 Thank you for joining us for today's event on the Brazilian election and Brazil's foreign policy under the next administration. This event is part of a CSIS America's Brazil initiative. The initiative engages a series of issue areas in which bilateral cooperation and private sector collaboration can improve understanding about Brazil. So as you know, today's event has a dual purpose. On the one hand, this wonderful group that we have here on stage will be talking about Brazil's presidential election and what it'll mean for the country's foreign policy. On the other hand, I'm thrilled to launch our latest report, co-authored with my good friend and colleague Hussein Calhout from Harvard's Weatherhead Center for International Affairs, the papers entitled Brazil's Presidential Elections, Expectations for Foreign Policy. The report is available on our website, csis.org forward slash americas, and it's a really informative piece. It was really great to partner up with Hussein, so I recommend it to all of you. I think you should check it out. Anyway, this is a very exciting time for Brazil. The first round elections take place this Sunday, and arguably they are the most contested in recent memory. Dilma Rousseff, the current president, has recently pulled ahead in polls relative to her chief rivals Marina Silva and Ayesha Neves. I'm sure many of you know Marina's candidacy has itself been something of an upset. Initially, the vice presidential running mate for Eduardo Campos Marina took over the top of the ticket when Eduardo Campos tragically died in a plane crash late summer, and she represents a change, I'd say, in tone for many Brazilians, a reality which caused an early surge of support for her candidacy. But according to many, this election is up for grabs. Even with Dilma's current lead, it's unlikely that we will see her win in the first round. And the second round is a completely different game. But a huge part of what makes all of this so interesting are the implications for Brazil's foreign policy, which is the main issue of our event today. Relative to her predecessors, Dilma has arguably dialed back the government's focus on foreign policy. So some feel that the prospect of change in the administration or the prospect of a change in the election could mean change from Brazil's approach to foreign policy. So what can we really expect then? I personally think, as is highlighted in our paper, that any change will be a narrative but not in content of Brazil's foreign policy. Brazil's foreign policy is based on a set of firmly held tenants that aren't likely to change quickly. It's much more likely, though, that each candidate, if elected, would rebalance the country's foreign policy priorities based on their own interests. Perhaps, for example, a Marina presidency could see renewed cooperation with the U.S. on the basis of shared environmental concerns because of her background. Or with Mr. Neves expanded commercial relations. Or with Dilma, a deepening of her focus on Brazil's existing multilateral commitments. But what about Brazil's relationship with the United States? As I was walking in, a good friend of mine at the embassy mentioned to me, U.S. and Brazil reached an agreement yesterday on the WTO cotton dispute. So there are some positive things that are happening in this relationship. But I think more is to be seen after the election. The U.S. and Brazil are natural partners despite the recent tensions that belie that reality. The two countries share a tendency toward prescriptive foreign policy and unease with dispassionate geopolitical dealings and a commitment to the most fundamental democratic values. In this regard, I think we're on a set course for our paths to converge. There are a lot of areas of potential shared interest for the U.S. and Brazil, energy, competitiveness, innovation, technology. Ultimately, what matters is that the two countries look to where their interests overlap as a guide for working together. And through that kind of mutual understanding, the U.S. and Brazil can build trust, make bilateral relations and progress real without letting the perfect be the enemy of the good. But for now, I'll leave it there. We're going to dive into the answers to all of these questions during this afternoon's event. And I'd like to get started. So I'm going to quickly introduce our panelists. And then Hussein's going to give a little bit of the content of our report. And then we're going to move on to some good conversation here with the folks that we have. So first, I want to introduce Paulo Sotero, who is the director of the Brazilian Institute at the Woodrow Wilson Center. He's an award-winning journalist, a native of Sao Paulo and lecturer at some of Washington's most esteemed universities. And I would say he's probably the senior Brazilianist that we have here in Washington. And one of the oldest. And the oldest. We have Clalia Trevisian, who is the Washington correspondent of Mostado de Sao Paulo. She's worked in journalism for the past 25 years all around the world. She's an accomplished author and she's a senior associate of the America's Program here at CSIS. And I'm really happy that she's my friend. And Sergio Lemucci, who's a new friend. And Washington correspondent for Valor Economico, where he's been since 2003. Like Paulo, he's an award-winning journalist and a specialist on Brazil's foreign policy, especially toward the United States. Welcome. And last, but not least, my good friend, Hussain Kalupe, the co-author of this report. He's a political scientist, professor of international relations, Brazilian foreign policy expert, and research scholar at Harvard's Weatherhead Center for International Affairs. Welcome. I think this is the beginning of a very close partnership. It's been a true pleasure to work with you on this report. I've learned a lot and I hope our partnership endures. So thanks to all of you for joining us here at CSIS. I'm sure it's going to be a great discussion. Just a few reminders. We're on the record today. We're webcasting live, so greetings to the folks that are watching us. After the discussion, we will engage in a Q&A session. We want to try to get as many people to participate. So we are going to hopefully benefit from your knowledge as well and have a very vibrant conversation about such an interesting issue. So without further ado, Hussain, I'll allow for you to start and then we'll get to our panels. Thank you, Carl. I would like to express the honor and the privilege to be here at the CSIS. And I would like to thank you for this remarkable experience to work in partnership with you and with your staff. And also, I'm very glad to be here between friends on familiar faces from the Brazilian Embassy and also from other places in the bureaucracy of Washington. Well, we worked hard in this piece of paper trying to