non-commitally, that the US “expressed appreciation” for Brazil’s geopolitical ambitions.

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Brazil and the US: A relationship of equals?

Writing for Inter Press Service, correspondent Jim Lobe noted that the summit “could not escape a mutual sense of disappointment in how relations have developed during Obama’s presidency”. Lobe notes that “Washington had clearly hoped that, under Rousseff, Brazil would move much closer to the US on a wide array of global and regional issues than had been the case under her charismatic predecessor, Luiz Inácio Lula da Silva”. However, the correspondent adds, “the changes have not been as great as the administration had hoped”.

According to the New York Times, the tension between Rousseff and Obama was palpably apparent at times. During the Washington summit, the paper noted, the “leaders’ eyes rarely met and Ms Rousseff rarely looked at Mr Obama as he spoke. He looked intently at her during her remarks, nodding in agreement at times. But he seemed to bristle when she expressed concern that America’s ‘monetary expansion policy’ could impair growth in emerging economies like Brazil’s”.

Brazil and the US vie for influence

An exporting dynamo and powerhouse with a growing middle class, Brazil is using its newfound economic clout to venture into world politics like never before. In contrast to Venezuela, which routinely launches rhetorical broadsides against the US, Brazil espouses a less confrontational foreign policy. One wonders, however, whether Brazil might reach the limits of its patience at a certain point, if it believes the US is steadfastly standing in its way.

Secret US State Department cables recently disclosed by whistle-blowing outfit WikiLeaks underscore Brazil’s growing sense of self-confidence. In one cable, for instance, leading members of the Brazilian political establishment told US officials that their country should serve as “the natural leader of Latin America, or at least of South America”.

Such assertiveness has discombulated US officials, and it is clear from just a superficial read of the diplomatic correspondence that US diplomats are more cautious and level-headed with the Brazilians than elsewhere in Latin America, where officials tend to be direct, and even confrontational.

Back in Washington, right-wing hawks at the Brookings Institution view Brazil’s rise with trepidation, remarking gloomily that the country “appears determined to position itself as the Latin American hegemon as it deepens its investment in various schemes of regional political and economic integration that pointedly exclude the United States”.

The Stratfor cables

There are other indications that US political elites have their eyes carefully trained on Brazil. In February, WikiLeaks published confidendial email correspondence pertaining to Stratfor, a Texas-based company providing “geopolitical analysis” to large corporations – but also key US agencies, such as the Department of Homeland Defence, the Marines and the Defence Intelligence Agency. The emails were reportedly stolen by hackers claiming to be a branch of Anonymous.

Antisec targets US security firm

In one report, entitled “LatAm Analytical Guidance: Themes and Issues to Monitor”, Stratfor stresses that, as long as Brazil maintains “credibility and fiscal conservatism”, the country “may go far”. However, Brasilia’s relationships with South American states, Stratfor states, “must be watched very carefully”.

In particular, Stratfor noted, Brazil’s companies in Latin America “are a very strong political force” and “operate with the full weight of the Brazilian government behind them”. Sneakily, Stratfor noted, Brazil employs investment projects as a “double tool”. While the projects are designed to support home-based firms, the initiatives also provide financing to individual countries which would in turn receive foreign direct investment. In such a way, Brazil “cultivates a debt in the other country, and [this] gives Brazilian companies a chance to expand their operations”.

Brazil erodes Washington’s traditional sphere of influence

In an unsettling development for Washington, Brazil has muscled in on the traditional sphere of influence of the US. In 2006, former Brazilian president Lula traveled to Lima to meet with his Peruvian counterpart, Alan García. The Brazilian leader stressed the need for greater physical integration between Peru and Brazil, and lobbied for a regional, military and political alliance between the two countries.

Lest García get the wrong idea about Brazilian intentions, Lula declared that his country did not seek regional “hegemony” but merely sought to transform South America into “a global actor on a par with China and India”. Responding to Lula, García candidly admitted that he preferred Brazilian regional hegemony to that of the United States.

