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Biden says U.S. and Brazil ready for deeper relationship

U.S. Vice President Joe Biden (R) speaks to Brazil's President Dilma Rousseff during a meeting on his visit to Brazil, at the Planalto Palac
U.S. Vice President Joe Biden (R) speaks to Brazil's President Dilma Rousseff during a meeting on his visit to Brazil, at the Planalto Palac

By Anthony Boadle

BRASILIA (Reuters) - U.S. Vice President Joe Biden wound up a visit to Brazil on Friday saying it was high time the two largest economies in the Americas became closer partners in trade, investment and energy.

"We're ready for a deeper, broader relationship across the board on everything from the military to education, trade and investment," Biden told reporters after meeting with Brazilian President Dilma Rousseff.

The White House announced on Wednesday that Rousseff will make a state visit to Washington on October 23, the only one that President Barack Obama is offering a foreign head of state this year, indicating the importance his administration is placing on closer ties with Latin America's largest nation.

Biden praised Brazil for recently writing off $900 million in African debt, saying it showed the emergence of Brazil as a "responsible" nation on the world stage.

During his three-day visit, Biden also commended Brazil for lifting millions of people from poverty over the last decade and showing the world that development and democracy are not incompatible. However, he also urged Brazil to open its economy more to foreign bushiness and to be more vocal in defense of democracy and free-market values.

Relations between Washington and Brasilia have improved since Rousseff took office in 2011 and adopted a less ideological foreign policy than her predecessor, Luiz Inacio Lula da Silva, who befriended Iran and drew Brazil closer to Venezuela's anti-U.S. government under the late Hugo Chavez.

As the Brazilian economy surged on a commodity boom in the last decade, China displaced the United States as Brazil's largest trading partner due to its massive purchases of Brazilian iron ore and soy.

Perceiving the advent of better ties between Brasilia and Washington, U.S. and Brazilian businesses are actively pushing for a strategic partnership between their countries that would allow for more flexible investment rules, a treaty to eliminate double taxation and a visa waiver program to make travel easier for tourists and executives.

"The atmospherics are improving rapidly, in part because Brazil has taken a lower profile on some contentious global political issues like Iran," said Eric Farnsworth, vice president of the Americas Society, a business forum dedicated to fostering ties between the United States and Latin America.

Brazil is also beginning to understand that China and other leading emerging nations are not yet substitutes for economic ties with the United States. While the so-called BRIC countries have rapidly gained a greater share of the global economy, they still are no match for American businesses in terms of providing the investment and technology Brazil needs, Farnsworth said.

"There seems to be a growing sense that the United States may unnecessarily and gratuitously have been pushed away by the previous government, particularly as China slows and commodities markets soften," he said.

EMERGING POWER

Much of the future relationship with the United States will depend on whether Brazil, whose economy still remains relatively protected by high tariffs and other barriers, can make trade easier, Biden said in a speech in Rio de Janeiro.

Among many pending issues between the two nations are a longstanding effort to ease visa restrictions for travel and a push by U.S. companies for protection of intellectual property rights in a Brazilian marketplace rife with pirated software.

U.S. oil companies are keen to tap enormous offshore oil deposits that promise to turn Brazil into a major oil producer.

The United States is also urging Brazil to buy F-18s made by Boeing Co. to upgrade its fighter jet fleet, a multi-billion-dollar deal that would mark a significant jump in the strategic and security relationship between the two nations.

Brazil is seeking U.S. backing for a long-coveted permanent seat on the U.N. Security Council. Washington has said it "appreciates" Brazil's ambitions at the United Nations, but has stopped short of backing its call for a place on the council.

While Biden stressed the potential of the world's largest and seventh-largest economies to grow closer, a free trade agreement is not on the cards because Brazil is part of the South American customs union Mercosur. The bloc's rules say member countries must act in unison on trade issues.

Some observers think it is not realistic to expect any dramatic move towards a full-fledged strategic partnership any time soon.

"Brazil has achieved the stature and recognition it enjoys today in part by maintaining its independence from the United States," said Michael Shifter of the Inter-American Dialogue think tank in Washington.

"It will want to keep some distance, while seeking to take advantage of what the United States has to offer."

(Reporting by Anthony Boadle; Editing by Paulo Prada and Doina Chiacu)

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