understand and trying to imagine how it could be the foreign policy, especially of ASU and especially of Marina, because already we knew it, we tested the foreign policy of Dilma in the last four years. Finally, our conclusion or brief conclusion, it is no matter whom are going to win the elections, Brazil is a very solid country and has very solid principles in foreign policy. And I think it is, we can see a great consensus between the three main candidates and the broader lines of the Brazilian principles, let me say that, such as the enhancement of the multilateral institutions, the reform of the Security Council of the United Nations, and the Brazilian inspiration for a permanent seat, the respect of the international law, the protection of the human rights and the enhancement of the democracy and the enhancement also of the sustainable development. So basically those are the main lines and the norm of the three candidates will be able to change essentially those principles. Basically what I can say is the Labour Party, as we call it in Brazil, again want to introduce a foreign policy labeled by Brazil leader of the south, global south, Brazil is leader of the countries and development, Brazil want to rebalance the geoeconomical order and want to be a very important influential actor in the international political scene. ICOs in the other hand, his foreign policy label is based on Brazil should emphasize its diplomacy as a trader state, he want to be more closer to the orbit of the western powers, he want to restart or renew the relation with the United States, with the European Union and probably he could have a little harder politics toward South America or toward Argentina particularly. Well Marina Silva, I guess she's kind of between the both foreign policy, so she has some aspects from DPT and she has other aspects from the PSDB, the Social Democrat Party, but I think what Marina aspires it is to be recognized as the humanitarian environmentalist leader and probably she want to push a agenda based on that, projecting Brazil as the leader of this subject. Well, and Marina, a platform or a foreign policy paper, she emphasized that Brazil should take more steps, strong actions related to humanitarian field, human rights, but there is a very gray area, diplomacy is not the white and black, and that probably will result in some costs for Brazil, so there's some incongruencies in her and out in her paper, for example, to condemn Russia and what related to Crimea and the other day to take some coffee with the Russian in the bricks, that's not something factible, especially at least for the Russian perspective. Well what I also can appoint here, that we can see certain disengagement from some areas, likewise the Middle East, I think ISU foreign policy will be, will still link economically because Brazil in the last 10 years increases straight to the Middle East from 3 billions dollars to 25 billions of dollars, so I think I will keep it, but we will draw a little bit in some political aspects. I think for the Labour Party, Brazil will keep the same strategy without any innovation, and Marina is a great incognito in this subject because she doesn't have any mention to her foreign policy towards the Middle East except Syria and the civil war at Syria, Brazil will be a little bit critical about what's going on there, but definitely what I can say, she is quite susceptible to some pressures, especially from the evangelical side, which they are quite closely with the Jewish lobby, so yes indeed, what possibly she can do in like Gaza war, it's different actions rather than Dilma governments, like I do not believe that you will withdraw an ambassador or condemn one side without the other, possibly she could be more pushed more toward more balanced, not balanced, could be a list for Israeli policy, but the main challenge of all the candidates, it's how to combine moralistic and idealistic aspect with pragmatism and realism in the next four years, so and how they want, how they are going to make from their promises as a coherent guidelines of the Brazilian foreign policy. Great, great, so thank you Hussain, with this we're going to open it up to our panelists and Paolo, I'm sure you have many views and opinions on these issues, you've seen administrations come and go and people make promises sometimes, they keep them, sometimes they don't, so it would be very interesting to hear your views and opinions on these issues. Well, first the idea that there's not going to be much change, followed by our description, I think I believe that with President Dilma Hussain's wins re-election, which is likely, maybe even probable at this point, there won't be much change, she may have made an effort, she may make an effort to get better relations with countries that are more meaningful for the Brazilian economy, the Brazilian economy will be the main driver of foreign policy, domestic policy or any other policy in Brazil, Brazil is basically in a recession right now, it's not common in Brazil for Brazil to be in a recession, Brazilian foreign policy has one of its tenets, has always had its development and development depends on economic growth and Brazil does not have it now and probably will not have much of it in the next couple of years, it makes very difficult to do foreign policy in that context, it conditions foreign policy. In the case right now it's unlikely that either Marina or I assume that this will prevail, I think that there would be a significant change. First of all, it's not, you know, there will be a going away from the Bolivarian aspects of politics in South America, I think there will be an effort to try to recast Mercosur to its original purpose which was to promote trade integration and trade liberalization, right now Mercosur is an obstacle to that. There would be, I believe, an effort to really a better, a more engaging relationship with the United States along the lines President Fernando Henrique Garduas was engaged in with Bill Clinton and even with George W. Bush at the beginning. For one particular reason, unlike the party in power, Aécio Navas comes from an area of Brazilian politicians that do not have a cheap on the shoulder regarding the United States, they don't have a predisposition against the United States. The traditional left in Brazil has. Marina Silva is a person that comes from the traditional left but she brings a new element to the left, to the democratic left in Brazil which is the idea of sustainability. After she lost her first, the first time she ran for president in 2010, after she came to the United States, she spent time here, she was a fellow at MIT. She is a very well-versed on topics like energy, etc., that are central to a effort to try to put Brazil back on the growth pattern but an economy with higher quality. So I think that's a fundamental