There are clear indications that Washington is made uneasy by Brazil’s sudden rise. One year prior to Lula’s Peruvian trip, Curtis Struble, the US ambassador to Lima, wrote that the US was enmeshed in an “undeclared contest” with Brazil for political influence in the Andean region. “We are winning on most issues that count,” Struble added, remarking that negotiations over a US-Peru free trade deal had remained positive. However, the ambassador noted ominously, “the government of Brazil is still very much in the game” and had met with some success in pushing for the so-called South American Community of Nations or UNASUR, which would diminish US influence.

If anything, the contest for regional dominance has only intensified in recent years. Peru’s current leader, Ollanta Humala, hired campaign advisers tied to Lula’s Workers’ Party during his country’s most recent presidential campaign. Moreoever, as soon as he was elected president, Humala flew to Brazil and met with Lula protégé Dilma Rousseff. It was Humala’s first official trip abroad in his new office and sent a clear sign of Peru’s geopolitical priorities.

Not surprisingly perhaps, Stratfor too has its sights trained on the Andean region. In its report entitled “Latam Analytical Guidance: Themes and Issues to Monitor”, the company advises its employees to watch for growing relations between Brazil and other countries, such as Peru and Colombia.

Monitoring the Brazilian military

Whether they like it or not, every great power must eventually develop a potent military. Shortly before Anonymous’ hacking attack, the Stratfor corporation issued a report called “The Geopolitics of Brazil: An Emergent Power’s Struggle with Geography”. Historically, Stratfor noted, Brazil was capital-poor and could not afford a navy. This situation, the company continued, led Brasilia “to seek alliances with whatever the dominant Atlantic power … happened to be, in order to hold the traditionally more powerful Argentina in check”.

Buyers flock to Brazilian arms fair

Stratfor went on to remark: “Brazil’s navy is unable to patrol the Brazilian coastline reliably beyond the Brazilian core territories. Thus, Brazil maintains close – if not exactly friendly – relations with the United States, both to ensure that America never views Brazil as a state of concern and as a hedge against other potential threats.”

Quietly, however, Brazil has been building up its armed forces. In one WikiLeaks cable, the US ambassador to Brasilia, Clifford Sobel, wrote: “After more than twenty years outside the political mainstream, and twenty years of minimal resources, the Brazilian military is now making a case for its modernisation.”

What will be the role of the Brazilian military in future? Sobel’s analysis suggests that the South American juggernaut will act to defend its strategic and economic interests. Take the Brazilian navy, for instance, which will defend the country’s burgeoning offshore oil facilities. According to Sobel, there was no threat to Brazil’s oil deposits, but the media and political leaders hyped the issue in an effort to enhance the national security state.

Hoping to join the ranks of the world’s most prominent military players, Brazil seeks to acquire nuclear powered submarines and aircraft carriers. Other priorities include satellite capability, particularly through a space launch, and cybernetics. The entire strategy is designed to promote Brazilian “independence”; that is, the ability to “project its military power as it wishes, able to produce its own military hardware and able to control strategic economic sectors”.

The US ambassador informed Washington that the Lula government wanted to purchase nuclear submarines and to increase Brazil’s “domestic manufacturing capability for weapons via technology transfer”. Eventually, Sobel added, Brazil sought to rebuild its military capacity, including fighter aircraft, and to develop “a new, more structured organisation of South American defence ministers”.

Brazil’s military rise has been meteoric, and judging from cables the US is sitting up and taking notice. In May, 2009 US Chargé d’Affaires in Brasilia Lisa Kubiske wrote to her superiors about a vast Latin American Aerospace and Defence show held in Rio de Janeiro. The show featured more than 100 exhibitors showcasing aerospace, defence and security products, and the event itself was much larger than previous exhibits. “Brazilian exhibitors occupied approximately twenty per cent of the exhibit space, promoting sales of vehicles, aircraft, weapons and ammunition,” Kubiske wrote.

Brazil’s quest for military independence

In his book The Next Decade, Stratfor founder George Friedman writes that Brazil is not currently a power that is “particularly threatening or important to the United States”, and “there is minimal economic friction”. In the long term, however, Friedman believes that “there is only one Latin American country with the potential to emerge as a competitor to the United States in its own right, and that is Brazil”.

