Cover Page
The handle http://hdl.handle.net/1887/45261 holds various files of this Leiden University
dissertation.
Author: Marcuzzo do Canto Cavalheiro, C.
Title: Assessing the Brazilian-Chilean bilateral relations: public diplomacy, nation
branding and presidential diplomacy
Issue Date: 2017-01-18
Assessing the Brazilian-Chilean
Bilateral Relations:
Public Diplomacy, Nation Branding and
Presidential Diplomacy
Carmela Marcuzzo
Assessing the Brazilian-Chilean Bilateral Relations:
Public Diplomacy, Nation Branding and Presidential Diplomacy
Proefschrift
ter verkrijging van
de graad van Doctor aan de Universiteit Leiden,
op gezag van Rector Magnificus prof.mr. C.J.J.M. Stolker,
volgens besluit van het College voor Promoties
te verdedigen op woensdag 18 januari 2017
klokke 16.15 uur
door
Carmela Marcuzzo do Canto Cavalheiro
geboren te São Paulo (Brazilië)
in 1978
Promotiecommissie
Promotor:
Prof.dr. P. Silva
Overige leden:
Prof.dr. E. Amann
Prof.dr. R.Th.J. Buve
Prof.dr. D.A.N.M. Kruijt (Universiteit Utrecht)
Prof.dr. A.M. Stuven (U. Diego Portales, Chili)
CONTENTS
Acknowledgements ..........................................................................................................v
Introduction ....................................................................................................................1
Chapter 1
Public Diplomacy, Nation Branding and Presidential Diplomacy ............................... 23
1.1 The Emergence of Public Diplomacy ..................................................................... 26
1.1.1 Public diplomacy and propaganda: impacts on traditional diplomacy ............ 36
1.1.2 Paradiplomacy and public diplomacy ............................................................ 39
1.2 Brazil-Chile Relations and the Emerging Field of Nation Branding ........................ 47
1.2.1 The emergence of nation branding ................................................................. 54
1.2.2 A nation branding perspective........................................................................ 61
1.2.3 Brazil’s global rebranded image .................................................................... 66
1.2.4 The Chile’s nation-branding politics .............................................................. 71
1.2.5 Chile’s nation branding and historical backgrounds ...................................... 74
1.3 The Dimensions of Brazil and Chile’s Mutual Perceptions ..................................... 78
1.3.1 The Brazilians’ multiple perceptions of Chile ................................................. 82
1.3.2 Chileans’ views on Brazil .............................................................................. 86
1.3.3 The Chile-Brazil multifaceted approach ......................................................... 88
Chapter 2
The Historical Dimension of Brazilian-Chilean Relations ............................................ 93
2.1 Brazil-Chile Nation State Building ........................................................................ 97
2.1.1 Chile image background ................................................................................ 99
2.1.2 Chile’s independence and the process of nation building .............................. 105
2.1.3 Brazil’s historical roots ............................................................................... 108
2.2 Chile Economic Evolution During the Nineteenth Century ................................... 115
2.2.1 Chile’s second economic cycle and its consequences .................................... 121
2.2.2 Chile’s political roots and physical framework ............................................. 123
2.3 Brazil’s Historical Economic Evolution ............................................................... 126
2.3.1 Brazil’s industrialisation during the First and Second World Wars ............... 132
2.3.2 Chile’s economic roots ................................................................................ 134
2.3.3 Brazil-Chile similarities to German immigration aspects .............................. 135
2.4 The Triple Alliance War and the War of the Pacific: Brazilian and Chilean Positions
i
................................................................................................................................. 137
2.4.1 The Triple Alliance War (1864-1870)........................................................... 137
2.4.2 The War of the Pacific ................................................................................. 140
Chapter 3
Brazil-Chile Bilateral Relations since the 1990s ......................................................... 147
3.1. Linking the ABC Pact with Brazil-Chile Ties from the 1990s Onwards ............... 147
3.1.1 The Brazil-Chile decentralised approach ..................................................... 150
3.1.2 Brazil’s international insertion vis-à-vis Chile ............................................. 155
3.1.3 Brazil-Chile dialogue within the multilateral perspective.............................. 158
3.1.4 Redefining the Brazil-Chile bilateral approach ............................................ 162
3.2 The Background of the Latin American Context During the 1980s ....................... 165
3.2.1 The military influence in the transitional period ........................................... 168
3.2.2 Brazil and Chile’s regional policy during the 1980s ..................................... 173
3.2.3 The development of Brazil-Chile links from the 1990s onwards .................... 177
3.3 Mercosur vis-à-vis Brazil-Chile Bilateral Relations .............................................. 183
3.3.1 The potential benefits of UNASUR regarding Brazil-Chile relations ............. 194
3.3.2 Brazil-Chile relations in the democratic context ........................................... 199
3.3.3 Brazil-Chile cooperation in infrastructure.................................................... 202
3.3.4 Brazil-Chile background of paradiplomacy .................................................. 214
3.3.5 The growing para-diplomatic approach to Brazil-Chile bilateral affairs ....... 221
3.4 Brazil-Chile Relations within the Economic Context............................................ 226
3.4.1 The Brazil-Chile relationship: economic background ................................... 226
3.4.2 The shifting scenario of the 1990s and the emerging power of the business
sector................................................................................................................... 228
3.4.3 The growing influence of foreign direct investment on bilateral affairs ......... 234
3.4.4 Nation branding within the foreign direct investment environment ................ 238
3.4.5 FDI and the multi-faceted approach in bilateral affairs ................................ 241
3.4.6 Brazil’s FDI in Chile ................................................................................... 245
3.4.7 Chile’s FDI in Brazil ................................................................................... 250
3.4.8 The economic and historical FDI perspective ............................................... 253
3.5 Brazil-Chile Ties during the Administrations of Presidents Rousseff and Piñera ... 256
ii
Chapter 4
Brazil, Chile, the United States and Argentina Managing their Nation Brands ........ 259
4.1 Chile’s Reformulated Nation Branding ................................................................ 266
4.1.1 Brazil’s energy brand .................................................................................. 267
4.1.2 Chilean and Brazilian relations with the United States ................................. 270
4.1.3 The United States’ strategy towards the continent ........................................ 275
4.1.4 Brazilian and Chilean diverging strategies towards the FTAA ...................... 281
4.1.5 The limited scope of the FTAA ..................................................................... 286
4.1.6 The diverging aspects of the FTAA and Mercosur ........................................ 289
4.2 The Brazilian Business Sector vis-à-vis the FTAA ............................................... 293
4.2.1 Brazilian economic strategy in the 1990s ..................................................... 295
4.2.2 Chile’s liberal economic backgrounds.......................................................... 296
4.3 United States Foreign Policy Under George W. Bush vis-à-vis Latin America ...... 299
4.3.1 Brazil, the United States and Mercosur’s biofuel and ethanol markets .......... 302
4.3.2 Mercosur vis-à-vis Brazilan and Chilean foreign policy ............................... 304
4.3.3 The fundamental matters concerning the FTAA ............................................ 306
4.4 The Present Course of Brazilian Foreign Policy ................................................... 307
4.4.1 Brazil-United States bilateral relations during the Obama administration .... 312
4.4.2 Chile’s expectation with regards to the United States ................................... 317
4.5 The Pacific Alliance vis-à-vis Mercosur ............................................................... 319
4.5.1 Brazil-Chile-Asia......................................................................................... 323
4.5.2 The background and potential of a Brazil-Chile-Asia partnership................. 324
4.5.3 Chile as a bridge to Asia .............................................................................. 331
4.5.4 Brazil-China................................................................................................ 333
4.5.5 The Brazilian-Chilean coordinated policies towards Asia ............................. 338
4.6 Latin American Infrastructure.............................................................................. 340
4.6.1 China’s power and its impact on Brazilian and Chilean foreign policy ......... 343
Chapter 5
Brazilian-Chilean Energy Scenarios and their Impact on Bilateral Relations ........... 347
5.1 Brazil and Chile’s Energy Matrix ........................................................................ 355
5.1.1 Natural gas ................................................................................................. 359
5.1.2 Chile’s natural gas issue .............................................................................. 365
iii
5.1.3 Brazil-Chile natural gas demand in the foreseeable future ............................ 369
5.2 Nuclear Energy ................................................................................................... 371
5.2.1 The historical background of Brazil’s nuclear programme ........................... 374
5.2.2 Brazil-Chile nuclear power dialogue............................................................ 377
5.3 Renewable Energy Sources ................................................................................. 381
5.3.1 Brazil as an emerging energy leader vis-à-vis Chile ..................................... 386
Conclusion ................................................................................................................... 388
References ................................................................................................................... 398
Summary in Dutch ...................................................................................................... 435
Curriculum Vitae ........................................................................................................ 444
iv
Acknowledgements
First of all I want to express my gratitude to my supervisor Prof. Patricio
Silva for his inspirational guidance and thoughtful insights during the entire
process of this dissertation.
This doctorate dissertation would have not been written without all those
who provided support to my research. Particularly, I would like to express
my gratitude to the Navy Commander Ricardo Wagner de Castilho. I would
like also to thank the Brazilian Ambassador Frederico César de Araújo and
the Brazilian diplomat Daniel Pontes. Also my thanks to Odilon do Canto
(President of the Agência Brasileiro-Argentina de contabilidade e controle
de materiais nucleares, ABACC) and Silvio de Almeida (Inspector of
ABACC).
I received the support of key actors who represented both public and private
sectors of Chile. I would particularly like to thank Alberto van Klaveren
(Vice-Minister of Foreign Affairs, 2006-2009), Luis Maira (Minister of
Planning and Cooperation, 1994-1996), Roberto Pizarro (Minister of
Planning and Cooperation, 1996-1998), Alvaro Díaz (former Chilean
Ambassador to Brazil, 2007-2010), Jaime Gazmuri (Chilean Ambassador to
Brazil), Álvaro Camargo (Director of ProChile in Brazil), Jaime Baeza
(Professor at the University of Chile), Carlos Parker (Chilean Ambassador),
Mladen Yopo (Subdirector, Centre for Strategic Defense Studies, ANEPE),
Jorge Riquelme and Alvaro Gusmán (Officials from the Ministry of Foreign
Affairs), Horacio del Valle (Consul to Rio de Janeiro) and Carlos Monge
(international analyst).
My eternal gratitude to my parents Marilene and Luis Carlos (in memoriam)
for their dedication and support in all my pursuit. My mother-in-law Janete,
my brother Gabriel and sister-in-law Mariana who have always supported
me.
I dedicate this book to my admirable husband Paulo for his endless support
in all moments of my studies and to our little son Luis Paulo who is a loving
and happy child and inspiration for move forwards.
v
Introduction
Brazil and Chile are countries with very different dimensions and features in
terms of their territory, geography, culture, landscape, climate, economy,
and civil-state society relations. This partly explains the lack of comparative
studies so far between these two South American countries on any topic
whatsoever. Although both countries share a common Iberian and Catholic
heritage, several factors help explain the relative detachment and distance
between both countries from independence up until today. For some, Brazil
has always showed a relative lack of in the rest of the Spanish-speaking
American nations, with the country concentrating on its own concerns. For
others, the fact that Dom Pedro II declared Brazil an empire in the early
nineteenth century raised suspicion among the other emerging Latin
American states, such as Argentina, Paraguay and Uruguay, who had all
adopted the republican model. Therefore, from the very beginning of the
post-colonial period, Brazil has been an exception in South America and has
had to try to gain its place in a group of nations that obtained independence
from Spain after a long emancipatory war.
The relationship between Brazil and Chile has changed over the years to
the extent that bilateral relations cannot exclusively be studied using a
narrow, state-centric approach that solely focuses on the classic channels of
traditional diplomacy. Contemporary international relations are not the
exclusive domain of state-centric actors, given the increasing importance of
emerging non-state actors in foreign affairs. The rapid expansion of global
media (including social media) in recent decades has certainly contributed to
the direct involvement of larger audiences, who have acquired a voice in
foreign affairs. This new scenario demands a multi-faceted approach
involving the various actors who participate in discussions on foreign affairs
vis-à-vis the official actors.
Since the 1990s Brazil-Chile relations have involved multiple actors.
Therefore, concepts such as public diplomacy, nation branding and
presidential diplomacy are useful to help understand the complex and multilayered nature of contemporary Brazilian-Chilean bilateral relations.
Brazilian and Chilean engagement with diversified sectors cannot be
underestimated, since non-official actors have become extremely active in
international relations. The concept of public diplomacy is congruent with
1
the nature of present-day Brazilian-Chilean ties. Indeed, the importance of
public attitudes to how foreign policy is executed, to public-private
interaction, to communication with civil society in a two-way dialogue, and
the growing participation of non-official actors in the international arena
have all become evident. The traditional view of public diplomacy has to do
with government dialogue with the public in order to influence public
opinion.
The relevance of public diplomacy has grown in recent years. Thus, the
important role played by culture in a public diplomacy strategy has led some
authors to highlight its cultural nature.1 Public diplomacy is about building
ties with state-centric and decentralised actors when managing foreign
policy targets, which means that the Brazil-Chile pragmatic approach goes
hand in hand with a flexible outlook on public diplomacy. Public diplomacy
is a diplomatic instrument to exert what is known as soft power, in which
the communication and messages transferred to public opinion from thirdparty countries are essential. 2
The wide variety of sectors involved in foreign affairs currently demands
1
See Maria Susana Arrosa Soares (2008), “A diplomacia cultural no Mercosul”, Revista
Brasileira de Política Internacional, vol. 51, n o 1. pp. 53-69. In contrast to the concept of
media diplomacy which encompasses an exclusive communications system, public
diplomacy embraces a broader approach. See also Leonardo Valente and Maurício Santoro,
“A diplomacia midiática do governo Hugo Chávez”, Observatório Político Sul-Americano.
Rio de Janeiro. http://www.plataformademocratica.org/Publicacoes/22372.pdf. Public
diplomacy laid the groundwork for discussions and strategic action to promote long-term
foreign policy strategy. Raquel San Martín (2015), “Diplomacia pública: cómo vender un
país sin que se note”, La Nación, 4th January 2015.
2
Alfredo A. Rodríguez Gómez (2013), “Estrategias de comunicación y la nueva
diplomacia pública”, Revista Científica de Comunicación, Protocolos y Eventos, no 1, pp.
61-76. Madrid: Ediciones Protocolo. According to Nye, soft power lies in the ability to
attract and persuade. The ability to attract others to our side. Joseph Nye (2005), Soft
Power: The Means to Success in World Politics, p. 11. New York: Public Affairs. Public
diplomacy also deserves attention regarding the other Latin American states. For instance,
the Peruvian Embassy in Ecuador has at Public Diplomacy Department to promote cultural
activities as the way of establishing confidence. Departamento de Diplomacia Pública,
Embajada del Perú en Ecuador,
http://www.embajada.pe/sites/ecuador/laembajada/
Paginas/Diplomacia-publica.aspx. In Brazil, the Ministry of Foreign Affairs of Peru carried
out initiatives in order to promote the country’s history and culture as part of its public
diplomacy strategy. Ministerio de Relaciones Exteriores, “Diplomacia Pública peruana: una
puerta abierta al mundo”, Monday, 23rd December 2013, in http://diplomaciapublica
peru.blogspot.com.br/.
2
that theoretical explanations pay attention to the collaborative context in
which international relations take place. The main difference between
traditional and public diplomacy is that the former embraces relations
between state-centric actors, whilst the later also involves interaction
between non-official groups. For instance, trans-governmental networks and
international organisations frequently pursue their own agenda, irrespective
of and sometimes even contrary to the declared policies of their own
governments. Transnational and trans-governmental issue networks seem to
have a major impact on the global diffusion of values, norms and ideas in
such diverse issue-areas such as as human rights, international security or
the global environment. However, there is no reason to assume that
transnational relations regularly promote good causes, since transnational
terrorism and drug trafficking, for instance, have a terrible impact on
international affairs. Moreover, transnational relations have different
implications according to each country. For example, the idea of spreading
democratic values had an important impact on Brazil and Chile’s foreign
policies.3
Public diplomacy has turned into an important tool for creating
international power, inasmuch as it encompasses the use of soft power as a
mechanism of persuasion rather than the use of force, coercion or payments
to achieve foreign affairs goals. According to Nye, this concept includes
elements of culture, values and foreign policy (2008: 95-96). In recent years,
soft power has emerged as a core concept for understanding the importance
of public diplomacy in current international relations. Hard power has been
at traditional tool of foreign policy, using military or economic coercion in
order to get results. However, in recent years, soft power has become an
indispensable instrument for approaches in international relations. Soft
power creates the appropriate framework to explain why international
relations have become more complex.4
Therefore, public diplomacy has become more influential in
contemporary foreign policy, given its role in convincing audiences rather
3
Thomas Risse-Kappen (1995), Bringing transnational relations back in non-state actors,
domestic structures and international institutions. Cambridge: Cambridge University Press.
4
Judith Trunkos (2013), What is soft power capability and how does it impact foreign
policy. University of South Carolina,
http://www.culturaldiplomacy.org/academy/content/pdf/participantpapers/2013acdusa/Wha
t-Is-Soft-Power-Capability-And-How-Does-It-Impact-Foreign-Policy--Judit-Trunkos.pdf.
3
than imposing policy. For instance, Bolivia’s perception of Chilean foreign
policy is different to Brazil’s. This means that the perception of each
country’s audience differs, especially in the case of Bolivian-Chilean
relations which have been hugely influenced by historical events. Therefore,
public diplomacy reflects the uneasy relations between Bolivia and Chile. 5
As a result of Brazil-Chile bilateral relations, the Brazilian audience is much
more receptive to Chilean foreign policy.
Attention must be paid to both sides the two dimensions of the public
diplomacy concept. On the one hand, traditional public diplomacy deals
with the influence of public attitudes on the formulation and implementation
of foreign policies. It embraces the different dimensions of the interaction of
private-public groups and interests in one country with those of another, as
well as how foreign affairs are reported, their impact on foreign policy; and
the two-way communication channels between official actors and foreign
audiences.6
On the other hand, there is the emerging role played by new public
diplomacy whenever the popularisation of access to information turns
citizens into independent observers and assertive participants in
international relations. The growing number of participants in international
relations (such as states, international organisations, non-governmental
organisations, transnational companies, the media, scholar, and others) has
widened the focus of traditional diplomacy. As Bolewski points out, as well
as traditional diplomacy, modern society is creating more and more
innovative diplomatic denominations. The dynamic channel created by the
Brazilian Ministry of Foreign Affairs for receiving comments and
suggestions from civil society to be incorporated into the formulation of
public policy illustrates this point. These new participants are capable of
prejudicing and possibly forcing the state’s position to varying degrees.
Foreign ministers no longer play the role of gatekeepers in foreign affairs
but are, at best, coordinators (Bolewski, 2007: 18). While traditional public
diplomacy focuses on national interests, new public diplomacy points out
universal values such as democracy and human rights and goes about
broadening the role and function of the media and decentralised actors in
5
See “Chile debe mejorar su diplomacia pública”, El Mercurio, 5 May 2014.
“What is public diplomacy?”, The Fletcher School, Tufts University, http://fletcher.tufts.
edu/murrow/diplomacy
6
4
external affairs.
New public diplomacy relies on strengthening dialogue and shifting the
foreign policy paradigm, meaning it does not have the hierarchical structure
of traditional public diplomacy. As Rubio points out, the difference lies in
the hierarchical nature of traditional public diplomacy with state-centric
actors as the exclusive executors of foreign policy aims (Rubio, 2014: 12).
In contrast, new public diplomacy targets trustworthy relations between
state-centric and decentralised actors, and encourages the creation of multimedia communication channels in order to promote the insertion of civil
society in international relations.7 New public diplomacy encompasses the
growing interdependence and proactive positioning of multiple actors in the
foreign policy agenda, emphasising micro relations to the detriment of
macro and state-centric links. 8 Therefore, it also embraces public-private
collaborative initiatives and civil society’s participation in external affairs.9
According to Outhavong, the relevance of a nation’s reputation has
grown in recent years inasmuch as a good country image favours foreign
investment, trade, tourism, private sector competitiveness and world
influence in different areas (2007: 4). As nations become integrated into the
world economy, cross-border tourism and labour mobility rose; TV
channels, movies and music became universally available to consumers,
and, more recently, access to the internet has became universal. These
factors have forced people to compare themselves to other cultures and
national realities. Companies have developed fundamental market-oriented
7
The term ‘international relations’ is used within a broader understanding and with the
participation of diverse actors. However, for some authors, the term international relations
is too exclusive to refer to a multifaceted approach. Obviously, on many occasions it does
represent broader of concerns about the political relations between nation-states.
Nevertheless, the growing importance of other actors should be taken into account. See
John Baylis et al (2011), The globalisation of world politics:an introduction to
international relations. Oxford: Oxford University Press, p. 2.
8
See Bernardo Sfredo Miorando (2010), Diplomacia pública no Brasil: estudo sobre
imagem internacional brasileira. Universidade Federal do Rio Grande do Sul, Faculdade de
Ciências Econômicas. Porto Alegre, pp. 42-44.
9
The influence of civil society networkers gives them new responsibilities. For example,
those involved in transnational civil society networks must become more transparent about
who they are, what they are doing, why they are doing it, and where they get their financing
from. For a better understanding, see Ann M. Florini (2000), The Third Force: The Rise of
Transnational Civil Society. Washington D.C.: The Brookings Institution Press, p. 6.
5
strategies to project themselves as global brands. 10
Given that the world has become an interdependent marketplace,
countries tend to develop campaigns to strengthen their nation brand.11
Since the early 1980s, Chile has dedicated a lot of efforts and resources to
initiatives directed at improving the country’s image abroad. Chile ranked
fourth behind Brazil, Argentina and Costa Rica as the most valuable of 21
Latin American countries. 12 Brazil, for its part, has more recently attempted
to improve its international image by stressing the country’s diversified
energy matrix. However, Brazil’s impressive economic growth over the past
decade would not have been possible without a growing supply of energy. 13
In our view, the concept of nation branding is useful for analysing BrazilChile bilateral links. Nation branding efforts, combined with the increasing
role played by the country’s presidents in foreign policy are indeed core
elements to exploring Brazil-Chile relations. In this manner, the study of
contemporary Brazilian-Chilean relations demands a dynamic approach
simultaneously including the analysis of the role played by public
diplomacy, nation branding and presidential diplomacy.
However, the analysis of the bilateral relations between these two
countries also requires the study of a broader historical perspective. The
importance of the different Portuguese and Spanish colonial backgrounds
that each country has inherited cannot be underestimated. In this way,
differences in language, culture, history and political institutions have
played a significant role in the relative lack of cooperation between both
countries in the past. Moreover, until the nineteenth century border disputes
with other countries were at the core of Brazil and Chile’s foreign policy
10
Douglas B. Holt (2004), “How global brands compete”, Harvard Business Review,
September. https://hbr.org/2004/09/how-global-brands-compete.
11
Nation branding and the nation brand are two different concepts, since a nation has a
brand image with or without nation branding. See Ying Fan (2006), “Branding the nation:
What is being branded?” Journal of Vacation Market, vol. 12, no 1. Los Angeles: SAGE,
pp. 5-14. According to Urrutia, nation branding also originates spontaneously as an
international market demand. Amaia Arribas Urrutia, “La marca país no engloba toda la
identidad nacional”, DIRCOM magazine no 80. http://www.revistadircom.com/dircom-enlatinoamerica/mexico-dircom/328-la-marca-pais-no-engloba-toda-la-identidadnacional.html.
12
“Chile es la cuarta marca país más valiosa de Latinoamérica”, El Mercurio, 23
September 2013.
13
See Mauricio Tiomno Tolmasquim (2012), “Perspectivas e planejamento do setor
energético no Brasil”, Estudos Avançados, vol. 26, n o 74. São Paulo.
6
agenda, rendering whatever favourable environment had existed for
cooperation practically non-existent.
In this sense, boundary conflicts had undeniable implications when
prioritising relations with South American states, to the detriment of
developing possible partnerships in other areas. As Bernhardt indicates,
during the Nineteenth century Latin America experienced five post-colonial
wars related to the delimitation of national frontiers: two Cisplatine wars
between Argentina and Brazil (1825-1828 and 1839-1852) based on
territorial disputes and leading to the establishment of the Republic of
Uruguay; the War against the Confederation (1836-1839) in which Chile
destroyed the confederation established between Peru and Bolivia; the
Triple Alliance War (1865-1870) in which Paraguay lost territory to Brazil
and Argentina and the War of the Pacific (1879-1883) in which Bolivia
became land-locked and Peru lost the southern territory of Tarapacá to Chile
(Bernhardt, 1983: 61).
At that time, neither Brazil nor Chile considered each other as a potential
partner for dealing with regional issues and therefore no understanding were
reached on different issues. In addition, Chile together with Ecuador, was
the only South American country to have no direct border with Brazil. The
fact that it had no common border meant that Chile was not among Brazilian
foreign policy’s main priorities. According to Pochet, the lack of welldefined borders encouraged regional conflicts at the beginning of the
nineteenth century (Pochet, 2005: 147). The historical context did not
encourage the establishment of diplomatic ties either, so Chile has received
very little attention from the Brazilian empire. The lack of important ties
between both countries seems to have prevented the development of a longstanding partnership between Brazil and Chile, to the extent that significant
links were only developed in the 1990s (Magnoli, 2016).
Sharing essential similarities helps understand the study of the bilateral
relations of these countries from the 1990s onwards. Both share
geographical peculiarities with Chile’s location behind the high summits of
the Andes and Brazil’s extensive Atlantic coastline leading to a certain
sense of isolation from the rest of the Latin American region. In addition,
both countries face totally different directions with Chile regarding the
Pacific Ocean as a source of future prosperity while Brazil is part of the
Atlantic world. In this regard, these countries have specific geographical
7
realities which do not facilitate strengthening ties with other Latin American
states.14 Both countries are in the same boat, anchored by the difficulties of
participating in regional projects.
At the same time, these two countries do respect each other. Indeed, they
share mutual historical perception of each other as being stable and
trustworthy countries in a region filled with turmoil. Chile is considered one
of the South America’s most stable and prosperous nations. It has been
relatively free of the coups and arbitrary governments that have stood out so
much in the region. It had Latin America’s fastest-growing economy in the
1990s and has weathered recent regional economic instability. 15 According
to Collins, in the case of Brazil, many companies come to the country
because the business environment is more familiar than that of the other
BRIC (Brazil, Russia, India and China) countries (Collins, 2015). It also has
a more stable public and private sector and a better-proven legal framework
than some of the other BRIC countries.16
Moreover, contemporary international relations have become more
diverse as non-governmental organisations (NGOs); civil society and
multilateral, regional and international organisations have increased their
presence and role in international affairs.17 Therefore, international relations
14
The great expectations linked to being part of the Pacific world are captured in Chile’s
national anthem (“… and that sea that quietly washes up on the shore promises a splendid
future…”).
15
See BBC News, “Chile profile”, Latin America & Caribbean news, 26th November 2014.
http://www.bbc.com/news/world-latin-america-19357495.
16
BRIC was an acronym formulated by the Chief Economist at Goldman Sachs, Jim
O’Neill, in a 2001 study entitled “Building better global economic BRICs”. It became an
analytical category in itself in economic, financial, business, academic and media circles. In
2006, the concept gave rise to the foreign policy of the group, incorporating Brazil, Russia,
India and China. In 2011, on the occasion of the Third Summit, South Africa became part
of the group, who adopted the acronym BRICS. “Learn about BRICS”, BRICS 6th
Academic Forum, 18th-19th March 2014, Instituto de Pesquisa Econômica Aplicada
(IPEA). http://www.ipea.gov.br/forumbrics/en/learn-about-brics.html.