difference. It's not a small difference, etc. The other things are, you know, there is now a day in Brazil, an enormous first of those that follow foreign policy. Foreign policy has been barely mentioned in the presidential election. President Dilma came to the United States to give a speech but it was basically to use the platform to create some, you know, try to get some dividends at home. It didn't work very well. She was heavily criticized in some quarters, including by some very senior former diplomats for her speech. I believe that Marina gave one or two, she gave one basic interview to Associated Press that dealt a bit with foreign policy. The region, not much of a surprise there, but I think that as I describe, I think she would go into a different direction. I assume that it's the same, I assume that it's focusing on trade, but the problem is, frankly, that the most likely scenario is that President Dilma will continue to have, you know, will continue to be at the Palácio Guplan Alto. We all know that President Dilma is not particularly interested in the subject of diplomacy. She doesn't have a temperament for diplomacy. And this is, I'm not saying that I'm going to read to you something that junior diplomats, and apparently 340 of them, we have 1,400 diplomats. So a good proportion of Brazilian diplomats sent recently a letter according to Foda de São Paulo, and this has not been denied by anybody, saying that the government of Dilma deconstructed everything that the administration of Lula and Celso Mourinho, the former foreign minister, did for Itamara Ti and foreign policy. Those are diplomats talking. People that are hired are there working to promote diplomacy. And so I would not argue with them on that. They have that position. I talk a lot with diplomats, and you can sense an enormous frustration, a disappointment to the point that sometimes you have to contain people to be calm and not say things that they could harm themselves if said in the wrong places. I have many friends that are diplomats, many. Actually, I think, well, it's one of the few advantages of age. I know a lot of former Brazilian ambassadors now that remain friends and remain active. And I disagree with their thesis. I think they are under an illusion that under President Lula and Mourinho, we had this very active foreign policy. We had a kind of a celebrity foreign policy. We wanted to be, because of President Lula, which is such a magnificent, has such a wonderful history, I think his election was very affirming of Brazilian democracy, his personal biography allowed us to, and the success at home of poverty reduction gave a lot of legitimacy to an agenda that would put Brazil in a position here. We are not preaching to you. We are doing it. We want to do diplomacy by example. So for a while there was really a vision, but that vision did not materialize. That vision produced one thing, which was the increase of the staff of it, from 1,000 to 1,400, because there was an idea that that vision would correspond to actions here and there. There would be initiatives, et cetera. Give me one example. In 2005 there were 12 diplomats at the Brazilian embassy in Washington, DC. In 2009 there were 28. So one would assume that this would correspond to the expansion and a deepening of the relationship. Actually it ended up corresponding to the creation of, I think, I stopped at 22 working groups. And that went then later was created the working groups of the working groups. I stopped there. Because frankly I do not agree that there was, it was none of the strategic objectives stated by President Lula, with probably the best of intentions were achieved. The integration in South America, there were some successes in terms of and some positive interventions in terms of UNASU, especially in diffusing a couple of crisis. But the vision was not because you ended up actually complicating things. Brazil ended up complicating things when it incorporated Venezuela to Mercosur in a way that according to a former foreign minister and I cite, Celso Lafer, who wrote it for the São Paulo, that was done illegally. That was done in, did not respect the terms of the treaty. And I remember receiving calls from dear friends, Brazilian diplomats saying, we don't do that. We follow treaties. We follow agreements. So this is the, you know, in the other two things where obviously we wanted to, the idea of reform of the National Security Council of the United Nations with Brazil. This is a very old demand for Brazil, unsupported by President Roosevelt, that Brazil becomes a permanent member. If one day the Security Council is reformed, well, again, if one day it's reformed, I don't see it being reformed in the next maybe what, 10, 20 years. I don't think that Brazil will get much support from the countries that would normally support Brazil, the democracies. I don't see it happening. And the third one that was, would have been the coronation of a foreign policy strategy based on trade, the trade expansion, trade liberalization, which was first you work South America. You organize that space and in a open regionalism and then you bring that to the WTO. At the WTO we do the liberalization where every subject is discussed, which was I think a reasonable way of thinking. Problem is, didn't work. The WTO, as you know, the round has collapsed. It's not going to be revived. So if you judge things by measuring the results of what was intended, it's pretty frustrating. I don't see much changing, obviously, if President Dilma Rousseff gets reelected. I assume she will make efforts to try to get some traction. Brazil needs to, in order to revive its economy, Brazil needs to open its economy. In order to become more competitive, Brazil needs to open its economy. This in itself would be a fundamental change in Brazilian foreign policy. I am always hopeful, I think, that the pressures that were in the streets in June of 2013 will come back, will be for surface if their demands that were heard then are not, don't get a response. And to do that I think you have, Brazil has to integrate itself in the world economy and in the global politics in a different way. Finally, one point regarding the speech that President Dilma, at the UN the other day, generated a lot of controversy because Brazil didn't do a combination of the horrible terrorist acts of people decapitating people in front of the religion. There was not initially a mention of that, but there was a denunciation and a criticism of the, which was, you know, the tradition was in a position, you know, things are better solved through dialogue, et cetera, then there was an explanation by the foreign minister saying, no, no, she was not, President was not referring, obviously, to dialogue with the guys who, with the executioners, right? One very senior former diplomat in Brazil thought that