Nikolas Kozloff

My big piece about up and coming power Brazil and what's behind the story in terms of big power rivalry with the U.S. To read the article, click here.

Just made an appearance on al-Jazeera English on Sunday, though unfortunately it does not seem to be available on the internet. The discussion centered around the upcoming Venezuelan election and the ramifications of Hugo Chavez's illness upon domestic politics as well as the international left. I said that Chavez made a big mistake by not grooming a successor about six years ago, which jeopardizes the whole "Bolivarian" project. From there, we got into the issue of the pitfalls of populism and the idea of the charismatic leader. If Chavez should falter, the most immediate beneficiary will probably be Brazil, and I have decidedly mixed feelings about this. In my next and upcoming article, I highlight these concerns in light of secret correspondence involving the U.S., Brazil and Argentina.

To read the article, click here.

For some time, I have been writing about revelations stemming from correspondence between the State Department in Washington and various U.S. embassies based around Latin America.  Leaked WikiLeaks documents have revealed growing U.S. concern over the left tide in the wider region and crucial strategies to derail progressive change.  More surprisingly, perhaps, the cables also hint at key fissures within the South American left --- tensions which the U.S. has been all too willing to exploit.

 

Divide and rule tactics may work to a degree with Ecuador, Venezuela or Bolivia, but the U.S. will have a tougher time managing Brazil.  Indeed, what struck me most as I poured through the documents was the marked difference in tone between U.S. embassy cables emanating from Quito, La Paz and Caracas on the one hand, and Brasilia on the other. 

 

It's clear from just a superficial read that American diplomats are much more cautious and level-headed with the Brazilians than elsewhere in the Andes, where U.S. officials tend to be much more direct and confrontational.  For Washington, Brazil promises to be the chief geopolitical worry in the decades to come, not Venezuela.

 

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.  Unlike the Andean region, which has been plagued by chronic volatility, Brazil's political institutions look relatively stable.  Provided that Brazil's economic fortunes continue to soar, the South American juggernaut will surely be a force to be reckoned with in future. 

 

Behind Mercosur's Façade

 

Speaking with the Americans, leading members of the Brazilian political establishment remarked that their country should serve as "the natural leader of Latin America, or at least of South America."  Leading, however, is obviously a very different concept from standing shoulder to shoulder with smaller nations, and for those who view South America as essentially marching relentlessly toward regional integration along leftist lines, WikiLeaks cables can serve as quite a corrective.  Indeed, Brazilian conservatives were reportedly very unhappy with their government's "overly acquiescent approach to Bolivia, Ecuador, and Venezuela." 

 

As one reads the cables, a more complex and nuanced picture emerges of Brazil, a country torn by many conflicting impulses and agendas.  To be sure, Brazil is a member of trading bloc Mercosur which has helped to politically align sympathetic leftist regimes in South America.  Yet, if the diplomatic cables can be believed, many influential Brazilians view Mercosur with a healthy degree of skepticism and during the era of former president Luiz Inácio "Lula" da Silva, "most parts" of the Brazilian government were opposed to the trade bloc, seeing little benefit to their country from such integration. 

 

Lula, who himself came up from the ranks of organized labor, favored Mercosur but recalcitrant elements including the Ministries of Finance and Development saw matters differently.  Chafing under Mercosur's yoke, these technocrats complained that Brazil provided too much money toward the trade bloc's infrastructure fund, while other countries donated much less.  In particular, the influential industrial lobby complained that Mercosur was "selling out" commercial interests for the mere sake of preserving the trade bloc's unity.  Like the U.S., then, where Republicans routinely complain about multilateralism, the United Nations and doling out foreign aid to needy countries, Brazilian officials too "complained that underdeveloped areas in Brazil's northeast will get short shrift compared to needy areas" elsewhere in South America. 

 

As Brazil starts to accrue more power, the country may run into an image problem.  Like the U.S., which has been criticized for its sorry environmental record on climate change, Brazil too could find itself politically isolated from its more radical neighbors.  According to one WikiLeaks cable, environmental subjects within Mercosur are "very messy" with "no cooperation of note."  Reportedly, Argentine officials believed that Brazil was "focused on its position as a major player with China and India, not as part of Latin America, while Venezuela, Ecuador, Cuba, and Bolivia form a separate block with their own interests."

 

The Cocaine Connection

 

Brazilian skittishness was also evident toward its radical neighbor Bolivia.  Publicly, Lula and the Brazilian left proclaimed their solidarity with Chávez protégé Evo Morales, a radical indigenous coca grower.  But cables reveal Brazilian concern over political stability and the drug trade.  As early as 2004, prior to Morales' election as president, the Brazilians viewed instability in Bolivia with "grave concern," including the "disturbing convergence of an energized indigenous movement with the drug problem."

 

In some ways, then, the Brazilian relationship to Bolivia echoes U.S. ties to Mexico, a country which has also been convulsed by the drug trade.  For years, high level officials at Lula's GSI or Institutional Security Cabinet had viewed Brazil as essentially a corridor country for outbound narcotics to other nations, but "the brutal reality of violent, drug-driven crime in Brazil's cities has shattered that outlook…and huge quantities of cocaine and other drugs appear in large and small Brazilian communities throughout the country."    

 

The GSI, as well as the police were concerned "about the potential for increased cocaine flows into Brazil from Bolivia in the event of a Morales victory."  "We are clearly the target," remarked one GSI official, "for the low-grade coca based narcotics produced in Bolivia, which are flooding Brazilian cities, with devastating social consequences."  Feeling increasingly frustrated, the Brazilians had sought to convey their concerns to La Paz, via "indirect channels" and even through policy suggestions.  When Brasilia suggested that its Andean neighbor should substitute alternative crops for coca leaf, however, Bolivia balked and "fell back on the traditional crop argument," thus "shutting down further discussion." 

 

Brazil's Voracious Energy Needs

 

Like Mexico, which supplies oil to the U.S., Bolivia is an energy supplier to Brazil and provides natural gas.  In 2005, the Brazilian Minister of Mines and Energy said his country was "worried" about the reliability of its natural gas supply emanating from Bolivia.  If the gas supply decreased or prices skyrocketed, the official conceded, Brazil would "face a serious problem."

 

So concerned was Brazilian intelligence that high level officials developed contingency plans.  At the GSI, analysts sought to evaluate what the likely impact of an energy shortfall might be.  In the midst of Bolivia's presidential election season, Lula hoped that any new regime would "not allow radical new government policies or general instability to damage Brazilian energy industries."  If need be, Lula would reportedly take the same tone with Bolivia that "a parent would take when firmly disciplining an errant child."

 

Brazil to Chávez: We Run Things Here

 

Publicly, Brazil has demonstrated solidarity with Hugo Chávez and his protégé in Bolivia, Evo Morales.  However, WikiLeaks cables suggest that Brazil is ambivalent about the volatile Andean region and skeptical about Venezuelan leadership.  In 2007, for example, Brazil was reportedly skittish about Chávez's moves to establish a so-called "Bank of the South" which would counteract the International Monetary Fund.  Brazil already had its own development bank known as BNDES, and would "need to be convinced" of the efficacy of further institutions.  In the effort to foster its own regional agenda, Brazil has promoted BNDES, which finances infrastructure development through the trans-Andean highway. 

 

Whatever his own interest in BNDES, Lula was reportedly willing to go along with Bank of the South as long as Brazil was given a prominent place at the table.  In a snub, however, Chávez reportedly went behind Lula's back and negotiated with Argentina, causing the Brazilians to become "absolutely livid."  Perhaps, these types of developments made Brazil even more skeptical of Chávez and determined to assert its own independent leadership in the wider region.

 

Further cables underscore this subtle geopolitical shift.  In August, 2009 Lula traveled to Bolivia's coca growing region of Chapare.  There, the Brazilian met with Morales in a stadium "amid a festive atmosphere" of 10,000 cheering coca leaf growers.  Publicly, the two praised each other but beneath the surface lurked tensions.  Speaking to U.S. officials, Brazilian diplomats said they had grown quite frustrated with Bolivia on counter-narcotics and economic policy, adding that they wanted to "provide Morales with alternatives to the radical advice he is receiving from Venezuela and Cuba." 