17
One of the critical points in the negotiations of the European Union and Mercosur
agreement was the absence of channels for the participation of civil society. According to
some authors, the new negotiating mandate should have included references to civil
society’s involvement in order to promote political dialogue. Participation would occur
through periodic conferences involving representatives of civil society organisations in
European Union and Mercosur territory. More information in Deisy Ventura (2003), As
assimetrias entre o Mercosul e a União Europeia: os desafios de uma associação interregional. Barueri: Manole. pp. 527-529.
8
cannot only be regarded from single state perspective, due to the emergence
of multiple and dynamic foreign policy actors. Within the framework of
contemporary international relations, new insights about the increasing role
played by public diplomacy, nation branding and presidential diplomacy
help to shine a light on the multi-layered nature of present-day bilateral
relations.
Several concepts and partnerships have been built in the margins of
international instruments and traditional diplomacy, aiming at being more
inclusive and enhancing implementation. The emergence of present-day
issues demands a new public diplomacy approach, since traditional
diplomacy offers limited conceptual areas for analysing contemporary
networks. As Betsill and Bukeley indicate, the international governance of
global climate change, for instance, takes place through processes and
institutions operating at and between a variety of scales and involving a
range of actors with different levels and forms of authority (Betsill and
Bulkeley, 2006: 145).
In the past, the absence of a common border helped avoid conflicts and
long-standing rivalry in the nineteenth and twentieth centuries. As opposed
to the reality of the Plata Basin (and the conflicts faced by parties such as
Argentina, Brazil, Paraguay and Uruguay) the lack of boundary disputes
laid the groundwork for a different type of relationship between Brazil and
Chile. For obvious reasons, for example, Argentina and Brazil faced
historical-geographical conflicts in the nineteenth century. The common
border between both nations was also a source of tension between the
Portuguese and the Spanish in South America in the seventeenth century
(Maestri, 2014: 241). From a Brazil-Chile relationship perspective, Brazil’s
stance of not directly intervening in Chile’s internal affairs has also played
an important role in preventing undesirable situations. In addition, Brazil
and Chile’s democratic and libertarian vocation and their constant
commitment to human rights should be considered.18
Brazil and Chile also have experienced different moments of tension with
their common neighbour Argentina. This explains why Argentine foreign
policy has tried to avoid conflict with Chile and Brazil simultaneously, as
Argentina cannot allow itself to be fighting on two fronts at the same time.
18
See “Bilateral relations”, Embajada de Brasil en Chile.
http://chileabroad.gov.cl/brasil/en/relacion-bilateral/comercio-relaciones-bilaterales/.
9
At the same time, Brazil and Chile avoided showing their explicit alliance in
certain historical circumstances to prevent retaliation from Argentina, even
though their attitudes demonstrated their mutual support. Although the
dispute over Acre in 1899 was treated as a bilateral issue, Chile only
officially declared its support of Brazil after Argentina has shown explicit
support for Peru and Bolivia in their conflict with Chile. In this sense, Chile
shared common cause with Brazil in terms of, their unfriendly disposition
towards Argentina and the United States (Vera, 2008: 243).
For most of the nineteenth and twentieth century neither Brazil nor Chile
was keen on the other strengthening their bilateral ties with Argentina.
Indeed, neither of them had a trustworthy relationship with Argentina.
Argentina and Chile have historically disputed the southern Andes and the
waterways connecting the Atlantic and the Pacific. Their relationship was
affected by the possibility of Argentina joining Peru and Bolivia against
Chile or Chile forming an alliance with Brazil against Argentina. As Vera
highlights, after the War of the Pacific (1879-1884) Chile became a status
quo power, but its reputation as a successful aggressor in the past has
plagued its credibility even up to the present (Vera, 2008: 351-352).
Argentina consistently sought to make limited territorial gains and important
advances to project its power into Peru and Bolivia, the countries bordering
Chile’s north. Not until the 1990s however did Argentina abandon its goals
and become a status quo power.19
The scenario has radically changed since the early 1990s, to the extent
that, for the first time, Brazil and Chile share closer relations with their
common neighbour. Shifting the focus, Argentina has become the country
with which Chile and Brazil have their strongest links in the region.20
Currently, Argentina is considered Chile’s best regional partner. An
example of this is the creation of a military partnership between Chile and
Argentina illustrated by the COMPERSEG (the Permanent Security
Committee). As a result, Argentina and Chile are now the most advanced
South American countries with regards to cooperation in security matters.
19
See David R. Mares (2000), Exploring the impact of economic cooperation on political
and security relations between Argentina and Chile.
http://www.stimson.org/images/uploads/research-pdfs/mares.pdf.
20
It is difficult to establish to what extent losing the Falklands War against Great Britain in
1982 and the subsequent weakening of the Argentine armed forces played a role in the
adoption of Buenos Aires’ more reconciliatory position vis-à-vis Brasília and Santiago.
10
According to Fuentes and Alvarez and considering the growing
importance of international security cooperation, the military (that is, the
armed forces of Argentina and Chile) have been involved in peacekeeping
operations. However, in 1978, both countries faced one of their most serious
periods of conflict. In 1977, Argentina rejected the ‘Arbitration Award’,
judgement that recognised Chile’s sovereignty over a group of small islands
at the southern tip of the continent. Following the end of the Beagle dispute
and the restoration of democracy restoration in Chile in 1990, the important
process of Argentina-Chile security cooperation began. This was
symbolised by the Treaty of Peace and Friendship in 1984 and the
Declaration of Santiago in 1990 signed by Presidents Aylwin and Menem
(Fuentes and Alvarez, 2011).
Brazil and Argentina have also established ties in the area of security
through the ABACC (the Brazilian-Argentine Nuclear Agency to Account
For and Control Nuclear Materials).21 Both the Brazilian and Chilean
initiatives demonstrate partnerships in key areas, cooperating with
Argentina on a host of issues ranging from trade to security and from hard
power to soft power.
Having said this, a favourable context is witnessed in the understanding
of the Southern Cone balance of power and how Argentina has exerted
influence on Brazil-Chile bilateral relations in the long run. In the past,
Brazil has attempted to build good relations with Chile, anchored by the
imminence of a war with Argentina.22 As highlighted by Moniz Bandeira,
Brazil, Chile and Argentina understood that their partnerships would bring
with them a clear set of benefits to counterbalance the growing presence and
21
The historical process of Brazil and Chile building trustworthy relationship dates back to
17th May 1980 when they signed the agreement for the Development and Application of
Peaceful Uses for Nuclear Energy. “Criação da ABACC”, Agência Brasileiro-Argentina de
Contabilidade e Controle de Materiais Nucleares (ABACC). http://www.abacc.org.
br/?page_id=16. See Coperação Nuclear Brasil-Argentina complete 20 anos”, Estadão,
Internacional, 8 July 2011.
22
Wars encourage a different kind of attitude towards the state, based on collective identity.
Nothing unites a nation behind a faltering leader like a war, since the quickest way to make
a nation is to form an army. A total war can help evade social conflicts and orient the same
struggle towards external enemies. In the nineteenth century some thought it impossible to
create a nation without war. Miguel Angel Centeno (2002), Blood and debt: War and the
Nation-State in Latin America. University Park: Penn State University Press, p. 29.
11
power of the United States in the region. 23 Therefore, these circumstances
paved the way for the establishment of the ABC (Argentina-Brazil-Chile)
Pact in 1915.
This pact resulted in the development of a coordinated approach to
international affairs that included the three South American countries.
According to Teixeira, this pact was important for Brazil, since it made
Chile a strategic ally for Brazilian foreign policy in the long run. An
important aspect of the Brazilian Baron of Rio Branco’s strategy was the
organisation of South America along with the other regional powers,
Argentina and Chile. The Baron of Rio Branco conceived the ABC pact as
crucial for guaranteeing the peace and order in the southern half of the
Americas (Teixeira, 2012: 27-29).
The ABC Pact illustrates two important points: firstly, the Brazilian
Ministry of Foreign Affairs (Itamaraty) had been targeting developing closer
relations with the south since the first decade of the twentieth century. 24
Secondly, the Itamaraty’s idea of strengthening links with Chile to seek
tangible gains was not new in terms of Brazil’s foreign policy strategy. For
instance, Brazil and Chile had provided each other with mutual support in
the multilateral field. Brazil and Chile, together with Argentina, were
elected members of the Human Rights Council in 2008-2011.25 Despite the
fact that the Brazil-Chile bilateral relationship only underwent important
transformations from the 1990s onwards, Chile was recognised as a strategic
23
See Luiz Alberto Moniz Bandeira (2010), Brasil, Argentina e Estados Unidos: conflito e
integração na América do Sul (da Tríplice Aliança ao Mercosul), 1870-2003. Rio de
Janeiro: Revan.
24
Although the ABC Pact was created as a political instrument by the Baron of Rio Branco
in 1904, negotiations continued until 1915 when it was signed with Lauro Müller as
Minister of Foreign Affairs. The ABC Pact was not ratified, but its official aim was to
maintain peace in South America. According to Heinsfeld, Brazilian diplomacy wanted to
isolate Argentina in South America as well as prevent it from influencing other countries in
the region. Brazil’s foreign policy strategy was to prevent Argentina from becoming
supreme in South America. In this regard, Chile played a key role as a loyal balance. More
information in Adelar Heinsfeld (2009), “As relações Brasil-Chile: o pacto ABC de 1915”,
ANPUH XXV Simpósio Nacional de História. Fortaleza. http://anpuh.org/anais/wpcontent/uploads/mp/pdf/ ANPUH.S25.1436.pdf. See Adelar Heinsfeld (2012), “Rio Branco
e as relações do Brasil e Chile no âmbito da proposta do Pacto ABC (1915)”, Revista
História: Debates e Tendências, vol. 12, no 1, jan/jun 2012. Passo Fundo: UPF. pp. 11-21.
25
See Embajada de Chile en Brasil. “Bilateral relations”. http://chile.gob.cl/brasil/
en/relacion-bilateral/comercio-relaciones-bilaterales/.
12
ally in the long-term. As Pedroso and Pedroso indicate, although Operation
Condor in the 1970s and early 1980s led to cooperation in the field of
security, both countries were oriented towards the development of strategic
economic models during the military period (Pedroso and Pedroso, 2007).
As the father of Brazilian foreign policy, the Baron of Rio Branco said in
February 1909 that “the relationship between Brazil and Chile is
limitless”.26 The South American subsystem, in which Brazil, Argentina and
Chile were the three most important regional economic and military powers,
favoured the formation of alliances between the three actors. The agreement
reached in 1902 between Argentina and Chile through the executing of the
Treaty of Arbitration and Disarmament reduced their influence in areas to
the Atlantic and the Pacific. As a result, these Southern Cone alliances led to
a strengthening of the autonomy and independence of the region’s countries.
During the nineteenth century, Brazil and Argentina struggled over
hegemony in the Plata Basin. Brazil’s Proclamation of the Republic in 1889
occurred when strategic rivalry between both states still persisted. Argentine
military power was a concern for the Brazilian army at that time.27 The
declaration defined the nature of a stable long-term alliance between Brazil
and Chile at a formal diplomacy level.
In the 1990s, following the restoration of democracy in the region, the
existing scenario favoured the development of closer bilateral ties. In those
years, most Latin American countries underwent profound economic
reforms allowing trade liberalisation. According to Figueiredo and
Lamazière, sharing universal values led to the strengthening of the relevant
traditional diplomatic links: Chile’s support of Brazil’s aim of becoming a
permanent member of the United Nations Security Council; the United
Nations peace keeping mission in Haiti involving Brazil and Chile as part of
their foreign policy strategy; a common position promoting democracy in a
multilateral context and the common defence of human rights, women rights
26
See Ministérios das Relações Exteriores do Brasil, “Ministro das Relações Exteriores,
Discursos”. 8th October 2012. http://www.itamaraty.gov.br/pt-BR/discursos-artigos-eentrevistas/ministro-das-relacoes-exteriores-discursos/4555-intervencao-por-ocasiao-doseminario-brasil-chile-novos-horizontes-amizade-sem-limites.
27
Guilherme Frazão Conduru (1998), “O subsistema Americano, Rio Branco e o ABC”,
Revista Brasileira de Política Internacional, vol. 41, no 2, July/December. Porto Alegre:
UFRGS. http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0034-7329199800020
0004.
13
and environmental topics among others (Figueiredo and Lamazière, 2012).
As the United Nations Security Council became more active, the separation
between domestic and international security was questioned and the
relationship between security, development and human rights became more
intense and relevant.
As Herz points out, peace operations are presented as instruments for
global governance, especially if the country aims to play a relevant role in
international debates (Herz, 2013: 25-26). The ever more important position
of Chile as a major Latin American actor (involved in the discussion of
many world issues) goes hand in hand with the projection of Brazil as an
emerging global power.28 As Buono argues, this dialogue not only
encompasses political and economic debate, but also includes a reflection on
the dynamic process implied in sustaining an inclusive South American
dialogue (Buono, 2006: 13). Along with raising regional issues such as as
organised crime, money laundering, immigration and sources of energy,
both dialogue between the Ministries of Foreign Affairs and the use of a
decentralised approach were encouraged.29
The creation of official channels for the participation of organised civil
society by the Brazilian Ministry of Foreign Affairs (Itamaraty) fostered
their participation in the decision-making process. As Lima points out, there
was a trend for the growing participation of organised civil society in the
international negotiations headed up by the Itamaraty since the United
Nations Conference on the Environment and Development (1992), the
World Conference on Human Rights (1993), the International Conference
on Population and Development (1994), the World Summit for Social
Development (1995), the Fourth World Conference on Women (1995) and
the Second United Nations Conference on Human Settlements (1996)
(Lima, 2009: 7).
28
Brazil’s diplomacy of solidarity, built upon at commitment to human rights, social
development and south-south cooperation based on international collective action and
under the auspices of the United Nations Security Council became an important source of
converging interests between Brazil and Chile. More information about Brazil’s diplomacy
of solidarity in Ricardo Seitenfus (2014), Haiti: dilemas e fracassos internacionais. Ijuí:
editor Unijuí.
29
International cooperation as a new instrument for external affairs began after the Second
World War, as a result of the creation of bilateral agreements such as the Marshall Plan
(drawn up by the United States). Abel Gallardo Pérez (2007), Cooperación internacional
descentralizada. Valparaíso: Government of Chile, p. 39.
14
Furthermore, sustainable public-private partnerships (PPPs) for
infrastructure projects increased participation in bilateral relations. The
Brazil-Chile bioceanic corridor initiative is a case in point. Chile’s
orientation towards the Pacific region is not merely geographical but also
embraces an economic reality. As Muñoz highlights, although Japan and
South Korea are its main trading partners, Chile is improving its economic
links with countries such as Malaysia, New Zealand and Australia. Ties
have also expanded between the Asia-Pacific countries and Mercosur and
Brazil has also expanded its presence in Asia. Brazilian President Cardoso
(1995-1998, 1999-2002) was the first Brazilian head of state to visit
Malaysia. Joint ventures between Brazilian companies and Chinese
enterprises are another advance in the same direction. In the meantime,
Chile and Brazil have been working on making multimodal connections
between the Atlantic and Pacific Oceans viable (Muñoz, 2001: 79).
Business links cannot be underestimated considering Brazil’s position as
the leading outward investor in Latin America combined with Chile’s nation
branding initiatives oriented at attracting foreign investments. The BrazilChile Double Taxation Convention (2001) to avoid double taxation and
fiscal evasion also illustrates the strengthening of fluid commercial and
investments between these two nations. Such a convention is a key element
when considering whether to set up a company in certain country. The two
countries investment flux has a lot to do with avoiding double taxation.30 As
part of their bilateral strategic relationship cooperation in energy, science
and technology identifies new horizons for “friendship without limits”. 31
Brazil’s stable democracy and emerging position as a global power has
helped the study of nation branding as part of its foreign policy strategy. As
the host of the Football World Cup in June 2014 and the Olympic Games in
2016, Brazil has gained an overwhelming visibility that has enabled it to
project a remarkable nation brand. Almost against the odds, the main reason
30
To ensure access to the Convention between the Federal Republic of Brazil and the
Republic of Chile to Avoid Double Taxation and Prevent Fiscal Evasion with respect to
income. This agreement has shown the strong connection between both nations tax system.
See the Chile Brazil Convention. http://www.receita.fazenda.gov.br/principal/ingles/
Acordo/Chile/Chile03042001.htm.
31
This emblematic phrase from the Baron of Rio Branco set up a new paradigm for
Brazilian foreign policy. Sean W. Burgers (2012), “Is the Itamaraty a problem for Brazilian
foreign policy”, Política Externa, Dec/Jan/Feb 2012-2013. São Paulo: Editora Paz e Terra,
pp. 133-148.
15
cities want to host the Olympics is that they are wildly popular with the
voters who foot the bill. Rio de Janeiro’s hosting of the 2016 Olympic
Games received strong local support during the bidding process. However,
the World Cup hosted by Brazil in 2014 became the focus of protests
against government waste and corruption.32
As Essex and Chalkey argue, the Olympic Games has become the most
visible and spectacular public cultural event in modern society. The host
cities are required to provide new sporting facilities that are up to world
class standards. Indeed, wider investment in tourism, transport,
telecommunications and hotel accommodation and environmental
improvement are also often necessary to ensure the smooth running and
success of the Games for both athletes and spectators. These wider
investments also contribute to establishing a global image for the host city,
which can promote inward investment and tourism in the long-term (Essex
and Chalkey, 2003: 7).
In the case of Brazil, the projection of a nation brand is related to
presidential diplomacy and the charismatic figure of President Luiz Inácio
Lula da Silva. As one of the BRICS (Brazil, Russia, India, China and South
Africa), Brazil has also changed how it is perceived in international politics.
BRICS countries include more than 40% of the world’s population and
account for a quarter of the world’s economy. China may shortly bypass the
United States to become the world’s biggest economy, despite the fact that
leadership of the World Bank and the International Monetary Fund (IMF)
remains the exclusive preserve of the United States and Western European
countries. One of the important aspects of the BRICS lies in the fact that
China wants to build its own global system with their help. India and South
Africa need easier access to one of the biggest savings’ reservoirs in the
world and Russia was ostracised after its annexation of Crimea. 33
Since mid-2015, Brazil has experienced growing economic problems as
inflation rises and the rate of economic growth radically declines. At the
same time, in its second term, Rousseff’s government has had to confront a
mounting political crisis due to one of the biggest corruption scandals in
32
See “Why would anyone want to host the Oliympics?” The Economist, 8th September
2013. http://www.economist.com/blogs/economist-explains/2013/09/economist-explains-0.
33
Pankaj Mishra (2014), “China is driving the BRICS train”, Blomberg View, 20th July.
http://www.bloombergview.com/articles/2014-07-20/china-is-driving-the-brics-train.
16
Brazil’s history. This brought her government to the point of near collapse
in the early 2016. 34 The figure of Lula da Silva has also been totally
eclipsed, since he has also been connected to a series of scandals concerning
leadership of the Workers’ Party (PT).35 All this has severely affected
Brazil’s international image and its previous efforts to improve its
international brand.36
From the Chilean perspective, transitioning from a dictatorial regime to
democratic rule in the 1990s required the rebranding of the country’s
external image. Chile’s longstanding reputation as a highly institutionalised
country with respect for institutions and for the rule of law contributed to its
image as an exception in the Latin American context. According to Niesing,
despite its recent declines, Chile remains a global leader in economic
freedom and an example for other Latin American countries. Aided by
prudent public financial management and successful fiscal policy, it has
kept public debt low and budget deficits under control (Niesing, 2013: 107).
Chile is second in the world in protecting property rights and has been
renewing its commitment to open trade and investment by participating in
the Trans-Pacific partnership talks. 37 Chile nation branding is part of the
strategic international insertion of a small and little-known country onto the
worldwide stage.
The lack of studies on relations between both countries does not mean
that strong bilateral links between Brazil and Chile since the restoration of
democratic rule have not existed. On the contrary, most studies tend to focus
on the traditional perspective of diplomacy, denying the existence of highly
important actors in the international arena. Some of the topics that should be
34
In March 2014, the Brazilian Federal Police launched an investigation called ‘Lava Jato’
on car-washing services offered at gas stations. The aim was to investigate illegal currency
exchange and money laundering. However, it led to the discovery of corruption in the
Brazilian petroleum company, Petrobras and political parties involved in the Workers Party.
See Folha de São Paulo, “Entenda a operação lava-jato”, 22/04/2016.
http://www1.folha.uol.com.br/especial/2014/petrolao/.
35
See Valor Econômico, “Moro diz que Lava-Jato não tem culpa da crise e pede protesto
pacifico”, 10/03/2016. http://www.valor.com.br/politica/4474336/moro-diz-que-lava-jatonao-tem-culpa-da-crise-e-pede-protesto-pacifico.
36
From 2003 onwards, PT governments were involved in a scheme in Petrobras that was
aimed at securing a permanent hold on power. See The Economist, “How should
presidential systems deal with political breakdown?”. vol. 419, 9th-15th April 2016.
London, p. 38.
37
“Chile”, 2015 Index of Economic Freedom. http://www.heritage.org/index/country/chile.
17
pointed out in Brazilian-Chilean bilateral relations are energy resources, the
emergence of Brazil as one of the BRICS and the importance of Chile as a
bridge to the Pacific Ocean. 38
Furthermore, the lack of studies on Brazil-Chile bilateral ties does not
mean that Brazilian foreign policy has not focused on strengthening ties
with Latin American countries as a whole. As Marreiro points out, President
Dilma Rousseff paid the region special attention. Given priority to Latin
America became evident when President Rousseff cancelled her official
visit to the World Economic Forum’s annual meeting in Davos, Switzerland
(Marreiro, 2014: 23). Instead, she decided to attend the official inauguration
ceremony of the Bolivian president, Evo Morales. This shows that Latin
America was a high prior in Brazil’s foreign policy strategy.39 During the
second mandate of Chilean President Michelle Bachelet (2014-2018), the
Chilean government has emphasised a more proactive foreign policy
towards Brazil.40
President Rousseff also prioritised the summits of the Community of
Latin America and Caribbean States (CELAC) during her two terms in
office.41 When she was in Quito for the 4th CELAC Summit on 27th
January 2016, she mentioned an important partnership with Ecuador in
important areas such as infrastructure, for example the multimodal MantasManaus route linking Ecuador’s Pacific coast to the Brazilian Amazon
region with ports and highways. 42 The inclusion of a range of issues, such as
the Pan-American Health Organisation (PAHO) on the Zika virus in the
Americas, the bioceanic corridor project between Brazil, Chile and Bolivia,
the Brazil-Chile agreement on joint Antarctic research efforts and the
38
In North America the railways linking the Pacific to the Atlantic coast dates back to the
nineteenth century. See, A América do Sul e a integração regional: 28th September 2011,
Rio de Janeiro, Brazil. Apresentação do Embaixador José Vicente de Sá Pimentel; discurso
inaugural do Embaixador Antonio de Aguiar Patriota. Brasília: FUNAG, 2012, p. 13.
39
See Bruno Peres (2015), “Dilma cancela viagem a Davos e vai à posse de Evo Morales”,
Valor Econômico, 13th January 2014, p. 10.
40
See Rosalba O’Brien (2013), “Chile under Bachelet to warm to Brazil”, Reuters, 16th
December. http://www.reuters.com/article/2013/12/16/us-chile-election-foreign-idUSBR
E9BF0JO20131216.
41
Valdo Cruz and Mariana Haubert (2014), “Dilma cancela ida a Davos para prestigiar Evo
Morales”, Folha de São Paulo, 13th January 2015.
42
Ana Cristina Campos (2016), “Rousseff advocates closer cooperation in Latin America”,
EBC Agência Brasil, 27th January 2016. http://agenciabrasil.ebc.com.br/en/politica/
noticia/2016-01/rousseff-advocates-closer-cooperation-latin-america.
18
Brazil-Chile decision to invest in higher education systems demonstrates
that Brazil-Chile relations goes beyond mere commercial issues and the
relevance of multilateral dialogue in Latin America. In addition to current
international political topics, the importance of other actors in their
relationship should not be underestimated.
The structure of the book
The fact that public diplomacy is about building relations and two-way
communication challenges the idea that traditional diplomacy can be
considered as the only way foreign affairs can be conducted. The need to
amalgamate communication with traditional diplomacy allows countries to
foster broader connections and contributes to enhancing mutual
understanding. A crucial point is that public diplomacy supports traditional
diplomacy inasmuch as both ideas are complementary for the understanding
of current international relations and the multiple channels that connect
countries, such as private-public partnerships, civil society, commerce and
infrastructure.
Brazil-Chile ties go about developing a lasting relationship, with public
diplomacy bringing a deeper understanding of their bilateral links. In this
study, public diplomacy, presidential diplomacy and nation branding are the
core analytical tools used to analyse Brazil-Chile relations considering the
relevance of national image projection and the different types of actors
involved in international affairs. Brazil’s potential to become an emerging
world leader demands a public diplomacy approach. A smaller country,
Chile should be studied from a nation branding perspective, since this is an
important component in understanding its foreign policy.
After the introduction, Chapter 1 provides the theoretical framework for
this study and deals with the working definitions of public diplomacy,
presidential diplomacy and nation branding, which are the core analytical
concepts of the study. Along with public diplomacy, para-diplomacy has
also been the result of the growing participation in foreign affairs of
decentralised actors, such as federal states, provinces and municipalities. In
fact, public diplomacy embraces the idea of paradiplomacy and both
concepts encompass the idea of cooperative arrangements, so the
aforementioned ideas can help develop a deeper understanding of Brazil19
Chile relations. Public diplomacy goes hand in hand with the idea of
opening up foreign policy communication channels using new medias such
as digital devices that usually involve interactive users.
Chapter 2 analyses the historical backgrounds of Brazil-Chile relations.
Their bilateral relations go back to 1915 when the so-called ABC
(Argentina-Brazil-Chile) Pact was established. The signing of this pact was
a clear message that having a closer relationship with Chile was important
to Brazil’s foreign policy. Sharing similar historical characteristics such as
political stability and obeying the rule of law (in contrast to other Latin
American states) was a relevant component to the establishing of mutual
respect between both countries. Indeed, since the early nineteenth century,
both countries were considered clear examples of stable political states in a
region in turmoil. Although in many respects Brazil and Chile did not
establish an explicit alliance, the continuous and smooth relations between
them helped maintain the geopolitical balance and contain their common
neighbour, Argentina.
Chapter 3 shows how the establishment of mutual understanding was a
core element in Brazil-Chile relations from the 1990s onwards. This chapter
embraces the democratic period whereby the two countries developed the
most important ties that help understand the nature of their bilateral links.
Combining democratic restoration with the development of decentralised
cooperation offers a new framework in which to observe different aspects of
the Brazil-Chile partnership. The cooperation initiatives that emerged in the
region among regional actors such as the Mercado Común del Sur
(Mercosur) and the Unión de Naciones Suramericanas (UNASUR)
established regular opportunities for dialogue to tackle regional issues with
multilateral forums consolidating a new dynamic for bilateral dialogue.
Despite their different foreign policy strategies, these two countries
strengthened their ties from the 1990s onwards and developed decentralised
links in different areas.