it was, actually he wrote a piece, I'm referring to Rubens Recupero, a man known, was ambassador here, said that dialoguing with the executioner, this was the title of his column the other day, but then the foreign minister came out and said, no, the dialogue was not that, your misunderstanding, is the dialogue with the international community about this issue of, yes, there is a dialog in the international community, the only problem is that Brazil is not part of it. Claudia. Well, hi, thank you for your invitation. Let me just be following this a little bit, no, no. So do you think that there would be a difference depending on who wins, one, and two, how do you make out it, because this has been an issue that has been coming up more and more, the speech of President Dilma at the UN and the effectiveness of it, the purpose of it, the reaction? How do you see these things? Well, we see a difference based on what the outcome of the election would be and what, I guess, what's the status of foreign policy with Brazil right now. Yeah, well, regarding to the elections itself, I think there has been a very volatile election. If you look at 20 days ago, there was a great expectation that Marina would go to the second round with Dilma that she could win the election. I think the Dilma campaign was very successful in deconstructing the Marina image. Marina had an image of a very authentic politician, someone that was out of the traditional space, and with methods not always, that's not a very thinking, it's ethical, they managed to associate Marina with the most conservative sectors of the Brazilian society. Like the Dilma campaign managed to associate Marina with the bankers, managed to present the proposal of Marina for the independence of the Central Bank as something that would benefit the region, threaten the social conquerors that the poor people had in the last 12 years, and also in social issues. Marina was associated with very conservative positions, especially in the question of gay rights, to the point that Mark Ruflo, the American actor, he recorded the video supporting Marina, because he worked with Fernando Mereles, which is a director that worked with him, and he received a lot of criticism on the social media, people saying that Marina was against gay rights and then he withdrew his support to Marina. And I think Marina was not able, like she was not very able to contest it, and she committed errors herself, like releasing her program, and then reviewing it in less than 24 hours exactly on this issue of gay rights, and it gave the impression that she was bowing to the pressure of the evangelical community. So I think she arrived in the eve of the first turn in a very fragile situation, like she is losing support while Dilma is increasing support. In a situation in which they are not able to contest it, the economy is barely growing, like the economy will grow less than 1% this year, probably 0.5%, but there is one thing, unemployment is still historically low. The unemployment in August was 5%, which was the lowest for in August in 13 years or 15 years. Yes. And you have also something that Dilma was very, did in a very, her campaign was very effective in presenting the social benefits as one of the main conquerors of Brazilian population, and if any of the other candidates win, these social benefits could be at risk. And regarding to foreign policy, I think, first of all, I think the relations with the United States, I think no matter who wins, even if Dilma wins, I think the question of rebuild the relations with the United States will be one of the priorities. And I think to use an expression of one very good diplomat and very well connected, that the current situation is unsustainable. Brazil and the United States have a lot of economic relations, trade relations that cannot, you cannot have a high level relationship that does not match this relation. The United States is the largest foreign investor in Brazil by far. Brazil is increasing its investment in the United States. There are a lot of big companies in Brazil that are increasing its investments here. The United States is the main destination of Brazilian tourists, is the main destination of the students that the government is sending abroad to study the science without borders. So I think there will, and I think one expression that you use in the report that somehow the United States need to throw a ladder for Dilma to get out of the hole that she put herself. And I think like yesterday Marina gave an interview to Cristiana Mampur, and I think the ladder needs to be thrown to Marina as well, because on the interview she criticized, she mentioned the question of the NSA, and she was very strong, and she said the United States needs to recognize its mistakes. So I think there need to be, I think with IESO, in the unlikely scenario that IESO is, I think it would be much easier to rebuild this relationship as I was talking with who was saying before, like he does not have, he was not a target of the NSA, he does not have this personal difficulties that Dilma has. And I think another area that there will be a change no matter who wins, I think is Mercosul. I think even if Dilma wins, I think the current situation is also unsustainable. I think there is a growing sense in Brazil that Mercosul is becoming a more, a more, a more, a more of a problem than a solution. And also one thing that probably would be, would see the largest or the biggest change I think would be the question of Venezuela. I think there will, for sure if IESO wins or Marina wins, I think there will be some kind of a more less ideological relation with Venezuela. And I think what I, and I think if Dilma wins probably things will not change. And one thing that I'm hearing, there was a lot of reference, the principles that guide the Brazilian relations and the reference to democracy. And it's on the charter of the OAS. And I'm hearing more and more from Brazilian officials reinterpretation of the meaning of democracy. And the expression that, oh, we need to contemplate different kinds of democracy. And Venezuela has its own kind of democracy, has its popular kind of democracy. And it needs to be respected by the OAS charter. I think with Marina and IESO, I think there will be a lower degree of tolerance to human rights abuses and suppression of dissent inside Venezuela. But I think also there is, but there, the space to do, I don't see a rupture or, because we have economic relations, important economic relations with Venezuela. Last year Venezuela was number seven in the ranking of the main destination of Brazilian exports. And we mainly exports industrial products to Venezuela. And the same with Argentina is our third main trading partner. So I think I agree with the paper like there, you're not going to see dramatic ruptures or changes. But