Eventually, adds Friedman, Brazil could pose an economic challenge if it developed its air and naval power so as to dominate the Atlantic between its coast and West Africa, “a region not heavily patrolled by the United States”. This could lead to “a South Atlantic not only dominated by Brazil but with Brazilian naval forces based on both the Brazilian and the African coasts”.

Given such alarmism, it is not surprising that, behind the scenes, Stratfor developed a keen interest in Brazilian military developments. In one secret email, the company remarked to researchers that “Brazil will be building up its military capacity over the next decade or so. ANYTHING to do with Brazil’s military doctrinal development and military industrial development is of interest. This is a top priority, long-term item”.

Riz Khan – Brazil’s growing clout

Publicly, the US and Brazil enjoy formal armed forces ties, but behind the scenes there has been friction over the question of military technology. According to WikiLeaks cables, top officials in the Brazilian military are unhappy about US export licenses. The officers griped that the state department’s policy of delaying such licenses was “aimed at restricting Brazil’s access to military technology”, and had created “problems at the political level”.

According to Sobel: “Many of Brazil’s political leaders remain uncomfortable with the idea of a close security relationship with the US and believe France would be a better strategic partner.” During a recent trip to France and Russia, the Brazilian defence minister negotiated greater arms ties and was accompanied by a whole host of top level officials, including the presidential foreign policy adviser, the secretary general of the ministry of foreign affairs and the long-term planning minister.

The Stratfor corporation was apparently very interested in Brazil’s efforts to establish military ties with outside powers, and in an email, company officials remarked: “Specifically, watch for relationships with more advanced military powers to be established (eg France) where technology transfers may be formalised.” In Rio de Janeiro, some Stratfor sources believed that France had actually bribed Brazilian officials to purchase “inferior” Rafaele jet fighters. There were some “serious kickbacks going on”, the source claimed, and unfortunately the US Treasury Department “forbids us to pad their wallets the way the French can”.

Diplomatic intrigue in the buffer states: Paraguay, Uruguay, Bolivia

In its report, Stratfor noted: “Brazil cannot be truly secure, until, at the very least, it controls the northern shore of the Rio de la Plata.” Recently, Stratfor added, Brazil has managed to accumulate enough capital to “encroach into the Argentine-Brazilian buffer states of Bolivia, Paraguay and Uruguay”.

Brazil has invested heavily in the Bolivian energy and agriculture sectors, Stratfor added, and “most Bolivian foodstuffs are now sold to or through Brazil to the outside world”. Meanwhile, Brazilian state-owned energy company Petroleos Brasileiros – or Petrobras – is managing the Bolivian natural gas sector, which represents by far the largest component of the poor Andean nation’s state income. Quietly, the Morales government in La Paz has been moving towards Brazil and away from Hugo Chávez of Venezuela. According to WikiLeaks documents, Bolivia has been getting “tired of the Bolivarian idea”.

Stratfor adds that Brazilians have migrated in large numbers to Paraguay and represent “the dominant investors in the economy – particularly in electricity, as the two are partners in the Itaipu Dam”. According to US diplomats, Brazil threatened to withhold or delay its electricity payments to Paraguay if its smaller neighbour refused to go along with Brasilia’s strategic objectives. Meanwhile, Strafor remarked: “Brazilian (and Argentine) cash fuels Uruguay’s vibrant financial sector, and Brazilian-born Uruguayan citizens now own a majority of Uruguay’s farmland.”

How far will Brasilia go?

“For all practical purposes,” Strafor remarked: “Brazil has already secured dominance in the three buffer states – Uruguay, Bolivia and Paraguay are all but economic satellites of Brazil.” However, Brasilia faces a philosophical dilemma. “In light of Brazil’s historically passive foreign policy,” the company noted, “these states rarely shirk from demanding better terms out of Brasilia.”

Brazil overtakes UK

as sixth-largest economy

Take, for example, tiny Paraguay – which reportedly “chafes” under the “yoke” of Mercosur, a South American trade bloc which for all intents and purposes is led by Brazil. In a game of push back, Paraguay recently tripled the cost of electricity produced by the Itaipu Dam, Brazil’s single-largest source of electricity.