Chapter 4 provides a broader context to understanding the fundamental
aspects of the Brazil-Chile relationship, with Argentina and the United
States playing a significant role in determining periods of closer relations
between the two states. Argentina and the United States exert a great
influence over Brazil-Chile ties, to the extent that closer links with either
Argentina or the United States encourage closer or more difficult relations
20
between Chile and Brazil. The different standpoints adopted by Brazil and
Chile vis-à-vis the United States foreign policy in the region was a
fundamental factor in determining the way the two countries developed their
present bilateral relations. For instance, their different diplomatic
perspectives on the Free Trade Area of the Americas, launched by the
United States in December 1994 influenced both Brazil and Chile’s decision
on whether to strengthen their political ties or seek to develop decentralised
bilateral relations. Intense links established with their common neighbour
demands an analysis of how relations with Argentina interfere in BrazilChile links. This influence was not only important in the nineteenth century
but is also important in the present, as Argentina continues to be a
fundamental actor in Brazil-Chile bilateral affairs given their economic and
trade interdependence as well as Argentina’s relevance as a political actor in
the region.
Chapter 5 describes the increasing importance of energy resources in
foreign affairs taking into account the fact that energy is a relevant source of
power. Brazil’s offshore discoveries of pre-sault in 2007 changed its nation
branding projection in a significant way, giving the country a new level of
oil reserves and production. Energy security encourages a new form of
dialogue between states, since the topic has been gaining relevance in the
last few years in the debate in the international community. Chile’s shortage
of natural gas as a result of the President Nestor Kirchner’s decision to
diminish Argentine gas exports in 2004 led to an unpredictable energy crisis
in Chile. Brazil’s well-consolidated energy matrix and Chile’s ongoing
energy supply problem fostered a dynamic dialogue between both parts. The
Chilean government foresees energy shortages from 2017 onwards, which
means energy discussions have become a priority on the country’s agenda.
Due to its position as an energy provider, Brazil is an interesting partner for
Chile’s import-dependent energy sector.
The final section of the study highlights the relationship between Brazil
and Chile. Both countries share common values, significant trade,
complement each other economically, have direct investments and tax
treaties and provide each other with mutual respect and support, which are
core elements to establishing constructive, stable and trustworthy relations
in the long run. Indeed, Brazil’s aim to become at recognised global player
requires Chile’s support in the multilateral field. Both sides share coherent
21
values and are important allies at world summits. The existence of a variety
of formal and informal bilateral arrangements between both states provides
the potential for partnerships in a range of areas. Brazil is currently more
integrated with the global economy than ever before and its status as an
emerging power will certainly lead to the reformulation of Brazil-Chile
bilateral ties, focused on a multilateral approach.
22
Chapter 1
Public Diplomacy, Nation Branding and Presidential
Diplomacy
The embrace between former presidents Fernando Henrique Cardoso and
Ricardo Lagos at a meeting in March 2012 was definitely an historic
moment, occurring, as it did, between two influential former South
American heads of state, who shared similar well-known academic and
political trajectories as well as matching democratic values.1 The expression
on their faces revealed their mutual admiration and respect and a longlasting friendship between two remarkable political thinkers. Lagos and
Cardoso were essential to transforming the economic and political arenas of
their particular countries. Lagos played a fundamental role in the process of
democratic restoration in Chile in the 1980s. 2 As an important leader during
Chile’s transitional period, Lagos was a key figure in the Democratic
Alliance opposition coalition and the founder and first president of the Party
for Democracy (PPD).3 As Brazil’s Finance Minister, Cardoso implemented
the most successful plan for economic stabilisation the Real Plan in June
1994 and then continued to apply pro-growth economic policies after he
became President of Brazil in 1995.4
Lagos and Cardoso share similar academic experiences. Following the
1964 military coup in Brazil, Cardoso went into exile in Chile. At that time,
1
“Palabras para Venezuela: visiones de una economía con rostro humano”, a summit
organised in Caracas on 10th March 2012, with the presence of the former Presidents
Fernando Henrique Cardoso, Ricardo Lagos and Felipe González.
2
The socialist government of President Ricardo Lagos in Chile (2000-2006) stands out as a
notable exception of economically and politically successful leftwing commitment to
neoliberalism. Lago’s impressive approval ratings underlined the widespread acceptance
among the people of his economic policies. Patricio Navia (2006), “Neo-liberal and
socialist: lessons from the Ricardo Lagos government for leftist leaders in Latin America”,
Beyond neoliberalism in Latin America. New York: Duke University Press, pp. 218-219.
3
See Paul W. Posner (2008), State, market, and democracy in Chile: the constraint of
popular participation. New York: Palgrave Macmillan, p. 66.
4
The Economist, “The Real Plan: Echoes of 1994”, 3 July 2014. http://www.
economist.com/blogs/americasview/2014/07/real-plan.
23
Chile was an island of freedom in Latin America and a regional centre of
culture and intellectualism. As one of the so-called Dependencia theorists in
Chile, Cardoso co-authored his most influential book, Dependency and
development in Latin America with the Chilean sociologist Enzo Falleto.
The intellectual affinities between Lagos and Cardoso provide an interesting
context in which to understand the importance of Chile to the reestablishment of Brazil democracy. Alongside their genuine respect for
democratic values and human rights, Cardoso and Lagos also shared a
pragmatic approach towards the economy, which led to the signing of an
agreement in March 2002 to reduce dues and implement quotas to facilitate
bilateral trade.5
The broader context under which Brazil-Chile developed their links
involves more than traditional diplomacy. The growing influence of
business in foreign affairs and an increase in issues on the international
agenda meant diplomacy not only concerned intergovernmental politics,
with the insertion of diverse actors demanding a new approach to current
Brazil-Chile bilateral affairs. For instance, a Chilean delegation made up of
Economy Minister Luis Felipe Céspedes, Chile’s Ambassador to Brazil,
Jaime Gazmuri, the Executive Vice-President of the Foreign Investment
Committee, Jorge Pizarro, and the Deputy International Director of ProChile, Rafael Sabat, travelled to Brazil in November 2014 for meetings with
local authorities and business people in a bid to boost the flow of investment
between the two countries. 6
Contemporary diplomacy requires the introduction of concepts such as
public diplomacy, nation branding and presidential diplomacy to face up to
an increasing number of topics at both regional and worldwide levels. 7 The
5
Chile and Brazil share strong links considering that the friendship between presidents
Lagos and Cardoso also extends to many Brazilian ministers, such as Paulo Renato Souza
(Minister of Education), Francisco Weffort (Minister of Culture) and José Serra (Minister
of Health, as President Cardoso highlighted in his formal speech to the Chilean National
Congress. “Presidente destaca laços de amizade com Chile”, Agência Brasil, 19/03/2002,
http://memoria.ebc.com.br/agenciabrasil/node/631536
6
Chile Foreign Investment Committee, “Chile invites Brazilian businesspeople to step up
investment in the country”, 4th November 2014. http://www.ciechile.gob.cl/en/espanolchile-invita-a-empresarios-brasilenos-a-intensificar-las-inversiones-en-el-pais/.
7
The wide range of concepts used to better understand the complex character of current
external affairs has increased to the extent that some authors also point out concepts such as
‘parliamentary diplomacy’. Parliamentary diplomacy explains the international activities
24
aforementioned concepts help understand the broader context in which
Brazil-Chile ties exist. Although diplomacy maintains certain aspects of
secrecy and discretion international relations become public in the sense that
foreign policy also needs citizen support.8
Sharing common ground in public diplomacy and nation branding are
core components of an analysis of international relations since the two
concepts focus on aspects beyond traditional diplomacy. 9 However, public
diplomacy and nation branding have different roots. Public diplomacy
comes from international relations and describes the influence of public
attitudes and engagement on the forming and execution of foreign policies.
It also incorporates interaction between private groups and interests in one
country or another. Finally, it encompasses the impacts of foreign affairs on
domestic policy and intercultural communication.10 Although nation
branding emerges as a new concept, it relates to image promotion and
national identity. Nation branding incorporates political, sociological,
cultural, historical and marketing approaches despite the fact that it is much
more than marketing.11 According to this approach and by including public
diplomacy and nation branding into the analysis, the role played by a larger
number of actors in contemporary Brazilian-Chilean relations can be
undertaken by Members of Parliament with the aim of increasing mutual understanding
between states and improving the scrutiny between countries and the democratic legitimacy
of intergovernmental institutions. See Frans W. Weisglas and Gonnie de Boer (2007),
“Parliamentary Diplomacy”, The Hague Journal of Diplomacy, vol. 2, issue 1, pp. 93-99.
8
See Nick Parfait Momengoh (2013), Secret diplomacy: The practice of back channel
diplomacy by liberal democratic states for the degree of Doctor of Philosophy in Global
Affairs, State University of New Jersey.
9
Mexico faced significant problems with its public diplomacy, given that certain cultural
aspects turned into negative public diplomatic topic. Instead of being associated with
cultural diversity, regional leadership and long-term economic development, the country
projected as negative international image with high levels of violence. Nicholas J. Cull
(2013), “El futuro de la diplomacia pública: implicaciones para México”, Revista Mexicana
de Política Exterior, p. 21.
10
Public-private partnerships focus on attracting private financing for public projects.
Roger Wettenhall (2003), “The rhetoric and reality of public-private partnerships”, Public
Organisation Review, vol. 3, issue 1, pp. 77-107.
11
According to this approach, graphics such as slogans, logos, music and lyrics play an
important role in the development of the country’s projection of its nation brand. See
Daniel de Castro Linhares and Isaak Newton Soares (2012), “Marca País: o logo como um
recurso mercadológico dos países latino Americanos”, Revista Unicuritiba. revista.
unicuritiba.edu.br/index.php/percurso/article.
25
considered.
In the case of Brazil, the influence of public diplomacy, nation branding
and presidential diplomacy in the country’s foreign policy strategy was even
more remarkable during the administration of President Luiz Inácio Lula da
Silva (2003-2010). Chile has rebranded itself over the years mainly for
commercial reasons, with President Ricardo Lagos (2000-2006) and
President Michelle Bachelet (2006-2010 and 2014-2018) playing more
active roles than the Conservative Sebastián Piñera (2010-2014) in the
country’s approach to foreign policy. The two countries have different
reasons for developing public diplomacy and nation branding
communications, thereby identifying the distinguishing circumstances in
which Brazil and Chile build their ties. Chile is frequently remembered as a
country with a successful nation brand. The fact that commodity prices
started to fall in 2014 was one of the reasons the Brazilian economy faced
its most severe recession since the Wall Street Crash of 1929. The fall in
commodity prices was not the only reason for the depression, given the
governmental scandal concerning Petrobras (the Brazilian state-controlled
oil company) during President Rousseff’s mandate (Chade, 2016). Thus
Brazil needed to rebrand itself as an emerging global power. Chile,
however, grew 3% as copper exporter in 2015.12
Brazil-Chile relations are based on a long-term bilateral approach since
both countries have shown an interest in cooperating in the fields of publicprivate partnerships, science, infrastructure, trade, investments and
multilateral foreign policy. Public diplomacy, nation branding and
presidential diplomacy show that their bilateral relations encompass
complementary economies, decentralised relations with local governments,
civil society participation and the defence of similar values, such as human
rights.
1.1 The Emergence of Public Diplomacy
Public diplomacy goes beyond traditional diplomacy since it encompasses a
wide range of areas that interact with foreign policy strategy. While
12
Latin America as a whole will grow by 2%. According to economists, Chile operates a
counter-cyclical, fiscal policy, saving during good times and spending during bad. The
Economist. “Dependency on commodities”, 10-16 January 2015, pp. 8-9.
26
traditional diplomacy considers governments as the only central actors in
foreign affairs, public diplomacy recognises the increasing importance of
decentralised actors in international relations. Decentralisation not only
refers to international relations, but also government decentralization, which
has become an important tool to deal with current issues. As White points
out, “the main objective of decentralisation is to create the most efficient
and accountable form of government possible. Decentralisation is often
introduced to offset a problem that has caused dissatisfaction with a
centralised system” (White, 2011: 9). Diplomacy has become more flexible,
creative and democratic in Brazil since the late 1990s. Although Brazilian
foreign policy is centralised in nature, cities, states and the legislative power
have increased their participation in the debate on international affairs. The
decentralised aspect of foreign policy encompasses the relationship between
the Executive and Legislative powers, the role played by the president, the
Ministry of Foreign Affairs and the participation of states and cities in
international relations (Figueira, 2009: 13-14).
In similar circumstances, Chile’s centralised government does not mean a
lack of decentralisation initiatives in foreign policy, as illustrated by the
Chilean Border Committee that, since the 1990s, has fostered decentralised
relations with Argentina. As in Brazil, the Chilean decentralisation process
also encouraged relevant debate over administrative and judicial
proceedings in order to facilitate local participation in foreign affairs.
During the government of President Lagos, Chile aimed to strengthen its
relationship with Latin America, so the government encouraged the
participation of decentralised actors in projects such as the bioceanic
corridor, intervention in the peace process of neighbouring countries and the
strengthening of the cross-border network observed in Chapter 3.13
The main goal of public diplomacy is to integrate and make the growing
role played by the new actors who interact in different aspects of foreign
policy visible.14 According to this approach, civil society, the business
13
See Comisión Asesora Presidencial en Descentralización y Desarrollo Regional.
“Propuesta de Política de Estado y Agenda para la Descentralización y el Desarrollo
Territorial de Chile”, 7 October 2014. https://prensa.presidencia.cl/lfi-content/otras/
informes-comisiones/InformeDescentralizacion.pdf.
14
International relations encompass interaction between different actors. The Bretton
Woods Conference, in 1944, regulated the modern global system of the international
economy with two main aims: advancing the reduction of tariffs and other barriers to
27
sector and individuals have become an important part of foreign affairs
taking into account the emerging interdependence between different sectors
in different countries. Indeed, emerging actors support foreign policy
strategy, therefore serving to legitimise long-term diplomatic targets.15
Public diplomacy is more than simply increasing the participation of new
actors in foreign policy; it includes communication with regional
governments, NGOs, minority groups, private sectors and all the other
groups that exert influence over foreign policy planning. New concepts in
international relations emerge due to the need to deal with different
phenomena and face contemporary dilemmas. Changing from the nationstate as the predominant actors in foreign affairs demands a new mechanism
to help understand international relations. It should be remembered that, in
the past, the modern state was historically part of the transformation of the
world’s processes (Caselha, 2014: 642).
Public diplomacy deals with a complex variety of actors, along with
communication channels, to transmit the diplomatic message between
diplomats, foreign correspondents, and the public. In this respect, civil
society has had a large impact on contemporary foreign policy, hence the
transnational flow of information and ideas that constitutes an important
part of international links. According to Sfeir-Younis, civil society has a
large impact on contemporary foreign policy, since it tends to observe
global concerns, such as environmental issues, crime, human rights and
trade. The existence of an organised and effective civil society is the
greatest social phenomenon of the latter part of the twentieth century and
this new millennium (Sfeir-Younis, 2004: 29).
As Hurrell points out, today’s foreign policy engages new issues, areas,
actors and public-private partnerships to promote opportunities for dialogue
international trade and creating a global economic framework to minimise economic
conflicts among nations. The conference demonstrated how economy and politics can
closely interact, considering the importance of trade in foreign affairs. Trade exerts an
overwhelming influence on their relationship between states hence trade is a crucial
component to Brazil-Chile bilateral links. Peter Malanczuk, Modern Introduction to
International Law, seventh revised edition. New York: Routledge, p. 222.
15
The international organizations, non-governmental organizations and multinational
companies are some of the actors that came to divide states in the international arena.
Marques, Guilherme Bez (2008), “Velhos e novos atores: as relações internacionais de
Vestfália ao século XXI”, Ius Gentium: teoria e comércio no Direito Internacional, no 1,
jul. http://www.iusgentium.ufsc.br/revista/artigo01.pdf.
28
and channels to tackle matters of global importance. International
organisations, non-governmental organisations and multinational companies
are some of the actors that came to divide states in the international arena
(Hurrell, 2006: 10-11). Traditional diplomacy has not diminished its role in
the world order, even though today’s complex international agenda has
deepened the interdependence of different sectors when dealing with diverse
issues (Von Bülow, 2010).
However, the issue of public diplomacy deserves proper attention, given
that foreign policy maintains its secretive nature. This does not mean that
there is a lack of secrecy within diplomacy, since the way foreign policy is
conducted still maintains a high level of discretion. Being discreet is as core
element when negotiating international affairs. Nevertheless, according to
Szondi the international relations context in the early 2000s and the fact that
diplomacy at a certain point became public should be considered.16 On one
hand, many actors in civil society paid special attention to how foreign
policy was conducted. On the other, politicians discovered that the foreign
policies they materialised brought them popularity. The personal aspect is a
fundamental element of presidential diplomacy as will be seen. For instance,
President Lula’s foreign policy focused on closer dialogue with civil society
by introducing international affairs into his official speeches. In addition to
this, the Lula administration prioritised strengthening ties with Latin
America, building up ties in particular in private-public partnerships with
the region’s countries (Almeida, 2003: 87).
Obviously, strengthening the links between foreign policy and domestic
politics played an essential role in promoting Brazil’s insertion into the
international arena, with the country initiating a series of diplomatic
initiatives in that respect. For example, President Lula’s at the beginning of
the G3 (consisting of Brazil, India and South Africa) and the G20 summits
occurred at ministerial meeting of the World Trade Organisation (WTO).
Moreover, his strategy to transform the BRIC concept into a diplomatic
16
Each country conducts some kind of public diplomacy, while nation brand initiatives are
less common. Nation branding is considered an instrument of public diplomacy. Gyorgy
Szondi (2008), “Public diplomacy and nation branding: conceptual similarities and
differences”, papers discussing in diplomacy, Netherlands Institute of International
Relations ‘Clingendael’, p. 29. Jian Wang (2006), “Managing national reputation and
international relations in the global era: Public diplomacy revisited”, Public Relations
Review, vol. 32, Issue 2, pp. 91-96.
29
endeavour reshaped the domestic political debate. According to Pim,
interaction between foreign policy and domestic politics was increasingly
important in President Lula’s administration. In this respect, the mass
media, businessmen, union leaders and the industrial and agricultural sectors
mobilised around Lula’s government’s foreign policy. In its foreign policy
strategy, Lula’s administration had all kinds of tools and forms of
multilateral initiatives, bilateral relations and informal cooperation
mechanisms to achieve diplomatic priorities (Pim, 2009: 18-19).
President Lula’s administration was much more active than that of his
successor, Dilma Rousseff. Nevertheless, President Rousseff maintained the
main aims of Lula’s foreign policy, although her government practiced a
much more discreet and reserved kind of diplomacy. For obvious reasons,
Lula’s political abilities opened many doors in the international scenario
and, to some extent, facilitated President Rousseff’s international insertion.
As Visentini points out however, she concentrated her efforts on improving
the old Brazilian infrastructure. In addition, Rousseff was more concerned
about economic affairs and carrying out the PAC (Accelerated Growth
Programme) the programme of public infrastructure works begun by Lula.
In addition, President Rousseff placed greater emphasis on human rights
issues. For instance, during the Arab Spring, Brazil was cautious of
supporting Arab regimes. This stance contrasted with President Lula’s
active foreign policy in the Middle East, intervening in the IsraeliPalestinian conflict (Visentini, 2014: 71).
The origins of this new public diplomacy lie partly in experience itself, as
well as the current debate on the need for more public diplomacy.17 In
Brazil, the Ministry of Foreign Affairs (Itamaraty) considers public
diplomacy an important bridge between the government and civil society to
promote transparent national public policies and turn them into something
17
In the mid-1960s, the term public diplomacy was first used by a former American
diplomat and Dean of the Fletcher School of Law and Diplomacy, Edmund Gullion. In the
following decades its practice became related to the United States. The US public campaign
embraces the communication of the American way of life to foreign politics. US public
diplomacy depends on political and cultural congruency between the US and the target
nation, as well as on the strategy, power and motivations of foreign elites to promote
positive news about the US in their media. Robert M. Entman (2008), “Theorising mediate
public diplomacy: The US Case”, The International Journal of Press Politics, vol. 13, n o 2,
pp. 87-102.
30
more democratic for citizens.18 Brazilian public diplomacy receives
proposals from civil society to be included in foreign policy in order to carry
out national aims. In these attempts to bring foreign policy closer to civil
society, the adoption of the new Brazilian Access to Information Law
favoured the perception that diplomacy is, to a certain extent, open to
society’s participation.19 The support of technological tools such as the
internet and social media foster the more active participation of civil society
in international affairs and the global reach of the actions carried out by the
Ministry of Foreign Affairs. The active role played by the Brazilian
Ministry of Foreign Affairs in digital media ensures a more effective
communication with citizens.20 International agendas have become more
dynamic and should not be restricted to relations between state actors.
Public diplomacy not only considers the importance of soft power in
international affairs, but also communication channels that lead to a growing
interdependence between actors.21
As Schneider argues, “the exchange of ideas, information, art and other
aspects of culture among nations ant their peoples to foster mutual
understanding, forms an important component of the broader endeavour of
public diplomacy, which basically comprises all that a nation does to
explain itself to the world” (Schneider, 2005: 147). However, public
diplomacy is more than just selling policy, culture and values: it implies a
vast field including mass media communication, the intervention of public
18
Ministério das Relações Exteriores, “Diplomacia Pública”. http://www.itamaraty.gov.
br/index.php?lang=pt-BR.
19
The New Brazilian Access to Information Law, approved by the Senate and ratified by
president Dilma Roussef in November 2011 came into force on 16th May 2012. It provides
greater transparency and involvement regarding the access to information already guarantee
by the Constitution since 1988. However, the law also provides sanctions for those who
deny access to information. “Brazil: new Access to Information Law becomes effective
today”, Article 19, 16th May 2012. https://www.article19.org/resources.php/resource/
3208/en/brazil:-new-access-to-information-law-becomes-effective-today.
20
See “Diplomacia Pública, Acesso à Informação”, Ministério das Relações Exteriores,
18th July 2015. http://www.itamaraty.gov.br/index.php?option=com_content&view=
article&id=106:diplomacia-publica&catid=44&Itemid=135&lang=pt-BR
21
In Mercado Comun del Sur (Mercosur) and the Unión de las Naciones Sul Americanas
(UNASUR) the increasing participation of civil society remained a crucial factor to further
integration. Since the beginning of the 1990s, the mobilization of civil organisations has
increased its role in the regional integration process. Friedrich Budini (2015), “Política
externa e participação social no Mercosul”, Carta Capital. http://www.cartacapital.com.br/
blogs/blog-do-grri/politica-externa-e-participacao-social-no-mercosul-9519.html
31
opinion in foreign affairs and increased interaction between state actors and
non-official groups.22
The openness and communication with the public also gives them a say
in the decision-making process, thus it has empowered civil society’s
participation in the foreign policy debate. According to Copper,
contemporary diplomacy means “openness and transnational cooperation”
(Copper, 2003: 76 quoted by Melissen, 2005: 5). Such openness and multilevel cooperation implies more collaborative diplomatic relations with
diverse actors. In this scenario, public diplomacy has turned into an
indispensable component of a collaborative model of diplomacy. Noninstitutional actors also play an important role, considering the participation
of media, political parties, organised interest groups and the Legislative and
Executive powers in foreign affairs (Cann, 2012: 31).
The Brazil-Chile relationship cannot be fully understood without taking
into consideration its public diplomacy components, given the multi-level
bilateral nature of their relations. For example, the two countries work
together closely on multiple levels, sharing, for example, important
technological cooperation agreements: the Basic Agreement on Scientific,
Technical and Technological Cooperation (16th July 1990); the
Complementary Agreement to the Basis of Scientific, Technical and
Technological Cooperation (15th September 1998); and the Cooperation
Agreement in the Field for the Peaceful Use of Nuclear Energy (20th March
2002).23 According to Cabral and Weinstock, bilateral technical cooperation
has become a significant tool to strengthen ties, since it means the transfer
of ideas, knowledge, skills and technology to promote development. It is
normally carried out through providing training, expertise and consultancies
(Cabral and Weinstock, 2010). The proliferation of actors gaining the
capacity to intervene in foreign policy topics favours multi-level
cooperation in international affairs.
Due to their increasing importance in transnational discourse from the
late 1990s onwards, non-state actors have become crucial participants in
22
Only a systematic multidisciplinary effort can lead to a coherent theory of public
diplomacy. Eytan Gilboa (2008), “Searching for a theory of public diplomacy”, The
ANNALS of the American Academy of Political and Social Science, vol. 616, March 2008,
pp. 55-77.
23
“Agreements and Treaties”, Embajada de Chile en Brazil. http://chileabroad.gov.
cl/brasil/en/relacion-bilateral/acuerdos-y-tratados-bilaterales/.
32
Brazil-Chile relations. The participation of non-state actors in the
international scenario has increased in the last few years. In this regard
regional and local governments, transnational corporations and
communication technologies have become important actors in foreign
affairs.24 The concept of public diplomacy took shape in Brazilian
diplomacy through a set of activities targeted at promoting dialogue with
civil society. According to Souza, public diplomacy is about building
relations, communication, credibility and trust (Souza, 2010). Since 2012,
Brazil’s public diplomacy has aimed to establish a new means of dialogue
between official actors and civil society in order to legitimise the country’s
foreign policy agenda.25 Despite the fact that public diplomacy has so far
been understood almost exclusively in terms of Brazilian state-centric
diplomacy, the business sector has also played an important role in BrazilChile bilateral links. In addition to this, the actions of all the political actors
involved in bilateral relations, such as local governments, public-private
partnerships and the reformulation of the state’s role should be taken into
account, since they influence international affairs. In this respect, as la Porte
points out, public diplomacy is more than the activity carried out by the
state, so non-official actors’ participation should be considered. 26
The increasing role played by public diplomacy has also led to an
important debate in Chile, since the emergence of new communication
techniques has changed the restricted approach of traditional diplomacy. 27
During Piñera’s administration (2010-2014), the Chilean Minister of
24
See “La visión de la ONU sobre los actores no estatales en las relaciones
internacionales”, Paradiplomacia-governos locais, 4th February 2011. http://www.
paradiplomacia. org/noticias.php?lang=po&seccion=6&no ta=22
25
See Marco Antonio Nakata, “Diplomacia Pública”, Redes E-Gov. http://www.redesegov.com.br/wp-content/uploads/2014/05/04-Apresenta%C3%A7%C3%A3o-DiplomaciaPublica-2014-Marco-Nakata-MRE-Itamaraty.pdf. The Preparatory Committee Summit of
Rio+20 from 29th-30th May illustrates civil society’s participation in Brazilian public
diplomacy. “Texto de apoio para a consulta pública”, Rio+20 Conferência das Nações
Unidas sobre Desenvolvimento Sustentável. http://hotsite.mma.gov.br/rio20/consultapublica-4/texto-de-apoio-para-a-consulta-publica/.
26
Teresa la Porte (2012), “The legitimacy and effectiveness of non-state actors and the
public diplomacy concept”, Public Diplomacy Theory and Conceptual Issues. ISA Annual
Convention, 1st-4th April, San Diego. http://files.isanet.org/ConferenceArchive/
58816b94a39845d9a5b618ae52e7c80c.pdf.
27
Claudio Garrido Melo (2007), “Diplomacia Publica y Propaganda”, Diplomacia, no 113,
October-December. Santiago de Chile: Academia Diplomatica, pp. 7-17.