I think in the question of Venezuela probably would be where, or the Bolivaria, where it would be. The issue that's come up with both Paulo and Claudia has been the issue of the economy. And the economy of Brazil right now faces some serious challenges. And I think Paulo talked about the economy as being the driver of a lot of the foreign policy. Who do you think would be more likely to make reforms that are consistent with strengthening Brazilian's foreign policy if it's rooted, as Paulo said, in having a strong economy? First, thank you for the invitation. I think Marina or I ask you, they have tried to push an agenda of reforms that is clear. Dilma is saying at her programs, at her speeches that there's nothing fundamentally wrong with their policies. So I think I asked Marina would pursue an agenda of reforms. But there's something that Paulo mentioned and the situation of the economy is very delicate now. The commodity boom is over. So maybe there will be a push in the direction of pragmatism or whoever will be the next president. There's something interesting that I think that the private sector now wants free trade agreement with the U.S. This was a major change. Brazilian industrial leaders are usually very protectionists. And I talked to one of the directors of Confederação Nacional de Indústria in the Industrial National Confederation. And they want a free trade agreement to the U.S., a free trade agreement to the European Union. And they'll press the government in this direction. I think in a word that Brazilian economy, we won't have the revenue from commodities. The productivity is so low. And what people are saying that Brazil is true does not participate in many of the supply chains, global supply chains, is a way of from innovation. So it's fundamental that you have this kind of approach to deal with free trade agreements. But I think any of the candidates, if president, they will try to reset the relations with the U.S. It would be more difficult to deal with them, because yesterday, for example, Minister Figueiredo was here. They signed the end of the cotton controversy. And I was there, Clara was there. We insisted, wow, is this a sign of improvement of the overall bilateral relations. And he was very clear that it was only a step of progress in the trade relations. He was very careful. He said that it's a solution for a specific problem in a specific area, which is the trade area. So there's maybe the ladder that you said in your report that they should give to Dilma. It's important. And something that we need to be done. But I asked you and Marina, I think you would be much more pragmatic. Even I didn't see this interview with Marina. But Mauricio Hans, one of Marina's economic advisers, he was here last week at the U.S. Chamber event. And he said that he wanted to, Marina's government would develop ties with the U.S. And he said that the Mercosur is stagnated. I think they are ready to try to negotiate something more pragmatic with the U.S. Armino Fraga, a month ago, in an interview to Valor from my colleague, Sergio Lell, he said that, well, about Mercosur, we should say we'll go this way. Or the Mercosur comes with us, or we'll go without Mercosur. It was a blunt statement. So I think if I ask you when there will be a change, but it's unlikely that he will be even in the second round. But I think Marina and Mauricio Hans also pointed that Mercosur is stagnated. And I think they are, even in Dilma's government, they are running out of patience with Arminina, for example. They are an obstacle for negotiations with the U, for example. And now they are delaying some payments for exporters, for Brazilian exporters, because they have a shortage of dollars. Let me stay with you for a little bit. And I know I want to open it up. And there's wonderful points being made everywhere. And this session should really have been an afternoon session. No? Okay. Anyway. So on that point, a lot of the thinking is that so the United States is engaged in free trade agreements with the Europeans, with TPP. You're seeing a lot of activity in the region, specifically with the Pacific Alliance, trying to be more attractive to find markets in other places. And it truly is a global sort of reach that the Pacific Alliance is trying to have with over 30 observing members from all over the world. And there's a thought that, wait, Brazil is sort of stuck out there and hasn't made any kind of alliance. It's not even the Pacific Alliance. This EU issue sort of comes back more and more. What is the likelihood that this fervor or this desire, and this is for all of you, this fervor desire to sort of break away and do something different away from Mercosur or reform Mercosur, what's the likelihood that this actually would come into being? And that's the first question. And the second issue is you talk about a lot of will or interest in Brazil and having closer relations with the U.S. I worked with Congress for many years and we were really trying to push the issue of a tax treaty for a long time and felt that that was a way of doing this. How likely is the Mercosur reform or change or movement away from it a possibility? And how likely is that something like a tax treaty would be more possible on the Brazilian side? Because the U.S. is a completely different discussion with the two years that we're going to have presidential politicking, et cetera. But from the Brazilian side, how do you see that evolving? How real is this interest in doing something different from Mercosur and how real is this interest in doing something with the United States? I think any candidates would like a tax treatment with the U.S. It doesn't matter if it's Dilma or Marino. I think this is not a problem. And people, I think they will detach from Mercosur and they'll try to develop something, some strategies to do that. For example, in the negotiations with the EU, they talked about the two-speed integration and the tariffs would be lowered in different velocities depending on the country. I think there would be people desire to do something different. I'd like to say a few things about this. When I thought that the idea that Claudia mentioned that the improvement in U.S.