 

Are Brazilians the New Gringos? 

 

It would be an overstatement to claim that Bolivia is a Brazilian satellite, but some WikiLeaks documents suggest that the small Andean nation could be quietly moving away from Venezuela in the hopes of gaining a new benefactor.  As far back as 2008, Brazilian legislators claimed that Bolivia was "tired of the Bolivarian idea."  According to Brazil's Chairman of the National Defense Committee and Senate Foreign Relations, the Bolivian ambassador in Brasilia "apologized…for some disagreements between presidents Lula and Morales a couple of years ago and agreed…that the two countries need to continue their tradition of friendly relations."

 

The WikiLeaks cache ends in early 2010, so we don't know much about the further ins and outs of this diplomatic game.  What's clear though is that Brazil's footprint has only increased in its own "near abroad," leading to new political frictions.  Today, the Bolivian left and indigenous peoples are probably just as prone to attack Brazilian imperialism as Washington's dictates.  At issue once again is BNDES, an institution which is fast outstripping the World Bank.  When BNDES announced it would support road construction through remote indigenous territory in Bolivia, the effort sparked protest from local Indians who accused Evo Morales of being a foreign lackey.  

 

BNDES, which seeks to create strong Brazilian multinationals via below-market loans, could fall under greater criticism in the years ahead.  With support from BNDES, companies like oil giant Petrobras, iron flagship Vale, and steel maker Gerdau have been conducting a big push into neighboring countries.  The Brazilian wave however has been met with wariness and resistance from Paraguay to Guyana to Peru to Ecuador, where local residents have protested large boondoggle projects. 

 

Big Power Rivalry in the Southern Cone?

 

As BNDES extends its influence, and Brazil ramps up diplomatic and political ties to Peru and even Colombia, Chávez's Venezuela has become eclipsed.  Such developments have not escaped the attention of Argentina, Brazil's historic rival for dominance in the Southern Cone.  If WikiLeaks cables are any indication, Buenos Aires has become increasingly alarmed by the unpredictable nature of Brazilian foreign policy, and even fears that its South American neighbor may be tempted to back up its interests through military means.   

 

My interest was particularly piqued by one cable dated to 2009, in which Argentine nuclear non-proliferation officials complained to U.S. diplomats "about the direction of Brazilian security policy in the final years of the Lula Government."  The Argentines were concerned about "yellow lights," such as Lula's outreach to Iran and North Korea.  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.

 

The Argentines were particularly looking forward to Brazil's presidential transition in 2011, because Lula's "unmatched popularity and his late-in-the-term detachment from political considerations had allowed him to become a risk-taker in foreign and defense policy."  Any successor, the Argentines hoped, "would shy away from such controversial policies in his or her first years, perhaps retrenching on the Iran relationship and becoming more cooperative on new nuclear confidence-building instruments."

 

While it's true that Brazil has become somewhat less of a "risk-taker" under Lula's successor, Dilma Rousseff, the South American giant will certainly be a huge force to be reckoned with in the years to come.  How Brazil's rise reconfigures South American politics, particularly in regard to Argentina, could be interesting to watch.  What is most importantly reinforced from the WikiLeaks documents, however, is the notion that the U.S. may now face a real competitor in the region.

A two part series focusing on the Durban climate conference. To read Part I, click here. For Part II, click here.

As more and more WikiLeaks cables get released, the Brazilian-U.S. diplomatic relationship has become increasingly illuminated.  Though somewhat wary of each other, Washington and Brasilia sometimes saw eye to eye on matters of geopolitical importance.  Take, for example, both countries' handling of Venezuela's Hugo Chávez.  Under the helm of Luiz Inácio "Lula" da Silva, Brazil cultivated a strategic alliance with Venezuela and publicly the two nations embraced South America's "pink tide" to the left.  Yet, WikiLeaks documents reveal that Brazil may have shared Washington's concern over Chávez's rising geopolitical importance, particularly in the Caribbean theater.

 

During the Bush years, American diplomats kept a close bead on Venezuela's growing partnerships in areas far afield.  In Jamaica, for example, U.S. officials conducted a "sustained effort to dissuade" the authorities from supporting Chávez's bid for a seat on the United Nations Security Council.  Concerned over Venezuela's rising star in the region, the Americans met with the Jamaican political opposition.  Writing to her superiors in Washington, U.S. ambassador in Kingston Brenda Johnson expressed "concerns over the influence of Venezuelan money and energy supplies in Jamaica in the years ahead." 

 

Monitoring Chávez in Jamaica

 

During a local cricket match, Bruce Golding of Jamaica's opposition Labour Party approached the ambassador to request a meeting.  Asking that the U.S. hold the information in "strict confidence," Golding revealed that his party's concern over Chávez had "heightened in recent weeks."  Confidentially, he continued, a "senior person in the government" had passed him "sensitive inside information," and "a number of persons within the government" were "frightened over the secrecy" concerning Jamaica's official dealings with Chávez. 

 

Spinning a rather cloak and dagger narrative, Golding explained how senior officials from the ruling People's National Party (PNP) had recently flown to Caracas.  Once in the Venezuelan capital, he claimed, they had been given one or two large packages and thereafter returned to Kingston.  The opposition politician alleged that overall the Venezuelans had doled out $4-5 million to the PNP in Caracas in order to finance the electoral campaign of Prime Minister Portia Simpson Miller.  The very next week, the government magically claimed that it had managed to repay $475,000 to a Dutch-based oil trading firm called Trafigura.         

 

Earlier, the company had made the "contribution" to the PNP, but when the matter came to public attention the news spiraled into a full blown campaign finance scandal.  Speaking to the U.S. ambassador, Golding thought it was "logical" that part of the cash which Venezuela had given to the Jamaicans had been later used to pay back Trafigura.  Going further, Golding claimed that just before the Trafigura "contribution," the PNP had experienced financial problems and even found it difficult to maintain its own facilities.  Recently, however, there had been a "dramatic turnaround," and the party no longer found it necessary to solicit contributions from the private sector. 

 

Because Jamaica already participated in Chávez's so-called Petrocaribe program, which provided liquefied natural gas to the Caribbean nation, Golding feared that "it would be easy to imagine a scenario in which Chávez offered to write off or defer a portion of these debts in return for government of Jamaica support of his positions in international fora."  In drawing closer to Chávez, Golding continued, Jamaica was "getting mixed up with something from which it will be difficult to extricate ourselves."  In conclusion, Golding thought that Chávez had become a "godfather with money."  Jamaica, he said, was "being sucked into an agenda not of our own making.  Chávez waves cash, we're mesmerized, and cave in to anything he wants."

 

While it's unclear whether Golding was speaking the truth, WikiLeaks cables suggest that the U.S. ambassador took the politician's points seriously enough.  Reflecting a paranoid anti-Chávez mindset, Johnson told the Jamaican that he should "raise these concerns with U.S. government officials during [an] upcoming visit to Washington." 

 

Grenada and St. Vincent and the Grenadines

 

Elsewhere in the Caribbean, U.S. diplomats carefully monitored Chávez influence.  In St. Vincent and the Grenadines, the Americans sat up and took note when local politicians signed on to Venezuela's PetroCaribe accord.  When Chávez sent liquefied petroleum gas to the government of Prime Minister Ralph Gonsalves, the American Embassy in Bridgetown remarked that "the timing of the shipments, the first of which arrived just prior to St. Vincent's December 2005 general election, led to speculation that they were also intended to shore up the electoral prospects of the PM.  Gonsalves is one of Venezuela President Hugo Chávez's most ardent supporters in the region."

 

Over in Grenada, meanwhile, the Americans noted that the authorities had signed on to the PetroCaribe deal and hoped to import diesel supplied by Venezuela's state oil company PdVSA.  In light of the contentious history of U.S. military intervention in Grenada, Washington would have been interested in keeping Grenada out of Venezuela's orbit.  It's not clear from the cables whether American diplomats pressured Grenada to cut its links to Venezuela, but other documents suggest that, overall, Washington had grown concerned about the Caribbean theater.

