The Crafty Superpower

But no government has been as determined as Lula's in extending Brazil's international footprint. Though he began his political career on the left, Lula surprised foreign and national investors alike by preserving Cardoso's market-friendly policies at home, much to the frustration of his militant Workers' Party allies. For the left, he offered a pumped-up foreign policy. "Lula put Cardoso's foreign policy on steroids," says Donna Hrinak, a former U.S. ambassador to a number of Latin countries.

Lula has doubled the number of departments in the Foreign Ministry and embarked on a breathless international itinerary, visiting 45 countries and spending nearly one of every five months in office abroad just since 2007. "Aero-Lula," the local press has dubbed him. The explicit purpose of all this diplomacy has been to boost relations with other developing countries. But Lula's increased visibility has also helped force the richest nations to lower trade barriers. In two major cases in 2004, the WTO ruled in favor of Brazil, ordering the U.S. to drop subsidies to cotton farmers, and told Europe to end its protection of the sugar-beet industry. In keeping with Lula's staunch support for free trade, Brazil also sided with the U.S. at the recent Doha trade talks over the developing world's own protectionist barriers. In a recent report warning of rising protectionism in developing nations, the World Bank praised Brazilians for resisting pressures to close down its own borders.

At least part of these efforts spring from Brazil's undeclared strategy to blunt U.S. influence in the region and dispel expectations that it play a proxy role for Washington. In fact, while U.S. officials wax diplomatic over their new "global partner," Brasília has been mostly silent as Venezuelan strongman Hugo Chávez threatens foreign companies, intimidates the opposition and bullies its courts and Congress. "No one can claim that democracy doesn't exist in Venezuela" is Lula's canned defense of companheiro Chávez. Citing the catchall rule of sovereignty, Brazil also roundly condemned Colombia, the U.S.'s closest ally in the region, for attacking a guerrilla encampment in the Ecuadoran jungle last year, and routinely abstains on U.N. resolutions condemning human-rights violations in Cuba.

But Lula has hardly thrown in with the Bolivarian revolution. Instead, he has controlled the region by co-opting his neighbors with trade, turning the whole continent into a captive market for Brazilian goods. Ultimately, Brazil's power derives not from guns but from its immense store of natural resources, including oil and gas, metals, soybeans and beef—and it has become a key supplier of markets in Asia and closer to home. Brazil now enjoys a trade surplus with every country in the region, including a $1 billion surplus with Venezuela. "Turning natural resources into value-added goods has helped Brazil punch above its weight," says David Rothkopf, a former U.S. Commerce Department official.

For instance, Lula has curbed two grandiose initiatives from Chávez's playbook, a regional development bank (Banco del Sur) and a joint Brazilian-Venezuelan oil refinery, by quietly never getting around to allocating money to help. He also chided Chávez for his lavish spending on modern weapons even though Venezuela's economy is so weak it has become utterly dependent on Brazil for basic consumer goods. "Christ, what do you want these weapons for?" Lula reportedly berated Chávez in a recent visit. "You can't even get milk for your coffee in the hotels." Brazil's Congress will probably end up approving Venezuela's entry into Mercosur in the coming weeks, not as an endorsement of Chávez's imperial designs but as a way to contain him through the trading bloc's treaty obligations, such as respect for democracy and property protection.

This might be risky politics. But the smart money is on the Brazilians. With no manual for becoming a global power, Lula's Brazil seems to be writing one of its own.

© 2009