U.S. and Brazilian presidents talk trade, economics at White House meeting

McClatchy NewspapersApril 9, 2012 

WASHINGTON — The leaders of the Americas' two largest democracies met Monday at the White House, with President Barack Obama and Brazilian President Dilma Rousseff stressing collaborating in areas such as education, science and technology and discussing the need to strengthen their economic relationship.

While there were no major breakthroughs in a visit for which expectations were low, Rousseff said that despite talk about the United States' decline and the rise of developing countries like Brazil, the two countries' economic fortunes remain interconnected and Brazil needs the United States to be strong.

Making her first visit to Washington since taking office in 2011, Rousseff expressed concern about the U.S. keeping interest rates low, part of the Federal Reserve's effort to stimulate the economy. She has made this criticism throughout her presidency — including in meetings with European leaders such as German Chancellor Angela Merkel — arguing that low lending rates in Western countries leads to a flood of excess capital into countries like Brazil, lowering the value of its currency.

Rousseff told reporters after meeting with Obama that they had discussed how to avoid a "liquidity crisis of substantial proportions which would thus affect all countries adversely." She repeated this concern in an address to business leaders at the U.S. Chamber of Commerce.

She also told Obama that while rapid expansion in the so-called BRICS countries — Brazil, Russia, India, China and South Africa — have helped drive global economic growth, "the resumption of growth in the midterm certainly involves a substantial resumption of growth in the U.S. economy," she said.

For his part, Obama praised Rousseff and called Brazil "a leading voice in the world."

The two leaders signed several agreements including a U.S.-Brazil defense cooperation dialogue, which would build on a military relationship that has grown since 2010. Defense Secretary Leon Panetta will travel to Brazil this month to meet with his counterpart, Celson Amorim, Brazil's defense minister.

An Obama administration official said that the leaders also discussed a controversy involving the Air Force's cancellation earlier this year of a $335 million contract to purchase planes from the Brazilian aviation company Embraer and Nevada-based Sierra Nevada Corp. After a lawsuit filed by Hawker Beechcraft, the Wichita, Kan., company that lost out in the bidding, a Justice Department probe found documentation errors in the contract and the Air Force launched an internal investigation.

The administration official, who spoke on condition of anonymity because he wasn't authorized to speak to the press, declined to discuss details of the talks on the issue, a recent source of tension between the two countries.

The United States announced that it would open two more consulates in Brazil, in the cities of Belo Horizonte and Porto Alegre. Brazil is now the fourth largest source of overseas visitors to the United States, with 1.5 million visits in 2011, a 26 percent increase from 2010, according to federal statistics. The Commerce Department expects that the number of Brazilian tourists will rise to 2.8 million by 2016.

An administration official said that the leaders also discussed Iran, another issue on which the countries have had differences. While attending a summit of BRICS nations in March in New Delhi, Rousseff criticized the efficacy of harsher sanctions that the United States and European nations have imposed on Iran in an effort to force Tehran to abandon its nuclear program.

Improving business ties was the main focus of her visit; the U.S. Chamber of Commerce held a daylong event on U.S.-Brazil relations.

Obama and Rousseff met Monday with the U.S.-Brazil CEO forum, a group of executives from both countries that meets twice a year that's charged with making policy recommendations. The group, formed during the tenures of President George W. Bush and Rousseff's predecessor, Luiz Inacio Lula da Silva, played a big role in getting the United States to ease the process for Brazilians seeking U.S. visas.

U.S. executives who attended Monday's meeting at the White House included Jim Albaugh, president and CEO of Boeing; Vikram Pandit, CEO of Citigroup; and Gregory Page, president and CEO of Cargill. Brazilian executives in attendance included the president and CEO of aircraft maker Embraer, Frederico Fleury Curado, and CEO of the engineering and chemicals conglomerate Odebrecht, Marcelo Bahia.

A Brazilian official who wasn't authorized to be quoted by name said that the group recommended prioritizing health care and security issues, adding that "our challenge is to engage the private sector in both countries."

(Sreeharsha is a McClatchy special correspondent.)

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