-Brazil relations is inevitable, I actually wrote that a couple of times. Probably it was public and it was proved wrong. So I'm not saying that anymore. I also believe that, but I'm not writing it anymore. If you go to the Humphries Post, there is a piece of mine two years ago that is inevitable. Obviously, rationally it has to happen. And actually the relationship between Brazil and the United States continues to be very intense, except at the level of the two federal governments. All the other relationships are quite intense. They're good. The fact that they finally removed this thing, the cotton case after 12 years, obviously it's positive. We have here and there competent negotiators and they compromise. Wow, what an idea. And to resolve this thing because it's needed. It's necessary. The problem is, and if you see, for instance, I am involved in something called a scientific cooperation between Brazil and the United States. For instance, you are all invited, October 28th, a one-day symposium at the Wilson Center about something that's fundamental to the Brazilian economy, to the future to climate change. It's a study done cooperatively by American scientists, Brazilian scientists ongoing on the hydrological equilibrium of the Amazon region. If that goes, the Brazilian agriculture goes with it. Energy production in Brazil, mostly hydro, goes with it. It's a matter, it's a very important matter. Brazilian and American scientists and with the São Paulo Science Federation and the Department of Energy have been working. This is a subject that had been studied for 10 years. And they are. They were in four places in the Amazon taking measurements about the size of a rain drop at different altitudes. This cooperation exists. The cooperation between industries, especially the ones that are global, exists all the time. The transit of people, the only problem is the two governments cannot, they have to catch up with reality. The reality is much better than the relationship would. And this is, this business of friends, the tax, I frankly, if Dilma, imagine a re-elected Dilma, I don't know what is the conclusion she will take from the re-election. She may decided that everything she was doing was absolutely right and therefore she will continue to do the same thing. She may also, she has all the power and she's a very energetic person and say, so let's do a tax treatment treaty with the United States. A tax treaty with the United, Brazilian United States would probably be worth two alcas for Brazil because it would make businesses that already exist between, some American companies have been in Brazil forever and there are some major Brazilian companies here now. If you facilitate that, that would create some momentum for a tax treaty. There's a matter of political will and conviction. If a president, a re-elected president, Dilma or an elected, they have to put together their people, negotiate and move. That's, it's very simple. You have to have the will and the capacity to do this. I would like to see that. On the NSA thing again, there are certain, it's Milor Fernandes, a great satirist that once said that when ideas get old, they move to Brazil. And once we get stuff and this is the NSA, now we're not going to get away with the NSA stuff. The Indians, India, was the main target of the NSA spine. No country, no prime minister, no, it was more spied on by the NSA, this operation, than India. The prime minister of India, the Modi, who was actually, had a visa, what, canceled, right? I don't know. He could, no, he wasn't the least of people. No, no, I think he was denied. The visa was revoked and then was reinstated. So it was much more serious situation. He was here the other day at the White House because pragmatism, because the interest, the national interest of India are informing a policy in this world and India participates in very complicated negotiations regarding international peace. And so this is, you know, I think it's very difficult to talk about those issues right now because we have to see what is the outcome of the, like, maybe if we have a second round, maybe the candidates will use the second round to debate some of those questions related, for instance, to the economy that are related to foreign policy, but they have not so far, so we don't know what they really think. And I think also the question of NSA and, like, I don't think, during the election moment, during the campaign, like, I don't think Dilma can in any way reach a position that she would appear not being tough with the U.S., but even though when she gave an interview to Christiana for last month in which she said, well, the problem of NSA is not a problem of Obama, it was something that was a consequence of the war on terror. That seemed to be a kind of opening for a less confrontational position. Let me allow me to make some brief remarks on the Brazil-U.S. relations. I think Dilma, she threw the ball in the court of the United States, and she needed some important and strategic signs from Obama's administration. No matter who I'm going to win, I don't think even ISU or Marina, they will be capable to improve the relation without any important signs from the United States. This is a very crucial point. What Brazil want, and no matter whom will be the president, it's a recognition on the Brazilian condition as a strategic partner of the United States. And ultimately, what we should ask, what do the United States want from Brazil? They want a partner, they want a strategic partner, or they want to maintain Brazil and the ghettos of the American foreign policy. So this is a very crucial question. I don't believe ISU will restart the relation just because he wanted to do without any counter-offer from the United States. You know, when people talk about that in this country, strategic partnership for the United States means something very different than what it does for Brazil. So when we put that on the sheet, I think it's helpful and necessary to define the terms. So institutional relationships, legally binding relationships is usually what strategic means to the U.S. And up until now it's been difficult to develop that kind of relationship with Brazil. So when you talk about, when Secure talks a little bit about a willingness to embark on a different kind of policy with a tax treaty or an evolved or a different kind of version of Mercosur for obvious reasons. That kind of talk is a little more sort of consistent with what the United States sees as sort of the pillars to create a strategic relationship. When people talk about the Security Council, I mean I don't know when Security Council reform is going to happen, maybe you're right, maybe it's 10 years from now, I don't know. But one of the things that you hear from folks here is that sure we'd support Brazil, but Brazil would have to be supporting a lot of the things that we support because we don't want to put another member on the Security Council that doesn't work so much with the United States. And that's just sort of the United States response. So it's very helpful to get a sense of what strategic relationship means. I know because of our previous conversations that they're competing orbits now that didn't exist before like the BRICS. And that is something that I think we sort of need to unpack and I'd like to unpack a little bit of this. I'm sure there's people that have questions. So I don't want to sort of just monopolize. I think we will go over a little bit, but I'd like to give