As per tradition, the opening address of the 68th United Nations General Assembly (UNGA) was given by Brazilian President Dilma Rousseff. She was followed by President Barack Obama, who, as one wag put it, had read her speech the day before. Although the previous week’s cancellation of the Brazilian presidential visit to the United States, something unheard of in recent memory, had already sent a strong signal about Brazil’s displeasure with the NSA’s snooping revelations (including the President’s own e-mails and phone calls), Ms Rousseff didn’t mince words in her UNGA speech either, delivering a second rebuke to Mr. Obama and his administration.
Latin American ties

How significant is this spat between the two largest powers in the Western Hemisphere? Is it just another piece of diplomatic posturing, soon to be forgotten and swept under the rug, or is there more to it than meets the eye? What does it tell us about the state of U.S.-Latin American relations, on a downhill spiral since 2009? Brazil is often described as a swing state, in the South, but from the West, a democracy traditionally friendly to the U.S., that fought on the side of the Allies in World War Two, but with an independent foreign policy.

One standard response is that the spat only hurts Brazil. The U.S. President has enough on his plate these days to worry about Latin America. Moreover, Brazil’s recent economic slump would seem to indicate the South American country needs more U.S. trade and investment. Not taking part in this year’s only White House state dinner would thus represent a missed opportunity for Brazil. Yet, Washington can’t have it both ways. Either Brazil is considered a strategic partner or it is not, in which case one wonders about the criteria that inform such a category, which would exclude the world’s seventh largest economy. If the former, having these differences aired in public, let alone in such a high-visibility platform as the UNGA’s opening address, cannot be a good thing.

To be fair, Brasilia gave Washington plenty of time to come up with a satisfying response, including at a bilateral meeting between both Presidents at the G20 summit in St. Petersburg earlier last month, and a special visit by Foreign Minister Luiz Alberto Figueiredo to Washington to meet with U.S. National Security Advisor Susan Rice. Yet, both the White House and the State Department dithered and allowed the visit, the first by a Brazilian President since 1995, to unravel. Given what is at stake in the multilayered U.S.-Brazilian agenda, this is surprising.

Oil stakes

What takes the NSA’s Brazilian spying allegations beyond the tired and trite argument that “everybody does it” (to which the Brazilian response is, “well, we don’t”) is the targets involved. President Rousseff’s own e-mails and phone calls merited particular attention from Washington. Moreover, according to the revelations of the O Globo newspaper from the files provided by Edward Snowden, another top target was Petrobras, the Brazilian state oil company.

Petrobras, the fourth largest oil company in the world, with an annual turnover of $90 billion, can hardly be considered a security risk or potential funder of terrorism. What Petrobras does have, is some of the most sophisticated technology for deep-sea oil drilling, something U.S. oil companies are keen to get their hands on. Petrobras also plays a leading role in the bidding process for the Libra subsalt oilfields in the Santos Basin, off Brazil’s southern coast — coming up in October — in which U.S. oil giant Chevron takes part. These are rich pickings, totalling some 12 billion barrels of recoverable oil, out of 80 to 100 billion of barrels of oil in that area. Petrobras says the security of the auction is not compromised, and that the bid will go on as planned. Yet, who can be absolutely sure about that? If Chevron walks off with some prize oil blocks, can anybody guarantee it was not because of privileged information, courtesy of the NSA?

Defence contracts

Another significant issue on the bilateral agenda is defence contracts. The Brazilian Air Force needs to upgrade its fleet of fighter jets, and U.S. company Boeing is competing with France’s Dassault and Sweden’s Saab for a lucrative contract valued at $4 to 5 billion. Brazil is undertaking a major upgrade of its military platforms, and the last thing the U.S. wants is to be excluded from some of the juiciest defence hardware purchases around.

Beyond these rather narrow U.S. concerns, there are larger issues at stake for two of the world’s largest democracies. Perhaps none is as salient as that of Internet governance.

Controlling the net

The United States has for long portrayed itself as the foremost champion of internet freedom. Efforts by a number of countries in the South to establish a multilateral framework for internet governance have been rejected by Washington and its allies as misguided efforts by government to interfere in a self-regulating system that has thrived because it is managed by (mostly U.S.) business.

Under this guise of internet freedom, however, Big Brother is watching all of us, and leading U.S. internet companies like Google, Microsoft and Facebook have provided whatever information the NSA and the U.S. government request. Suddenly, the cause of internet freedom has morphed into the cause of finding out what we are all writing and telling each other — all for our own good, of course.
With 80 per cent of global internet traffic going through U.S. servers, there is a problem. Brazil, with 44 per cent internet penetration and a population that includes some of the highest numbers of users on Facebook, Twitter and YouTube, would like to see this changed. Brazil would also like to upgrade its ineffectual cybersecurity systems. Fibre-optic submarine cables that link up Brazil directly with western Europe (thus bypassing the U.S.), bills that would mandate the storing of digital data on Brazilians in Brazil, and other such measures are on the table. Some of these measures may work, some may not. In turn, this might lead other countries to create their own “national Internet,” defeating the very purpose of the world wide web.

Thus, the danger of a Balkanisation of the Internet is real and rings especially for countries like India, whose IT and IT-enabled services sector depend so heavily on it. It is in everybody’s interest that the U.S.-Brazil spat be resolved amicably. For those who believe that the knowledge society is here to stay, and that worldwide connectivity is its handmaiden, this should include a step back from the abyss of breaking up the internet. One way forward is through multilateral governance of the web and stronger penalties for violating our privacy.
The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.