THE US AND BRAZIL: allies increasingly at odds
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US-Brazilian affairs were much simpler before the boom years. In the first part of this century, the two nations maintained a friendly, if lopsided, alliance - a so-called ``special relationship'' in which Washington played the role of hemispheric patron state. The arrangement fostered commercial ties and some US financial aid.Skip to next paragraph
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In turn, Brazil usually could be relied upon to support US foreign policy. (After a brief fliration with the Axis, Brazil sent thousands of troops to join the Allied cause during World War II.)
Certainly, the financial assistance from Washington was not all Brazil expected. US resources after the war were lavished on the Marshall Plan to rebuild Europe, and in the 1960s, the rhetoric of the Alliance for Progress was far more bold than the grants-in-aid it dispersed.
But US private investment grew in the post-war decades, and Brazil drew substantial sums from the World Bank and Inter-American Development Bank, to which the US is a principal contributor. Now, though, the North-South understanding has become strained.
Suddenly, it seems, emergent Brazil and the US are squaring off on a number of issues in venues all over the globe. In September, in Punta del Este, Uruguay, Brazilian negotiators fought the US position to include ``services'' (such as banking and data processing) in world trade talks under the General Agreement for Tariffs and Trade.
At the UN last year, Brazil sponsored a law for a nuclear-free South Atlantic, an initiative the US opposed, fearing it would restrict access for the US Navy. Brazil sold grain to the Soviet Union despite a US boycott, and, as a member of the Contadora support group, denounced US funding of the contras in Nicaragua. Last year, Bras'ilia reestablished diplomatic ties with Cuba.
Brazil's call for debt relief through restructuring of the world financial order, and criticism of the US budget deficit as driving up world interest rates, have not been warmly received in Washington.
Trade is probably the sorest subject of all. The US, burdened by a $170 billion trade deficit, has labeled Brazil a commercial freeloader.
In November, the Office of the US Trade Representative released its report on world trade barriers. The 20-page section on Brazil, which is termed ``one of the world's most closed economies,'' was the longest in the 300-page report. According to Washington, Brazil petitions as a competitive exporter against protectionism abroad and yet ducks behind a third-world shield to protect parts of its market from foreign businesses.
Its own state firm, Embraer, holds a monopoly on small aircraft. Petrobras, the giant government oil company, controls the growing business in oil exploration and refining. In 1984, the Brazilian Congress approved a ``market reserve'' to foster a domestic computer industry. This so-called ``informatics law'' bans foreigners from the fast-growing market in small computers.
Bras'ilia, for its part, charges that the US promotes free markets only when it enjoys clear advantages, such as in high technology, and slams shut the protectionist portals to products in which it is no longer competitive, such as steel and textiles.
Brazilian companies are second only to Japan in the number of anti-dumping charges and countervailing duty petitions currently being brought by American businesses against foreign firms. Although the Reagan administration has turned down most requests for retaliation, the pressure is mounting.
Brazilian exports to the US fell by about 10 percent last year due to tariff barriers and quotas. A recent decision by the US to remove 28 Brazilian products, ranging from semi-precious stones to thermometers, from duty-free status will cost Brazilians another $400 million a year. Protectionism