33
Foreign Affairs, Alfredo Moreno launched a blog in August 2011 in order to
promote public diplomacy and creates a bridge between civil society and the
Ministry of Foreign Affairs. In this way, public diplomacy became a crucial
mechanism for fostering the interaction of citizens and civil society
institutions with the Chilean Chancellery.28 As Cook highlights, an
important point illustrating the participation of actors beyond the Executive
power is the role played by Parliament in international affairs since the
1990s, constituting a fundamental component of Chile’s approach to foreign
policy (Cook, 2012: 262). Indeed, the increased participation of the
Executive power through trainee diplomats who have to establish links with
the private sector and non-governmental organisations contributes to
developing foreign policy strategy.29 In this way, the participation of the
Executive and the Legislative branches together with civil society has, since
the 1990s, become a new reality in Brazil-Chile bilateral relations.
The main difference between traditional diplomacy and public diplomacy
is that the former is related to the relationship between the representatives of
states or other international actors and the latter involve the general public in
foreign societies and highlights the importance of non-official groups,
organisations and individuals (Melissen, 2005: 11). Public diplomacy does
not mean that diplomats have no direct role beyond diplomatic affairs; in
fact they should work at maintain their relations with the existing elites and
the training programme aimed at civil servants, police, the military and the
judiciary. 30 However, they need to realise that these activities, although
necessary, are not enough on their own and that diplomats and other
government officials should promote a broader coalition of non28
The aim of the Chilean Ministry of Foreign Affairs is to encourage citizens to participate
in the foreign policy process. “Ministro de RR.EE. de Chile inaugura de sitio web de
diplomacia pública”, Ministerio de Relaciones Exteriores, Chile Abroad, Embassies,
Consulates and Multilateral Missions of Chile. http://chileabroad.gov.cl/blog/noticias/
2011/08/23/ministro-de-rr-ee-de-chile-inaugura-sitio-web-de-diplomacia-publica/.
29
More information about the Chilean case in John Hemery (2005), “Training for public
diplomacy: an evolutionary perspective” in Jan Melissen, The new public diplomacy: soft
power in international relations. London: Palgrave Macmillan.
30
Moreover, public diplomacy means that the state engages in image projection,
communication and building relationships with domestic and foreign audiences. Antônio
Ferreira de Lima Júnior (2015), “O papel da diplomacia pública nas relações internacionais
contemporâneas”, Redefinindo a diplomacia num mundo em transformação, 5 o National
Meeting from 29th-31st July 2015. Associação Brasileira de Relações Internacionais
(ABRI). www.encontronacional2015.abri.org.br/arquivo/downloadpublic.
34
governmental agents (Riordan, 2005: 186). As Melissen points out, “the
new public diplomacy will be an increasingly standard component of overall
diplomatic practice and is more than a form of propaganda conducted by
diplomats” (Melissen, 2005: 11). Public diplomacy embraces public affairs,
the participation of new actors and the reformulation of the nation brand in
order to attract investments.31 The interaction of emerging actors in BrazilChile bilateral relations will be analysed in more detail in the following
sections and in Chapter 3.
As Riordan argues, “recent years have seen the emergence of a new
international security agenda, including non-traditional issues such as
environmental degradation, the spread of epidemic diseases, financial
instability, organised crime, migration, growing foreign direct investment,
resource and energy issues” (Riordan, 2005: 186-187). These issues are all
interrelated since they are transnational problems and demand a collective
approach. The threats that these issues pose to society cannot be managed
without collaborating with a wide range of partners from different
nationalities, cultures and political and economic backgrounds.32
Despite the differences between traditional and public diplomacy, both
should be developed according to mid-term objectives and long-term aims.
As Melissen states, “public diplomacy builds on trust and credibility and it
often works best with a long horizon” (Melissen, 2005: 15). It can target the
field of political dialogue, trade, foreign investment and the establishment of
a connection with civil society without the need for a gatekeeper’s influence
and beyond that, it also has hard power goals such as alliance management,
conflict prevention or military intervention. As long as public diplomacy
ensures a coherent environment for foreign policy to be carried out in,
Brazil-Chile long-term bilateral ties should be studied from this
perspective.33
31
As public diplomacy assumes a more prominent role in the diplomatic affairs of nations,
it is increasingly being used in the international relations debate. Kathy R. Fitzpatrick
(2007), “Advancing the new public diplomacy: a public relations perspective”, The Hague
Journal of Diplomacy, vol. 2, Issue 3, pp. 187-211.
32
For further information on this topic see Kal Raustiala (2002), “The architecture of
international cooperation: transgovernmental networks and the future of international law”,
Virginia Journal of International Law, vol. 43, Los Angeles: UCLA School of Law.
http://www2.law.ucla.edu/raustiala/publications/Architecture%20of%20International%20C
ooperation.pdf.
33
The countries of the ABC Pact (an alliance between Argentina, Brazil and Chile) seem to
35
1.1.1 Public diplomacy and propaganda: impacts on traditional
diplomacy
According to Clerc and Glover, concepts such as propaganda, nation
branding and foreign cultural relations require more attention in the study of
the so-called new public diplomacy. Likewise, public diplomacy,
propaganda and nation branding are also about communicating information
and ideas to foreign audiences. The goal is to change their attitudes towards
the original country, as well as reinforce existing beliefs (Clerc and Glover,
2015: 19). In practical terms, public diplomacy has more to do with the
perception of ‘engagement’ than simply the dimension of communication
targets.34 Public diplomacy is about building relationships with diverse
sectors, enabling various actors to participate in the international affairs’s
agenda. As Wang argues, any scenario of developing relations between
states demands cross-border cooperation between the public and private
sectors (Wang, 2006: 43-45).35 Consequently, public diplomacy performs a
gap-filling role since it involves a two-way communication channel. 36
be different from the rest of Latin America due to their rapid economic development,
democratic regimes and stable political institutions. Jorge Balán (2014), “The Southern
Cone of the Americas: higher education at a crossroads”, International Briefs for Higher
Education Leaders, no 4. Boston, p. 12. Apart from their historical backgrounds, Brazil has
attracted a lot of attention as an emerging economy and Chile continues to lead the region
in economic freedom and growth. The relationship between the two states should be studied
in a broader context. Míriam Leitão (2014), “A economia do Chile”, O Globo, Caderno
Economia, 13th March 2014, p. 12.
34
Public diplomacy demands that policy-makers and diplomats work together with a wider
range of actors beyond governments to move towards a more open diplomacy. Jim Murphy
(2008), “Engagement”, Public Diplomacy in a Globalised World. London: Foreign and
Commonwealth Office, pp. 6-15.
35
More information on the increasing role of business in public diplomacy in Jay Wang
(2006), “Public diplomacy and global business”, Journal of Business Strategy, vol. 7, Issue
3, pp. 41-49. The increasing role of transnational networks should be taken into account in
Brazil-Chile bilateral relations, Marisa von Bülow (2010), “Civil society, organisations and
their pathways to transnationality”, Building transnational networks: civil society networks
and the politics of trade in the Americas. New York: Cambridge University Press, p. 5.
36
The US Information Agency defined public diplomacy as promoting the national interest
and the national security of the United States through understanding, informing, and
influencing foreign publics and broadening dialogue between American citizens and
institutions and their counterpartes abroad. Stephen Johnson and Helle Dale (2003), “How
to reinvigorate US public diplomacy”, The Heritage Foundation Backgrounder, no 1645.
Washington D.C., 23 April. http://www.heritage.org/issues/public-diplomacy.
36
In contrast to public diplomacy, propaganda has, in some respects,
negative connotations, although it should be stressed that few would
consider public campaigns by West European countries aimed at building
up their civil society as propaganda. 37 According to Welch, “propaganda is
the deliberate attempt to influence the opinions of an audience through the
transmission of ideas and values for the specific purpose, consciously
designed to serve the interest of the propagandists and their political master,
either directly or indirectly” (Welch, 2005: 16-17). Propaganda tends to
send out a single message in a one-way direction without expecting an
answer.38 However, emerging new medias have changed the unique
perception of media as a single unit.39
The previously mentioned definition of propaganda is hard to distinguish
37
There is an unfair dismissal with regard to propaganda, meaning that the term criterias
need analysis. Douglas Walton (1997), “What is propaganda, and what exactly is wrong
with it”, Public Affairs Quarterly, vol. 11, Number 4, pp. 383-413.
38
The term propaganda has a universally negative connotation. Propaganda is more an
exercise of deception than persuasion. Propaganda intends to manipulate others’ beliefs. In
contrast, public diplomacy involves attempts to influence the foreign audience without the
use of force. The mechanism of public diplomacy used to influence foreign target audience
are media diplomacy, public information, political action and cultural programmes. Eric
Braham (2006), “Propaganda, beyond intractability”, August. http://www.
beyondintractability.org/essay/propaganda.
39
Today, new digital technologies, particularly new communication networks connected to
the internet, are important models of cultural production. These new media tools are
flexible enough to serve the general models of information. The so-called ‘new media
culture’ describes the kind of changes that occur in cultural and social environments after
the expansion of digital technologies. This idea incorporates groups of people and practices
connected to the media and the political power of networks and networking. Slavomir
Krekovic (2003), “New media culture, internet as a tool of cultural transformation in
Central and Eastern Europe”, IWM Junior Visiting Fellows’ Conferences, vol. XIV, nr. 6.
p. 6. http://www.iwm.at/wp-content/uploads/jc-14-06.pdf. The media has been considered
an important actor in diplomacy, since the interest of citizens in this has increased in the
last few years. Given that misperceptions and distorted images have led to conflicts of
interests between states, the media and international affairs, these are key elements in
foreign audience’s perceptions. The Arab Awakening in 2011 was an important example of
the power of the real media, since the importance of the uprising extended beyond the Arab
states and affected the rest of the global community. This means that policymakers and
diplomats cannot be mere spectators. However, the crucial point is the incompatibility
between speed and diplomatic action. Diplomaticy became obsolete for dealing with new
media such as Twitter and Facebook. See Philip Seib (2012), Real-time diplomacy: Politics
and Power in the Social Media Era. New York: Palgrave Macmillan.
37
from some of the definitions of public diplomacy. 40 Either the former or the
later refers to modern communication with the public, encompassing
different target groups and focusing on increasing the support and
participation of non-state actors in how foreign policy is carried out. As
Melissen points out, “public diplomacy is similar to propaganda in that it
tries to persuade people what to think, but it is fundamentally different from
it in the sense that public diplomacy also listens to what people have to say”.
The main difference between the two lies in the pattern of communication;
modern public diplomacy is considered a ‘two-way street’, getting over the
point that it is persuasion by means of dialogue based on a liberal notion of
communication with foreign publics (Melissen, 2005: 18).
In this sense, a category such as propaganda has its limitations when
capturing the range of aspects that guide the relationship between diplomats
and civil society.41 Shaping new public diplomacy is much more complex
than the idea of one-way messaging, as ‘propaganda’ proposes.
Accordingly, agents of the state have to build ties with society in order to
defend national interests. However, the rise of new media changes the idea
of conventional media as the only instrument that gives direct information.
As Ayad points out, “the public audience is relying less and less on
traditional information sources. Journalists and experts are no longer the
only reliable sources of information. New technology has brought new
sources of communication” (Ayad, 2012: 26).
Expanding new forms of communication allow individuals to be much
better informed than in previous years, increasing interaction and
conversation about international issues. The diversification of new medias
contributes towards empowering civil society and exerting a significant
40
See Ben D. Mor (2007), “The rhetoric of public diplomacy and propaganda wars: a view
from self-representation theory”, European Journal of Political Research, vol. 46, Issue 5,
pp. 661-683.
41
From a communications perspective, several key features make propaganda the tool of
choice in certain contexts and public diplomacy in others. Propaganda deliberately
manipulates the communication through a variety of techniques so that some aspects are
hidden from the audience and the audience feels compelled to accept the message. Public
diplomacy is open public communication in a global communication arena. To gain trust,
public diplomacy must be absolutely credible for the government to stand any chance of
success. R. S. Zaharna (2004), “From propaganda to public diplomacy in the information
age” in Nancy Snow and Yahya Kamalipour (eds) War, Media and Propaganda: A global
perspective. New York: Rowman & Littlefield, p. 5.
38
influence on public diplomacy strategy.42 Whilst the state remains the
primary source of power and law in the international system, emerging
actors promote international cooperation between different sectors.43
Bearing this mind, it is important to remember that public diplomacy
involves about a highly complex apparatus to deal with foreign affairs’
recent demands. 44 The public diplomatic approach encompasses a credible
nation branding enforced by coherent propaganda, and dynamic presidential
diplomacy.
1.1.2 Paradiplomacy and public diplomacy
The presence of emerging actors in international relations explains the need
for a new approach to face the challenge of foreign affairs. In the twentyfirst century, governments are dealing with global challenges such as
environmental issues, humanitarian catastrophes, security threats and
transnational crime among others and as a result, conventional models are
not efficient enough to deal with the problems in the new world order. The
growing role played by non-state actors in rule-making and implementation
needs a more dynamic approach. 45
42
On 20 June 2013, more than one million Brazilians protested against poor public
services, corruption, the cost of living, extravagant spending on the World Cup and much
more. “Brazil’s protests: the cries are answered”, The Economist, 29th June 2013, p. 58. In
Chile, protests resumed on 4th August 2011, when tens of thousands of students marched in
major cities in favour of free education. “Education in Chile: we want the world”, The
Economist, 13 August 2011, p. 52.
43
In Realism, the international system is defined by anarchy. This means the absence of a
central authority as well as the idea that states are sovereign and autonomous of each other.
See Pecequilo, Cristina Soreanu (2004), Introdução às relações internacionais: temas,
atores e visões. Petrópolis: Vozes, pp. 115-117.
44
Colombia’s domestic situation involving drug trafficking and criminal activity requires
the government to manage foreign affairs perfectly. The negative image of Colombia
associated with cocaine production and armed conflict demanded a new public diplomacy
strategy to tackle the country’s negative image. A negative perception abroad decreases
foreign direct investment (FDI) and tourism and damages the nation’s international image.
See Jennifer Florez Torres (2010), “La diplomacia pública en una perspectiva comparada:
una estrategia de la política exterior y su implementación en la política colombiana”,
Pensamiento Jurídico, no 30, January-April. Bogotá: Stilo Impresores, pp. 263-293.
45
See Thomas Risse (2011), “Governance in areas of limited statehood” in Risse, Thomas,
Governance in areas without a state: policies and politics in areas of limited statehood.
39
Important decisions are not only made by central governments;
subnational governments also play a significant role in today’s international
relations. At present, international activity needs to relate domestic and
international forces and the interactions between the two.46 The increasing
emergence of paradiplomacy lies in the new demands of foreign policy
worldwide.47 An important question when analysing the paradiplomacy
phenomenon concerns understanding why sub-national entities go abroad.
With this in mind, paradiplomacy can be considered as the direct
international activity carried out by sub-national entities in order to support,
complement or correct central official diplomacy.
Sub-national actors have several reasons - whether economic, political or
cultural - to operate on the international arena. There are numerous reasons
for developing para-diplomatic ties, given the specific features of a certain
region, province or city, to establish international links. The level of
decentralisation, the relationship between the central government and the
decentralised entity and geographical position play an important role in
paradiplomacy. However, as Serra argues, these are not fundamental
components for developing para-diplomatic relations, since this has to do
New York: Columbia University Press.
46
The changing role of diplomacy in the twenty-first century has been notorious, since it
has gone from a peaceful method of maintaining inter-state relations to being an instrument
of communication in a globalised context. Traditional diplomacy has only normally been
practiced by diplomats and statecrafts today there is a growing participation of other actors,
such as international organisations, transnational companies, the media and NGOs, shifting
the focus of international relations. Wilfried Bolewski (2007), Diplomacy and International
Law in globalised relations. Germany: Springer. The growing role of subnational and
formal actors imposed a new language on foreign policy to help understand the complex
scenario in which foreign affairs are carried out. Francisco Aldecoa and Michael Keating
(1999), Paradiplomacy in action: the foreign relations of subnational governments. London:
Frank Cass Publishers.
47
Globalisation and the rise of transnational regimes, particularly regional trading areas,
have diminished the distinction between state and subnational governments. Paradiplomacy
is opening international affairs to other actors, where states are no longer considered
exclusive actors. Michael Keating, “Regions and international affairs: motives, opportunites
and strategies” in Aldecoa, Francisco and Keating Michael, Paradiplomacy in action: the
foreign relations of subnational governments. New York: Routledge. p. 6. For instance,
Chile and Argentina developed a subnational relationship in the early 1990s through the socalled ‘Comités de Frontera’ and ‘Comités de Integración’ along the 5.500 Kilometres of
their shared borders. Loreto Schnake (2010), “Paradiplomacía en Chile: el caso de la region
metropolitana”, Friedrich Eberto Stiftung. http://library.fes.de/pdf-files/bueros/chile/ 08521.
pdf.
40
with the local governments’ aims of establishing links beyond their borders
(Serra, 2009: 73-74). No matter exactly what their motives, their reasons are
similar: to seek support in the international arena for their demands. The
idea of becoming more active internationally is not something exclusive to
certain regions, since the current foreign affairs context demands new
organisational ways of dealing with these issues.48
In this study, paradiplomacy has nothing to do with separatism,
nationalist movements or political reasoning (the idea that regions seek
legitimacy and recognition abroad). Instead, it has to do with digital media,
since creating direct communicational links is congruent with public
diplomacy, nation branding and presidential diplomacy. This means the idea
of multi-level cooperation to complement traditional diplomacy and
strengthen international links.49 Although Brazil and Chile do not share
common borders, both countries have decentralised relations. For instance,
the Brazilian northeast state of Ceará has developed an important
relationship with Chile. 50
Paradiplomacy is particularly relevant to understanding the capacity of
sub-state entities’ participation, irrespective of their metropolitan state, in
48
In the mid-1980s, Mexico initiated a process of political liberalisation and democratic
transition which favoured the trend towards political decentralisation. The decentralisation
of the federal government led to ties being strengthened in the areas of economic promotion
and tourism. Rafael Velázquez Flores (2015), “La paradiplomacia mexicana: las relaciones
exteriores de las entidades federativas”, Revista de Relaciones Internacionales de la
Universidad Autónoma de México, no 96. pp. 123-149. One example of this is the summer
programme created by the government of Mexico specifically through the Ministry of
Social Development and the Mexican Institute of Youth. The programme involves Mexican
young people going to Colombia to participate in workshops on preventing of pregnancy.
The aim is for Mexican students to have a chance to change the problems in Colombia.
Jennifer Jacqueline Galeana Zavala (2014), “The Latin America paradiplomacy model
makes sense for US-Russia relations”, Russia Direct, 26th July 2015. http://www.russiadirect.org/opinion/latin-american-paradiplomacy-model-makes-sense-us-russia-relations.
49
Growing interdependence as part of the globalisation process led to emerging concepts
such as paradiplomacy. An increasing paradiplomatic role in foreign affairs can also be
noted in the Triple Frontier (Brazil, Paraguay and Argentina), which explores the
relationship between the three based on conceptual debate, whether this contributes to
strengthening cooperation or encouraging dissonance between the states. Cardin, Eric
Gustavo. “Globalização e desenvolvimento regional na Tríplice Fronteira”. In: Ciências
Sociais Unisinos, vol. 45, n.1, pp. 162-170. São Leopoldo: Editora Unisinos, 2009.
50
See Governo do Estado do Ceará, “Governador se reúne com embaixador do Chile”. 1st
November 2013. http://www.ceara.gov.br/sala-de-imprensa/noticias/9356-governador-sereune-com-embaixador-do-chile.
41
international affairs. 51 This is also called ‘federal foreign policy’, inasmuch
non-central states seek out their own specific international interests.52
Paradiplomacy makes it clear that autonomous entities can participate in the
international arena by establishing their participation scope.53 It is important
to highlight that autonomous entities do not engage in traditional foreign
policy.54 Rather, as Ribeiro argues they have limited autonomy and
excessive bureaucracy when managing their policies in the international
system (Ribeiro, 2009: 124). This means that they are sufficiently
competent to make decisions independently, even within the existing
constitutional framework of their state.
On the whole, foreign ministries cannot be considered the exclusive
domain of foreign policy. The emergence of sub-national entities in
international affairs is partly linked to the nation-state crisis and the process
51
However, paradiplomacy does not mean that subnational entities differ from the central
government. Paradiplomacy represents the force within a state from its lowest level, which
plays a relevant role in shaping foreign and domestic policy. In contrast to emerging actors
on the international scene, subnational entities are the only actors with a state-like nature.
Alexander S. Kuznetsov (2015), Theory and practice of paradiplomacy: subnational
govenments in international affairs. New York: Routledge, p. 3.
52
Subnational governments incorporate strategies that are far-removed from the exclusive
domain of central governments. Local government empowerment is a significant tool for
subnational entities to achieve their development goals. Reinaldo Dias (2015), “Um tema
emergente nas Relações Internacionais: A paradiplomacia das cidades e municípios”,
Âmbito Jurídico, 27th July 2015. http://www.ambito-juridico.com.br/site/index.php
?n_link=revista_artigos_leitura&artigo_id=8156.
53
Paradiplomacy is also linked to the idea of ‘branding’ and how to attract international
resources. The Brazilian city of Santos (where the Port of Santos is located) has focused on
attracting tourism. The government of São Paulo - through the Department of International
Affairs - organised the University Forum of Paradiplomacy. Fábio Pereira Ribeiro (2014),
“Paradiplomacia: Enfoque estratégico para Estados e Municípios”, Revista Exame, Edição
1093, 28/05/2014. São Paulo: Editora Abril, p. 23.
54
International relations in the state of São Paulo were in line with the Brazilian
Constitution and the federal model. The government of São Paulo encourages cooperation
in areas such as technology, the environment, public security, investments, education and
agriculture. São Paulo has not only expanded its cooperation with Latin American
countries, but also with multilateral organisations such as the World Bank, the United
Nations and the Inter-American Development Bank. “Relações Internacionais”, Governo do
Estado de São Paulo. http://www.saopauloglobal.com/rel_inter.aspx. See an analysis of the
engagement of the state of São Paulo in international affairs in the area of the environment
from the 1970s onwards in Joana Setzer (2013), Environmental paradiplomacy: the
engagement of the Brazilian state of São Paulo in international environmental relations.
PhD thesis London School of Economics and Political Science. London, June 2013.
42
of economic globalisation. According to Paquin and Lachapelle, there is a
clear practical reason to the increase in the participation of sub-national
governments on the international scene, given their aim of attracting foreign
direct investment and encouraging exports (Paquin and Lachapelle, 2005:
5).
Given glosalisation and intensified regional integration, sub-state entities
have started to develop their own foreign policies, most significantly in the
areas of economic and trade policy, the environment, agriculture and
tourism as well as traditional domestic policy areas such as justice and
domestic affairs.55 To achieve any progress in the mid-term, there needs to
be proper mechanisms for consultation and coordination between
autonomous entities and central governments on matters of international
affairs. When referring to the participation of these entities in the
international arena, this does not contravene domestic foreign policy aims in
most cases. Often complementing as well as benefitting them instead.56
As explained when analysing the role played by public diplomacy in
contemporary international affairs, it is important to stress that foreign
policy is no longer the exclusive domain of foreign ministries.57 On the
55
In the Mexican state of Chiapas initiatives are carried out by local governments seeking
sustainability and adaptation to the climate, creating proposals in this respect.
Environmental paradiplomacy has to do with the action of sub-national entities related to
external actions such as the green economy, environmental governance and climate change.
Horacio Rodríguez Vázquez (2013), “Hacia la construcción de una agenda de
paradiplomacia ambiental en la frontera sur de México”, Explanans, vol. 2, no 1, JanuaryJune 2013, pp. 13-34.
56
The paradiplomacy trend is facilitated, in the case of federations, by the autonomy
granted by the central government, in contrast to what occurs in unitary states. For instance,
immigration problems demand a dynamic approach from non-central governments to deal
with central governments. In extremely rare cases, sub-national entities go against the
federal government. This kind of relation is called ‘protodiplomacy’ and has been studied
in the case of Spain. More information about its diverse aspects can be found in Mariana
Andrade e Barros (2010), “Outlooks for the legal framing of paradiplomacy: the case of
Brazil”, Federal Governance, vol. 7, n o 3. Ottawa: Forum of Federations, pp. 39-49.
57
It is important to stress that public diplomacy and paradiplomacy are related to
democratic governments. However, there is the institutionalised paradiplomacy of countries
such as Argentina, Germany and Spain and that of other countries, in which paradiplomacy
does not have a formal character, such as the United States, Canada and Australia. The
tendency in international affairs for the growing participation of non-state entities has
exerted its influence on the process of Africa’s political decentralisation. Some
paradiplomacy activities have been initiated in Africa from the 1980s onwards, due to the
end of bipolarity and the apartheid regime, for example. Camila Andrade (2015), “Há
43
contrary, international relations are now part of a significant number of
individual sub-state entities. Like public diplomacy, paradiplomacy also
indicates that states remain at the forefront of conducting their foreign
policies. That said, it is the sovereign state that decides how much of its
power is shared (Wolff, 2009: 1-3).
From a Brazilian perspective, the so-called paradiplomacy of federal
entities has been vigorous in the last few years.58 This has meant the
introduction of a certain social federalism in which the decentralised
political authority acts as closely according to real and socially constituted
interests as possible. This new dimension of international relations has its
origins in the changes that occurred at local federal levels. 59 In response to
the creation of an original phenomenon concerning foreign policy-making
and the country’s trade, decision-making processes involved the increasing
internal mobilisation of federal entities (Saraiva, 2006: 430-34).
As Saraiva points out, the international secretariats of the states of the
Federation of Brazil are organised so as to consolidate the strategic and
tactical choice of sub-national units in their own international missions.
According to this scholar, governors often travel with more objectivity and
are better prepared to negotiate commercial interests than the members of
the central government. Despite the international legal restrictions that
paradiplomacia na África”, Relações Internacionais, Diplomacia, 26 March 2015.
http://relacoesinternacionais.com.br/2015/03/26/ha-paradiplomacia-na-africa/.
58
Although paradiplomacy began during the administration of President Cardoso, it was
during the term of President Lula that it achieved certain relevance in foreign policy. Subnational entities gained legitimacy during his administration, given that he promoted
dialogue between sub-national enties and the Ministry of Foreign Affairs. Furthermore, he
carried out important changes to the bueraucracy of the Ministry of Foreign Affairs, which
facilitated its relationship with non-central actors. Cássia Maria Siqueira Marques da Costa
(2012), “As movimentações recentes da dimensão subnacional da política externa
brasileira”, Seminário Nacional de Pós-graduação de Relações Internacionais, Institution
of International Relations, University of São Paulo. Brasília, FINATEC, 12th-13 July 2012.
59
The Brazilian states of Rio Grande do Sul, Parana and Santa Catarina institutionalised
their interregional agreements with the north-eastern provinces of Argentina in 1998. The
agreement was institutionalised by the Protocolo Regional Fronteirizo No 23. See Eduardo
Iglesias et al (2009), “Republic of Argentina” in Hans Michelmann, Foreign Relations in
Federal Countries, p. 26. The Constitution of the Brazilian state of Rio Grande do Sul aims
to strengthen Latin American integration. “Preâmbulo”, Constituição do Rio Grande do
Sul.
http://www2.al.rs.gov.br/dal/LinkClick.aspx?fileticket=WQdIfqNoXO4%3D&tabid=3683
&mid=5359.