 

In 2008, for example, U.S. ambassador to Barbados and the Eastern Caribbean Mary Ourisman sat down with Ralph Gonsalves of St. Vincent and the Grenadines.  Speaking over breakfast at the U.S. Embassy in Bridgetown, Ourisman pressed Gonsalves on his country's recent participation in Chávez's Bolivarian Alliance for the Americas (or ALBA) summit in Caracas.   Somewhat defensively, "Gonsalves was quick to deny any military and intelligence agenda or component to ALBA, and appeared to generally want to disassociate himself from Chávez's ideologies.  He was quick to thank the United States for its continued military and law enforcement assistance." 

 

Gonsalves' soothing assurances notwithstanding, Ourisman was suspicious.  "While the friendly nature of the meeting reflected the Embassy's generally good relations with St. Vincent and the Grenadines," she remarked, "Gonsalves was at his legalistic best, downplaying both Saint Vincent's and the Grenadines involvement in ALBA."

 

Brazil's Fears over Guyana

 

While it's not too surprising that Washington during the Bush years kept a careful eye on Chávez in the Caribbean, it's interesting to note that Brazil too had grown concerned.  On the surface at least this might seem surprising: publicly, Brazil's Workers' Party President Luiz Inácio "Lula" da Silva embraced neighboring Venezuela.  WikiLeaks documents, however, reveal that powerful figures in Brasilia were growing increasingly restive and nervous when faced with Venezuela's bold assertiveness in the Caribbean.

 

As part of its efforts to become a "responsible" member of the international community, Brazil has taken a more active role in the Caribbean theater, sending peacekeeping troops to Haiti and beefing up ties to Cuba in advance of the island's post-Castro transition.  Speaking to U.S. diplomats, Lula officials threw cold water on the notion that leftist Venezuela would continue to play a significant role in Cuba.  Chávez's brand of "strident" populism, they remarked, had "less space to grow in Latin America than you may think."  On the other hand, closer to home in the Caribbean Brazilian politicians saw themselves in more direct competition with Venezuela for geopolitical influence, for instance in Guyana.

 

Chorus of Conservative Brasilia Politicians

 

In early 2007, former President and sitting Senator Jose Sarney of the Brazilian Democratic Movement Party fretted to American diplomats that Venezuela was "becoming a destabilizing military power."  Warming to his theme, Sarney remarked that he was "especially concerned about Venezuela's irrendentist claims on Guyana's Essequibo region."  Growing even more alarmist, the politician stated that two thirds of Guyana was rich in diamonds and Chávez could "cause trouble over an area of 170,000 square kilometers."  A conflict was all but inevitable, Sarney continued, and "in that event, a burden will fall on Brazil's shoulders."

 

In the following months, a growing number of conservative politicians in Brasilia echoed such alarmist claims until Sarney finally laid down the gauntlet, urging Washington to "do more to counter Venezuelan President Hugo Chávez's increasingly destabilizing actions in the region." 

Since Sarney's last tete-a-tete with the Americans, tensions had mounted in the Essequibo region, with Guyana accusing Venezuela of militarily invading its territory to stave off gold mining operations.  Caracas flatly rejected the claim, arguing that the incursion occurred squarely within Venezuelan territory. 

 

Reiterating his previous arguments, Sarney said that Chávez sought to "create a hotspot of regional conflict like the Balkans," and would seize Guyana's Essequibo region.  Speaking candidly, the politician remarked that Lula was "aware of the dangers Chávez presents," but unfortunately the Brazilian Foreign Ministry was "infiltrated" with Chávez sympathizers.

 

The Mood Begins to Shift in Brasilia

 

Despite Sarney's claims about the pro-Chávez leanings within the Brazilian government, WikiLeaks cables suggest that many within the political elite had grown tired and impatient with Venezuela.  Take, for example, Defense Minister Nelson Jobim, who "expressed a personal concern that if Chávez started to have domestic problems, he could decide to focus public attention on unresolved claims on Venezuela's borders."  Rather bluntly, Jobim suggested to the Americans that Brasilia and Washington should "step in and confront Chávez if he did anything extraterritorial."

 

Though Lula continued to defend Venezuelan democracy, opposition politicians in Brasilia began to see their president's position on Chávez as "weak and fearful of conflict."  Overall, the Americans noted, the mood was changing in Brasilia and there was "growing agreement among the political and foreign policy elites that Venezuela represents a threat to stability and that something must be done."

 

By early 2008, Sarney was openly asking the Americans for any information relating to Venezuela's arms purchases.  Elaborating further, the veteran politician added that Chávez's aggressive behavior could pose a threat to a Brazilian road which stretched from the jungle city of Manaus all the way to the Guyanese border. 

 

Interestingly, however, it wasn't just the political opposition which had grown leery of Chávez and Venezuela's regional ambitions.  If WikiLeaks cables can be believed, Lula himself was ready to throw in the towel and the president had grown increasingly worried about Venezuela's "serious" border problems with Guyana.  Indeed, Lula believed that Venezuela might even want to "annex one third of Guyana's territory."  

 

That, at least, was the claim of one Antonio Delfim Netto, one of Brazil's "most influential economic commentators" and a former Minister of Finance who was said to meet with Lula regularly to provide informal economic advice.  Delfim, who the Americans referred to as a "strictly protected" source, told the U.S. ambassador in Brasilia that "if Venezuela were to invade Guyana, Caracas would likely militarize all of Venezuela's south, antagonizing the indigenous populations there."

 

Delfim added that this would "have an impact on Brazil because the territories of at least one tribe, the Yanomami Indians spills over the Venezuela-Brazil border.  Delfim believes that, should Venezuela invade Guyana, the Yanomamis will declare independence, forcing Brazil to get involved in a Venezuela-Guyana war."

 

Fortunately, the border dispute did not turn into armed conflict but further WikiLeaks cables suggest that Brazil may have seen Venezuela as an ongoing geopolitical rival in Guyana.  In late 2009, U.S. Chargé d'Affaires Lisa Kubiske wrote Washington that Brazil was involved in talks with Guyana to build a hydroelectric plant in the disputed area claimed by Venezuela. 

 

To be sure, Lula officials told the Americans, the project would augment energy capacity for both Guyana and Brazil.  However, the initiative would also exert an important political impact by allowing Guyana "to establish government infrastructure in the disputed territory."  Kubiske added that the project would allow Lula to build upon Brazilian efforts to promote a South American political bloc, "through which Brazil can conduct harmonious regional relations while building a base of support for its larger international ambitions."

 

Wary Allies

 

In an effort to stay on the good side of most all countries, Brazil is reluctant to offend those nations in its immediate neighborhood.   WikiLeaks documents suggest that, for now, Brazil and the U.S. are somewhat ambiguous diplomatic partners.  Both reportedly see eye to eye on the need to keep Venezuela in check within the Caribbean theater, with Brasilia frequently taking a back seat and waiting for the U.S. to take the initiative and rein in Chávez. 

 

For the time being, then, an unsure Brazil will continue to play the role of junior diplomatic partner.  However, in the not so distant future such an arrangement could be subject to change.  As Brazil becomes more economically and politically prominent, the South American juggernaut may seek to exert its influence more assertively, even within Washington's traditional "back yard" of the Caribbean or even Central America.  If WikiLeaks cables are any indication, U.S. diplomats are already keenly aware of this growing rivalry and see Brasilia as their greatest competitor in the region.

From the Monroe Doctrine, which was aimed at curbing the encroachments of European powers in the nineteenth century, to Cold War foreign policy, designed to forestall the geopolitical machinations of the Soviet Union in the twentieth century, Washington has stopped at nothing in its bid to maintain power and prestige within its own regional "back yard" of Latin America.  But with all of those rivalries now a relic of the past, the U.S. is moving on to the next threat to its own hegemony: Iran.  That, at least, is the impression I got from reading diplomatic cables which were recently released by whistle-blowing outfit WikiLeaks. 

 

For Washington, a great concern was that Iran might gain a strategic foothold in South America, recruiting key allies such as Brazil.  Much to the chagrin of the Americans, Brazil under former president Luiz Inácio "Lula" da Silva sought to carve out a more independent foreign policy which even embraced the likes of Mahmoud Ahmadinejad.  By extending cooperation to Iran, Lula aimed to increase trade and boost collaboration on biotechnology and agriculture.  In a surprising development, Lula even urged the west to drop its threats of punishment over Iran's nuclear program, a move which proved very reassuring to the politically isolated Ahmadinejad.

