Obama and Dilma Agree on Bourbon and Cachaca, but Not Much Else

For Brazilian President Dilma Rousseff, this week's two-day American visit was a big one. She had already been to China, India and Germany, and had even hosted President Barack Obama in Brazil last year.

But in world-diplomatic terms, nothing rates quite as high as the White House.

Rousseff was also following in the footsteps of her popular predecessor, Luiz Inacio Lula da Silva, a president with natural charisma who made his presence felt on the world stage, and who was memorably described by Obama as "my man."

Consequently, the Brazilian media were following her every move, and while it was observed that Dilma, as she's known, didn't get the full state dinner recently awarded to U.K. Prime Minister David Cameron, many noted approvingly that the 90-minute meeting the presidents conducted was double the allotted time.

They made some notable progress. Rousseff discreetly supported Obama's re-election in hoping for a better economic situation under his leadership "in the next years." Obama called the Brazilian leader "my good friend" and praised her "incredible" leadership. They discussed easing visa requirements, gave much emphasis to a science program that could send thousands of Brazilian students to the U.S., and made plans to expand energy cooperation.

But the Brazilian press quickly focused on the things that were not said. Veteran journalist Ricardo Setti, in a post for the weekly news magazine Veja, noted that, for one thing, the two never mentioned some long-simmering arms-sales disputes.

They didn't include the sensitive area that is the purchase of supersonic jets for the Brazilian Air Force, which Boeing is competing for and in which the Americans have great interest, nor the cancellation, by the United States Air Force, of the purchase of a big lot of training aircraft and Tucano planes, made by the Brazilian company Embraer.

Nor was Brazil's long-standing ambition of a permanent seat on the United Nations Security Council even touched on, Setti wrote. "Brazilian diplomacy, on this crucial point, did not advance one millimeter."

Throughout the coverage of the visit, there was a sense that the only reason the U.S. is paying attention to Brazil these days is because there's more money here. Brazil offers relatively stable growth, substantial oil reserves and a vast potential market for American goods in its booming lower-middle class -- but the economic relationship remains unequal.

Dilma, for instance, once again attacked U.S. monetary policy, which she blames for flooding the Brazilian economy with dollars.

The influential economics journalist Miriam Leitao, writing in O Globo, noted the large trade imbalance between the two countries. Brazil's 2011 trade deficit with the U.S. reached a record $8.2 billion. Much of this is because Brazil is increasingly importing American ethanol, gasoline and diesel because of a shortage of domestic refining capacity and falling ethanol production. Even though the U.S. ended a tariff on ethanol in December, Brazil still lacks the capacity to meet its internal demand, never mind export.

Brazil has struggled for decades to break down the commercial barriers imposed by the United States on ethanol, but when the barriers fell, instead of us having the product and exploring the opportunity, we began to import. The United States began to buy more of our oil, not because of a sales effort by Brazil but more by their choice ... The United States is a country with a high trade deficit, because even during crisis it is still a major importer. Because of this, it's strange for Brazil to maintain a growing trade deficit with them.

Luiz Augusto Neves, president of the Brazilian Center for International Relations, told O Globo: "The relations between Brazil and the U.S. are far below what they could be. It is a relationship without enthusiasm."

Obama was big on generalized praise of Brazil, but ended up giving away very little in practical terms -- compounding the sense of an unequal relationship. As business daily Valor noted in an editorial, Dilma didn't look particularly content in the official photo:

Obama didn't just evade giving his visitor the honor of a state dinner at the White House, but also didn't give support for a permanent seat for Brazil on the United Nations Security Council ... or even good news about the purchase of Embraer planes and the imports of beef.

In the Folha de Sao Paulo newspaper, journalist Clovis Rossi pointed out a related "great omission" of the meeting: the uprising in Syria. He quoted from a joint statement the leaders released, then gave his take:

`The presidents stressed the importance of cooperative efforts to produce conflict resolutions that are sustainable and contribute to peace and stability' … My God in heaven, not even the biggest expert in cliche, in talking loud and saying nothing, in producing hollow platitudes, would be capable of so much emptiness.

This silence on Syria seemed to typify the current relationship. The U.S. wants access to the Brazilian market. It wants Brazil's oil when it starts flowing properly. It just doesn't think Brazil is grown-up enough to start playing international politics with the big boys.

Perhaps that attitude was best encapsulated in a little commercial present Obama offered Brazil: After about 40 years of discussions, the U.S. officially recognized the sugar-cane spirit cachaca -- used to make caipirinha cocktails -- as a genuine Brazilian product, which means it can be sold in American liquor stores as "cachaca" and not just "Brazilian rum." Brazil, in turn, pledged to recognize American bourbon and Tennessee whiskey.

Distillers cheered. But booze can only do so much to improve a "relationship without enthusiasm."

(Dom Phillips is the Rio de Janeiro correspondent for World View. The opinions expressed are his own.)

To read more from the World View blog on emerging markets, click here.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

    To contact the author of this story:

    To contact the editor responsible for this story:
    Timothy Lavin at

    Before it's here, it's on the Bloomberg Terminal.