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  1. Wealth
March 16, 2009

Brazil, South America's mediator

By Spear's

Lula is the socialist leader who has everyone’s ear: the Latin American socialist ‘revolutionaries’ as well as the US.

The recent meeting between Lula and Obama marks a turning point in US-Latin America relations – and not. It confirms Lula’s status as the de facto leader of Latin America and the one with which the US government prefers to engage, for a number of reasons.

First, Brazil, as the 10th largest economy in the world, is a member of the G20 and their meeting is certain to lay some groundwork for the April 2nd summit in London.

Furthermore, Brazil’s giant Tupi oil reserves and leading production of sugar-based ethanol also make it a global player in the future of energy security, a major priority of the Obama administration. Lula is campaigning strongly to end the US’s dual-protectionist approach of high tariffs on Brazil’s highly-efficient sugar-cane based ethanol and its enormous subsidies of grossly inefficient corn-based ethanol produced by American farmers.

Third, as I said on Wednesday night’s interview for Caracol radio, Lula is the socialist leader who has everyone’s ear: the Latin American socialist “revolutionaries” such as Chávez, Correa and Morales, but is also pragmatic enough to expand trade simultaneously through Mercosur and with the US.

Engaging with Lula is much easier for Obama than engaging with moderate Taliban in Afghanistan (as he’s already doing), and yet not entirely dissimilar. Through Lula, Obama seeks to engage with a hitherto hostile flank of leftist presidents led by Chávez, while simultaneously sidelining them and rendering them irrelevant. (Obama has vowed to stop buying oil from Venezuela in 10 years.)

For instance, Lula supports Obama’s ending the embargo on Cuba, which is long overdue to be dropped from the US State Department’s State Sponsors of Terror List, an absolutely ludicrous assertion for the past three decades.

Cuba is desperate to trade with the US and will happily drop Chávez in favour of Obama. In response to his imminent isolation from his hitherto BFF in the region, Chávez has said he would like to engage with Obama, with whom he feels he can discuss the virtues of socialism, and has even asked Lula to plead his case with Obama.

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Lula is highly unlikely to do so, as in the past he has paid no more than lip service to Chávez while simultaneously undermining Chávez “bolivarian” regional plans – with the Bank of the South, gas pipelines, oil exploration, fiscal policy, trade policy and ethanol.

Obama in the meantime is making it perfectly clear that he is a leader of a similar political stripe to Lula: a pragmatic social democrat – all about political inclusion and social welfare while pursuing brutal economic and energy interests and a foreign policy that will extend their countries’ influence further than in the previous administration.

Lula’s arrival at the Obama White House before any other Latin American president is certainly a slap in the face of Colombian Pres. Alvaro Uribe, ostensibly America’s staunchest ally in the wars against drugs and terrorism as well as the most successful conservative government at the heart of an increasingly socialist region. But Uribe has been here before.

In 2006, after W’s ill-received regional tour, it was Lula, neither Colombia’s Alvaro Uribe nor Mexico’s Vicente Fox, who was invited to stay at Camp David. Even then the writing was on the wall for a major shift in US-Latin America relations. As they improve, it remains to be seen what the impact will be on the more vitriolic lefties, but I would not be at all surprised if it takes some of the wind out of their sails.

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