 

Throughout the Bush and Obama administrations, U.S. officials in Brasilia sought to glean more information about this budding relationship, sound out disaffected politicians, and express displeasure about growing diplomatic ties between Teheran and Brasilia when need be.  Key in this effort was U.S. ambassador in Brasilia Clifford Sobel, who pressured the Brazilian Ministry of Energy to cut its burgeoning ties to Iran.  Speaking to government officials, Sobel expressed deep concern over Brazilian state energy company Petrobras, which had been considering plans to invest in the Iranian oil and gas sector, located in the Caspian Sea.

 

The Petrobras Imbroglio

 

WikiLeaks correspondence reveals Brazilian diplomats as walking a very fine tight rope, striking out on the one hand toward rogue nations like Iran but on the other hand very keen on placating the Bush administration and staying within Washington's good graces.  Responding to Sobel, the Brazilians argued that if they did not invest in Iran then the Chinese would certainly beat them when it came time to develop deep water exploration and production.  However, the Brazilians also "acknowledged the seriousness of the issue [Brazilian-Iranian energy ties] to the international community and, although they did not say Petrobras would halt its… activities in Iran, they did make it clear that they understand the sensitivity of the political moment."

 

In a further effort to shore up energy ties, Brazilian under Secretary for Political Affairs Roberto Jaguaribe met with Iranian Vice Foreign Minister Alireza Sheikh Attar some time later.  "In particular," U.S. diplomats noted, "Iran was fishing for increased Petrobras investment, although the Iranians seem to be growing impatient with Petrobras' unresponsiveness."  Concerned about the situation, the Americans again pressed Brasilia to clarify.  Petrobras would not be bullied into any rash decisions by Teheran, government authorities stressed, and the company was unlikely to increase its stake in Iran in the near term.  "Indications that Petrobras is winding down its operations in Iran is a positive sign," noted Sobel, but the sanguine diplomat was quick to add that Brazil was "playing it both ways" with Washington and Teheran.

 

In late 2008, Sobel was still pleased that Brazil was "trying to assuage our concerns" on Iran.  Nevertheless, the ambassador had grown concerned, writing the State Department that "we will need to intensify our dialogue…if we hope to sway the government of Brazil that this is not the moment for increased engagement with Tehran."  Confiding in the Americans, Brazilian officials claimed that their country was "under tremendous pressure from Iran…to increase Petrobras investment."  Though Brazilian officials continued to stress that Petrobras was not considering any further investments in Iran, they also believed there was much "trade to be done between the two countries."

 

At the Rio Defense Fair

 

In the realm of defense, too, U.S. diplomats were eager to head off any growing ties between Brasilia and Teheran.  In April, 2007 the Americans received worrying reports about Iranian participation at a Latin American Air and Defense show to be held in Rio de Janeiro, which had been organized by a U.K.-based firm.  When he found an Iranian stand at the event, which stood in violation of United Nations Security Council strictures, an organizer grew alarmed and immediately contacted the Brazilian Ministry of Foreign Affairs, also known as Itamaraty. 

 

The Brazilians claimed they were unaware of the Iranian presence at the show, and would take steps to shut down the Iranian stand.  In Teheran, meanwhile, the Brazilian ambassador was dressed down by the Iranians who vigorously protested the treatment.  Why had they been invited to the show and then subsequently shut down, the Iranians wanted to know?  Defensively, the Brazilian ambassador countered that the invitation had been issued well before the issuing of United Nations Security Council measures. 

 

It would seem that the Brazilians were acting in good faith and in accordance with international law, but both Britain and the U.S. were still unsure where the Lula government stood.  When asked by the British if they would act to seize any assets belonging to the Iranian Defense Industries, Lula officials explained that no such interests existed in Brazil.  For their part, the Americans were a bit mystified about Brazilian intentions and wondered whether the authorities actually ordered the closing of the Iranian stand or merely "stood back" and left the closing of the booth to the show's UK-based organizing firm.

 

U.S. concern over defense-related matters continued well into the Obama era, as evidenced by Hillary Clinton's secret cable to the American Embassy in Brasilia.  The new Secretary of State requested that diplomats alert the Lula government to a possible effort by the Iranian firm Machine Sazi Tabriz to acquire machine tools from a Brazilian company called Mello S.A. Maquinas e Equipamentos.  Sazi Tabriz, Clinton explained, was the largest manufacturer of machine tools in Iran and had provided tools to the Islamic Republic's nuclear and ballistic missile programs.  Brazilian export of machine tools to the company, Clinton elaborated, could therefore be diverted to Iran's weapons programs. 

 

Senator Fortes Sounds the Alarm

 

Concerned over Iranian-Brazilian ties, U.S. diplomats conferred with dissident politicians opposed to Lula's more independent foreign policy.  In Brasilia, a "handful" of legislators had started to worry about the independent trajectory of Lula's foreign policy.  One of those politicians, opposition Senator Heraclito Fortes of the Democrats Party, breathlessly called the U.S. ambassador in late 2007.  Fortes requested an urgent meeting "to raise a matter he could not discuss on the telephone."  As Chairman of the Senate Foreign Relations and National Defense committees, he apparently saw himself as the last bastion of hope against Lula's more assertive trajectory on the world stage.  Sitting down with the ambassador and other embassy staff, including the assistant U.S. army attaché no less, the Brazilian painted an alarmist picture, remarking that he was "truly concerned" about Iranian, Venezuelan and Russian collaboration in the South American theater, including potential financing of arms sales. 

 

According to Fortes, presidential foreign policy advisor Marco Aurelio García had recommended that Ahmadinejad himself visit Brazil, and therefore the U.S. government should become engaged "before it is too late."  Growing even more heated and agitated, Fortes accused the Americans of being "indifferent" to what was happening in the region.  "You are children," Fortes declared to the startled Americans.  "You ignore a problem until it is well along and then it is too late."  In order to counteract Iran, Fortes recommended increased U.S. arms manufacturing partnerships with Brazil.

 

Internal Dissent on Controversial Policy

 

Fortes continued to seek out American counsel, as evidenced by a further cable dated from April, 2008.  This time the Brazilian sounded the alarm bell about Ali Reza Sheikh Attar, who had traveled to Brasilia in hopes of drumming up support for an anti-U.S. bloc in South America.  According to Fortes, the Iranian diplomat complained about UN pressure on Iran's nuclear program, and went so far as to claim that after the Olympics, China would purposefully exert pressure on the American dollar by selling off its U.S. investments.  Reportedly, Attar told Fortes that these Chinese actions would "be more powerful than an atomic bomb."

 

On the whole, Fortes declared, it was unlikely that Brazil would ever join in any anti-U.S. crusade in South America, but the politician was concerned about certain figures within the Lula circle including presidential adviser García who was reportedly receptive to Iranian overtures.  Itamaraty meanwhile seemed intent on pursuing a "correct" relationship with Iran, and unfortunately there was little that Congress could do to stop such high level diplomacy, save stalling ambassadorial appointments or appealing to public opinion.

 

Other cables hint at further dissension within the ranks.  According to U.S. diplomats, Lula and Itamaraty "were getting pressured on a near-daily basis by Brazilian religious and ethnic minority groups opposed to the Iranian government's activities."  Indeed, Brazilian Jews had lobbied high up officials within Lula's Workers' Party, advising the president not to meet with Ahmadinejad.  In addition, Brazilian Baha'is and Syrian-Lebanese Christians who had become alarmed by Iranian fundamentalism registered their concerns on a "more ad hoc basis." 

 

Attempt to Reassure U.S. Diplomats

 

Eager to exploit internal tensions over Brazil's controversial Iran policy, U.S. diplomats continued to press Lula officials on the growing number of meetings between the two countries.  "Iran seems to be placing a significant number of eggs in the Brazil basket as part of its strategy for enhancing relations with Latin America," ambassador Sobel noted, "as indicated by the bilateral meetings, the outreach to congress, and the push for a presidential meeting."  When pressed by the U.S., Brasilia authorities admitted to the exchanges but claimed that "Iran's interest in Brazil does not begin to approach the level of Iranian links with Venezuela."