44
constrain their internal legal actions, the states of the federation, in
particular, have been shown to be creative and active. 60
For instance, the northeast of Brazil has gradually emerged as part of the
foreign trade agenda. Traditionally a peripheral region in terms of exports,
the north-east has demonstrated its ability to mobilise resources towards
interaction with national and international fields in the last few years. The
State of Bahia has innovated by expanding international cooperation with
countries like Chile. In the case of Bahia this cooperation is carried out
through Promo (The International Business Centre of Bahia) as a key agent
in the mobilisation effort. However, the most dynamic federal unit in the
Brazilian north-east has been the state of Ceará, which has a specialist
advisor for international affairs. Besides having diverse partners such as the
United States, Europe and Asia, Ceará also has cooperation agreements with
countries like Cuba, Mexico and Chile. Despite legal constraints, Ceará has
begun to have a significant role in international trade.61
Brazil’s constitutional system gives municipalities and federate-states a
series of complementary and exclusive responsibilities. The constitution
does not prohibit the development of international ties. Nevertheless, as will
be explored in more detail in Chapter 3 that deals with Brazil-Chile bilateral
relations, Article 21 of the Federal Constitution points out that it falls to the
Union, which means the federate states, to maintain relations with other
states, as well as transborder relations. In this respect, the constitutional
amendment (Project 475/2005) deserves special attention in order to
understand the possible legal ramifications (Milani and Ribeiro, 2011: 25).
Despite legal obstacles, the new global order defines new ways to manage
of internationalisation processes, which cannot be dealt with without a local
60
In Brazil, paradiplomacy is carried out through agreements between the judicial branch
and other countries, for instance, Ecuador and Paraguay with regard to the use of electronic
voting machines. The negotiation process for the use of these machines led to an
international agreement. However, the agreements negotiated in the context of
paradiplomacy tend to be drawn up by the judiciary instead of the Ministry of Foreign
Affairs. Marcelo D. Varella (2012), Direito Internacional Público. São Paulo: Saraiva, p.
48.
61
In accordance with the trend of gradual internationalization from the 1990s onwards, the
state of Ceará has shown greater export growth than Brazil as a whole. More information in
Governo do Estado do Ceará, Empresas http://www.ceara.gov.br/empresas. Ceará em
números http://www.ceara.gov.br/portal_govce/ceara/ceara-em-numeros.
45
approach. Inevitably, paradiplomacy takes the same route as the approach
involving emerging organisational ways of supporting traditional
diplomacy.
Not all local governments approach international relations in the same
way. Both Brazil and Chile enforced para-diplomatic links in order to attract
investments, attracting international companies and seeking new markets for
their exports. Promoting tourism is another important reason for fostering
para-diplomatic ties as a kind of income and as an effective instrument to
encourage networking among different sectors. It can be seen how nation
branding, public diplomacy and paradiplomacy are all interrelated, since
they are important mechanism for encouraging tourism. These new forms
of cooperation also have a positive effect on bilateral relations, as do the
economic and political opportunities that emerge among local governments.
Therefore, paradiplomacy has to do with a multifaceted approach insofar as
it is not simply focused on economic gains. It serves to complement the key
concept of public diplomacy, considering the multifaceted approach of the
two theories.
Although the Chilean Constitution gives the central state the power to
sign treaties and conduct foreign affairs, para-diplomatic activities are not a
new phenomenon. In fact, this phenomenon has existed for more than a
decade both in regional governments, the so-called ‘Intendencias’,
communal governments and municipalities. Despite some legal limitations,
Branco highlights the fact that Chilean participation in the international
arena has increased in recent years (Branco, 2009: 82).62
Paradiplomacy contributes to promoting political and economic interests
and nation branding, since non-official actors also gain a relevant say in
international affairs. Brazilian oil exploitation on platforms that drill for
light oil with a high commercial value is relevant example of compatibility
between nation branding and paradiplomacy. The Metropolitan regions of
Baixada Santista in the state of São Paulo projects their nation branding as
associated with pre-salt discoveries in a similar way to Brazil’s ethanol
62
Emerging international actors include subnational entities, such as regional governments
and local municipalities. This international phenomenon has developed significantly in
Chile, Mexico and Argentina, see Omar Taupier (2010), “Integración desde lo micro:
paradiplomacia y comunicación en el escenario latinoamericano, Revista Académica de la
Federación Latinoamericana de Comunicación Social, no 79. Federación Latinoamericana
de Facultades de Comunicación Social (FELAFACS).
46
projection.63 As Szondi highlights, the multiple dimensions of public
diplomacy built around strategies of promotion and persuasion justify it
being understood as a nation branding strategy (Szondi, 2008: 6). Therefore,
economic considerations play a relevant role in paradiplomacy, given the
fact that non-official entities demand that they become global subnational
players. However, paradiplomacy also has other aspects, such as culture,
exchange programmes, tourism and foreign direct investment.
Paradiplomacy and the concepts mentioned in this study can help explain
the evolution of foreign policy in a broader analysis context, along with the
increase of new actors in the international arena. The paradiplomacy
approach draws to the dynamic of the Brazil-Chile bilateral approach and
how their specific interaction is understood.
1.2 Brazil-Chile Relations and the Emerging Field of Nation Branding
The way countries see each other is overwhelmingly important not only in
formal foreign affairs but also in decentralised diplomacy. Nation branding
is directly related to public and presidential diplomacy. It can be observed
that the former exerts an influence on various bodies, in which a remarkable
brand fosters interaction between different actors, given the attention that
this garners from other countries. As Kotler and Getner points out,
globalization has compelled states to project a national image in order to
attract foreign investments, tourism, trade and so forth. The country’s nation
branding affects outside attitudes towards the state’s products and services,
turning the concept into a relevant tool for promoting a distinct self-image
(Kotler and Getner, 2002: 251-252). The right and ability to develop a
consistent nation branding shows a clear strategy of launching consistent
international competitive advantages, laying the groundwork for long-term,
trustworthy partnerships. In the coming years, it is likely that the axis of the
global economy will shift from developed countries to emerging nations.64
63
Fábio Pereira Ribeiro (2014), “Paradiplomacia: enfoque estratégico para Estados e
municípios”, Exame. http://exame.abril.com.br/rede-de-blogs/brasil-no-mundo/2014/05/28/
paradiplomacia-enfoque-estrategico-para-estados-e-municipios/.
64
Nation branding has become a relevant concept in Latin America foreign affairs. For a
better view of naton branding process in other Latin American countries, see, Lina María
Echeverri Cañas and Christian A. Estay-Niculcar (2013), “The role of tourism in the
country brand consolidation of Argentina”, Visión de Futuro, año 10, vol. 17, n o 2.
47
This fact demonstrates the importance of Brazil and Chile’s nation branding
projection in international relations.
According to Kim, belief in a common culture, history, territory,
language and religion is an essential tool for building national image. The
cultural wealth of nations has become relevant in the new economy (Kim,
2012: 4). For obvious reasons, nations are not static entities but, are born,
transformed and retransformed according to the dynamics of internal and
external scenarios. The study of Brazil-Chile bilateral ties raises the
question of the influence of the national image on how foreign policy is
carried out.65 According to Dinnie (2012), nation branding makes a
difference in terms of international acceptance since it goes beyond
exporting products and has become an important way of communicating
with the rest of the world (Dinnie, 2012: 14). The concept of nation
branding helps to build stable relations between states, since it helps
countries get to know each other more easily. Nation branding projects a
country’s image to instinctively cause reaction among the citizens of another
country. Whilst nation branding focuses on the country’s most dynamic
features of the country, the inhabitant’ perception of national image can
differ from the nation branding projected abroad. This means that projecting
a nation branding can differs from domestic perceptions. In this chapter, the
significant ways in which Brazilian and Chilean citizens query each other
will be described in order to explore the growing role played by nation
branding in bilateral links, since Brazilian citizens’ perception over Chile
can differ from the Chileans own views on their country.
Although nation branding also encompasses cultural characteristics and
affects the way the country is perceived abroad, inhabitants’ perceptions
generally tend to be concise and related with memories of the past. Nation
branding goes hand in hand with the idea of increasing international
prestige, while citizens’ views have to do with remembering historical
Misiones: Facultad de Ciencias Económicas, Universidad Nacional de Misiones.
65
On the regional level, Brazil has emerged as Latin America’s standout global power.
Brazil’s national image and public diplomacy demands special attention. This authority is
evident in Brazil’s key role in the creation of the Union of South American Nations
(UNASUR) in 2008. Aleksandra Ristovic (2013), “Brazil’s soft power and Dilma’s
dilemma”. PDin Monitor. Washington D.C.: USC Center on Public Diplomacy at the
Annenberg School. See: http://uscpublicdiplomacy.org/index.php/pdin_monitor/article/
brazils_soft_power_and_ dilmas_dilemma/.
48
events. As Werther points out, consolidated nation images are difficult to
change. For instance an old nation like Great Britain with an established
image could not easily change its image overnight.66 Instead of invoking
multi-sector aspects to target ambitious nation branding, inhabitants’
perceptions embrace personal experiences and influential events in the
foreign country.67 Nation branding and public diplomacy are much more
complete mechanisms for understanding Brazil-Chile ties because the
relationship between the two states involves a transnational process that
traditional diplomacy does not encompass. Given that diplomacy affects
people’s lives in many ways, the growing interest in foreign affairs has
narrowed the gap between people’s impression of the country and nation
branding.68
Regarding Brazilian-Chilean relations, their divergent national images
come from the different historical backgrounds that led their engagement
with one another.69 The Brazil-Chile national images are connected to the
66
See Charlotte Werther (2011), “Rebranding Britain: Cool Britannia, the Millennium
Dome and the 2012 Olympics”. http://ojs.ub.gu.se/ojs/index.php/modernasprak/article/
viewFile/664/616.
67
Among the Latin American countries, Brazil was chosen the country in the region with
the best nation branding and with the best image in BRIC, according to the latest Nation
Branding Index in July 2015. Brazil is considered an accredited representative country in
international affairs. “Brasil é o país mais admirado da América Latina”, Notícias, 30th July
2015.
http://www.administradores.com.br/noticias/economia-e-financas/brasil-e-o-paismais-admirado-da-america-latina/49185/.
68
Examples of the positive role of civil society in domestic and international affairs
include, fostering gender equality, demanding respect for indigenous people and civil
society involvement in fighting corruption. Alfredo Sfeir-Younis (2004), “The role of civil
society in foreign policy: A new conceptual framework”, Seton Hall Journal of Diplomacy
and International Diplomacy. http://blogs.shu.edu/diplomacy/files/archives/03_sfeir
_younis.pdf. Brazilian civil society representatives work to establish a permanent forum to
discuss topics related to international relations. In July 2013, the Reflection Group on
International Relations which grouped together social movements, NGOs, foundations and
academic institutions held the Ten Years of Foreign Policy 2003-2013 Conference. The aim
was to create a permanent forum to promote dialogue between civil society and the
Ministry of Foren Affairs and the General Secretary. “Fórum Permanente de Consulta com
a sociedade civil sobre política externa”, Secretaria-Geral Presidência da República.
http://www.secretariageral.gov.br/atuacao/internacional/politica-externa-e-participacaocidada/forum-politica-externa.
69
An important fact that must be borne in mind is the different historical backgrounds of
the two countries with authoritarian pasts. In this sense, Silva and Cleuren’s analysis is
fundamental to understanding the different political scenarios in Brazil and Chile and their
rupture with the authoritarian regime. In this respect, efforts to directly integrate the
49
perceptions of the intellectual elite, who make the development of a
consolidated mutual knowledge about each country possible. Despite their
differences, the two countries share important historical features that are
relevant elements for strengthening bilateral relations. First and foremost,
academics and practitioners in the area of international relations agree that
history has played an important role in determining the foreign policies of
both states (Mullins, 2006: 9-10). Moreover, the idea of branding a nation
acts as a powerful political mobiliser to explain the relative coherence that
can be observed in the Brazil-Chile relationship.
In Brazil, the monarchy was the basis for building the national image in
the nineteenth century. The perception of Brazil was of a large population of
Portuguese speakers who remained united, unlike Hispanic America. At that
time, being Brazilian meant being different to the Hispanic world. In this
sense, the unique linguistic and sociological features of national image were
recreated on a continental scale. With the advent of the republic, Lafer
points out that many Brazilians realised that being Brazilian also meant
being Latin American (Lafer, 2009: 35-36). From this time onwards, South
America began to play a major role in the construction of Brazilian image,
with foreign policy working on establishing relations of relative equality
between the states.70 This view does not emerge clearly in the nineteenth
century, when the main vector of foreign policy was the consolidation of the
nation.
However, located on the geographical, political and economic periphery
of Europe, Brazil has never felt comfortable lagging behind a world order in
which the functioning of international politics was based on the balance of
great powers. As Rubens Ricupero indicates, this subsystem - with its own
dynamics - coexisted with the correlation of state forces between states
mainly manifested in the political, military, economic and technological
fields among others (Lafer, 2009: 65-67). Brazil’s foreign policy played a
population were different in the two contexts. See Patricio Silva and Herwig Cleuren.
“Assessing participatory democracy in Brazil and Chile: an introduction”, in Patricio Silva
and Herwig Cleuren (Eds) (2009), Widening democracy: Citizens and Participatory
Schemes in Brazil and Chile. Leiden: Brill, pp. 4-5.
70
For additional reading, see Lilia Moritz Schwarkz (2006), “A mestizo and tropical
country: the creation of the official image of independent Brazil”, Revista Europea de
Estudios Latinoamericanos y del Caribe. Amsterdam: CEDLA. http://www.cedla.uva.nl/
50_publications/pdf/revista/80RevistaEuropea/ 80MoritzSchwarcz-ISSN-0924-0608.pdf
50
key role even before the Declaration of Independence and ahead of its time,
Brazil’s diplomacy was an important element for promoting the country’s
international insertion.71 The study of Brazil-Chile bilateral relations should
take into account both the aspects of the links of traditional diplomacy and
the innovative characteristics of its public diplomacy. For instance, the
perception that foreign affairs are not only carried out by central actors, but
also by decentralised entities has important consequences for international
relations.
Brazil’s ongoing concerns about how it was projected internationally are
symbolised by the importance of international law in the country, alongside
its commitment to world legal order. The Brazilian Federal Constitution of
1988 brought relevant changes with regards the country’s international
insertion. Article 4 points out the principle of the prevalence of human
rights. For instance, the Convention on the Rights of People with
Disabilities illustrated Brazil’s active role in being committed to
international law.72
In contrast to other Latin American states, Brazil and Chile underwent a
stable nation-state building process during the nineteenth century, with the
two countries having better administrative coordination than their regional
counterparts. It should be taken into account that Chile is a much more
developed country with regards the concept of nation branding than its
Brazilian counterpart. Chile’s projection of a nation branding extends to the
point of civil society mobilisation considering the so-called ‘ChileGlobal’.
‘ChileGlobal’ embraces a network of business leaders, professionals and
students who reside abroad and are interested in joining to together to
contribute and benefit from the development of Chile.73 The construction of
the Brazilian nation was carried out by diplomatic action before
independence, with the same diplomatic strategy maintained during the
71
Its vague and extensive border has concerned Brazil since colonial times. In the period
between Brazil’s discovery in 1500 and the foundation of the city of Belém at the mouth of
the Amazon River in 1616, the Luso-Brazilians conquered the long coastline. Bradford
Burns (1967), “Tradition and variation in Brazilian foreign policy”, Journal of InterAmerican Studies, vol. 9, no 2, pp. 195-212. http://disciplinas.stoa.usp.br/ pluginfile.
php/115699/mod_resource/content/1/Bradford%20Burns.pdf.http://disciplinas.stoa.usp.br/p
luginfile.php/115699/mod_resource/content/1/Bradford%20Burns.pdf.
72
See J. Gomes Canotilho et al. (2013), Comentários à Constituição Federal do Brasil. São
Paulo: Editora Saraiva.
73
See ChileGlobal, Red de Talentos. http://www.chileglobal.net/que-es-chileglobal/.
51
period of the empire and the Old Republic (Silva, 2012: 71). Therefore, the
perception of the two as stable countries is in their historical roots.
With regards to Chile, the idea of an ‘exception’ contains a key
component to the country’s nation building. Until recent years, this Chilean
characteristic has hindered its participation in regional projects. This is, in
part, a result of its history and the way in which its past has been interpreted.
Indeed, Chile’s geographical position also contributed to its strong element
of isolation. As Mullins emphasises, “its position behind the formidable
Andes and beneath the harsh deserts of the Atacama has led to a sense of
isolation from the rest of the continent. Chileans came to see themselves as
an oasis of calm in a turbulent region. The local saying, ‘Una buena casa en
un mal barrio’ (a good house in a bad neighbourhood) expressed this
sentiment (Mullins, 2006: 13-14).
The importance of retransforming the nation branding is clearly
illustrated in Brazil’s ethanol strategy. As Smith and Taylor points out,
Brazil’s position as an emerging power goes hand in hand with projecting
the country’s self-sufficient energy status (Smith and Taylor, 2008: 115).
This explains why the government of President Lula adopted the slogan
“Brazil, Fifth World Power” in 2009, which reflects the country’s
extraordinary energy resources, ranking it in the same category as the
United States, the European Union, China and India. The country’s selfsufficiency in oil and gas tends to strengthen its energy brand. Being
assigned the category of major exporter of energy due to recent offshore
discoveries shifted the scenario in Brazil’s favour.74 Furthermore, it also has
solar and wind power in unlimited quantities that have not yet been
developed, as well as significant deposits of uranium as fuel for nuclear
power plants.75
74
The discovery of offshore oil deposits, called pré-sal. Pre-salt oil was discovered in July
2005 by Petrobras engineers studying the Parati block in the Santos basin. The discovery of
the Tupi field the following year confirmed the signs that they were standing before a new
oil frontier, hidden under the sea and bellow a layer of rock and salt off the Brazilian coast.
At the time, the discovery was announced by President Luiz Inácio Lula da Silva as “a
passport to the future”. “Oil and gas, more than two minutes”. Exame, number 5, December
2013. São Paulo: Editora Abril, 2013. p. 38. See Lindbergh Farias (2011), Royalties do
Petróleo: as regras do jogo. Rio de Janeiro: Agir.
75
Having comprehensive information about the importance of Brazilian uranium deposits is
fundamental to understanding its diversified energy matrix. Increased interest in nuclear
power, as well as the possibility of energy cooperation, is an important tool for achieving
52
The previous sections have stressed the key roles of public diplomacy
and nation branding in Brazil-Chile bilateral relations. As already described,
nation branding must fit a country’s current context in order to establish a
well-consolidated national brand. Brazil is the world’s ninth ranking
producer of oil, not considering recent offshore discoveries that will take the
country into the top five of world producers (Rohter, 2012: 171-174).
Chapter 5 discusses the increasing importance of energy in foreign affairs in
more detail, particularly as a mechanism for strengthening Brazil-Chile ties.
Energy is not only a crucial element for the economy but also, for foreign
policy, which relies on the domestic energy scenario.76 The growing
incursion of energy in international affairs demands a new approach to
studying Brazil-Chile bilateral relations, since the energy topic exerts an
overwhelming influence over foreign policy strategy.
It should be highlighted that not only have national images been
progressively transformed but also the way international relations are
carried out, involving the participation of increasingly important new actors.
This means that the old-fashioned, traditional diplomacy turns into
something more dynamic, which includes a variety of new actors to face the
complex demands of globalisation. The contemporary issues faced by the
global order demand new ways of conducting international affairs. In this
scenario, Brazil-Chile engagement urges the reformulation of foreign
policy’s approach to global and regional issues. As Varella points out,
according to international law’s principle of respect for human rights, Brazil
in-depth dialogue between states. Brazil has metasomatite uranium deposits, developed
upon different base rocks. “World distribution of uranium deposits (UDEPO) with uranium
deposit classification”. Nuclear fuel cycle and materials section. October 2009, IAEA,
TECDOC 1629. Vienna: International Atomic Energy Agency (IAEA), 2009. p. 15. One of
the largest known metasomatite deposits is found in the Lagoa Real District in Brazil.
However, the deposits in Itatiaia, Brazil have specific characteristics. “Technical meeting
on metasomatite uranium occurrences and deposits”. International Atomic Energy Agency
(IAEA). 17th-19th June 2013. Vienna: International Atomic Energy Agency (IAEA), 2013,
p. 1.
76
In the Latin American context, the energy issue is an important element in both domestic
policy and foreign affairs, since it encompasses both the political and economic sectors.
Moreover, the increasing participation of the task related to energy in political debate
cannot be undermined in the analysis of international relations. Mexico’s constitutional
energy reform illustrates this point, as President Peña expects the reform will bring energy
security and improve the economy. “Reforms in Mexico: oil’s well that ends well”. The
Economist, no 8866, vol. 409, December, p. 44.
53
and Chile share the same foreign policy strategy relating to the defence of
these (Varella, 2012: 26). Brazil-Chile bilateral links should involve
decentralised actors to help understand the ties between the two states.
Therefore, public diplomacy is a crucial element when studying Brazil-Chile
bilateral relations, given its multifaceted approach.
1.2.1 The emergence of nation branding
An understanding of public diplomacy requires a brief study of how
countries brand their own nations. As the analysis of the following section
demonstrates, branding a nation includes great efforts to export the
country’s cultural trademark. Moreover, it combines corporate branding
techniques and applies them to different countries. In recent years, countries
have invested in forming their own national image, which has required
centralised coordination efforts. Nation branding now, however, is different
from the national image techniques used in the past, since it needs to project
essential values to differentiate its products from those of its competitors in
order to gain a competitive advantage.
As Melissen argues, “public diplomacy is initiated by practitioners,
whereas branding is about the mobilization of all of a nation’s forces that
can contribute to the promotion of its image abroad” (Melissen, 2005: 19).
Although there are some conceptual differences between nation branding
and public diplomacy, in practice both discourses should be aligned,
inasmuch as both attempt to differentiate the country’s image in a globalised
world dominated by modern countries, which tend to look more like one
another. According to this approach, a nation branding project aims to
promote key issues that should be taken into consideration abroad.
Nation branding aims to distinguish unique features from any others. In
contrast, public diplomacy seeks to generate interaction between different
sectors with mutual understanding as the target. Public diplomacy and
nation branding are core concepts to understanding Brazil-Chile bilateral
relations. The participation of civil society has gained importance in foreign
affairs and nation branding has emerged as a crucial element in foreign
policy. As Anholt indicates, for countries like Brazil, achieving a wellconsolidated nation brand gives them better chance of joining the tewenty54
first century group of first world countries (Anholt, 1998: 401-402).
Despite their similarities, public diplomats know about the limited aims
and modest nature of most diplomacy campaigns, which are usually based
on the common sense assumption that they do not determine foreign
perceptions. At the same time, they cannot only be connected to hard
diplomacy, since soft diplomacy also has an overwhelming importance for
foreign policy aims.77 The current international scenario demands that the
role played by diplomats or so-called public diplomats and the idea of
multilateral diplomacy be reformulated. As Spies argues, “taking into
account the prevalence of multilateral diplomacy at the start of the twentyfirst century, profiling of multilateral diplomats per se is important because
it sheds light on the contemporary evolution of diplomacy” (Spies, 2013:
213).
In contrast, the main feature of branding campaigns is their holistic
approach. The creation of a nation branding mobilises strategic marketing
practices as well as clarity of vision from an over-competitive world
(Melissen, 2005: 20). The application of branding techniques and tools
serve as a core element for projecting the nation’s image abroad in a
positive way. Like the public diplomacy process, branding a nation requires
multi-sector collaboration in order to sustain differentiation (Steinberger,
2009: 168).
Branding a nation mostly meet the demands of transition countries with
an international image that is still weak or among small nations, as in the
case of Chile.78 Crucially, branding a nation emphasizes the country’s
features and reflects its aspirations, but cannot transform existing social
realities. Otherwise, the nation’s brand would not be truthful and
consequently not achieve credibility. Efforts to build a country’s image
77
“What is mean by the word ‘diplomatic’? In addition to traditional diplomacy focused on
foreign ministries, does the word also include the ‘soft’ tools of international dispute
settlement”? Lucy Reed. “Observations on the relationship between diplomatic and judicial
means of dispute settlement”. Laurence Boisson de Chazournes, Marcelo G. Kohen and
Jorge E. Vinuales. Diplomatic and judicial means of dispute settlement. Leiden: Martinus
Nijhoff Publishers, 2013, p. 291.
78
Neoliberal ideology has set down important roots in Chile, transforming the nation brand
into a more dynamic one. Neoliberalism allowed Chile to export itself in many ways,
particularly by promoting the country’s aggressive participation in international trade.
Cristina Prieto (2011), Branding the Chilean nation: socio-cultural change, national identity
and international image’, PhD, Leiden University, p. 101.
55
should be focused on presenting its most unique features, which distinguish
the country from others, relying on the aims of each state.79 The function of
‘selling’ the country’s attributes should be carefully planned in order to
avoid any dubious interpretation of the nation’s defining characteristics.
Nation branding and public diplomacy are in fact complementary
ingredients of foreign public policy. Both have similar aims regarding the
foreign public, considering that both have the foreigner’s perception as their
starting point.80 Indeed, both tend to be more successful when they are
examined as long-term approaches, despite being dominated by daily issues.
The two concepts demand a multi-dimensional approach and cannot be
carried out without multi-sector partnerships. 81
Both ideas involve the double perception of engagement either inside the
country - to bring together a range of perspectives - or to coordinate the
formulation of the image abroad. Public diplomacy and nation branding are
vital components for Brazilian and Chilean international affairs, considering
the fact that former needs to project itself as an emerging power and the
later has been on the sidelines of global decisions. According to Özcan,
nation branding and public diplomacy’s ultimate targets are the nation’s
image. However, public diplomacy has a strong connection with traditional
diplomacy, since both concepts are directly related to the Ministry of
79
An interesting example of the promotion of a country’s image is Germany, which
launched the competition “How to promote Germany” in 1995. The project involve the
German companies, Lufthansa, BMW, Siemens and Bosh. Rosa Nurtazina et al. (2014),
“Definition, structure and core functions of the state image”, International Journal of Social,
Behavioural, Educational, Economic and Management Engineering, vol. 8, no 2, p. 486.
http://waset.org/publications/9997471/definition-structure-and-core-functions-of-the-stateimage.
80
Canada is an important example of the combination of public diplomacy and nation
branding. The Canadian government uses the nation brand to attract exchange students. The
government has ranked Canada as having several advantages, such as high quality
education and multiculturalism in order to project its twenty-first century public diplomacy.
Ray Freddy Lara Pacheco and María Fernanda Flores Álvarez (2012), “Marca país y
diplomacia pública, el caso de ‘imagine: education in/au Canada’ y la atracción de
estudiantes de intercambio”, Revista Mexicana de Estudios Canadienses, no 23. Culiacán:
ABECAN, pp. 69-85.
81
Public diplomacy does not mean state-state relations, but state relations with foreign civil
society in order to offer better mechanism for understanding foreign countries. The
importance of the concept has grown in recent years. See Carla Fernanda Avendaño Maneli
(2014), Estrategia de marca país Argentina (2003-2007): Nueva diplomacia pública para
la reinserción internacional durante la presidencia de Néstor Kirchner. Córdoba: Publicia.