back to that. But first of all let me open it up and get some questions from the audience. There's tweeted questions as well so I wanted to try to get everything to be 20. If you could just go to these gentlemen over here and we'll just take how many questions are there? We'll take one, two, three questions and then you guys pick which ones you want to answer. If you could just identify yourself first and your question. Hello, my name is Jose Miguel Pulido. I work at Mitsui. Thank you very much for a great presentations. I was wondering about the issue of governability. If Marina or ASIO or DOMA wins, DOMA will probably have a weekend PT. Marina said that she doesn't want to construct alliances which would be very new for Brazil. So even if they want to start economic reforms, what's the likelihood that they can accomplish them? Thank you. Next question. I won't ask a question, but I just note that China wasn't discussed very much. Identify yourself. Oh, I'm sorry. I'm Tom O'Donnell. I work in Energy and International Affairs. I'm currently in Berlin teaching. Two things. One, the NSA issue. It's always dealt with and referred to as though, well, it's kind of silly that people go on about this because it's things that happen between governments and it's political. It's for public consumption. And I've heard a number of American ambassadors and other diplomats both in Europe and Latin America more or less say things like that and it really shouldn't be taken. I think there's just a disconnect by the United States in understanding. One thing that everybody that they always say I noticed is that, and of course there was no economic side to this. But Brazil is precisely a country where there may have been significant economic effects of the spying. One is, you know, the negotiations over the airplane sales. If those negotiations in fact were being spied on, it raises the question, were the American commercial negotiators given information? Of course the other side, when you find out that, doesn't want to sign the contract because who knows what they knew. It raises legal issues in the United States if other competitors didn't get the information. And the same thing with Petrobras. What are the effects? So I think it's a pragmatically has to be, it's not just a matter of an apology, there has to be a certain trust involved. If you could address that. The other thing is with Venezuela, again here it's often, this is often addressed as a question of because of the political proclivities of the workers party, there's a sort of closeness. But I think what's left out is that the business, there's a significant section of the business class that might not be PT, but they agree with keeping relations in this way with Venezuela because Venezuela is rather a basket case and what it's really going to need over time is infrastructure, not only exports. And Brazil of course, probably I would predict that more so than China, it'll be Brazil that supplies this sort of thing. And so it's, I think if you could address this, it's not just a political question, but there's a business interest. And the gentleman in the back there, and I think then we'll let you guys pick. Vitoria? Straight to the right. Hi, my name is Marcia Coimbra for the Huffington Post, Brazil, Brazil Post. Brazil is going to go through the next year through very dramatic economic adjustments, even with Dilma or more with Marina or ISU. And some economists say that Brazil may hit the bottom next year economically. So I would like to hear from you what does this impact with the relation with the United States? Okay, great. Who would like to go first? About the governability. Well, if Dilma wins, she will keep the majority in the Congress. I guess no Brazilian president has such a big majority in the recent democratic era in Brazil. This is very easy to talk about. Secondly, if ISU wins, well, probably the PMDB will move toward ISU and they will rebuild the association during the 90s, PMDB, PSDB and PSD and whatever. If Marina wins, then I guess she will be in trouble what we should look at if she will be capable to make some concession and what she now, during campaign, what she's saying, I'm not going to do concession, I'm not going to make the old way of politics, whatever, but you cannot govern without PMDB in the Congress. So effectively it will depend ultimately on one, what kind of concession that she will be able to make to have a majority to govern. Let me say something. The only certainty about Brazilian politics next year, in the first of January, is that the PMDB will move towards whoever wins the election. That's what the PMDB does. But depends how many ministers they will have. Yes, now, it's a matter of price. Okay? That's all. And that there are presidents like Fernando Henrique Cardoso that managed to protect certain key areas of the government where there was no negotiation about governability and then dealt with PMDB and all the... We have 32 parties. It's a pluralistic country. We deal with all those. It's a nightmare, it's fragmented, it doesn't work. About governability, there was one president in Brazil that governed under very dire circumstances, a very decent man, a very valiant opponent to the dictatorship. It was a senator from Ina Gerais that eventually became our president, had no political party, had no basis in Congress and was able to select a group of people in a difficult situation that resolved the two most negative legacies of the military dictatorship, the foreign debt crisis and the danger of near hyperinflation, pay-all plan. This was done by a president that covered... All of this was done in a year and a half. So it's perfectly possible, I think, that the problem of governability that I would see is once there is probable re-election of President Dilma Rousseff that the economy will not allow her to respond to the demands that were in the streets last year, remain there, which is, we want more, we want better, we want faster. And all of this will cost money. And President Dilma will not have the space to respond to that. So my difficulty with this, the problem of governability is the possibility that the streets could erupt again. The campaign has been, in a sense, in certain senses, it's very good, actually the campaign, the organization, there is a debate, but because of what the candidates chose to focus on, there has not been really so far a debate about the tough choices the country has to make. So therefore it's very difficult to see. And finally on NSA, I just think, you know, I think it's important to deal, I think Germany is one of the countries that is dealing with this seriously. German has an absolutely strategic relationship with the United States based on values and is able to deal with that. I hope that Brazil will, and the United States, will get an understanding, trust is