 

Tensions continued into early 2008, when the U.S. Embassy in Brasilia pressed officials to clarify high level diplomacy reaching out to Ahmadinejad.  The Americans had grown concerned, noting that Brazil "often tilted uncomfortably towards the anti-U.S. view of things in the Middle East."  Again, Lula officials were defensive, claiming that Middle East diplomacy was "necessary to balance Brazil's high-level engagement with the Arab countries."  In another tack, the Brazilians stated that it was Iran, and not Brazil, which was pressing most for greater political and economic engagement. 

 

Brasilia officials declared that they were skittish about a potential Lula-Ahmadinejad meeting, and "they were trying to stall such an encounter but that sooner or later they would run out of pretexts and a meeting would become inevitable."  Perhaps, American diplomats noted, the Lula government realized that "evenhandedness [was] critical to remain a credible player."  By avoiding a presidential meeting with Ahmadinejad, Brazil seemed to be sending a "positive signal that [it] understands its responsibility as a self-proclaimed neutral player."

 

Turning the discussion to Iran's wider role in South America, the Brazilians sought to appease U.S. concerns.  "Bolivia," they noted, "has nothing to offer Iran, commercially or politically."  Even the Iranian-Venezuelan alliance, they continued, had "no substance."  Overall, the Brazilians downplayed Ahmadinejad's influence, declaring that the Iranian leader, like Hugo Chávez of Venezuela, was "more bluster than anything." 

 

Sobel's Strategy

 

Despite such reassurances, Sobel remained unconvinced and, in July, 2008 wrote his superiors that Brazil's continued focus on the Middle East was "worrisome."  Overall, the diplomat added, Brazil's "almost obsessive interest in pursuing 'balanced' relations tends to come at our expense, leading the government of Brazil to stay neutral on such issues as Iranian support of Hizballah, Iranian activities in Iraq, and Tehran's flouting of United Nations Security Council resolutions, while remaining blind to aggressive Iranian moves in the region."

 

In Sobel's view, it was unlikely that the U.S. could persuade Brasilia "to take an approach fully in step with ours."  Nevertheless, he added, "it is critical to engage the government of Brazil both to ensure they have a complete understanding of U.S. policy and concerns in the region, and to demonstrate that we take Brazil's leadership aspirations seriously."  Accordingly, Sobel urged Washington to send high level authorities "to come to Brasilia for detailed discussions with Brazilian government officials, members of Congress, and, where appropriate, press, regarding Iran nuclear proliferation, support for terrorism." 

 

Sobel then detailed the planned charm offensive.  In addition to Fortes, a couple of other Senators had expressed concern with Lula's foreign policy, and the U.S. should therefore "take advantage" of this "window opening up to bridge the gap in our Middle East dialogue."  Washington should "seize the opportunity to try to steer Brazil away from its usual role of sideline sniper and make an attempt to recruit Brazil into a helpful or at least truly neutral role." 

 

Obama Officials: Whose Side is Brazil On?

 

Sideline sniper or genuine ally?  That seems to be the question on many U.S. policymakers' minds, including newly appointed Secretary of State Clinton, who sent a detailed questionnaire to subordinates seeking more information on Iran's precise role in South America.  In particular, Clinton wanted to know what governments in the wider region sought from Iran, and how they were catering to the desires of the Islamic Republic.  In addition, Clinton wanted to know, were Latin American governments concerned about Iran's ties to terrorism?  If WikiLeaks cables are any indication, the Americans were perplexed by Iran's political offensive in the region, and had precious little intelligence about the Islamic Republic's diplomatic missions or wider strategic intentions. 

 

Sensing American disquiet, the Brazilians again sought to reassure Washington shortly after Obama's inauguration.  Speaking to U.S. diplomats, Lula officials said they had tried their utmost to strike a conciliatory tone with Ahmadinejad, urging the Iranians to "respond positively" to Obama's more multi-faceted approach to foreign affairs.  Under Secretary for Political Affairs Roberto Jaguaribe then heaped praise on Obama for striking the "right signal" and "right chords" to the Iranians. 

 

U.S. Chargé d'Affaires Lisa Kubiske, however, was unconvinced by Brazil's double game.  In late 2009, she wrote Washington worriedly that Ahmadinejad would likely travel to Brasilia and sign bilateral agreements.  Lula and his inner circle of advisors, however, did "not appear to fully grasp the negative feedback that will be created by the Iran visit."  Kubiske seems to have believed that Brazil was out of its depth and had only a "small number of experts on the Middle East in Itamaraty."  As it punched above its weight, carrying out a "frenzied effort" to reach out to many players in the Middle East, Brazil risked committing "missteps and misunderstandings."  Without a clear sense of Brazilian loyalties, Kubiske reiterated the Embassy's earlier request to send Washington Middle East experts to Brasilia for a set of thorough briefings. 

 

WikiLeaks documents leave off in early 2010, but one can be sure that American puzzlement over Brazil continues today.  Though Lula's successor Dilma Rousseff has been less of a maverick in foreign affairs than her predecessor, Brazil is certainly a rising power on the world stage and the country will likely throw its weight around, not always to the liking of Washington which expects its regional partners to stay in line and not depart from the age old script.

In their correspondence with the State Department, U.S. diplomats in South America have been exceptionally paranoid about the activities of Hugo Chávez and the possibility of a leftist regional alignment centered upon Venezuela.  That, at least, is the unmistakable impression that one is left with by reading U.S. cables recently disclosed by whistle-blowing outfit WikiLeaks, and it's a topic about which I have written widely in recent months.  Yet, with President Hugo Chávez's health now fading fast and Venezuela looking like a rather spent force politically, it would seem natural that Washington will eventually turn its sights upon other rising powers --- countries like Brazil, for instance.

 

Judging from WikiLeaks cables, the U.S. doesn't have much to fear from this South American juggernaut in an ideological sense, and indeed leftist diplomats within Brazil's Ministry of Foreign Affairs are regarded as outmoded and anachronistic relics of the past.  Nevertheless, Brazil is a rising player in the region and U.S. diplomats are keenly aware of this fact.  For the time being, Brazil and the United States maintain a cordial, if not exactly stellar diplomatic relationship.  As Venezuela fades and Washington struggles to maintain its crumbling hegemony in the wider region, however, Brazil and the U.S. will inevitably develop rivalries.

 

This geopolitical competition has fallen somewhat under the radar, but a close reading of WikiLeaks cables lays bare Washington's secret agenda.  As far back as 2005 American ambassador to Lima Curtis Struble wrote that the U.S. was enmeshed in an "undeclared contest" with Brazil for political influence in Peru.  "We are winning on most issues that count," Struble added, remarking that negotiations over a U.S.-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 U.S. influence.

 

Run-Up to 2006 Election

 

Further cables indicate that the Brazilian administration of Luiz Inácio "Lula" da Silva pursued narrow-minded self interest in order to advance Machiavellian geopolitical and economic goals.  In the run-up to the Peruvian presidential election in 2006, Brazilian foreign policy advisor Marco Aurelio García visited Peru where he met with members of the Alejandro Toledo administration.  During his discussions, García sought to spearhead moves to establish the South American Community of Nations in the face of internal difficulties. 

 

Chief amongst those "difficulties" was none other than Hugo Chávez, a regional rival.  In order for the South American Community of Nations to progress, its two constituent parts, namely trading blocs Mercosur and Andean Community, would have to be "stabilized."  According to García, however, the Andean Community was in "crisis" due to Chávez's "antics."  Speaking to the Peruvians, García recommended that the Toledo government simply "ignore his [Chávez's] diatribes" [privately, the Brazilian added, Lula had helped to "rein in" the Venezuelan leader]. 

Meanwhile, García opposed Chávez's so-called Bank of the South, an institution designed to counter large financial entities like the International Monetary Fund and World Bank.  According to a WikiLeaks cable, the Peruvians agreed that Bank of the South would not be suitable for the new South American Community of Nations.  Like García, Toledo officials saw the more conservative Andean Development Fund as a more appropriate mechanism to enhance regional integration.

