Brazil: Stepping Back From Mediation on Iran | STRATFOR

Brazil: Stepping Back From Mediation on Iran | STRATFOR
Summary

Brazil’s foreign minister said that his country would step back from its role as a mediator on the Iranian nuclear dispute due to the unfavorable response Brasilia believes its efforts received from the United States. However, Brazil’s decision to step away from the negotiating table likely has more to do with other economic and political considerations.

Analysis

Brazilian Foreign Minister Celso Amorim told the Financial Times on June 20 that Brazil will no longer play a proactive role in mediating the Iranian nuclear dispute. Amorim said, “We got our fingers burned by doing things that everybody said were helpful and in the end we found that some people could not take ‘yes’ for an answer.” The “some people” to which Amorim referred was the United States, which immediately doused a Brazilian-Turkish nuclear fuel swap proposal with the Iranians by pushing a fresh U.N. Security Council (UNSC) sanctions resolution against Iran.

Though tensions are simmering between Washington and Brasilia, there are indications that Brazilian President Luiz Inacio Lula da Silva is exercising greater caution in how his administration handles the Iran portfolio. Brazil, along with Turkey, was not happy with the way the United States neutralized their nuclear fuel swap proposal and cut short their time in theinternational spotlight. Brasilia and Ankara expressed this ire by voting “no” instead of abstaining in the UNSC vote on Iran, which was viewed as an unpleasant surprise in Washington. Beyond Brazil’s irritation at how it was treated by the United States, however, there are a number of reasons why Brasilia is treading carefully in how it deals with Iran.

Brazil is keeping an eye on the U.S. Congress and the European Union parliament legislation currently in the works that aims to reinforce the recent UNSC resolution with additional energy and financial sanctions on Iran. Though Brazilian trade and investment in Iran is still relatively limited, Brazil is looking to prop up that trade with future ethanol sales, which, depending on how strictly Washington chooses to enforce the sanctions and the status of U.S.-Brazil relations, could be subject to some of the pending energy sanctions. There are also indications that Tehran’s efforts to set up a branch of its Export Development Bank of Iran (EDBI) in Brasilia, like the one it has based out of Caracas, Venezuela, have been paying off. Consequently, Brazil has been coming under scrutiny from the U.S. Treasury Department, which has already blacklisted EDBI for allowing Iran indirect access to the U.S. financial markets and for providing support to the Iranian nuclear weapons program and the Islamic Revolutionary Guard Corps. Rumors are also circulating within the Brazilian diplomatic community that if Brazil pushes too hard against the U.S. position on Iran, it could run into some difficulty in acquiring key parts from France for the nuclear reactors it is building for the Brazilian navy’s nuclear-powered submarine program.

At the same time, Brazil is working on extracting further concessions from the United States in anongoing trade dispute over U.S. cotton subsidies — a negotiation which has so far allowed Brazil to pressure the United States into partly subsidizing the Brazilian cotton industry and into lifting a ban on Brazilian meat exports in return for Brazilian restraint in imposing World Trade Organization-sanctioned retaliatory measures against the United States. While Brazil’s tensions with the United States regarding Iran are not limited to the nuclear issue, that issue commands the most public attention, and by stepping away from the dispute for the time being, Brasilia will be able to downplay its differences with Washington on the other contentious issues.

The Brazilian administration has, after all, already succeeded in creating the perception it was seeking at home and abroad — that Brazil is an aspiring global power on the rise. The nuclear fuel swap proposal was widely perceived within Brazil as a major feat in Brazilian foreign policy, but if Brazil continued pushing hard for it when the United States is determined to impose sanctions on Iran, its foreign policy efforts would appear ineffective at best. Amorim’s statement on Brazil taking a step back from the dispute was also made public on a Sunday when much of Brazilian public’s attention was occupied by the Brazilian national team playing in a World Cup game, which, whether intentionally or not, allowed da Silva’s government to deflect criticism for voluntarily downgrading Brazil’s involvement in Iranian nuclear affair. The Brazilian administration is also looking to deny Sao Paulo Gov. Jose Serra, who is one of the leading contenders for the October presidential race, an opportunity to use the Iran issue against against da Silva’s preferred successor, Dilma Roussef. In a reference to Iranian President Mahmoud Ahmadinejad, Serra has publicly accused the da Silva government of “praising dictators.” When Brazil’s attention turns from the World Cup to the presidential race in the coming month, da Silva’s administration will be much more conscious of how its relationship with Iran factors into the campaign.

As Amorim clarified, Brazil still believes in the viability of the Turkey-Brazil nuclear fuel swap proposal and will jump back into the mediation process should the negotiating atmosphere between Washington and Tehran become less hostile in the future. In the meantime, the Brazilian administration will be eager to publicize its diplomatic forays in the Middle East and play up tensions with Washington so long as its relationship with Iran does not incur any real negative consequences for Brasilia.

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