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Brazil: After Years of Social and Economic Progress, New Challenges Emerge

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Brazil: After Years of Social and Economic Progress, New Challenges Emerge DIRECTORATE-GENERAL FOR EXTERNAL POLICIES POLICY DEPARTMENT 2013 COUNTRY BRIEFING Brazil: After years of social and economic progress, new challenges emerge Abstract Large-scale social protests have highlighted the challenges Brazil faces, despite economic and social progress achieved in the last decade. Political life is dominated by the issue of how to respond to protestors' grievances. With a year left before the next presidential and parliamentarian elections, on 5 October 2014, speculations about the main candidates and possible alliances between the political parties are intensifying. President Dilma Rousseff's approval rates dropped after the protests, but re-election is still likely. Rousseff's almost three years in power have been marked by a number of corruption affairs which have forced several ministers to resign. The mensalão (or 'big monthly payment') corruption case directly involves the President's Workers' Party (PT). Yet the scandals appear not to have weakened the President, who has taken a strong stance against corruption. The economy has expanded at a sustained rate since the mid-1990s, but growth has slowed in recent years due in part to a less favourable international economic environment. There are concerns that Brazil has become excessively dependent on commodity exports and that its industry has lost competitiveness. On 24 January 2013, the latest EU-Brazil Summit was held in the framework of the Strategic Partnership launched in 2007. The two parties agreed to deepen their political dialogue and establish a high-level dialogue on international peace and security. FOR EUROPEAN PARLIAMENT INTERNAL USE ONLY DG EXPO/B/PolDep/Note/2013_272 September 2013 DV/1004728EN.doc PE474.372v01-00 Policy Department, Directorate-General for External Policies This Country Briefing was requested by the European Parliament's Delegation for Relations with the Mercosur countries. AUTHORS: Jesper TVEVAD Directorate-General for External Policies of the Union Policy Department WIB 06 M 051 rue Wiertz 60 B-1047 Brussels CONTACT: Feedback of all kinds is welcome. Please write to: [email protected]. To obtain paper copies, please send a request by e-mail to: [email protected]. PUBLICATION: English-language manuscript completed on 27 September 2013. © European Union, 2013 Printed inBelgium. This Country Briefing is available on the intranet site of the Directorate-General for External Policies, in the Regions and countries or Policy Areas section. Translation(s) into FR PT ES DISCLAIMER: Any opinions expressed in this document are the sole responsibility of the authors and do not necessarily represent the official position of the European Parliament. Reproduction and translation, except for commercial purposes, are authorised, provided the source is acknowledged and provided the publisher is given prior notice and supplied with a copy of the publication. 2 Brazil: After years of social and economic progress, new challenges emerge Table of contents 1 Key issues and developments 3 2 European Parliament–Brazil: Milestones 4 3 Political situation in Brazil 6 3.1 Overview 7 3.2 Parliament 8 3.3 The social protests 10 3.4 The corruption affairs 12 3.5 Outlook: towards the 2014 elections 13 3.6 Foreign policy and international relations 15 4 Economic and social issues 20 4.1 Economic indicators 20 4.2 Trade and investment 21 4.3 Towards a new growth model? 23 4.4 Social issues 25 5 The EU and Brazil 27 5.1 EU-Brazil relations 27 5.2 Cooperation 29 5.3 Trade and investment relations 30 5.4 Outlook for the European Parliament 32 5.5 Policy options 34 6 Basic data 37 7 Map 39 1 Key issues and developments 3 Policy Department, Directorate-General for External Policies The EU-Brazil Strategic Partnership established in 2007 has served as a basis for an important intensification of EU-Brazil relations, as reflected in the high number of sectoral dialogues and cooperation initiatives in many areas. Brazil' status as the most significant regional player and an increasingly important global actor makes the country a key interlocutor for the EU. The EU and Brazil share the commitment to international cooperation and effective multilateralism. A key objective of the Strategic Partnership is to reinforce cooperation to meet global challenges. Interparliamentary cooperation between the EP and the Brazilian Congress has not yet been fully institutionalised. The first and so far only interparliamentary meeting between the EP and the Brazilian Congress took place in July 2011. Both chambers of the Brazilian Congress have put forward informal proposals on a regular forum for dialogue with the EP. Brazil will cease to receive bilateral development cooperation from the European Commission. The country's contribution to global development aid has expanded. This highlights the relevance of exploring new forms of EU-Brazil cooperation, particularly triangular development cooperation in other parts of Latin