 

Handling Humala

 

García also met with nationalist presidential candidate Ollanta Humala, a kind of Chávez protégé.  During the campaign, the Venezuelan leader had provocatively backed Humala while attacking the candidate's chief opponents.  At campaign events, Humala had taken a leaf from his political mentor by sporting red T-shirts, calling himself "comandante" and boasting of plans to assert greater state control over energy resources.   

 

None too pleased by Humala's tilt toward Venezuela, García reportedly told the candidate that Brazil disapproved of Chávez's actions which promoted "intranquility" in the region.  Moreover, the diplomat remarked that he did not agree with Chávez's notion of countries belonging to different "axes" of powers.  García added that he was very concerned about social, political and economic tensions in the Andean region and Brazil was intent on playing a larger stabilizing role.

 

The meeting took place at Humala's own house and the candidate's wife, Nadine Heredia, took great pains to graciously entertain the Brazilians [perhaps Heredia wanted to reassure her guests in light of her own reported links to Venezuela].  Humala meanwhile "was very polite, upright and not at all a firebrand."  The candidate added that he wanted Peru to peacefully co-exist with both the U.S. and Brazil. 

 

A More Assertive Brazil

 

In the event, Humala must have surely regretted his political associations with Chávez.  During the campaign, the Peruvian was widely criticized for his ties to Venezuela, and the connection may have even cost him the election.  The man who edged out Humala, former president Alan García, had a previous incarnation as a fiery nationalist.  However, García was extremely critical of Chávez during the campaign and as he succeeded to the presidency the veteran politician went out of his way to court Brazil.

 

According to WikiLeaks cables, Brazil viewed the election as a necessary corrective which would help to restore "regional equilibrium" and to curb Chávez's increased geopolitical profile.  In the wake of the contest, Lula met personally with García in Brasilia in what insiders termed a "love-fest."  Though both leaders had political origins on the left, García and Lula had long since jettisoned such ideals in pursuit of their respective careers. 

 

Perhaps, Lula sensed that Chávez's star had waned and that it was now time for Brazil to press its own strategic advantage.  The Brazilian president stressed the need for greater physical integration between Peru and Brazil, including the dreaded Inter-Oceanic Highway which stood to exacerbate deforestation in the Amazon (for more on this, see my book No Rain in the Amazon: How South America's Climate Change Affects the Entire Planet).  The project, which is being carried out by Brazilian construction giant Odebrecht, will ship Brazilian exports to China via Peruvian ports.

 

Lula also spoke of the need for a regional, military, and political alliance between Peru and Brazil.  Lest García get the wrong idea about Brazilian intentions, Lula stressed that his country did not seek regional "hegemony" but merely wanted 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.  Peru, the new president added, would surely be interested in forming joint ventures with Brazil and benefiting from Brazilian technological know-how.         

 

Judging from other cables, García sought to extend cooperation in yet other areas.  In 2009, U.S. diplomats reported that Lima was interested in purchasing a dozen Super Tucano combat support aircraft manufactured by Brazilian aerospace giant Embraer.  Details of the deal were discussed during a Lula visit to Lima, "with a large commercial delegation in tow."  The Peruvians may have been prompted to turn to Brazil out of pure frustration with the United States.  According to leaked documents, the García government was dissatisfied with the "slow and complicated U.S. defense procurement process and high price tags for U.S. equipment." 

 

Humala Act II

 

Perhaps recognizing that Chávez's star was on the wane, Humala saw fit to remake himself politically by cultivating greater ties to Brazil.  Reporting on Peru's recent presidential election, the New York Times remarked, "in a transformation this year that points to the eclipse of Venezuela by Brazil, Mr. Humala has swapped the red shirts for dark suits, explicitly rejected talk of seizing private companies and celebrated Brazil's market-oriented economic model, while distancing himself from Venezuela's president, Hugo Chávez."  In addition, Humala even hired campaign advisers tied to Lula's Workers' Party and paid a whopping four visits to Brazil.      

 

Then, Humala went out of his way to praise Brazilian companies invested in Peru's mines, steel industry and hydroelectric projects, adding that the new boondoggle Interoceanic Highway connecting western Brazil to Peru's Pacific coast was a landmark achievement.   Toning down the rhetoric, Humala started to refer to himself simply as Ollanta instead of "comandante."  Perhaps, the more moderate image helped Humala, who edged out conservative challenger Keiko Fujimori.  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 moving forward. 

 

Vying for Power in Peru

 

Though Humala continues to forge a partnership with the United States, Brazil could overtake Washington in the Andes.  To be sure, Peru has an important free trade agreement with the U.S. and both countries collaborate on combating drug trafficking.  However, Humala sees Peru as a crucial Pacific gateway and strategic link between the two mammoth economies of Brazil and China.  For years, Brazil and Peru ignored each other diplomatically but now trade has mushroomed into the billions of dollars. 

 

A voracious energy consumer, Brazil is keen on building hydroelectric projects in Peru which would allow the South American juggernaut to stop importing diesel fuel and produce electrical power instead.  A proposed 600 mile natural gas pipeline meanwhile is due to connect Peru's Camisea field with a petrochemical plant proposed by Odebrecht.  Additional firms are operating port concessions and even steel operations.  The owner of Brazilian company Gerdau, which acquired Peru's largest steel plant, is a friend to both Lula and Rousseff.  What is more, an additional Brazilian operation has purchased Peru's largest metal refinery, Cajarmarquilla, which produces indium, a material used to manufacture flat-screen televisions and computer monitors. 

 

In time, might Peruvian nationalists turn against Brazil?  The more Brazil inserts its tentacles into the Andean region, the greater the risk that the South American giant will ruffle feathers and local sensibilities.  Already, one hydro-electric project has led to major opposition and some fear that Humala might favor the Brazilians excessively as 80 percent of the operation's 2,000 megawatt output would be allocated to its giant South American neighbor. 

 

Moreover, Brazil hardly has a sterling record when it comes to hydro-electric power (for more on this, recall the controversy swirling around Hollywood director James Cameron), and one proposed Peruvian dam on the Inambari River would flood 158 square miles of rain forest, displacing some 7,000 people in the process.  Old foreign policy hand Marco Aurelio García, who now serves as Rousseff's top foreign policy adviser, and who had earlier warned Humala about cozying up too much to Chávez, has declared that the project is "very important" for Brazil.  Humala meanwhile says that locals' needs will be respected when it comes to deciding whether to move ahead with the project.  That is, for the time being.

 

Christ Statue of Lima

 

Overlooking the Pacific cliffs of Lima hangs a potent symbol of Brazil's rise on the world stage: a towering statue of Jesus which at first glance looks remarkably similar to Rio de Janeiro's Christ the Redeemer, a famous icon lying on the Atlantic side of the continent.  The statue, which rises 118 feet into the air, was sculpted in Brazil at a cost of $1 million and the cost was footed almost entirely by Brazilian construction conglomerate Odebrecht. 

 

The "Christ of the Pacific" statue was erected even before Humala came into power by outgoing president Alan García, and there was no public consultation surrounding its construction.  For Lima Mayor Susana Villarán, the donated Christ statute is a tasteless eyesore, while Humala has diplomatically remarked that the structure "would improve the Lima panorama."  Odebrecht told the Associated Press defensively that it funded the statue because it "contributes to the diffusion of artistic expression" wherever it does business and because the statue could promote tourism for the poor who live in the vicinity.

 

In a tweet, Peruvian playwright César de María exclaimed, "I have nightmares in which I see that Peru's president is Odebrecht and all we do every five years is elect its representative."  Speaking to Caretas magazine, outgoing Brazilian ambassador to Peru Jorge Taunay remarked "there is not the least risk of Peru becoming a satellite.  It's not in Brazil's nature."  Others, including Guillermo Vásquez, a retired professor at Peru's Center for Advanced National Studies, is alarmed by Brazil's presence but is resigned to his country's fate.  "Brazil is coming," he told the Associated Press.  "What are we going to do about it?"

