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Brazil: Background and U.S. Relations (CRS Report for Congress)

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Release Date Revised Feb. 11, 2016
Report Number RL33456
Report Type Report
Authors Peter J. Meyer, Analyst in Latin American Affairs
Source Agency Congressional Research Service
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Summary:

The United States traditionally has enjoyed robust economic and political relations with Brazil, which is the fifth most populous country and ninth-largest economy in the world. Brazil is recognized by the Obama Administration as a "major global player" and an "indispensable partner" on issues ranging from international development to climate change. Administration officials have often highlighted Brazil's status as a multicultural democracy, referring to the country as a natural partner that shares values and goals with the United States. Bilateral ties have been strained from time to time as the countries' occasionally divergent national interests and independent foreign policies have led to disagreements. U.S.-Brazilian relations were particularly strained following revelations in 2013 of alleged National Security Agency (NSA) activities inside Brazil. Cooperation has improved over the past year and a half, however, culminating in a June 2015 presidential meeting at the White House. Brazil and the United States are currently working together to address an outbreak of the Zika virus in Brazil and other Western Hemisphere nations. Other ongoing areas of engagement include trade, energy, security, racial equality, and the environment. Domestic Situation After narrowly winning a second-round runoff election in October 2014, President Dilma Rousseff of the center-left Workers Party was inaugurated to a second four-year term on January 1, 2015. Economic conditions in Brazil have deteriorated significantly in recent years, and Rousseff is now struggling to keep her campaign promises to protect social welfare programs and maintain low unemployment while simultaneously implementing austerity measures that many economists argue are necessary to attract investment and ultimately boost growth. Although international investors have advocated for a more rapid economic adjustment, much of Rousseff's political base is opposed to the policy shift. The economy contracted by an estimated 3.8% in 2015 and is expected to contract by 3.5% this year. Brazil's deep economic recession has weakened Rousseff's political standing, which was already fragile as a result of a major corruption scandal that has implicated numerous officials in the governing coalition. In December 2015, 11% of Brazilians approved of Rousseff's job performance while 65% disapproved. Some nominally allied legislators have distanced themselves from Rousseff, opposing her administration's austerity measures and other key portions of her policy agenda. Moreover, the president of Brazil's Chamber of Deputies has initiated impeachment proceedings against the president. Legislative Developments The 114th Congress has approved two legislative measures that will influence U.S.-Brazil relations. As part of the Trade Preferences Extension Act of 2015 (P.L. 114-27), Congress renewed the Generalized System of Preferences (GSP) program, which provides non-reciprocal, duty-free tariff treatment to certain products imported from Brazil and other designated developing countries. In the Consolidated Appropriations Act, 2016 (P.L. 114-113), Congress authorized reforms to the International Monetary Fund (IMF) that had been pending since 2010 and will provide greater voting power to Brazil and other emerging economies. The act also provided foreign assistance for Brazil, including $10.5 million to support conservation programs in the Brazilian Amazon. Two other bills introduced in 2015 are designed to pressure Brazil to amend its constitution to allow the extradition of Brazilian nationals; H.R. 2784 would suspend foreign assistance to Brazil, and H.R. 2785 would suspend the issuance of visas to Brazilian nationals, until it changes its extradition policies.