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Rousseff Tells Obama Rich Nations’ Policies Harm Growth

Brazilian President Dilma Rousseff
Dilma Rousseff, Brazil's president, said she is concerned about “expansionist” monetary policies that “lead to a depreciation in the value of the currencies of developed countries, thus impairing growth” in faster-growing emerging markets. Photographer: Jonathan Ernst/Bloomberg

Brazil’s President Dilma Rousseff urged the U.S. to invest more in the world’s sixth-biggest economy and told President Barack Obama that monetary conditions in rich nations are hurting global economic growth.

Rousseff, speaking yesterday alongside Obama at the White House, said she is concerned about “expansionist” monetary policies that “lead to a depreciation in the value of the currencies of developed countries, thus impairing growth” in faster-growing emerging markets.

Later, in comments to Brazilian reporters, Rousseff said that as policy makers in developed nations try to cut spending and budget deficits they’ve become too reliant on near-zero interest rates to stimulate growth. Such a policy mix is creating a “monetary tsunami” that damages Brazil by driving up the value of its currency and depressing exports, she said in comments echoing those she made last month in a trip to Germany.

Obama, hosting Rousseff for the first time since she took office 15 months ago, said trade and investment between the U.S. and Brazil is reaching “record levels.” He said the U.S. is opening two new consulates in Latin America’s biggest economy and has “drastically” cut down visa wait times for Brazilian visitors to the U.S.

Still, Rousseff said she’d like to see even more American investment, and cited recent offshore oil finds as a “tremendous opportunity” for expanding bilateral ties. Direct investments by Brazilian companies in the U.S. equal only 40 percent of the level of U.S. investments in Brazil, she said.

Trade Deficit

Rousseff said that in her meeting with Obama she expressed concern over Brazil’s trade balance with the U.S., which swung from a $6.4 billion surplus in 2007 to an $8.2 billion deficit last year as the real rallied and growth in Brazil spurred demand for imports.

Brazil is the only member of the BRICS group of major emerging markets -- Russia, India, China and South Africa are the others -- that has a trade deficit with the world’s biggest economy, and the South American nation generates the seventh-largest bilateral trade surplus for the U.S., Rousseff said.

At a meeting of business leaders Rousseff said she that Brazil’s trade deficit with the U.S. “needs to be progressively balanced.”

Obama is seeking to help U.S. businesses profit from Brazil’s oil discoveries, the biggest in the Americas since 1976, and from the $200 billion in road, airport and hotel improvements needed before the 2014 World Cup and 2016 summer Olympics.

Cuba, Iran

On foreign policy, Rousseff said she told Obama that this week’s Summit of the Americas must be the last to exclude Cuba. Both leaders will attend the regional gathering, taking place this year in Cartagena, Colombia, along with representatives from every other Western Hemispheric nation except Cuba, the region’s sole dictatorship.

How to deal with Iran’s nuclear program, which Brazil has defended and the U.S. says is aimed at developing a nuclear weapon, was not discussed, Rousseff said.

Also absent from talks, according to Rousseff, was Brazil’s pending decision to revamp its aging fleet of fighter jets.

Boeing Co.’s Super Hornet is competing against Dassault Aviation SA’s Rafale and Saab AB’s Grippen for a contract to supply Brazil with 36 fighter jets that the State Department estimates could be worth as much as $4 billion.

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