In the years to come, Uruguay too might be tempted to play a diplomatic double game, if it perceives Brazil as a bully. According to Stratfor, Montevideo “charges steep fees on Brazilian cargo”. Fearing that its political and economic interests might not be served by Mercosur, Uruguayan President Tabaré Vázquez also briefly flirted with the notion of signing a free trade agreement with Washington.

Meanwhile, even though Morales has become more partial to Brazil over the years, the Bolivian leader has been known to push back at times. Stratfor noted that, in the breakaway eastern “Medialuna” region of Bolivia, the La Paz government routinely confronts landowners, “who for all intents and purposes are fully integrated into the Brazilian economy”. Moreover, the Morales regime “has not been shy about its attempts to nationalise energy assets owned by Brazilian interests”.

Unaccustomed to playing political hardball like the US, Brasilia may be forced to make a choice in the not too distant future. Should Brazil continue to follow its stated policy of non-confrontation, it could find itself at a distinct disadvantage. As Stratfor noted: “If Brazil is going to make its gains stick, at some point it will need to devise a strategy for formalising its control of the buffer states. That means, among other things, learning to be less accommodating.”

Argentina: The big prize

In the long-term, however, if Brazil wants to become a truly world class power, it will have to extend its control over not only small buffer states but also the northern shore of the Rio de la Plata. “So long as Argentina can exercise functional independence,” Stratfor noted, “it persists as a possible direct threat to Brazil, constrains Brazil’s ability to generate its own capital and exists as a potential ally of extraregional powers that might seek to limit Brazil’s rise.”

If Brazil did manage to wrest control over the Rio de la Plata basin, Stratfor believes that the “game would then change greatly”. At that point, Brazil would “no longer be a vulnerable, enclave-based state, facing extreme challenges to its development. Instead, Brazil would control the majority of the continent and command broad swaths of easily developed arable land. Instead of cowering in fear of regional naval powers, it would be the dominant regional naval power. With that transformation, Brazil would not see extraregional navies as friends protecting it from Argentina but as enemies seeking to constrain its rise”.

Counting the Cost:

The rise of Latin America

Behind the scenes, Buenos Aires is reportedly very nervous about the rise of its northern neighbour. In one 2009 WikiLeaks cable, Argentine nuclear non-proliferation officials complained to US diplomats “about the direction of Brazilian security policy in the final years of the Lula government”. Moreover, Argentine officials were worried about “the pace of Brazilian military purchases”, and had even pondered what Buenos Aires might do in the event that Brasilia chose to develop a nuclear weapon.

It’s not clear from correspondence what the US made of such complaints, and the WikiLeaks cache abruptly leaves off in early 2010. Nevertheless, it is not unreasonable to surmise that, in the long-term, US intelligence agencies or the state department may concur with the Machiavellian sentiments of Stratfor’s George Friedman. In his book, Friedman writes that Washington should “maintain balances of power” and to strengthen Argentina as a countervailing force in the region.

Sneakily, Friedman continues, “the American president must be careful not to show his true intentions in this, and not to rush. A unique programme for Argentina could generate a premature Brazilian response, so Brazil should be included in any American programme, if it wishes to participate. If necessary, this entire goodwill effort can be presented as an attempt to contain Hugo Chávez in Venezuela. It will cost money, but it will be much cheaper, in every sense, than confronting Brazil in the 2030s or 2040s over control of the South Atlantic”.

Behind the facade of US southern cone diplomacy

On the surface at least, the notion of a US-Argentine alliance designed to counteract Brazil seems misplaced. Under the rule of Néstor and Cristina Kirchner, Argentina has flirted with South America’s “Pink Tide” to the left, which has been critical of Washington. Behind the facade, however, the Kirchners played a diplomatic double game. In order to appease the leftist set, Argentina’s power couple engaged in rhetorical anti-imperialism, but in their secret dealings with US diplomats, the two did their utmost to placate Washington and distance themselves from Venezuela and others.

