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Bolsonaro to face US pressure with Biden at the helm to Adapt to New Reality

Roberto Schmidt/AFP

Joe Biden

- Brazilian leader to face new international context next month
- Biden to place climate, human rights as top U.S.-Brazil issues

By David Wainer, Eric Martin, and Samy Adghirni/Bloomberg

Petroleumworld 12 18 2020

Brazilian President Jair Bolsonaro spent two years dismissing international criticism of his lax approach to deforestation, disregarding climate scientists and seeing the Amazon burn at a record rate under his watch.

But with his closest international ally leaving the White House next month, the Brazilian leader will have to decide how much he’s willing to risk to go it alone on an issue much of the world agrees on.

Bolsonaro’s non-conforming views on climate and his fervor for Donald Trump are increasingly worrying Brazilian officials about the long-term damage he’s sowing, according to two people with direct knowledge of the issue. The Brazilian president on Tuesday became one of the last world leaders to congratulate Joe Biden, and only after his victory was confirmed by the Electoral College.

“My concern is that we end up not having any substantial agenda with the U.S.,” Deborah Vieitas, chief executive officer of trade chamber Amcham Brazil, said in an interview. “If there’s no push to maintain high-profile contacts between officials and business people, this may harm advancements in trade and investment.”

Opening the Amazon for business has been a key campaign pledge from Bolsonaro, who largely sees the forest as an asset at the service of Brazil’s sovereign interests. Yet his efforts to ease environmental restrictions have started to backfire with investors, threatening trade deals that are needed to boost commodities and manufacturing exports in the aftermath of Covid-19. Latin America’s largest economy is only recovering slowly from the pandemic, with gross domestic product expected to grow 3.5% next year after an estimated 4.4% decline in 2020.

Dado Galdieri/Bloomberg

Jair Bolsonaro

Vieitas says Brazil and the U.S. have yet to resolve pending trade issues on steel, aluminum, ethanol and sugar. Despite Bolsonaro styling himself as a Brazilian version of Trump -- including dismissing the coronavirus pandemic as overblown -- he got very few concrete achievements from his alliance with the U.S. in his two years in power.

Support for Brazil’s membership in the Organisation for Economic Cooperation and Development was more symbolic than substantive, and a long-sought visa waiver agreement for business people was largely made moot by the shutdown of travel. China is still by far Brazil’s largest trading partner after surpassing the U.S. more than a decade ago.

Now, according to two people familiar with his plans, Biden’s administration will place two issues Bolsonaro often dismisses at the top of the U.S.-Brazil agenda: climate change and human rights.

New Reality

So far, Bolsonaro isn’t signaling he’s prepared to adjust to the new circumstances.

“Bolsonaro had a degree of protection as long as Trump was doing the same thing, but the new administration is not going to do that,” Thomas Shannon, a former U.S. ambassador in Brasilia and policy adviser at Washington-based law firm Arnold & Porter Kaye Scholer LLP, said in relation to Brazil’s environmental policy. “Bolsonaro will be exposed, and this is a moment for Brazilian society to express itself.”

In a sign that Brazilian lawmakers are trying to limit Bolsonaro’s policies, the senate on Tuesday vetoed an ambassador picked by the president to head Brazil’s mission to the United Nations in Geneva. Senators overwhelmingly voted against the appointed diplomat after he refused to answer questions over the country’s poor environmental record at a public hearing.

Working in Bolsonaro’s favor is his steady popularity, which gives incentives for the temperamental leader to stick to his confrontational strategy. The president’s approval rating remained stable in December at the highest level since he was elected in 2018 even as the government phases out popular monthly stipends, according to a Datafolha poll.

Yet after Biden takes office, Brazil will face a more concerted Western push to implement stricter environmental safeguards, with the U.S. likely to join Europe in tying the country’s record on deforestation to trade. Earlier this year, Germany said the destruction of the world’s largest rainforest calls into question whether a 2019 trade deal between the European Union and the Mercosur trade bloc led by Brazil can be implemented.

“Countries failing to address climate change will be less able to sell their products abroad,” said Sherri Goodman, Secretary General for the International Military Council on Climate & Security, which published a report last month calling on Brazil to make climate change a national security priority.

In a debate in September, Biden said his administration would rejoin the Paris climate change agreement and rally wealthy nations to protect Brazil’s rainforest as part of a greater effort to combat climate change, threatening the South American country with “significant economic consequences” if it failed to act. Bolsonaro hit back, calling Biden’s remarks “a sign of contempt.”

Tense Relationship

Rio de Janeiro-born Daniel Tenengauzer, head of markets strategy at Bank of New York Mellon Corp., said Biden’s threat was likely just campaign rhetoric, but he predicted a tense relationship even without a serious risk of economic sanctions.

“Going after Brazil on sanctions would be extreme,” he said. “You want to bring the establishment in Brazil and try to take the focus away from Bolsonaro. You don’t want to look like you’re meddling too much.”

Biden’s team says it’s determined not to make the U.S.-Brazil relationship personality-driven, signaling it wants to work through issues constructively. In a statement congratulating the president-elect, Bolsonaro said he’s ready to work together to “continue building a Brazil-U.S. alliance in defense of sovereignty, democracy and freedoom.”

Shannon, the former ambassador, said the big topics hanging in the balance will be shaped by how Bolsonaro approaches the issue.

“In many ways the tenor of the relationship is going to be set by Bolsonaro himself,” Shannon said, adding that it would be “a real shame” if the two largest democracies in the Western Hemisphere can’t work together.




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