Over the past few years, the international left has derived much satisfaction from the course of South American political and economic integration.  The novelty of such integration is that it has proceeded along progressive lines and has been pushed by regional leaders associated with the so-called "Pink Tide."  With so many leftist leaders in power, it is plausible to surmise that a left bloc of countries might challenge Washington's long-term hemispheric agenda.  Yet, behind all of the lofty rhetoric and idealism, serious fissures remain within South America's leftist movement, both within individual countries and within the larger regional milieu.

 

That, at least, is the impression I got from reading U.S. State Department cables recently declassified by whistle-blowing outfit WikiLeaks.  Take, for example, the Luiz Inácio "Lula" da Silva administration in Brazil, which at times encouraged a "hostile" climate against the Free Trade Area of the Americas or FTAA, a corporately-sponsored plan backed by Washington, while on other occasions encouraging "public doubt and confusion through its own often-conflicting statements" about the accord.  Behind the scenes, the Brazilian government was much more divided on the matter than commonly portrayed, torn between its South American loyalties on the one hand and the desire to gain access to the lucrative U.S. market for agricultural and industrial goods on the other. 

 

In 2003, the U.S. Embassy in Brasilia noted that "Brazil's political goals, which include a leadership role in South America along with a strong focus on development and the social agenda, sometimes clash in its pursuit of certain national economic interests."  Cautiously, Brazil conducted sensitive negotiations with Washington over the FTAA.  Lula's position was somewhat delicate: while the president needed a substantial export boost to fund his social agenda, producers were fearful about facing increased competition. 

 

Across the border in Argentina, Lula could count on political ally Néstor Kirchner, and as a result the prospects for further integration through South American trade bloc Mercosur looked bright.  On the other hand, however, Mercosur remained "more important as a political project than an economic one," and virtually all Brazilians recognized that, in the long term, Mercosur would not offer a viable long-term solution to Brazil's export needs. 

 

Itamaraty vs. Other Agencies

 

In addition to the economic contradictions, Lula faced serious political fissures within his very own cabinet over the FTAA.  In other pieces, I have noted the open U.S. disdain for Brazil's Foreign Ministry, known as Itamaraty.  A den of suspicious leftists, Itamaraty and its diplomats proved frustrating to Bush administration officials time and again.  Particularly irksome to the Brasilia embassy was Itamaraty's "rigid perspective" (read "opposition") on FTAA policy.  Specifically, the Americans fretted that Itamaraty Secretary General Samuel Pinheiro Guimarães and his ideological clique was driving anti-FTAA sentiment. 

 

In the long-term, however, such leftist sentiment within Brazilian foreign policy circles may be shunted aside by powerful interests.  Writing to the State Department, U.S. diplomats noted that "not everyone within the diplomatic corps nor within the government agrees with Itamaraty's current FTAA policy."  Specifically, Itamaraty faced opposition from the ministries of Agriculture, Development and Finance, and such divisions offered up a tempting target for Washington. Ultimately, the U.S. embassy decided that it would not seek to "exploit differences among ministers," but further WikiLeaks cables suggest that the Americans continued to gauge such fissures. 

 

Airing dirty laundry before U.S. officials, Paulo Venturelli of the Ministry of Agriculture remarked that Itamaraty negotiators were "paranoid" and had even lied to Lula about the status of FTAA deal making.  Venting yet further, Venturelli said that "top level officials" at the foreign ministry were "formulating policy based totally of 1960's North-South ideology and without real economic consideration."  In a jarring break from normal diplomatic protocol, Venturelli himself advised the Americans to take a "hard line" with his own government, and to either "tell Brazil to take the FTAA as is, or be left behind as the U.S. and the other countries proceed to form the FTAA."

 

The story was much the same during a meeting with Arno Mayer of the Finance Ministry who advised the Americans how to outflank and strengthen rival Brazilian agencies favoring the FTAA.  Mayer noted that Finance was supportive of FTAA but unfortunately Itamaraty was responsible for formulating trade policy.  Within Itamaraty, Mayer continued, officials believed that the U.S. was "out to isolate Brazil."  In an effort to "personalize" the FTAA issue, Itamaraty diplomats portrayed U.S. trade policy as "aggressive" and aimed at "encircling Brazil" by cutting deals with other Latin American countries. 

 

Tensions within Brazilian-Venezuelan Dynamic

 

In the event, Lula did not conclude an FTAA deal with the United States, and as a result the path was cleared for greater South American political integration along progressive lines.  Yet, even so, WikiLeaks documents reveal great fissures within the Mercosur bloc of nations.  Take, for example, the whole issue of Venezuela's admission to Mercosur, a development which stood to destabilize the delicate geopolitical balance.  Publicly, the Lula administration supported Venezuela's bid to join the large South American trade bloc.  President Hugo Chávez was, after all, a kindred political spirit and represented a key force driving the region's "Pink Tide" to the left. 

 

On the other hand, Lula's team and even Itamaraty did not "seem to be going out of their way to actively promote" Venezuelan membership.  Indeed, during a private meeting the Brazilian Vice-Minister of Development, Industry and Trade implied that Brazil "lacked enthusiasm" when it came to wider integration.  What is more, the Brazilian private sector was divided about Venezuela's bid.  While one group favored greater export opportunities, another "worried that Venezuela's admission to Mercosur will further complicate Brazil/Mercosur's trade negotiations with other partners." 

 

These businesspeople were concerned about Venezuela's more avowed anti-imperialist stances, particularly Chávez's opposition to the FTAA.  Moreover, they fretted that Brazil could be tainted through its association with Venezuela, and Chávez could "undermine" key efforts to establish trading links with the European Union.  In the long run, however, the Brazilian political elite seems to have calculated that it would be more worthwhile to bring Venezuela into the Mercosur fold, thereby constraining and moderating Chávez and not leaving him "to his own devices on the outside." 

 

Still, the insufferable Chávez was difficult to take as he had "frequently stolen the stage at Mercosur gatherings from Brazil's President Lula," and openly challenged Brazilian leadership by supporting Bolivian President Evo Morales's moves to grab assets belonging to state Brazilian energy company Petrobras.  Speaking to influential members of the Brazilian political elite, U.S. diplomats picked up on some skittishness.  Take, for example, one Senator Heraclito Fortes, who told the Americans that Chávez's behavior during a summit held in the Brazilian city of Manaus was "not normal."  During the proceedings, the firebrand Venezuelan leader reportedly insulted the conservative Brazilian Congress, thus leading the Chamber of Deputies to postpone a bill dealing with Venezuela's accession to Mercosur.  Expressing concern, Fortes remarked that Chávez was intent on garnering veto power within Mercosur, which would be "too much power for someone so unstable." 

 

Southern Cone Skittishness

 

The Brazilians weren't the only ones who expressed skittishness on Venezuela.  In Brasilia, U.S. diplomats met with their Argentine counterparts who said that Chávez's membership in Mercosur would be "problematic."  Traditionally, the Argentines and Brazilians had dominated Mercosur with "Paraguay and Uruguay trailing along behind."  If oil-rich Venezuela were to join Mercosur, however, this would introduce a "destabilizing element, with Caracas playing the Brazilians against the Argentines and vice versa to increase Venezuelan influence."

 

Elsewhere within the Southern Cone, regional leaders were "suspicious of his [Chávez's] motives and objectives."  Indeed, Mercosur members gave second thought to their pro-Chávez leanings once it became clear that Venezuela was intent on pushing an assertive agenda.  Take for example Chilean President Michele Bachelet, who reportedly stated her "firm dislike" of Chávez in private.  The only reason the socialist leader supported Venezuela in the first place was that she was "under great internal pressure from pro-Chávez members of her administration who want her to publicly support Chávez."

 

Montevideo Intrigue

 

Even as Brazil and Argentina grew leery about Venezuela's entry into Mercosur, other smaller countries became concerned about being eclipsed by powerful neighbors.  Take, for example, tiny Paraguay which "chafed" under the Mercosur "yoke."  According to U.S. diplomats, Brazil withheld or delayed its electricity payments to Paraguay if its smaller neighbor refused to go along with Brasilia's strategic objectives.