56
Foreign Affairs, whilst nation branding targets the masses and is directly
connected to the economy, trade, investments and tourism. The former is
much more related to international relations, while the later adopt a
marketing approach (Özcan, 2013). Although for different reasons, the two
countries demand well-consolidated nation branding projections and public
diplomacy initiatives.82
However, public diplomacy and nation branding have several differences
when shaping the two concepts is concerned and these should be pointed
out, since both ideas lay the groundwork for understanding Brazil-Chile
dynamic ties. While nation branding deals with a more uniform concept,
public diplomacy can be influenced by the history and culture of the
particular country and relates to interdependence. For this study, the
government will be considered as the official face and most important force
in public diplomacy, thus being the fundamental actor in foreign affairs,
notwithstanding indirect government participation and the engagement of
non-state actors functions as complementary elements within the analysis of
the Brazil-Chile bilateral relationship. In this way, the government should
be considered an important mechanism for analysing relations between the
two states. In recent years, the Ministry of Foreign Affairs has been the
main articulator of foreign policy in Brazil and Chile and therefore needs to
be studied alongside the ideas of public diplomacy. As Meireles argues, the
demand for the greater participation of various political actors in Brazil in
the formulation of the country’s foreign policy has shown the importance of
the public diplomacy initiative.83 In practical terms, government
administration connects the concepts of public diplomacy, presidential
82
Public diplomacy and nation branding focus on foreign public opinion and the perception
of the country’s image abroad. In this sense, foreign policy attempts to exert an influence
on foreign public opinion. Juan Luis Manfredi Sánchez (2011), “Hacia una teoría
comunicativa de la diplomacia pública”, Communication & Society, vol. 24, n o 2. Navarra.
http://www.unav.es/fcom/communication-society/es/articulo.php?art_id=394.
83
See Thiago de Oliveira Meireles (2015), “Ministério das Relações Exteriores:
Insulamento burocrático, pressões institucionais, novos atores e diplomacia pública”, V
Seminário em Pós-Graduação em Ciência Política, São Paulo: USP. Although Chile has a
well-consolidated nation brand, the historical conflict with Bolivia that gave the latter its
landlocked status demands a different regional approach. Paz Zárate (2014), “BoliviaChile: sensatez y sentimientos”, El País, Internacional, Tribuna, 11th July 2014.
http://internacional.elpais.com/internacional/2014/07/11/actualidad/1405085434_850059.ht
ml.
57
diplomacy and nation branding due to the growing interaction between
different actors in today’s foreign affairs.
Moreover, as opposed to nation-branding’s aims, public diplomacy does
not aspire to project the national image, but rather its goal is to promote and
maintain smooth international relations. Public diplomacy encompasses a
broader concept and multidimensional coordination in order to
communicate its targets to foreign publics.84 In this way, the concept
represents a way of studying Brazil-Chile links, since it encompasses a
range of areas beyond the traditional diplomacy perspective. While nation
branding contains one-way communication with the communicator
controlling the message, public diplomacy presumes a two-way
communication, encouraging dialogue between the different actors.85 The
goal of the public diplomacy approach is to avoid conflicts and foster
cooperation and constant dialogue to increase interaction when meeting
foreign policy targets.
In this corporate world characterised by multiple actors and the
increasing role of non-governmental organisations, public diplomacy makes
an effort to strengthen the country’s relationships with non-official target
groups abroad. As Falker highlights, despite an increase in the diversity of
the non-state actors involved in foreign affairs, actors do not exert a similar
influence on the international scene. Significant differences exist,
particularly between economic and social actors. As a result of their
financial and organisational resources, corporations are ranked and have a
privileged position in the transnational world. (Falker, 2008: 8-10). The
emergence of several patterns of interaction among governments, businesses
and civil society changes the traditional scenario, in which foreign affairs
84
The debate on the decline of Spain as a nation brand led the government to establish the
Public Diplomacy Advisory Comission in order to deal with the financial crisis. William
Crislett (2012), “El declive de la marca España”, El País, Opinión, 6th May 2012.
http://elpais.com/elpais/2012/05/04/ opinion/ 1336151389_072846.html.
85
Public diplomacy has an important impact on contemporary international affairs to the
extent that most governments practice at least one communicational aspect of public
diplomacy. The USA defines public diplomacy as the action of the government to generate
support for the country’s national security. The administration of President Bill Clinton has
established the Advisory Commission on Public Diplomacy aiming to reorganize the public
diplomacy of the USA for the twenty-first century. Victor Oviamionayi Iyamu (2004),
“Diplomacia pública en la bibliografia actual”, Ámbitos, no 11-12. Sevilla, pp. 215-236.
58
were carried out by a central administration.86 The participation of official
and nonstate actors in shaping foreign policy strategy is linked to the
expansion of globalisation and the need to confront transnational matters.
Observing Brazil-Chile from a public diplomacy perspective contributes to
filling the gap, analysing bilateral ties from an exclusively state-centric
standpoint.
As Risse-Kappen argues, as long as countries maintain stable and smooth
international relations with others, collaboration and coordination are easier
to manage in bilateral events. The ability to shape constant relationships
between states should be adopted in order to avoid conflicts and foster a
deeper interaction between official and non-state actors (Risse-Kappen,
1995: 7). As Baylis points out, the term international relations does not
mean that these relations are exclusively of the state. The relations between
cities, international organisations and NGOs should be taken into account in
international affairs. As far as the idea of ‘engagement’ is concerned, states
should coordinate their efforts to solve the transnational issues that urge
bilateral or international governance. 87 In the Latin American context,
public diplomacy facilitates discussions on regional issues, given that the
growth of transnational subjects demands closer dialogue between states.
Since Brazil is seeking to achieve the status of a great power and draws
attention to its role as regional leader, the country has taken important steps
in its public diplomacy efforts. However as will be seen in Chapter 3,
presidential diplomacy also plays an important role in foreign affairs
because it influences crucial decisions. As Malamud points out, pursuing
public diplomacy also relies on the charisma of the president, given the
fundamental aspect of presidential diplomacy in Latin American.
Presidential diplomacy - defined as presidential summits - is insufficient for
86
“Public opinion, the media, single population groups, political parties, NGOs, influential
individuals, and others express expectations of what a state’s foreign policy should be in a
certain case, of what should or should not be done, and of the objectives that should be
pursued or avoided. As public opinion, in democratically run societies, has a significant
effect on the popularity of the government, on political parties and, consequently, on their
electoral fates, it cannot be ignored by those who make foreign policy decisions; to a
limited extent, they must let themselves be guided by it”. Ernest Petric, “Decision making
in foreign policy”. Foreign policy: from conception to diplomatic practice. Leiden:
Martinus Nijhoff Publishers, 2013, p. 85.
87
See John Baylis (2014), The globalisation of world politics: An introduction to
international relations. Oxford: Oxford University Press.
59
understanding the idea’s importance. Presidential diplomacy goes beyond
presidential meetings, since institutional intervention also plays an
important role in foreign affairs (Malamud, 2005: 138).
As Schmidt (2010) highlights, partnerships are norm-based instruments
implemented in order to pursue the effects of multilateralism. Strategic
partnerships need to be based on the balance of mutual advantages and
commitment to both partners. The three expressions of foreign policy public diplomacy, nation branding and presidential diplomacy - should work
in unison to tackle international issues and unified foreign policy targets. In
order to defend their aims in a globalised world, countries should have
permanent partners in other nations with cooperation links in diverse
areas.88 Diplomacy cannot merely be oriented towards one-way
communication with government representatives, but rather public
diplomacy practitioners should get used to dealing with different forms of
transnational relations (Wilson, 1996: 78). Developing long-term links not
only includes official groups, but also decentralised actors, whose
participation in international relations has increased.
Public diplomacy and nation branding are interrelated to the extent that
crossing the fine line between the two concepts requires caution, as
previously aforementioned. It is possible to identify different degrees of
integration between public diplomacy and nation branding, since both
expressions of foreign policy serve to mobilise diverse sectors towards a
more cohesive representation of national interests.89 In contrast, presidential
diplomacy refers to the more active role played by some presidents when
conducting their countries’ foreign policy. Therefore, presidential
diplomacy means that presidents tend to adopt a more vigorous stance
within foreign policy affairs.90 Interestingly enough, both public diplomacy
88
See Anne Schmidt (2010), “Strategic partnership: A contested policy concept”. German
Institute for International and Security Affairs. http://www.swp-berlin.org/fileadmin/
contents/products/arbeitspapiere/FG%201%20discussion %20paper_Anne%20Schmidt.pdf.
89
Public diplomacy embraces multiple levels with subnational participation being essential
to mutual understanding and relationship. See Jian Wang (2006), “Localising public
diplomacy: The role of subnational actors in nation branding”, Place Branding, vol. 2, n o 1.
Palgrave Macmillan, pp. 32-42.
90
The Brazilian Minister of Foreign Affairs, Antonio Patriota, resigned in 2011, after
acknowledging that one of his diplomats had helped a Bolivian senator who had been
accused of corruption to travel to Brasília. This episode illustrates the active role played by
President Dilma Rousseff since Patriota was the first cabinet member from the Ministry of
60
and presidential diplomacy encourage the participation of civil society in
issues that go beyond national boundaries. At present, new emerging actors
create new patterns of behaviour and norms for relationships within foreign
affairs, meaning that Brazil-Chile ties should be studied from a multifaceted
perspective.
1.2.2 A nation branding perspective
The idea of perpetuating the nation-state as a necessary framework for
national image insertion is not entirely new. Nation branding enforces the
state’s power as a legitimate entity in the context of foreign affairs. 91 As
mentioned at the beginning of this chapter, nationally-imagined identity
consists of a number of features: language, cultural homogeneity, religion
and migration, which means the unique identification with certain myths
that lead to collective identification. As Anholt points out, the projection of
a national image to communicate a particular vision has changed in recent
years and as a result private interests have been involved as necessary tools
for widening mobility in recent geopolitics. A country’s brand has an impact
on virtually every aspect of its international engagement; however the
country’s image can lag behind and be disconnected from reality, although
the branding process also demands that non-commercial aspects shape the
nation branding (Anholt, 2005).
Some experts such as Fan and Villanueva argue that nation branding is
congruent with the concept of soft power, in contrast to the hard power of
military or economic assets.92 Soft power or co-optive power is related to
Foreign Affairs to resign. Claudia Safatle (2013), “Antonio Patriota é demitido do
Ministério das Relações Exteriores”, Valor Econômico, 26th August 2013, p. 26.
91
All Latin American countries have dedicated time and effort to launching nation branding
campaigns. Since 2014, Ecuador has used the slogan ‘Lo mejor de Ecuador, un país que
ama la vida’. “Ecuador ama la vida”, http://ecuadoramalavida.com.ec/. Colombia created
the slogan “La respuesta es Colombia” in 2011. http://www.colombia.co/la-marca. In 2012,
Peru launched the “Todos hacemos Perú” campaign. http://nacional.peru.info/es/
home/Inicio?area=. The aim of all the Latin American states with their nation branding
campaigns is to attract foreign investment, promote tourism, encourage exports and project
their values in the international arena.
92
As long as nation branding and soft power are concepts that concern national influence
on world stage, they share important similarities. See Ying Fan (2008), “Soft power: power
61
the power of persuasion and ideas, serving to complement the goals of
public diplomacy. Soft power and nation branding are inspired by the same
economic development, culture, persuasive strategy and ideology
(Pecequilo, 2004: 58-59). Like soft power, nation branding aims to spread
and promote national values, given their importance in building strategic
foreign policy targets. Both concepts serve as a form of national discourse to
ensure the spread of a positive image abroad.
Along with presidential diplomacy, nation branding is the most visible
practice among the three previously analysed expressions of foreign policy.
This concept attracts mainstream media attention and is also recursive,
through the use of the iconography of logos, symbols and slogans
(Aronczyk, 2008: 45). It should have a component of domestic support and
therefore the ability to convince different sectors of society, particularly the
elite whose best interests the government promotes. Furthermore, as long as
nation branding features are consolidated nationally, the country needs to
project national image abroad, oriented towards principles of competition
and innovation. The country must demonstrate its ability to generate wealth,
income, employment and political stability, relying on the brand it wants to
generate.93.
The concept of a nation becoming a brand has managed to gain
endorsement. In the context of globalisation, a good nation branding can
help with many national goals as it can lead to an increase in trade,
investment and tourism (Cromwell, 2016). Since every country has a
cultural trademark, the nation branding programme usually emphasises a
of attraction or confusion”, Place Branding and Public Diplomacy, no 4. New York:
Palgrave Macmillan, pp. 147-158. The field of cultural diplomacy embraces nation
branding and soft power and the idea of soft power is importantly exhibited internationally.
The case of Mexico with ‘Mexico: splendour of Thirty Centuries’ and Sweden’s nation
branding illustrate this point. Cesar Rivas Villanueva (2007), Representing Cultural
Diplomacy: soft power, cosmopolitan constructivism and nation branding in Mexico and
Sweden. Växjö Universiteit. Doctoral thesis. http://swepub.kb.se/bib/swepub:
oai:DiVA.org:vxu-1683?tab2=abs&language=en.
93
Branding is a neoliberal tool that generates value by making affective attachments
commodities and it has become a crucial element in international affairs. One important
aspect of nation branding is that it mediates the relationship between what is national and
what is global. Nation branding transforms national identity, given the transfer of national
ideas into the language of commerce. Nadia Kaneva (2012), “Nation branding in PostCommunist Europe: Identities, markets and democracy”, Branding Post-Communist
nations: marketing national identities in the new Europe. New York: Routledge, p. 16.
62
visual symbol - like Joan Miró’s sun for Spain – that can be adopted by
every organisation taking part in the programme to be used as a tool for
endorsement. However, the symbol alone is not enough; countries must also
differentiate themselves as consumer brands. In the field of tourism, they
should emphasise their art, culture, history, food, landscape, architecture and
other specific characteristics, using through sophisticated imaginary. Due to
increasing interdependence in the international arena, countries should
promote themselves in order to attract direct foreign investment. This kind
of investment policy is usually influenced by local legislation, regional
funding, tax breaks, the educational level of employees, transport
infrastructure, central and local government attitudes and so on (Anholt,
2005: 175).
Despite some similarities between the concept of nation branding and
stereotypes, the huge differences between them must also be emphasised.
According to Von Hippel, Sekaquaptewa and Vargas, “stereotypes are
consensual beliefs held by members of one group about the characteristics
of members of another group” (Von Hippel, Sekaquaptewa and Vargas,
1995: 178). As Hermann observes, the convenience of this definition is that
“stereotypes make it easier for us to prejudge another’s theoretical interest
and research based on a few words of conversation, an indication of where
and with whom an individual received his or her training or by reading the
abstract of an article” (Hermann, 2002: 21).
Furthermore, like nation branding, stereotypes generally reflect real
differences between groups in other words, “they have a grain of truth”
(Jussim, 1991; Judd and Park 1993: 21). Like nation branding, stereotypes
become selective, focusing on the most distinctive characteristics and
therefore providing the most notable differentiation between groups.94 In
contrast to the construction of a nation branding, stereotypes embrace how
outsiders are perceived by a foreign country, not always pointing out the
other group’s most favourable characteristics.95 Indeed, stereotypes are
94
See Michael Chattalas et al. (2008), “The impact of national stereotypes on the country
of origin effect: a conceptual framework”, International Marketing Review, vol. 25, issue 1,
pp. 54-74.
95
The challenge for Latin American country brands is to overcome the general
misconceptions connected with this stereotypical idea. Additional reading Country
Branding Index Latinoamérica (2013). http://www.futurebrand.com/images/uploads/
studies/cbi/CBI_Latinoamerica_2013.pdf.
63
much more easily maintained than changed, since their features are almost
self-perpetuating.
At a certain point, stereotypes compete with nation branding, taking into
account the fact that the former constitute part of unconscious thought and
exert an influence on the nation’s image. Unfortunately, stereotypes and
their potential negative features are the first idea for their foreign
counterparts.96 The characteristics that groups were given led to even greater
misconceptions and put the whole process of foreign policy in jeopardy. In
this sense, the process of building a nation branding is twofold: it has to
surpass stereotypes by working on the positive and negative directions that
the country takes and projecting a nation branding must have practical
implications in order to meet its specific interests.
Nation branding exerts an important influence on Brazil-Chile
cooperation initiatives, given the fact that it can alter the stereotypical
perceptions in which national image is articulated and understood. In the
following chapters, it will be seen that, in many respects, Chile is as an
example for Brazil to follow. According to Barros for instance, the Brazilian
National Education Council and the Ministry of Education proposed new
educational standards similar to the new parameters created by Chile. In
2012, Chile created these, as well as an examination, to assess the quality of
new-qualified teachers. According to this method, Chile identified the best
teachers as part of a consistent educational policy (Barros, 2013: 55).
Branding a nation is an effective way to assign the country a desirable
identity helping to develop closer bilateral ties insofar as it highlights the
country’s most positive and distinguishable features.97 Like public
diplomacy strategy, nation branding is also concerned with long-term aims
and always plays an important role in foreign affairs, considering that, as
96
Results show that performance satisfaction increased when Chinese exporters used
branding strategy, although reinforcing existing perception is easier than changing them.
See Lance Eliot Brouthers and Kefeng Xu (2002), “Product stereotypes, strategy and
performance and satisfaction: The case of Chinese exporters”, Journal of International
Business Studies, vol. 33, no 4. Palgrave Macmillan, pp. 657-677.
97
In 2005 the Inter-American Development Bank granted the loan to finance the
Dominican Republic’s nation branding programme. The multifaceted nature of nation
branding demanded a public-private partnership as part of the strategy of the Dominican
Republic’s strategy. Andrés van de Horst Álvarez (2005), “La marca país: Objetivo
estratégico de competitividad y posicionamento global”. http://www.competitividad.org.
do/wp-content/uploads/2009/09/a-competir-marca-pais.pdf.
64
previously mentioned, it is the functional equivalent of ‘national image’.98
The construction and promotion of a nation branding is a concerted and
systematic effort to act and communicate in a responsible and effective
manner, otherwise an attempt to create a nation branding only helps a
country create a stereotype. In this situation, a certain country can
unconsciously create difficulties for the demand of ‘non-typical’
commodities. As Georgescu and Botescu observes, in the case of Germany a
country usually related to engineering products it is very difficult for
fashion-related commodities to insert themselves into the market
(Georgescu and Botescu, 2004: 39). For instance, a company like Hugo
Boss has tried to dissociate itself from its German origins and emphasise its
European roots. As Olins reminds us, “if the nation’s leading brands are
based around too narrow a sphere of activity, those flagship brands in the
sector may flourish, but the other brands in different sectors may find live
more difficult” (Olins, 2005: 173).
There is a permanent need for recreating the nation branding in an
attractive way in the global arena. The branding process needs to shape the
national client and orient the image towards the nation’s aim, which is a
complex process. Increasing the participation of nation branding projection
in foreign affairs demands particular attention being paid to the topic in
Brazil-Chile bilateral context. Regardless of the fact that Brazil and Chile
have different goals with regards to nation branding, the concept plays a
central role when exploring their bilateral relationship. 99 The following
sections will describe in more detail the construction of Brazil as a global
brand and Chile’s focus on nation branding to attract foreign investment.
98
The fact that Brazil has held two importants world sporting events the 2014 FIFA World
Cup and the 2016 Olympics in the city of Rio de Janeiro has given the country international
visibility. This so-called sports diplomacy appears to be increasing particularly in emerging
countries, with emerging economies using sports diplomacy to achieve foreign policy goals.
In the past, only developed countries have been given the chance to host big sporting
events. Andreia Soares e Castro (2013), “2014 FIFA World Cup and 2016 Olympic Games:
Brazil’s strategy to win hearts and minds through sports and football”, Public Diplomacy
Magazine. New Jersey: USC Center on Public Diplomacy, p. 31.
99
With respect to nation brand ranking, “Os países com a melhor reputação do mundo:
Brasil em 21o”, Revista Exame, 14th September 2014. São Paulo: Editora Abril. For
commentary on the nature of nation branding and Chilean nation brand status, see Claudia
Labarca (2008), “La confianza y la reputación como variables del desarrollo económico y
la imagen país”, Cuadernos de Información, no 23. Chile: Pontificia Universidad Católica
de Chile, pp. 72-81.
65
1.2.3 Brazil’s global rebranded image
Carmen Miranda, the ‘Brazilian Bombshell’ to some and the ‘Chiquita
Banana Girl’ to others, was a famous singer, actor and dancer and the
symbol of Brazil in Hollywood in the 1940s and 1950s, portraying Brazil’s
image worldwide. Her elaborate banana headdress became her Hollywood
trademark. She sang in Portuguese, often accompanied by gestures that were
clearly caricatured as a hallmark of the exotic Latina singer. Carmen
Miranda became the highest-paid female performer in the United Sates
during World War II, as well as a significant element of Brazil’s image
abroad. A more accurate association connects her stereotypical image to the
Brazilian Carnival and the Brazil brand has deep historical roots in carnival,
sensuality and soccer, right up today. 100
Brazil’s stereotypical image of the late fifties when the country won its
first World Cup in Sweden in 1958 and became a great footballing nation
has continued to exert an influence until present time. At that time, Brazil
presented its soccer stars, Garrincha and Pelé, to the world and was
enormously proud of its footballing performance. 101 The football nation was
the first of Brazil’s images to be internationalised. However, modern Brazil
cannot only be recognised according to old-fashioned ‘footbaal nation’
cliché. Brazil’s rapid ascent to international visibility by holding two
important global events, the World Cup in 2014 and the Olympics in Rio de
100
From 1932 until the end of the decade, Carmen Miranda was the most famous female
performer in South America. Scott L. Baugh (2012), Latin American cinema: An
encyclopedia of movies, stars, concepts and trends. California: ABC-CLIO LCC. pp. 171173. More information about the duet between Miranda and Dorival Caymmi (the Brazilian
songwriter, singer, actor and painter) in 1939 with elements of Bahian folklore in nonstereotypical terms in Darién J. Davis (2012), “Racial parity and national humor: Carmen
Miranda’s sambas performances” in William H. Beezley and Linda A. Curcio-Nagy, Latin
American popular culture since independence. Maryland: Rowman Littlefield Publishers,
pp. 176-192.
101
See Roger Kittleson (2014), The country of football: Soccer and the making of modern
Brazil. California: The University of California Press. Football has been overwhelmingly
important to the construction of national identity. Deibson Fernando da Silva and Francisco
Xavier dos Santos (2013), “Por que o Brasil é o país do futebol?”, Revista Carioca de
Educação Física, no 8. Rio de Janeiro, pp. 2-9.
66
Janeiro in 2016, has changed the country’s image.102 Brazil’s announcement
that it had discovered vast pre-salt oil fields in 2007 promises to more than
quadruple its production, boosting both oil and gas production.103 Alongside
a booming oil market, the country’s position as the world’s largest
sugarcane ethanol producer turned Brazil into an important energy power.104
Brazil’s international position also changed as a member of important
multilateral international bodies such as BRICS (Brazil, Russia, India,
China and South Africa), G20, IBAS (India, Brazil and South Africa) and
BASIC (Brazil, South Africa, India and China).105 Brazil’s global policy
strategy changed the Bretton Woods system defined the country as a
102
Holding the 2014 World Cup and the 2016 Olympic Games for most Brazilians is the
ultimate expression of the nation’s elevation onto the world stage. Brazil’s successful
holding of the World Cup shows that the country is more than capable of delivering a
similar experience when the country hosts the Olympics in 2016. Brazil will become the
first South American country to host the Olympics. Aaron Stern (2014), “IOC official:
Brazil’s World Cup points to success for Rio 2016”, NBC Olympic Talk, 9th July 2014.
http://olympictalk.nbcsports.com/2014/07/09/ioc-official-brazils-world-cup-points-tosuccess-for-rio-2016/.
103
From 2010 to 2014, annual average daily pre-salt production grew almost twelve-fold.
“Pre-salt”, Petrobras. http://www.petrobras.com.br/en/our-activities/performance-areas/oiland-gas-exploration-and-production/pre-salt/. The study on the impact on the New
Regulatory Regime for Pre-Salt Layer Oil is now under discussion in the Brazilian National
Congress. The discussion refers to the revenues and taxation of activities related to the
exploration and production of oil and natural gas. Emmanuel Marques Silva and Ayrton de
Souza Porto Filho (2012), “Camada pré-sal: um estudo sobre a alteração nos critérios de
distribuição dos royalties do petróleo”, Gestão Contemporânea, vol. 2, no 1. Porto Alegre:
FAPAS, p. 17.
104
Brazil as a world producer of energy raises important questions, such as balancing
government intervention with market forces and lowering costs to allow for market entry
into an industry that is in its infancy. João Martines Filho et al (2006), “Bioenergy and the
rise of sugarcane-based ethanol in Brazil”, Choices, vol. 2, no 21. http://www.
choicesmagazine.org/2006-2/tilling/2006-2-10.htm. Brazil is the second largest producer of
ethanol, second only to the United States, where the raw material comes from corn.
Leidiane Coelho Carvalho et al (2013), “Cana-de-açucar e álcool combustível: Histórico,
sustentabilidade e segurança energética”, Enciclopédia Biosfera, vol. 9, no 16. Goiania, p.
530.
105
The G20 was established in 1999 during a summit of G7 finance ministers and heads of
central banks in the form of informal dialogue in the framework of the Bretton Woods
institutional system, in order to broaden dialogue on economic and financial policy issues
with countries also considered important to every country achieving stable and sustainable
global growth. The main issue was to solve the Asian financial crisis. However, this group
should not be confused with the G20 of developing countries, which was formed in 2003
during the WTO Fifth Ministerial Summit.
67
proactive emerging power.106 Brazil has strengthened its international
position in the last few years and new mechanisms must be created in order
to project the country’s current international status.107 Regardless of the
country’s strong image associated with football and carnival, Brazil’s aim is
to rebrand itself to sell its image abroad to foreign investors.
BRICS has contributed to the rebranding of Brazil’s image as a crucial
part of its international insertion. Since the BRICS joined together, the
desire to change the world system in order to reflect the diversity of world
power has become a fundamental element of Brazil’s foreign policy. 108
According to Tarter da Rosa, BRICS is consistent with the Brazilian
diplomacy goals of multilateralism, since its aim is to reform global
multilateral institutions (Tarter da Rosa, 2014: 29). Therefore, it confers
contemporary nation branding features on Brazilian foreign policy aims.
As Niesing highlights, Brazil had to work on the positive side of its
stereotypes and broaden the country’s values abroad. Brazil sells an
inviting, young and attractive image, which helps sell any kind of product
(Niesing, 2013: 82-83). The combination of the attributes of a diverse
country led to the origin of the ‘Made in Brazil’ brand worldwide. Brazil
ranks as the eighth largest textile maker and, as one of the world’s greatest
sources of food supplies, auto-parts, biofuels, pulp and paper, mineral
resources and steel, has one of the world’s five largest petrochemical centres
and builds private jets as well as some military aircraft. Between food
supplies and aircraft exports, aircrafts were Brazil’s top exports between
106
For more information about Brazil’s shifting foreign policy during the administration of
President Lula, see Britta Rennkamp (2011), “Desenvolvimento em primeiro lugar no G20
e nos BRICS?”, in Reflexões da política externa do Brasil e da sociedade civil, p. 160.
107
Among the BRICS members, Brazil under the administration of President Lula has
emerged as the most internationalised economy, either as a recipient of foreign enterprises
or direct foreign investments or due to the outward expansion of Brazilian companies and
investments. Lula has achieved strong coalitions among emerging states and has changed
geopolitical asymmetry towards north-emerging countries dialogue. See Amado Luiz Cervo
and Antônio Carlos Lessa (2010), “An assessment of the Lula era”, Revista Brasileira de
Política Internacional, vol. 53. Brasília. http://www.scielo.br/scielo.php?pid=S0034-7329
2010000300001&script=sci_arttext.
108
Among the BRICS members, Brazil has the most abundant water, solar energy and presalt resources and a growing agro-energy sector. Alberto Pfeifer (2012), “O Brasil, os
BRICS e a agenda internacional”. Mesa redonda: O Brasil, os BRICS e a agenda
internacional/Apresentação do Embaixador Vicente de Sá Pimentel. Brasília: FUNAG, p.
82.