One key area of Argentine-US relations which has fallen under the radar is technology. Indeed, the US embassy in Buenos Aires has placed great weight on such matters and has its own science and technology section. In 2006, the US ambassador to Argentina, accompanied by the defence attaché and US air force officers attached to the embassy met with CEOs of INVAP, a high technology company which builds nuclear reactors and satellites. The company served as the prime contractor for the Argentine National Commission for Space Activities and NASA to build a series of scientific satellites.

In a cable to Washington, the US ambassador recommended that his superiors support a $50 million Inter-American Development Bank loan to Argentina for a remote sensing satellite. The project, the ambassador believed, fell within the “US national interest” as the loan “would develop an industry where Argentina is globally competitive, and one in which the US government and US companies have extensive military, scientific and commercial interests”.

All branches of the US military were interested in the project, the ambassador added, and “two US military entities are interested in INVAP satellite technology for Future Combat Systems (FCS). The Space and Missile Defence Command is interested in INVAP satellite buses and, potentially, in its L-Band radar technology”. In addition, the US Army International Technology Centre South America, based in Argentina, was interested in identifying local technology “that could be useful for US defence applications”.

What’s behind the US installation in Chaco?

If anything, this curious but growing technological alliance between the US and Argentina has only deepened in recent years. In the provincial Argentine town of Resistencia, located in the Chaco region, US military satellite experts are “providing services” (the Chaco region is a strategically located northern Argentine province lying near to Paraguay, Bolivia and Brazil).

Leaks damage Latin American relations

In an even more suprising development, which may have raised eyebrows in Brasilia, the US has also helped to construct a base in Resistencia next to the local airport.

Officially, the Resistencia base [Sp] forms part of a joint US-Argentine initiative which will provide joint emergency relief and eventually deploy troops for “humaninatarian relief”. The centre, it is claimed, will help to coordinate relief efforts in the event of floods, droughts or outbreaks of tropical disease [Sp], such as dengue fever. Local authorities have emphatically stressed that the installation is a civil base only [Sp], and will be subject to the oversight of provincial authorities.

Jorge Capitanich [Sp], a pro-US governor of Chaco, swears that the Resistencia installation is not a military base. “They’re already claiming that the Marines are coming, as well as tanks and helicopters,” Capitanich remarked sarcastically, “but I want to categorically deny these stories.” Capitanich’s claims, however, are subject to some doubt, since the US embassy in Buenos Aires has openly admitted that the US Southern Command is financing the installation at Resistencia. Reportedly, the Resistencia operation represents the US Southern Command’s first ever [Sp] base in Argentina.

Notwithstanding Capitanich’s denials, the Argentine left claims that Resistencia amounts to a covert US intelligence operation, thinly disguised as humanitarian relief. One Argentine legislator [Sp] has called for an investigation into the “Yankee base in Chaco”, while another [Sp] has remarked that the Red Cross and Panamerican Health Organisation are perfectly capable of handling disaster relief, and “there is no justification to turn to a military entity of the US army, far less the Southern Command, which has a very dubious record in neighbouring countries”. Earlier this month [Sp], political and environmental activists held a demonstration against the base in Resistencia and marched to the local airport in protest.

Brazil and the US: Uneasy relations

To be sure, there’s no evidence to suggest that the Chaco base forms part of any nefarious US plot to monitor South America’s biggest economic and political power just nearby. What is more, if the US has developed some type of underhanded contingency plan to stop Brazil in its tracks, as Stratfor’s George Friedman recommends, there’s little concrete evidence to suggest this in the WikiLeaks cables.

Yet, for all that, recent political developments – as well as private correspondence – hint at certain underlying tensions which, if not ameliorated or addressed, could lead to a deterioration in relations. On balance, one would have to say that the ball is now in Washington’s court. Will the US seek to accommodate Brazil, or will it seek to outmaneouver the South American juggernaut in neighbouring countries – or even Argentina?

If it does, then Brazil might become more assertive. At that point, South America’s newest rising star will have to consider whether it wants to exercise greater political control over its hinterland and to become a real military power. For the time being, Brazil is resisting such temptations, but the world may wonder: for how much longer?

Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left and the founder of Revolutionary Handbook.

Follow him on Twitter: @NikolasKozloff