absolutely fundamental. And if countries have to do clandestine work, and most countries do it, they should at least hire professionals to do it. Sef, do you want to answer the question on the economy? Well, I believe the economy will be in a very difficult situation. There will be, there is a need to be a fiscal adjustment because now we are running almost no surplus. We will have to adjust the managed prices like gasoline, so it will be very difficult. And it's better if it's done in the beginning. And part of it's a problem of credibility. If you look at the business confidence, consumer confidence, it's in 2009 levels that was in the middle of the crisis. So if the expectations are well managed, it's possible to do that to overcome. A finance minister with a good speech, with a good team would do part of the job, I think. Then it would not be necessary to raise much more interest rates. So I think the economic agenda is more or less of everybody, but President Dilma during her campaign and her economic aides, they said repeatedly that there is no fundamental problem and they should keep the course. There will be some changes. She will change the finance minister, she announced it. But if she insists in this approach, maybe there will be some problems, especially on the credibility side. And I find it difficult to relate it with your question about what would mean to the U.S. Maybe Brazil will be too worried about its economic problems that the foreign policy would be in the second plan. Yeah, and I think there is one question that is also very difficult for the economy next year is the external sector. That will suffer the impact of the likely raise of interest rates in the U.S., which is already affecting, which in the long run could have a positive impact with the devaluation of the real. And regarding the NSA, I always, I don't like this speech of that. Everybody does. Because this speech that everybody does, it's one that only benefits the ones that can do. And the ones that, the country that could do the espionage, the scale that the U.S. does is only the U.S. So I think it cannot be used as a justification. I think the concerns of the Brazilian government, I think they are justified. And I think we should also kind of rewind, if you look at the relationship before the NSA scandal, what we were seeing in last year. It was a very positive scenario. There was this engagement. The engagement was growing. There was the expectation toward the state visit. There was a visit that human insisted in doing. It was something important for her. So I think if we take the NSA thing from the picture, it was a positive scenario. So I think the question now is how the two countries take the NSA out of the picture and go back to where they were. And yes, the agreement was important. Yeah, I think the agreement, the cultural agreement that you should have underestimated. Yeah, I think it's a signal that the things are going on. They're moving on. And there was, from the U.S. side, there was concessions. I think if they were elected, she would have less pressure also to improve this relation. And this year will be very hard for her, like running, campaigning, and accepting to dialogue with Obama administration without any gesture, positive gesture, she will be easily targeted by the other candidates. So I think also she's waiting for the second term to try to build a strategy for that. But also what she also, what also that requires is the, I coordinate strategy to rebuild the confidence, the level of the confidence between both countries. This is very important. And what she is expecting, it's any minimum action from Obama to take her out of the box. But without that, you cannot leave it. Yeah, just one thing, having been kind of a veteran here. Obama, President Obama will face now an election where his party may not fare very well. And that is another information that will be relevant for the future. How much engaged he will be able to be. Sometimes I find it unbelievable that Obama has now to worry about his own safety in the White House, frankly. It's pretty complicated. I think that yes, they can make just, but what I wanted to tell you, there's a very unfortunate episode of the NSA and I totally agree that President Dilma was absolutely dedicated to improving this relationship. I have no doubt about it. And what happened, and then after what happened, other things happened that left lots of resentment on both sides. And those are things that you cannot ignore. And those will be factors. And we know, because we talk to people here, we talk to people in Brazil, it's very, very unfortunate that the two largest democracies in this hemisphere had to go through that. If there is, you know, Brazil has all, and the United States, all the means to face their problems. And we have been proving this, you know, Brazil is the country. I like to say this, I heard it somewhere, I like it because it's true. You least expect. We surprise people. We have a capacity to. But, you know, it's a matter of, and not only in Brazil, it's also here. Those things depend fundamentally, the willing to engage and to resolve and to move forward, depending on vision and leadership. If there is leadership, those things happen. Take all the, in the history of recent agreements, things that were absolutely impossible. Leaders are the people that make things move forward. I think it's perfectly possible because the two societies want to get closer. I have no doubt about it. But the message apparently has not reached the governments yet. This has been a very fruitful and useful session. I want to thank you for agreeing to come. I want to thank you, Hussein, for working on the paper. I think it's a great piece that contributes to the discussion on these issues and expands and deepens understanding on this relationship. I want to finish with something positive. Since you said that Brazil was the country that surprises. Always does. So Churchill said about the United States and you probably know this quote, that the U.S. always does the right thing after it's tried everything else. I think that's what's going to end up happening. I think we're going to have a couple of challenging years. Obviously we have a presidential election and we call it the silly season here in the U.S. and you never know what's going to happen. That's just the reality of our democracy. But I think that eventually the two rivers will come together, and we'll be going in the same direction because it's in our benefit. It's in both of our countries' benefit to do this. So anything that we can do to expedite that process, and I think these events actually do help that because they maximize understanding, is something that you will always find me game to doing. So thank you, Paulo. Thank you. Claudia, Sergio, and Hussein. Thank you everybody for coming.