America and in Africa. The EU has been negotiating free trade — part of the broader Association Agreement — with Brazil and the other Mercosur countries since 1999. The decision of the EU-Mercosur ministerial meeting (in the margins of the EU-CELAC Summit in January 2013) that both regions should start internal preparatory work on the substance and the conditions for an exchange of offers on market access, to take place no later than the last quarter of 2013, has created expectations of fresh momentum can be brought to the negotiations. The large-scale social protests in June 2013 and the following months have highlighted the challenges Brazil faces, despite the economic and social progress achieved over the last decade. They revealed broader discontent with deficient public services, particularly in health and education, widespread corruption and the political system's lack of accountability. While some of the protestors' demands have been met, the prospects for fundamental political reform are uncertain. It is uncertain whether the protests will have a lasting political impact. The political opposition does not seem to have benefited from them. At present, President Dilma Rousseff appears to still have good chances of being re-elected in the October 2014 elections. Brazil's rising global role has been underpinned by years of economic growth and social development, largely based on commodity exports. There is however some concern that Brazil's economic growth model has become exhausted, and that the industry's loss of competitiveness threatens the economy's long-term sustainability. The need to re-establish competitiveness is acknowledged by the government, which has launched some reform initiatives. Some of the Brazilian government's measures are viewed by the EU as potentially trade- restrictive. According to the European Commission, Brazil is among the countries that over the last years have resorted to the highest number of new potentially trade-restrictive measures. 2 European Parliament–Brazil: Milestones 4 Brazil: After years of social and economic progress, new challenges emerge 13 June 2013 In its Resolution on the role of the EU in promoting a broader Transatlantic Partnership, the Parliament states that the EU and the US should secure the involvement of new key powers, including the EU's two Latin American Strategic Partners, Brazil and Mexico, in the shaping of the international environment and addressing regional conflicts and global challenges. 2 February 2012 In its Resolution on the EU foreign policy towards the BRICS and other emerging powers: objectives and strategies, the EP underlined the increased relevance in foreign policy terms of Brazil and the other BRICS countries. The EP called for enhanced cooperation between the EU and the BRICS on all matters of international concern, particularly with those BRICS that share and respect democratic values and strive for a social market economy. The Resolution welcomed the EU-Brazil Strategic Partnership Joint Action Plan 2012-2014. 6 July 2011 The first interparliamentary meeting between the EP and the Brazilian Congress took place in Strasbourg. The debate centred on the perspectives for an EU-Mercosur Association Agreement, and also addressed issues such as energy, the environment, scientific and technological cooperation, migration, the international economic and financial crisis and the reform of the international financial institutions. The deputies expressed support for creation of a permanent forum to deepen the dialogue between the EP and the Brazilian Congress. 15 February 2011 Parliament gave its consent to the conclusion of an agreement between the EU and Brazil on a short-stay visa waiver for holders of ordinary passports. The agreement allows Brazilian nationals to travel to all EU member states without a visa for short stays and extends the Brazilian visa waiver to all EU member states (before that, citizens of Cyprus, Estonia, Latvia and Malta needed a visa to enter Brazil). On the same date, the EP gave its consents to the conclusion of the Agreement between the EU and Brazil on air services. 20 January 2011 The EP adopted a resolution on Brazil's decision to deny the extradition of an Italian citizen who had been sentenced in absentia in Italy to life imprisonment (guilty of, inter alia, four murders and of involvement in an armed group). Parliament noted that the partnership with Brazil rests on the respect for the rule of law and fundamental rights and expressed confidence that the Brazilian authorities would process the Italian Government's request for a review of the decision. 12 March 2009 In its recommendation to the Council on the EU-Brazil Strategic Partnership, the Parliament stressed Brazil's role as a significant regional and global player and a key interlocutor for the EU who shares a common vision of the world. It further stressed that the Partnership should provide fresh impetus for the conclusion of the EU-Mercosur Association Agreement, and that its political agenda should include the promotion of joint strategies to tackle global challenges and of effective multilateralism.
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