 

Uruguay, too, found itself in a geopolitical quandary.  A tiny nation sandwiched between Brazil and Argentina, the country formed part of Mercosur and the region's pink tide to the left but simultaneously embarked on a high stakes double game with the Bush administration.  Fearing that its political and economic interests might not be served by Mercosur, Uruguayan President Tabaré Vázquez flirted with the notion of signing a free trade agreement with Washington. 

In Montevideo, U.S. diplomats sought to parse the diplomatic tea leaves.  In early 2006, U.S. Chargé d'Affaires James Nealon wrote that Uruguay might have been prompted to seek a free trade agreement with Washington due to the country's soured relations with Argentina.  Specifically, Uruguay had grown embittered over a bilateral dispute involving a paper mill.  On the economic front meanwhile, some Uruguayans blamed Argentina for dragging their tiny nation into a terrible financial crisis following the 2002 "corralito" bank run.

 

By openly questioning the underlying validity of Mercosur, however, Vázquez risked alienating not only his leftist regional partners but also "hardened lefties" within his own Frente Amplio coalition.  The Uruguay government was "navigating a fine line" by seeking to expand its trade relations with the rest of the world while simultaneously remaining a part of Mercosur.  Vázquez himself, wrote U.S. diplomats, was more of "a pragmatist than an ideologue."  A sly fox, the president sent conflicting signals over his country's economic and political loyalties.  Speaking in Caracas, Vázquez derided free trade with the United States, but backed a faction within his own coalition to keep the option open.  By openly traveling to Venezuela and standing with Chávez, Vázquez angered the U.S.  But WikiLeaks cables also reveal a fawning and deferential Uruguayan president who sought to appease Washington.  In an attempt to "allay U.S. fears" over Vázquez's rambling press conference with Chávez, obsequious Uruguay Minister of Industry and Energy Jorge Lepra called upon Nealon for a one-to-one meeting. 

 

Never fear, Lepra declared: his boss knew "how to manage the radicals within his governing Frente Amplio coalition."   Sometimes, the minister added, Vázquez needed to "placate that crowd," but rest assured internal politics would "have little effect on his [the president's] foreign policy overtures towards the United States."  Far from being a reluctant partner, Uruguay strenuously pursued the free trade matter behind closed doors.  In a follow up meeting, a very worried Lepra expressed grave concern over the fate of the trade deal, which unfortunately for Montevideo failed to materialize in the final analysis.

 

Bank of the South Imbroglio

 

WikiLeaks reveal yet further fissures within the left coalition, even when it came to hallmark initiatives designed to challenge the U.S.  Take, for example, the much heralded Bank of the South, a new financial institution aimed at counteracting the nefarious International Monetary Fund and World Bank.  Formed in late 2007, the bank was expected to contribute to regional integration, poverty alleviation, and investment.  During a ceremony, Chávez as well as Evo Morales of Bolivia and Rafael Correa of Ecuador made "forceful comments" criticizing large financial institutions which had imposed lending conditionality and offered "bad advice" to their clients. 

 

During the ceremony, Brazil's Lula as well as Argentine president-elect Cristina Fernández de Kirchner lauded the creation of the new bank.  Privately, however, both leaders were more circumspect.  According to U.S. diplomats, "Argentine and Brazilian officials are working behind the scenes to moderate Venezuela's influence in the organization of the bank in order to avoid the overt politicization of the Bank's lending policies."  In Montevideo meanwhile, Uruguayan Finance Minister Danilo Astori said he did not believe that Bank of the South was particularly useful and moreover Uruguay only agreed to participate "so as not to be isolated."

 

The Fraught Path to South American Integration

 

In the long run, the so-called Union of South American Nations or UNASUR may replace Mercosur as the guiding mechanism for regional integration along progressive lines, which could represent a blow to Washington's hegemony.  Yet, if WikiLeaks cables are again any indication, UNASUR has had difficulty getting off the ground amidst internal fissures.  Though Venezuela and Bolivia would have surely liked to see UNASUR strike a combative stance towards the U.S., there was little agreement about how to deal with Washington.  

 

Not to worry, the Chileans related to U.S. diplomats in Asunción: Santiago had already spoken to Paraguayan officials who had "all agreed that the UNASUR declaration should not be anti-U.S."  Indeed, during an UNASUR meeting the ostensibly leftist Paraguayan President Fernando Lugo had steadfastly "held that line."  Moreover, Chilean diplomats claimed that Chávez, who had delivered a feisty anti-imperialist speech at the UNASUR summit, annoyed most other heads of state. Behind the scenes, Venezuela reportedly lobbied Paraguay to cancel an upcoming meeting between Lugo and Bush, but that effort had failed. 

 

Moreover, if WikiLeaks cables are to be believed, Paraguay is just as shifty a player as Uruguay.  Confiding in the U.S. ambassador in Asunción, Lugo remarked that he had reached out to the rightist opposition in Bolivia.  In addition, the Paraguayan leader believed that indigenous president Morales had "a complex" about race.  In a report to Washington, the Americans noted that Lugo continued to "walk a fine, pragmatic line on regional politics."

 

Counteracting the Leftist Pink Tide

 

Whatever the shortcomings and weakness of the leftist "pink tide" in South America, however, the pace of regional integration seems to have seriously alarmed U.S. diplomats.  Speaking to their superiors at the State Department, Americans officials noted that "the entry of Venezuela into Mercosur clearly altered the power balance and dynamics of the organization. Mercosur has increasingly devolved from an imperfect customs union into a more restrictive and anti-American political organization…It is clear that we need better resources and tools to counter Venezuela's political efforts…[and] politicization of MERCOSUR expansion."

 

Furthermore, if Mercosur was merely worrying, then UNASUR would seem to represent an even greater ideological challenge for Washington.  In a cable sent to Washington, U.S. ambassador in Quito Heather Hodges expressed concern that Ecuadoran President Rafael Correa might take advantage of an UNASUR ceremony to raise the issue of destabilizing U.S.-Colombian military cooperation.  "We can be sure," Hodges explained, that Correa "will emphasize the importance of deepening South American integration, and he may well put this in the context of seeking to minimize the influence of and dependence on the United States in the region."

 

Faced with such ideological pushback, U.S. diplomats soberly assessed the geopolitical milieu and looked for internal weaknesses to exploit.  Throughout the Bush years, American officials focused their attention on Venezuela, but cables suggest that small countries like Uruguay and Paraguay were particularly susceptible to U.S. pressure.  A shrewd diplomat, U.S. ambassador in Montevideo Nealon wrote his superiors that "it is…probably in our interest to lend a helping hand to government of Uruguay that is struggling to emulate a moderate Chile rather than a Bolivarian Venezuela."

 

Moving From the Venezuelan to Brazilian Threat

 

Surely the greatest nightmare for U.S. diplomats is that Venezuela, with its populist anti-imperialism, might steer the course of South American integration.  Shrewdly, however, American officials have been able to deal with Brazil, which in turn acts as a moderating force on Chávez.  True Machiavellians, U.S. diplomats have even noted that the friction between Venezuela and Brazil "provides an opportunity."  Though the WikiLeaks cables leave off in early 2010, it would not be surprising if the Obama administration continues to pursue such a divide and rule strategy to this day.

 

 With Chávez's health now fading fast and Venezuela looking like a rather spent force politically, it would seem natural that Washington will eventually turn its sights upon Brazil.  Judging from WikiLeaks cables, the U.S. doesn't have much to fear from this South American juggernaut in an ideological sense, and indeed leftist Itamaraty may be outmaneuvered by more pragmatic forces in the long run.  Nevertheless, Brazil is a rising player in the region and U.S. diplomats are keenly aware of this fact. 

 

Take, for example, American ambassador to Lima Curtis Struble, who in 2005 wrote Washington that the U.S. was in an "undeclared contest" with Brazil for political influence in Peru.  "We are winning on most issues that count," Struble added, remarking that negotiations over a U.S.-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 UNASUR which would diminish U.S. influence.

 

If they are not doing so by now already, American diplomats are probably monitoring Brazil in an effort to preserve U.S. hegemony in the wider region.  In the not too distant future, State Department officials may believe it is imperative to sit down with their counterparts in Peru, Bolivia, or Paraguay in an effort to thwart not Caracas but Brasilia, and thus the Machiavellian game will start all over again.

To read the article on al-Jazeera, click here.