68
1999 and 2001 and the Brazilian brand Embraer grew in the field of
commercial aviation, military aviation and business jets. Embraer sells,
distributes and produces abroad, with regional offices in the United States,
Europe, China and Singapore.109
The commercial aviation has also grown strongly in the last few decades,
with the airline TAM emerging as a result of increasing domestic demand.
The TAM brand has been the leader in the Brazilian aviation market with
frequent flights and new international routes.110 In doing so, TAM
developed a strategic partnership with the Chilean airline LAN, creating the
LATAM Airline Group. This association has joined together the two most
important brands in Brazil and Chile in order to connect South America
with the world. This ambitious Brazil-Chile partnership in the commercial
aviation sector has widespread presence in Colombia, Peru, Argentina,
Brazil, Chile, Ecuador and Paraguay. 111 The respectable amount of
investment in the creation of the LATAM association is an interesting
example of mutual respect and trust between the two countries’ business
sectors.
Today, the Brazil brand is not only associated with the stereotypical
vision of a football nation, since many Brazilian companies operate
internationally in different areas, such as oil and gas, chemicals and
petrochemicals, environmental engineering, sugar and ethanol, food
supplies, the aircraft industry, the textile industry, fashion, banking and
thermonuclear energy among others.112 Brazil’s growing geostrategic role in
multilateral international forums, its potential hemispheric leadership and its
economic strength have changed its international projection.113. Brazil has
109
“What about Brazilian brands?”, in Interbrand Consultancy, www.interbrandsp.
com.br/tag/brasil/. With regard to tourism, Fabiana Gondim Mariutti and Janaina de Moura
Engracia Giraldi, “Análise da imagem do Brasil por meio do Anholt nation branding
index”, in ISNN Eletrônico.
110
TAM reduced its domestic activities by 20% because of Brazil’s difficult economic
situation. Elaine Patricia Cruz (2015), “TAM airlines to reduce operations in Brazil, job
cuts expected”, Agência Brasil, 20/07/2015. http://agenciabrasil.ebc.com.br/en/geral/
noticia/2015-07/tam-airline-reduce-operations-brazil-job-cuts-expected.
111
Exame.com, 21st August 2013.
112
The Brazilian petroleum industry includes the global processes of exploration,
extraction, refinement, transportation, and the marketing of petroleum products. “Brazil’s
oil and gas industries and associated companies”, Brazil & Gas, 2011. http://
braziloilandgas.com/brazils-oil-and-gas-industries-and-associated-companies.html.
113
BRICS has contributed to Brazil’s multilateral foreign policy as part of its strategy of
69
become a vital player in regional and global politics in numerous areas,
hence the fact that its nation branding is not only connected with wellcoordinated efforts to project its image abroad, but also encompasses other
diverse factors.114
The need to project a well-consolidated nation branding in an overcompetitive world requires conscious branding strategies. Not only have
small countries like Chile embarked on more conscious country branding,
but countries with huge dimensions such as Brazil have also required
strategic brand management.115 As previously observed, countries have
always branded and rebranded themselves in the course of history, today,
however, projecting a nation branding demands the implementation of new
marketing techniques. Nation branding is clearly situated in the field of
marketing, strengthening the idea that foreign affairs are no longer the
exclusive domain of traditional diplomacy. 116 Since international relations
are not the exclusive domain of governmental actors, public-private
partnerships should also be taken into account when exploring foreign
affairs.117 Nation branding’s strategic policy encompasses public-private
activities in order to achieve the country’s branding projection targets. In the
international insertion. Daniel Flemes (2010), “O Brasil na inicitiava BRIC: soft balancing
numa ordem global em mudança?”, Revista Brasileira de Política Internacional, vol. 1, no
53. Brasília, pp. 141-156.
114
National pride is part of the Brazilian spirit. Two slogans of two supermarket chains is
‘Proud to be Brazilian’, the same as TAM airline. Havaiana, the Brazilian flip-flop brands
are decorated with the Brazilian flag. For more information about Brazil’s brand and its
consumer market in contrast to that of the other BRICS countries, see Nigel Hollis (2008),
The global brand: How to create and developing lasting brand value in the world market.
New York: Palgrave Macmillan.
115
Chile’s nation brand strategy encompasses more sectors and includes more components
than its Brazilian counterpart. Brazil needs more private sector financing in order to
strength its nation brand. For more information, see Eva Niesing (2013), Latin America’s
potential nation branding: a closer look at Brazil’s, Chile’s and Colombia’s practice.
Hamburg: Anchor Academic Publishing, p. 132.
116
Nowadays ‘Made in’ has a greater influence on consumers, meaning that countries have
a strong interest in developing nation branding strategies. For consumers, this branding
matters, given that it can refer to important features, such as safety, quality and ecological
standards. “Made in: The value of country of origin for future brands”, Future Brand. 2014
http://www.futurebrand.com/images/uploads/studies/cbi/ MADE_IN_ Final_HR.pdf.
117
The rapid proliferation of public-private partnership in the areas of human rights,
environmental protection and global governance show the importance of the topic in
international affairs. See Magdalena Bexell and Ulrika Mörth (2010), Democracy and
public-private partnerships in global governance. New York: Palgrave Macmillan.
70
case of Brazil, partnerships between private consultancy agencies and
federal research institutes provide the mechanisms for consistent brand
implementation and management.
1.2.4 The Chile’s nation-branding politics
As Anholt and van Gelder point out, the concept of nation branding is not
static and evolves in the social, economic and political fields. Therefore, for
a nation to become a successful brand, it is recommendable that it fits the
current context of what the country proposes. Nowadays, the nation
brandings have inherited the role of cultural transmitter, becoming a form of
cultural exchange in a global scenario. There is no reason why the practice
of nation branding should be confined to developed countries. Given that,
nation branding can improve people’s lives, it should be transferred to all
nations of the world (Anholt and Van Gelder, 2005: 56-58). In the previous
section, it was shown how the strategy of nation branding emerges in an
overall context and the benefits that it has. Now, we would like to develop
several arguments to analyse the case of Chile, which is an interesting
example of a country that projects a positive nation branding. In this study,
we will focus on the economic aspect of Chile’s nation branding process.
In the Chilean case, the Foreign Investment Committee represents the
State of Chile in its dealings with investors around the world. The aim of
this committee is to position Chile as an attractive destination for foreign
investment and international projection. An increasingly interdependent
global environment means that countries have to look outside their own
borders in order to attract foreign investment. As previously mentioned,
projecting a nation brand is a joint effort of both the private and public
sectors. In order to attract investment the Chilean committee emphasises the
most convenient advantages of Chile’s business environment.118
118
The Foreign Investment Committee projects Chile as the best evaluated economy in
Latin America and one of the best evaluated among emerging economies worldwide.
According to this evaluation, its hallmark stability, transparency and competitiveness and
excellent business prospects position the country not only as the best destination for foreign
investment in the region, but as one of the world’s leading destinations. “10 Reasons to
Invest in Chile”, CIE Chile Foreign Investment Committee, http://www.ciechile.gob.cl/
en/porque-chile/
71
The strategy includes highlighting the macroeconomic fundamentals of
its economy, which is accompanied by decreasing inflation, a sharp drop in
public debt, stable external accounts and strong international reserves in
other words, this achievement is the result of Chile’s commitment to
economic liberalisation and free market policies.119 This means that Chile is
highly competitiveness with lower tariffs, increasing levels of foreign trade
and rapid integration into world markets. Indeed, the country projects itself
as having a modern telecommunications system, a solid banking sector, high
standards of public infrastructure, a functioning democracy, stable
institutions, excellent quality services and availability of qualified workers,
all of which function as key factors to impress foreign investors.120
The Chilean nation branding strategy has achieved excellent results, as
demonstrated by the latest Business Environment Rankings published by
The Economist Intelligence Unit (EIU). According to this ranking, Chile
was considered the best country in Latin America to conduct business
between 2010 and 2014. “This ranking is applied to the world’s 60 largest
economies, which account for more than 95% of global output, trade and
foreign direct investment (FDI) and measures the quality or attractiveness of
the business environment and its key components. The model considers 70
factors, across 10 categories, which affect the opportunities for and
hindrances to conducting business”. Chile ranked fifteenth.121 Although
Chile is considered the best country in Latin America to carry out business,
international technology companies still set up their firms in Asia (South
Korea and Singapore) rather than in Chile. According to sociologist Eugenio
Tironi, a professor at the Catholic University of Chile, despite its low levels
119
Chile has implemented the largest programme of privatisation of government ownedenterprises, and its social security system, run by privately managed individual retirement
companies has attracted the attention of many observers. Barry P. Bosworth et al (1994),
The Chilean economy: policy lessons and challenges. Washington D.C.: The Brookings
Institution, p. 14.
120
Positioning well-coordinated nation brands matters greatly for public diplomacy. Chile
is considered one of the countries that has successfully repositioned itself using coordinated
marketing techniques. John Quelch and Katherine Jocz (2005), “Positioning the nationstate”, Place Branding and Public Diplomacy, vol. 1, number 3, pp. 229-237.
121
In the report published by the World Bank, Chile ranked on 37th place out of 185
countries in 2012 maintaining its climb between 2010 and 2012. “Business Environmental
Ranking: 10 reasons to invest in Chile”, CIE Chile Foreign Investment Committee,
http://www.ciechile.gob.cl/en/porque-chile-3/
72
of corruption compared to neighbouring countries, Chile today is not the
economic Asian tiger it was expected to be ten years ago.122
Indeed, today’s unfavourable international context has limited direct
foreign investment on a significant worldwide scale. Nevertheless, Chile’s
economic and financial indicators did not experience significant turbulences
considering its annual average GDP of 6.6%, rising to an average of 7.3%
from 2009-2011. According to the Central Bank of Chile, FDI in Chile
reached $ 17, 299 million in 2011, up by 12.5% on 2010 ($ 15, 373 million)
and by 35.6% on the average for the previous five years. A large number of
foreign investors have chosen to use the Decree Law (DL) 600 mechanism,
according to which an investor signs a contract with the state of Chile for
the transfer of capital or other forms of investment and receives a number of
guarantees and rights, observed in more detail in Chapter 3 on Brazil-Chile
bilateral links.123
While the mining sector accounted for over half of FDI, the sector’s
importance has gradually decreased in the last few years. The mining sector
went down by an average of 15% in 1999-2001, even though it continued to
account for a significant number of FDI indicators. The recent decrease in
mining investments has been attributed to large investments in the
electricity, gas and water sectors, as well as in transport and
communications. 124 The current scenario is the result of the privatisations of
these sectors, combined with the intense competition that followed the
deregulation of mobile and long-distance telephone services. These two
sectors accounted for an average of 24% of total FDI between 2000 and
2005. However, according to what is set out by the Foreign Investment
Committee, multiregional investments correspond mainly to projects in
energy, telecommunications and the financial services sectors.125
122
Folha de São Paulo, 15th July 2007.
Since 1974 the majority of foreign investors have used this mechanism. “DL 600, CIE
Chile Foreign Investment Committee, http://www.ciechile.gob.cl/en/dl-600/que-es-eldl600/
124
Chile has the third highest copper mining costs in the world, after Canada and Australia.
One of the reasons for this is the high cost of power in the country. Energy accounts for up
to 15% of the costs at some of the state’s copper producers. Greta Bourke, “Chile’s mining
industry embraces change to improve community relations”, Business Insight in Latin
America, 21st November 2013.
125
More information in the “Impact of the FDI on the Chilean economy”, CIE Chile
Foreign Investment Committee, http://www.ciechile.gob.cl/en/inversion-en-chile/impacto123
73
Chile’s mercantile foreign policy has been a key factor for national
development, since it has orchestrated its rapid integration into the world
economy. For obvious reasons, the internationalisation of the Chilean
economy, through the creation of a network of agreements and alliances to
ensure and adequate presence of its products and services in the world’s
markets, has promoted continued foreign investment into Chile. These
elements are important contributors to Chile’s economic growth and help
raise FDI. As will be observed in the following section, Chile’s adherence to
the principles of open-regionalism considers trade agreements as the
mechanism for expansion and as a policy for promoting international peace,
the protection of human rights and democratic stability as core components
of its foreign policy targets.
1.2.5 Chile’s nation branding and historical backgrounds
As already mentioned at the beginning of this section, a nation must fit the
current context in which it emerges to become a successful brand. In the
Chilean case, this means that it should have an attractive, liberalised
business environment, as proposed by The Foreign Investment Committee.
If Chilean financial internationalization is studied over the course of history,
the reasons that have made this country so attractive to foreign business can
be understood. In the aftermath of Salvador Allende’s administration in
1973, the country was submerged in a scenario of hyperinflation, a complete
loss of both external and internal confidence, and severe balance of
payments difficulties, generated by the oil crisis and a downturn in copper
prices (Griffth-Jones 1981: 224).
This crisis contributed directly to the military coup of 1973. The military
government led by Augusto Pinochet, decided to liberalise the Chilean
economy. However, the government’s financial market policy was not
restricted to the domestic market. Government restrictions on foreign
investment in 1974 led to Chile’s investments laws being the most liberal in
Latin America (Haggard and Maxfield, 1996: 224-225). According to Silva,
these early domestic reforms strengthened the participation of a set of
financial actors at the expense of the more traditional import-substitution
de-la-ied-en-la-economia-chilena/
74
sectors (Silva 1991, 1993: 225). Since these new actors were more engaged
in financial activities, they achieved greater access to international financial
one. As a result, the portion of the economy in charge of financial market
reforms was linked to internationalised segments of private groups (Haggard
and Maxfield, 1996: 225).
Despite the government’s experiment with an orthodox stabilisation
programme in 1974-1975, this approach failed to reduce inflation.
Therefore, the Pinochet regime replaced the stabilisation programme with a
new economic team the “Chicago boys”, who emphasised a new exchange
rate. The new team lived up to expectations regarding government policy
and increased foreign and domestic creditor confidence. 126 However, as
Corbo, Foxley, Hastings and Ramos observe, “the crisis that followed in the
wake of this global monetarist experiment has been dealt with extensively
elsewhere” (Corbo 1983; Foxley 1983; Hasting 1993; Ramos 1986: 226).
As a result, a more pragmatic team, whose focus was on broader private
sector links came to power in the early 1980s. Under the new team, export
performance improved and people started talking about the “Chilean
miracle”. Despite its pragmatism, the team remained committed to liberal
policies and also preserved the fundamental posture of the government
towards capital account openness (Haggard and Maxfield: 1996: 226).
The positive business environment is, moreover, a reflection of certain
public policies implemented in Chile since 1990 in specific areas such as
political stability, modernisation of the state, social cohesion, and economic
freedom as previously mentioned. 127 Since 1990 when democracy was
restored, Chile has enjoyed a period of political stability. 128 This constant
126
In significant South American states, like Brazil, Chile, Argentina and Uruguay,
technocrats played a crucial role in economic management under military rule. As time
went by, the Chilean Chicago Boys expanded their influence to all areas of society,
including education, health, housing and the pension system among others. These
neoliberal technocrats turned themselves into the main intellectual leaders of the military
regime, justifying their political authoritarianism through economic liberalism. Patricio
Silva. En el nombre de la razón: Tecnócratas y política en Chile. Santiago de Chile:
Ediciones Universidad Diego Portales, , 2010, p. 161.
127
An important aspect to attracting Foreign Direct Investment (FDI) is the efficiency of
domestic firms. See David Greenaway and Richard Kneller (2207), “Firm heterogeneity
exporting and foreign direct investment”, The Economic Journal, vol. 117, pp. 134-161.
128
Chile’s elected government in the 1990s, focused on expanding social safety. There was
a consensus that the military economic policies should be expanded, along with social
policies. More information in Eduardo Aninat (2005), “Options and outcome of Chile’s
75
emphasis on democratic tradition as a strategy of Chilean foreign policy has
contributed to its achieving a greater degree of international prestige and
legitimacy (Morandé, 2003: 258).
In Chile, political and economic rights have been guaranteed by an
independent judicial system, which attempts to expedite access to justice
and reduce trial times. In order to modernise the state, measures were taken
in early 2003 to increase the efficiency of public administration and improve
government quality and transparency. Such measures were taken to
encourage performance-based incentives and reduce the number of
appointees in public posts. As a result, “top posts in public administration
are being filled competitively within the framework of a new system headed
by the Civil Service Directorate”.
In the social field, the government’s investment in social activity and
high economic growth had considerably advanced effects. In 1990, 39% of
Chileans lived below the poverty line, but by 2003 this percentage had
dropped to 18%. In an additional attempt to improve social welfare services,
the government of President Ricardo Lagos set up an unemployment
insurance programme, introduced educational reforms and overhauled the
health system. According to him, “these programmes are designed not only
to improve productivity and increase Chile’s competitiveness but primarily
to ensure that all the country’s citizens share in the benefits of economic
growth” (Chilean Foreign Investment Committee).
Thus, Chile’s image on the international stage has been shaped by
domestic strategies such as economic liberalisation in order to attract FDI,
socio-political development that has emphasised human rights and improved
educational standards and the aim to increasing national autonomy in the
international arena.129 In contrast to Chile, Brazil has to promote a more
active economic integration strategy to achieve better insertion into the
education reforms 1990-2000”, in Timothy Besley and Roberto Zagha, Development
challenges in the 1990s: leading policymakers speak from experience. New York: Oxford
University Press, pp. 301-319.
129
Foreign Direct Investment (FDI) is not a new phenomenon in the international
community and has also played an important role in European colonialism. Nevertheless
the way of carrying out FDI has changed over the course of history. FDI has become a
relevant element in international relations and deserves attention. Further reading in Martin
Griffiths and Terry O’ Callaghan (2002), International Relations: The Key Concepts. New
York: Routledge.
76
global economy. 130 A gradual increase in the Brazilian capacity to enforce
the competitive policies conducted by Camex and BNDES and the creation
of an agency to promote FDI can be seen and will be explored in the
following sections.
The internationalisation of the world economy seems to have had a
profound effect on domestic politics worldwide. As the world economy
changes, pressure to project the nations in a positive way in the international
arena increases.131 Therefore, the significance of nation branding as a tool
has increased. Despite the fact that not everybody does so profitably or
makes it work effectively, there is no doubt that a few countries have got it
right, as seen in the case of Chile, where an attractive national image is
invaluable asset, mainly in terms of the FDI that it attracts.132 In this
manner, nation branding is part of the Chilean national promotional
programme, which tries to differentiate itself through its stable, transparent
and well-organised business environment.133
The Brazilian and Chilean nation branding approaches offer an
interesting perspective on how to understand why both countries opted to
prioritise certain sectors of the domestic economy to the detriment of less
competitive internal sectors. Nation branding provides the relevant tools for
130
See Fabio Giambiagi and André Villela (2005), Economia brasileira contemporânea.
Rio de Janeiro: Elsevier.
131
Since the 1970s, as Chile, Vietnam, India, China, South Africa and Mexico have decided
to reduce trade barriers and government intervention in the economy and have opted to
privatised state-owned enterprises. However, internationalization has caused different
outcomes in each country, given their different realities. Helen V. Milner and Robert O.
Keohane (1999), “Internationalization and domestic politics, an introduction”, in Helen V.
Milner and Robert O. Keohane (eds), Internationalization and domestic politics.
Cambridge: Cambridge University Press, pp. 3-34.
132
Despite Chile’s long-term strategy of presenting itself as a serious and organised
country, two unpredictable episodes occurred the giant earthquake in February 2010 and the
collapse of a mine in August 2010. These episodes showed two important features of the
country resilience and resourcefulness in the face of adversity. “Chile’s country brand:
Coming clean”. The Economist, 10th September 2010. http://www.economist.com/
blogs/americasview/2010/09/chiles_country_brand.
133
Nation branding campaigns have become more important in Latin America to the extent
that countries such as Chile and Uruguay have promoted exchange programmes to project
their nation branding strategies. In this regard, the Chile Image Foundation and the
administrators of the ‘Uruguay Natural’ brand organised a summit to discuss activities in
which they could cooperate. “Marca país Uruguay recibe a Fundación Imagen de Chile en
Montevideo”, Uruguay Natural, 28th July 2015. http://marcapaisuruguay.gub.uy/marcapais-uruguay-recibe-a-fundacion-imagen-de-chile-en-montevideo/.
77
observing whether the country has achieved its image goals through nation
branding mechanisms, whereby strategic communication fulfilled specific
aims.134 The fact that Brazil emerged as a global brand was the result of
opening up the economy to foreign investors and encouraging new
industries to relocate to its territory. 135 In the case of Chile, revitalising its
brand was one of the demands of transitioning from a historically dictatorial
period.136 In contrast to Brazil, Chile’s nation branding seeks to let people
know about the country in order to project a modern image to new
audiences. Brazil and Chile are interesting examples of well-coordinated
nation branding policies as well as the influence of the concept on bilateral
ties. Along with nation branding, public diplomacy engages various actors
relevant to the carrying out of foreign policy aims.
1.3 The Dimensions of Brazil and Chile’s Mutual Perceptions
In general security issues do not dominate the Latin American study of
international affairs, although they are crucial to strategically understanding
bilateral relationships in the region. 137 This means that the relationship
134
Marketing goes about identifying potential customers (direct investors, for instance) and
the focusing on those clients can be more effective when communicating the importance of
benefits to the target group. Sam Vaknin (2010), Branding and place marketing.
https://archive.org/stream/NationBrandingAndPlaceMarketing/Nation-Branding-and-PlaceMarketing_djvu.txt.
135
The 2014 World Cup and the 2016 Olympics show that it is a good time for brands to
explore opportunities in the Brazilian market. As demonstrated by Chilean investors in
Brazil, these should understand the key socio-economic factors and cultural trends affecting
brands within Brazil. Daniel Buarque, “Brazil now: A look at key trends and factors for
international brands”, Hall & Partners, 4th July 2014. https://www.warc.com/Blogs/
Brazil_Now_A_look_at_key_trends_and_factors_for_international_brands.blog?ID=1873.
136
The last Country Brand Index for Latin America ranked Chile as the fourth most
valuable country brand in the region after Brazil, Argentina and Costa Rica. “Country
Brand Index Latinoamérica 2013”, Future Brand. http://www.futurebrand.com/foresight/
cbi/country-brand-index-latin-america. This ranking took five criteria into account: the
values system, quality of life, business aptitude, heritage and culture, and tourism. “Chile es
la cuarta marca país más valiosa de Latinoamérica”, El Mercurio Media Center, 23rd
September 2013. http://www.elmercuriomediacenter.cl/chile-es-la-cuarta-marca-pais-masvaliosa-de-latinoamerica/.
137
Differences in commitment to governing borderlands and borders between adjacent
states as in the case of the United States-Mexico, Mexico-Guatemala and Brazil-Paraguay
led to the risk of securitising interstate relations. Harold Trinkunas and Anne Clunan
(2016), “Alternative governance in Latin America”, in David R. Mares and Arie M.
78
between states can occur either through the absence of war or through the
presence of mutual trust. Therefore, the language of security still defines
bilateral links in Latin America and contributes to geopolitical analysis, for
example of Brazil-Argentina relations at the time of the Itaipú-Corpus
dispute.138 The relationship can also shown an outcome in terms of ‘unstable
peace’, in which a display of force is not uncommon during the negotiation
process. Brazil and Argentina, for example have had this type of
relationship since their independence period.139 Chile and Argentina shared
a so-called ‘fragile peace’, in which pending territory disputes survived for
most of the twentieth century (Oelsner, 2007: 269).
The concept of ‘mutual confidence’ is crucial to understanding the
Brazil-Chile relationship. According to Oelsner, “the level of mutual
confidence indicates the solidity of the peace upon which the relationship
rests” (Oelsner, 2007: 274). This level of mutual confidence can be
understood by means of compatible political regimes, interdependence, the
absence of conflicts and common institutions.140 Mutual confidence between
Kacowicz, Latin America security. New York: Routledge, p. 103.
138
The oil prices shock in 1973 was largely influenced by Brazilian foreign policy. This
crisis shifted the focus of its foreign policy in some way and altered the country’s insertion
into the international scene. The aim of emerging as a global power changed into a more
pragmatic approach towards South America leadership. Brazilian President Geisel faced
the international economic crisis by increasing industrialization and exports. Brazil needed
to increase its energy supplies in order to achieve these goals. However, Argentina
underestimated the impact of the energy crisis in Brazil and understood the energy issue as
a geostrategic one. The need for a quick solution to water resources brought at dispute
regarding the Corpus/Itaipú Dams. See Gian Luca Gardino (2011), “Diplomatic
investigations and historical analysis”, The origins of Mercosur: Democracy and
regionalization in South America. New York: Palgrave Macmillan, p. 26.
139
However, the cooperation between Argentina, Brazil and Chile in security policies over
the last decade demonstrates a high level of confidence. See Daniel Flemes (2005), “Notas
teóricas sobre a formação de uma comunidade de segurança entre a Argentina, o Brasil e o
Chile”, Revista de Sociologia e Política, no 24, Curitiba. http://www.scielo.br/scielo.
php?script=sci_arttext&pid=S0104-44782005000100014. Brazil, Argentina and Chile were
the only countries in Latin American with sufficient naval strength. Michael L. Krenn
(1996), Perspectives on Latin America and the Caribbean: The Chains of interdependence,
U.S. policy toward Central America 1945-1954. New York: M.E. Sharpe, p. 24.
140
Initiatives carried out in the multilateral field, such as Brazil-Chile cooperation in the
United Nations peacekeeping operation in Haiti (MINUSTAH), strengthened bilateral links
since the two nations share similar international values. Anfredo Rehren (2004), “Medidas
de confianza mutual entre Chile y Perú”, Revista de Ciencia Política, vol. 24, no 2.
Santiago.
79
the two states has been demonstrated since the ABC Pact and they share
democratic values, peaceful processes and great interdependence, as
illustrated by bilateral cooperation efforts. The perception of mutual
confidence between Brazil and Chile helps us to understand their bilateral
relationship in line with reality.
The lack of misconceptions in Brazil-Chile relations may account for the
strengthening of their long-term bilateral ties. This misperception
encompasses the discrepancies among the actors’ interests and goals.
Observing the incompatibility between interests and goals demonstrates the
difficulty of establishing bilateral relations (Vertzberger, 1990: 35-36). This
misconception contributes to defining cooperative scenario in the bilateral
approach to link trade, business interests, policy and multilateral foreign
policy goals.141
Mutual confidence and nation branding concepts are important tools for
understanding how Brazil-Chile cooperation occurs. Nation branding
concerns strategic communication between nation-states that seek different
goals in order to promote the country’s distinguishing features worldwide.
As the global scenario becomes more competitive, states embark on a more
conscious kind of country branding. Beyond attracting foreign investments,
nation branding projects the country’s image to a foreign audience,
including the civil society of other countries.142 The dynamic field of nation
branding accommodates different forms of approach, since the idea
demands growing integration and cooperation between different sectors.143
141
Brazil’s approach to its emerging role in world politics implies efficiency in military
security. Military security encompasses objective (the states’ military capacity) and
subjective (mutual perception between countries) aspects. The perception of an external
threat has gained importance in Brazilian foreign policy, given the country’s international
insertion. Today, the military dimension has led to a multiplicity of actors, from the super
power of the United States to emerging military power such as China and regional powers
such as Brazil (See Carlos Echeverría Jesús (2015), Relaciones internacionales III, paz,
seguridad y defensa en la sociedad internacional. Madrid: Universidad Nacional de
Educación a Distancia.
142
The importance of nation branding has increased worldwide. For further reading, see
Gilmore F. (2002), “A country-can it be repositioned?-Spain-the success story of country
branding”, The Journal of Brand Management, vol. 9, no 4, pp. 281-293.
143
Chile has created many marketing campaigns to project its nation brand. President
Piñera declared 2013 the ‘Year of Innovation’ and initiated a number of programmes to
foster entrepreneurship. A new brand ‘Imagina Chile’, was created, involving a national
campaign to promote an exciting future for Chile. Imagina Chile. http://www.
80
In doing so, it is also interesting to observe Chile and Brazil’s opinion of
each other and to what extent these opinions fit into each country’s domestic
context. A survey is one way to further research Brazil and Chile’s mutual
image of each other.
Examining Brazil and Chile’s views of each other using a survey allows
for a broad range of interpretations when exploring discussion of the nation
brand. Clearly, in matters relating to a country’s brand, nationhood
subjective forces are clearly at work (Mullins, 2006: 28). However, there is
no way to measure such opinions in an accurate manner. Thus, in an attempt
to examine the Chilean and Brazilian views of each other, the question now
is to what extent do the views and opinions of Brazilians correspond to
Chilean social economic reality? Is this view a result of the information
provided by the mass media, which sometimes offers a more stereotypical
view of countries in general or does it really detect a recent increase in
interest in Latin America, especially in Chile? Is the Brazilians’ nation
image of Chile, which makes a distinction between us and them deeply
rooted in a stereotypical model, or are Brazilians well informed about Chile?
When coming up with the survey’s six questions, each with five possible
answers an attempt was made to analyse whether the Brazilians’ level of
knowledge about Chile corresponds to its political economic reality.
When referring to foreign policy, it should be highlighted that despite the
progressive interest of the population in foreign affairs, interest on this topic
still tends to be low compared to other more immediate issues.144
Nevertheless, there has been an increase in people’s interests in foreign
policy in recent years. It should be pointed out that this growing interest
does not surpass the importance of domestic politics. In general, public
opinion tends to undermine how foreign policy directly affects citizens’
liquidagency.com/eu/studies/imagina-chile. Brazil’s rise to being the world’s preeminent
bioenergy producer led it to project energy as its main nation branding strategy. See João
Martines Filho et al. (2006), “Bioenergy and the rise of sugarcane-based ethanol in Brazil”,
Choices, the magazine of food, farm and resource issues, pp. 91-96.
144
The growing role of civil society in international negotiations in the 1990s encouraged
new operating procedures. In Brazil, the increasing participation of civil society in the
international agenda began late in the 1980s. However, domestic issues overlapped into the
international agenda. See Denilde Oliveira Holzhacker (2006), Atitudes e percepções das
elites e da população sobre a política externa brasileira nos anos 90. University of São
Paulo, Departament of Political Science, thesis for the post-graduate programme in Political
Science. São Paulo.
81
daily life and so. In this way, public opinion tends to prioritise economic
and financial issues to the detriment of foreign affairs. It is important to
observe that public diplomacy has to with international relations, whilst
nation branding is situated in the field of marketing. The field of nation
branding encompasses a combination of government and private measures
to project the distinctive characteristics of the nation’s image.
The option of collecting information from Brazilian university students
instead of people from different educational levels sought to provide a better
way of analysing Chile’s political and economic context. Since university
students answered the survey, it was assumed that their knowledge was
obtained from various sources of information and was not restricted to the
unilateral one-way message provided by private media. Therefore, there are
not wrong answers in the survey, although one answer may be more
appropriate than another meanings that the most correct answer provides a
more profound explanation of the question. Their level of knowledge can be
differentiated depending on the answers given. The total number of
Brazilians who answered the survey was 112: 53 international relations
students from a private Brazilian university (Universidade Cândido
Mendes), 43 arts letters from a federal public university (Universidade
Federal Fluminense) and 16 Masters or PhD students from a public health
research institution (Instituto Oswaldo Cruz). Instead of focusing on one
institution or on students from one specific area for this research, the idea
was to work with diverse groups including people from the healthcare area
and Brazilian public and private institutions in an attempt to embrace more
diverse views.
1.3.1 The Brazilians’ multiple perceptions of Chile
Nation branding can be defined as the strategic self-representation of the
country in order to attract foreign investment, trade, industries, resource
allocation and tourism among others. This definition refers to various
aspects of a nation, such as culture, policy, economy and trade, with a gap
between what the nation branding projects and what people think of other
countries. Nation branding strategy identifies a blend of coordinated
82
elements that show what differentiates the nation.145 In doing so, nation
branding aims to target not only governments and business sectors, but also
people’s image of a particular nation. Nation branding goes beyond the
scope of attracting investment and can target multiple audiences such as
civil society, inhabitants of a particular country, NGOs, provinces and
municipalities, given that the concept relies on visuals and slogans.
Although the nation branding can strongly be related to marketing
strategies, it may be unrelated to ordinary people’s image of a particular
nation. People’s opinion about other countries is also important when
understanding whether the foreign state gains a high level of acceptance
from the inhabitants of the target country. An attractive nation branding also
receives domestic support the inhabitants of the target country. When the
country has achieved this goal in most nation markets, public diplomacy
communication achieves its purpose of affecting target audiences. Public
diplomacy and nation branding are complementary concepts and rest on
their ability to shape the opinion of foreign audience. In this context of
Brazil and Chile, it should be analysed whether the multifaceted dimension
of bilateral ties has been accompanied by people’s engagement in the
international relations of both countries. Indeed, the role of non-state actors
in public diplomacy is on the increase, demanding a dynamic approach to
the exploration of the Brazil-Chile relationship from the 1990s onwards. 146
Given that Brazilians are a heterogeneous group, answers to the survey
illustrated their different levels of knowledge regarding Chile. Ironically,
countries located in the Latin American continent appear to be uninterested
in information about other nations. In general, Brazilians tend to study
Europe and the United States much more than the region’s history. As a
result, Brazilians’ knowledge of Chile is much more related to their self145
Nation branding is no restrained to attracting investment or the concept of being a
synonym for propaganda. For further reading, see Nadia Kaneva (2011), “Nation branding:
towards an agenda for critical research”, International Journal of Communication, no 5, pp.
117-141.
146
The existence of non-state actors is obvious throughout history; however widening and
deepening the level of cooperation in the international community has shifted the
opportunities for non-state actors in international relations. See Trevin Stratton (2008),
“Power failure: the diffusion of state power in international relations”, Infinity Journal, vol.
I, no 1. Also see, David S.A. Guttormsen and Carina van de Wetering (2013), “Non-state
actors in world politics and international relations research”, Political Perspectives, vol. 6,
issue 1, pp. 1-5.
83
interest in the country’s history and social-economic reality than the
consequence of formal education. Examining the survey’s answers, the
majority of these Brazilians have some idea about the Chilean economy,
although they still confuse Chile with other Latin America countries in
terms of politics. To this extent they mainly treat Latin America as a single
area, thus they are not concerned about the fact that Chile has the most
stable political system and the most consolidated democratic system in Latin
America.
Among the 112 Brazilians who answered the survey in March 2010, most
knew that Chile’s main export is copper. Messages in the Brazilian media
about the copper ‘boom’ and how the Chilean government has profited from
it in recent years may have exerted an influence on people’s image of the
country. People chose wine as Chile’s second main export probably decided
for that option taking into account the increase in the import of Chilean wine
to the Brazilian market.147
In the context of Mercosur, the majority (38) had a correct idea of Chile’s
policy towards this entity.148 This means that the majority have paid
attention to Chile’s strategic foreign policy, ignoring the core reason why
that policy was adopted. Therefore, it can be supposed that they do not
consider certain kinds of events, for instance the United States-Chile Free
Trade Agreement that officially took effect on January 1st, 2004. Chile did
not agree to join Mercosur as a permanent member, given that the two
possibilities available went in opposite directions. Chile’s nation branding
of transparent fiscal policies has achieved its goals regarding the Brazilian
audience, inasmuch as many of the Brazilians in the group agreed that Chile
147
Chile started with a strategy of penetrating international markets with average quality
wines sold at a low price. Jonathan Brooks and Sabrina Lucatelli (2004), “International
competitiveness of the A-B-C agro-food sector”, in Organisation for Economic
Cooperation and Development (OECD), Trade and competitiveness in Argentina, Brazil
and Chile: Not as easy as A-B-C. New York: OECD. p. 188. In 2014, Brazilian demand for
Chilean red wine increased by 22% and for white wine 25%. “Chile pretende aprovechar
aumento en demanda de alimentos nacionales desde Brasil”, Diario Comex, 7th November
2014. http://www.diariocomex.cl/21506/chile-pretende-aprovechar-aumento-demanda-ali
men tos- nacionales-desde-brasil.
148
The high external Mercosur tariffs in contrast to Chile’s lower effective average tariff
does not make the arrangement beneficial to the latter. Glenn W. Harrison et al (2001),
“Chile’s regional arrangements and the free trade agreement of the Americas”, Policy
Research Working Paper. The World Bank Development Research Group. Washington
D.C., p. 24.
84
is a positive example of transparent fiscal and monetary policy and one that
Brazil should follow.
The group of students from the Faculty of International Relations
deserves special attention, since they should supposedly have a better
understanding of Chile’s current and historical backgrounds. They defined
Chile using words such as ‘neoliberalism’, ‘isolation’, ‘seriousness’ and
‘stability’, which means they related Chile’s image to its present
circumstances. In contrast, people from the healthcare area, defined Chile
using words related to personalities and historical facts, such as ‘Allende’,
‘Andes’, ‘Pablo Neruda’ and ‘Pinochet’, together with those from the
Oswaldo Cruz Foundation with masters and PhD degrees older and share a
higher level of education. Although the international relations students were
expected to have better understanding of Chilean history and its present
context, this group did not have much more knowledge when compared to
the healthcare area. People from the healthcare area also demonstrated
knowledge of Chile’s most famous author to the detriment of the
international relations’ group.
Given that public diplomacy and nation branding involve the government
communicating with foreign publics, the audience’s opinion demonstrates
that certain countries have earned recognition when turning this into the
nation’s image. 149 Analysing the Brazilians’ opinion of Chile helps
understand whether nation brand strategy has achieved its expected goals.150
Most of the people who answered the survey shared the opinion that Chile is
a country with ‘transparent fiscal policies and high-level economic
149
The importance of public diplomacy in official foreign policy strategy is on the rise, to
the extent that Brazil’s Ministry of Foreign Affairs (Itamaraty) conducted missions focused
on trade and investments between Brazil and Chile. On 6th May 2014, the Brazilian
Foreign Minister Luiz Alberto Figueiredo Machado paid a working visit to Santiago for a
meeting with the Chancellor Heraldo Muñoz. Luiz Alberto Figueiredo was also invited by
President Michelle Bachelet to participate in ‘The Atlantic-Pacific Dialogue and
Opportunities for Trade and Investment in Latin America’ within the context of the
Business Advisory Council for Asia Pacific Economic Cooperation (APEC). “Visita do
Ministro das Relações Exteriores a Santiago do Chile” (2014), Diplomacia Pública,
http://diplomaciapublica.itamaraty.gov.br/31-brasil-chile.
150
As Simon Anholt points out, “Nation branding seems to be something that touches
citizens in a very profound way”. “Countries must earn better images through Smart
Policy”, Interviewed on 6th November 2007, Council of Foreign Relations.
http://www.cfr.org/polls-and-opinion-analysis/anholt-countries-must-earn-better-images
throughsmart-policy/p14719.
85
development’. In doing so, Chile’s nation branding policy highlights its
seriousness and reliability and meets its strategic marketing targets. This
predictability, in comparison with unstable Latin American states, helps
distinguish it as a country that respects institutions and the law.
1.3.2 Chileans’ views on Brazil
Chile’s privileged position, driving high economic performance and without
serious social struggles, facilitates a marketing technique approach that
projects the idea of a country that works properly. As Chile consolidates
nation branding as an important and growing political instrument, the
concept has achieved importance dimensions within the country’s foreign
policy targets. In the case of Brazil, the country’s international growth
opened up the economy to foreign investors and somehow shifted the context
of nation branding building. Brazil enjoys strong and distinctive image along
the years. A rebranded Brazil encompasses a combination of factors: recent
discoveries of large offshore pre-salt oil deposits; its ranking as the world’s
largest sugarcane ethanol producer and a pioneer in using ethanol as motor
fuel and its role as host of the 2014 World Cup and the 2016 Olympic Games
in Rio de Janeiro.
Moreover Brazil’s aircraft industry, fashion brands and wonderful nature
reflect the attributes of a diverse young country. 151 As a country with huge
dimensions and a widespread international projection, Brazil is a wellkonown brand per se. Instead of only being recognised as the country of
carnivals, beautiful beaches, unsophisticated techonology and primary goods,
Brazil has strengthened its international position this century and rebranded
itself globally. Surveying Chilean students at the faculty of International
151
Among the Latin American countries, Chile has the most favourable image of Brazil.
Chile is the country where the largest share of those people interviewed has a positive view
of Brazil, 74%. Sergio Lamucci (2014), “Brasil tem imagem positiva em boa parte do
mundo, diz pesquisa Pew”, Valor Econômico, 11/06/2014. The Brazilian cities of São
Paulo and Rio de Janeiro are considered extremely attractive for business. However,
Brazil’s size and potential demands differentiate ways of promoting its image on the
international market. Therefore, initiatives such as BestBrazil focus on showcasing its
financial markets to foreign investors and are important tools for projecting its nation
brand. BRAIN (Brasil Investimentos & Negócios, “Imagem do País”. http://www.
brainbrasil.org.br/imagem-pais.
86
Relations about Brazil’s image was a significant step towards observing its
international projection in the region. Since nation branding provides a
modern discourse and slogan to project the country abroad, it can see
whether Chileans’ opinions are related to Brazil’s contemporary image or,
stereotypes.
It must be emphasized that, among the Chilean students only 19 from the
Faculty of International Relations at the University of in Santiago were
surveyed in September 2010. This low number of interviews certainly does
not allow us to categorically establish what Chileans think about Brazil.
However, it does provide some useful insights about Chile’s perception of
Brazil. According to Von Hippel et al., “stereotypes are consensual beliefs
held by members of one group about the characteristics of members of
another group” (Von Hippel, Sekaquaptewa and Vargas, 1995: 178). Instead
of highlighting Brazil as an emerging global power and identifying the
country according to its current international status, the country’s definition
related to stereotypes. In this sense, for the Chilean students Brazil’s image is
created using past memories and perceptions such as ‘carnaval’ (carnival),
‘fútbol’ (football), ‘alegría’ (cheerfulness) and ‘samba’. However, the group
defined Brazil using words such as ‘potencia’ (a great power), ‘potencia
latinoamericana’ (a Latin American power), ‘país más importante de
Latinoamerica’ (the most important country in Latin America) and
‘hegemonia en Latinoamerica’ (hegemony in Latin America).
Another important point is the question that explores the serious
possibility of developing strong bilateral links between Chile and Brazil. 152
According to the Chileans’, Chile’s foreign policy does not maintain strong
relations with countries in the region’s countries, although there is the
possibility of strong bilateral relations for economic interests and due to the
need for strategic alliances in the continent. As argued, both countries have
historically satisfactory foreign relations. Although the Chileans’ image of
Brazil is more related to stereotype, some of the students demonstrated a
better understanding of the country’s current emerging international
152
Chile is the traditional partner of Brazil. In 2013, bilateral trade reached US$ 8.8 billion.
There are zero tariffs for 98% of bilateral trade a better index than that between members of
the Pacific Alliance. Ministério das Relações Exteriores, “Brasil & Chile: parceria
tradicional e abertura para o comércio”, Diplomacia Pública, 11/03/2014. http://
diplomaciapublica.itamaraty.gov.br/31-brasil-chile/61-brasil-chile-parceria-tradicional-eabertura-para-o-comercio.
87
projection of power. The perception that Brazil and Chile can strengthen
their economic links is an interesting one when analysing Brazil-Chile
bilateral relations.
The opinions of the Chilean students go in hand in hand with the concept
of public diplomacy, since the Brazil-Chile relationship not only involves the
relationship between the governments’, but also the participation of actors in
foreign affairs who are not state-centric which is on the increase. As
government visibility, the growing participation of non-state actors emerges,
encouraging stronger economic links and new mechanisms for conducting
foreign policy. Foreign affairs encompass public-private partnerships and
foreign direct investment, trade and energy resources make an important part
of international relations. Moreover, it is difficult to distinguish the political
perspective from economic aims when observing the context of foreign
affairs. The government, political conditions and the economy are important
components of foreign policy strategy and therefore the combination of these
elements should not be undermined when exploring Brazil-Chile bilateral
ties.
Although only a few Chilean students answered the survey, they gave
important answers that show that Brazil’s image is strongly related to
stereotypes. At the same time, few students offered information on the
current status of Brazil’s projection in the region, given that information on
current geopolitical circumstances would provide a broader viewpoint
regarding the country’s image beyond stereotypes. For some students, the
important role Brazil has played in the process of Latin American integration
was recognised, alongside the perception of the country as a world power.
The importance of exploring the economic potential of Brazil-Chile links is a
key point to understanding the mechanisms of bilateral ties as some students
highlighted.
1.3.3 The Chile-Brazil multifaceted approach
Public diplomacy and nation branding involve connecting different sectors
by targeting the audience of a particular country and opening a broader
analysis of the Brazil-Chile relationship. Contemporary diplomacy cannot be
restricted to state actors and gives a voice to credible non-state actors in order
88
to achieve foreign policy goals. 153 The growing interdependence between
international actors demands multifaceted approach to understanding the
importance of the country’s links with non-public actors.154 The economy,
trade, foreign investment, security, infrastructure, phytosanitary barriers and
energy and industrial fields exert an overwhelming influence on Brazil-Chile
bilateral relations and the combination of these elements must be considered
when exploring the links between the two countries.
Chile’s notorious progress based on its adoption of the neoliberal
economic model and its transparent fiscal policies defines a more economy
oriented diplomacy. 155 Chile’s position as the top producer of copper, and
nitrate and as producer of agricultural, fishing and forest products, alongside
its high level of foreign trade and reputation for strong financial institutions,
has led to an economy oriented foreign policy. 156 In the case of Brazil,
foreign policy involves a lot of state and non-state actors in policy-making, to
the extent that the country’s foreign affairs cannot be explored from a unique
traditional diplomacy perspective. Brazil took on a more dynamic approach
to foreign policy, which corresponds to the country’s projection as an
emerging great power. The nature of the two countries’ foreign policies
demands a broader approach in order to understand pragmatic bilateral links.
The growing importance of Chile’s nation branding in foreign policy
signifies a shift in political paradigms beyond traditional diplomacy, with the
cultivation of public opinion by the government in other countries assuming
a more important role. Chile’s market-based view of the world goes hand in
hand with its projection of a nation brand. Sharing common parameters with
regards to democratic values, Brazil and Chile’s current foreign policies
153
See Geoffrey Allen Pigman (2010), Contemporary diplomacy. Cambridge: Polity Press.
Additional information in Thomas Risse-Kappen (1995), Bringing transnational
relations back in non-state actors, domestic structures and international institutions.
Cambridge: Cambridge University Press.
155
More information about other Latin American countries with the neoliberal model in
Amado Luiz Cervo (2000), “Sob o signo neoliberal: as relações internacionais da América
Latina”, Revista Brasileira de Política Internacional, vol. 43, no 2. Brasília: Instituto
Brasileiro de Relações Internacionais. http://www.scielo.br/ scielo.php?script=sci_arttext
&pid=S0034-73292000000200001.
156
The Chilean outward-oriented and pro-private sector’s economic focus is
institutionalised in the constitution. As long as the country is a democracy, any change to
these would have to be made through constitutional reforms. David R. Mares and
Francisco Rojas Aravena (2001), The United States and Chile: coming in from the cold.
New York: Routledge, p. 49.
154
89
demand a dynamic approach, which includes interdependence between state
and non-state actors. In the light of nation branding and public diplomacy,
the Brazilian Ministry of Foreign Affairs (the well-known Itamaraty)
promotes broader communication channels to foster dialogue with civil
society. The Itamaraty’s use of modern mechanisms to strengthen dialogue
with non-official actors such as businessmen, academics, journalists, trade
unionists, parliamentarians and representatives of social movements defines a
new paradigm in Brazil’s foreign policy approach.
Building new mechanisms to encourage communication in a two-way
dialogue means that there has been a change in Itamaraty’s policy towards
more transparent foreign policy goals as part of Brazil’s international
insertion strategy. Strengthening the channels of interaction between official
actors and non-state actors is crucial to promote the participation of civil
society in topics of the foreign policy agenda that, in the past were restrained
to the diplomatic field. Current foreign policy rests on the ability to model
the viewpoints of different actors towards coherent foreign policy targets.157
Public diplomacy allows for the participation of more credible actors, who
are also important to achieving a broader understanding of foreign affairs.
Civil society’s growing interest in foreign policy topics is a core element
of the development of democracy. Public diplomacy refers to more
appropriate tools to explore foreign affairs and official and non-official actors
are equally important to better communicating and engaging with citizens.
The increasing importance of non-state actors is not an isolated phenomenon
and Chile has also recognised the more active role played by unofficial actors
in foreign policy. Chile’s discussion on how to create better mechanisms to
encourage the participation of civil society, NGOs, academics and trade
unionists goes hand in hand with the principles of public diplomacy.158 With
the emergence of international non-official actors, it is possible to identify
different levels of integration between them, which enables a constant
dialogue to take place and can result in stronger cooperation links.
The mercantile nature of Chile’s foreign policy strategy is connected to
the country’s strategy of prioritising relations with the United States and
157
The events instigated by the Itamaraty from 26th February until 2 April 2014 alongside
the creation of the so-called ‘White Book of Brazilian Foreign Policy’ aimed to define
courses of action and stimulate public debate on the work done. Blog Diplomacia Pública,
Ministry of Foreign Affairs.
158
El Mercurio, 23 March 2014, p. 11.
90
Pacific Coast countries. Chile’s foreign policy rests with the President of the
Republic. The constitution assigns him responsibility for maintaining
political relations with foreign powers and international organisations as well
as conducting negotiations. The President also has the power to complete,
sign and ratify treaties deemed in the interests of the country, which must be
submitted for congressional approval. 159 Although the foreign policy of
President Sebastián Piñera (2010-2014) focused on the Pacific Alliance
Agreement, Chile’s image vis-à-vis Brazilian media was still that of wellorganised, transparent and pragmatic country. The Brazilian Foreign
Minister, Luiz Alberto Figueiredo declared that integration between the
Pacific Alliance and Mercosur would be possible by accelerating the tariff
reduction processes.160
While non-state actors penetrate the sphere of international relations, the
concepts of public diplomacy and nation branding provide a broader base for
understanding contemporary diplomacy. Raising new topics on the
international agenda produces a much more complex scenario in which to
analyse international relations than previous government-oriented foreign
policy. In this sense, contemporary foreign policy cannot be perceived as the
exclusive domain of state-to-state diplomacy; diplomacy nowadays has
evolved, with multiple actors encouraging the more active participation of
citizens in foreign affairs. Brazil and Chile recognised the importance of civil
society participation in foreign policy and public diplomacy, nation branding
and presidential diplomacy provide the core component for observing the
influence of state-centric and non-state actors in the two countries’ bilateral
links.
Nevertheless, the concept of public diplomacy is new to the Latin
American scenario and the contextualisation of public diplomacy relies on
specific historical and cultural circumstances and differs in each country.
Brazilian public diplomacy seeks to discuss Brazilian foreign policy - as well
159
The Chilean Foreign Ministry is a second level decision makers, responsible for the
planning, direction, coordination, implementation and dissemination of the foreign policy
decided upon by the President. Among its mains goals are the coordination of ministries
and government agencies on issues that affect the implementation of foreign policy. 1980
Political Constitution of the Republic of Chile. Article 32, 15o.
160
Mercosur has already agreed with the four original members of the Pacific Alliance Chile, Peru, Colombia and Mexico - to reduce tariffs on a wide range of products and
services. Electronic Journal, MercoPress.South Atlantic News Agency, 8 February 2014.
91
as topics on the international agenda - with civil society. As foreign policy
becomes more democratic and encourages the participation of civil society,
emerging communication channels strengthen the links between state and
non-state actors. Brazil’s international insertion as an emerging global power
demands closer links to civil society in order to gain support for the country’s
ambitious goals. Internal support provides a perception of the importance of
international topics to domestic development. Understanding how the
international agenda affects domestic politics favours civil society support in
order to achieve foreign policy aims.
A clear shift can be detected from public diplomacy compared to the
former traditional analysis of diplomacy, whereby states and governments
were major actors in foreign affairs. Since Brazil-Chile bilateral relations
encompass infrastructure cooperation, partnerships in the field of security,
mutual support in the multilateral field, partnerships in the areas of academia,
technology and education, agreements to avoid double taxation, informal
networks and so forth, bilateral ties do not directly involve governmental
actors and the role of non-state actors increases. As the role of the
government becomes less important, the increasing number of non-official
actors demands a new approach to contemporary foreign policy. Public
diplomacy, nation branding and presidential diplomacy provide a departure
point for exploring the Brazil-Chile relationship from the 1990s onwards.
92
Chapter 2
The Historical Dimension of Brazilian-Chilean
Relations
International relations, diplomacy and foreign policy affairs generally have
strong historical roots. It is well-known that modern diplomatic institutions
keep systematic records on how bilateral relations between countries have
evolved every time. Therefore, the history of these relations should certainly
be taken into consideration when formulating present-day foreign policy.
Moreover, history has paved the way for understanding the roots of the
Brazil-Chile relationship and how the concepts of public diplomacy, nation
branding and presidential diplomacy function as core components when
explaining the Brazil-Chile multifaceted diplomatic approach. Historical
backgrounds help explain the development of bilateral relations, since the
two countries have specific historical roots to the detriment of other Latin
American countries.
The states of Brazil and Chile share a historical civic culture that
underpins agreements rather than a conflictive relationship; both faced a
smooth civil-military transition to democracy and had to handle the delicate
questions arising from the abuse of human rights during their military
governments. Despite the existence of a democratic regime, the military
retains significant power in Brazil and Chile. In Brazil, it retains the right to
veto key legislation, with the most important decisions being made by
bureaucrats in economic and planning ministries.1 Chile’s democratic
regime has also had to coexist with some legal remnants from the time of
the military dictatorship. This is illustrated by the facts that Pinochet was
able to maintain his position as commander-in-chief until March 1998 and
the military has maintained its extensive influence in foreign policy. 2
1
However, Brazil’s Truth Commission was created by Law 12.258/2011 and was passed on
the 16th May 2012 as part of the Transitional Justice process, whose idea was to confront
past abuses, outlining strategies such as the rights and interests of the victims, survivors and
their families. Brazil’s Truth Commission aims to investigate human rights violation
between 1946 and 1988. http://www.cnv.gov.br/index.php/institucional-acesso-informa
cao/a-cnv.
2
Chilean President Michelle Bachelet (2014-2018) presented an amendment for changes to
93
As mentioned in the previous chapter, the beginning of the twentieth
century brought the ABC Pact, in which Brazil sought to foster cooperation
with Argentina and Chile, the other main Southern Cone countries. The
ABC Pact demonstrates the long-term importance of Chile as a key country
in establishing the geopolitical balance of the region. The ABC Pact was an
attempt by Brazil, Argentina and Chile to counterbalance the United States’
power in the region. According to Santos, the ABC Pact had an important
impact on Argentina-Brazil bilateral relations in the second term of
Brazilian President Getúlio Vargas (1951-1954). The Brazil-Argentina
relationship should be understood through how they complemented each
other economically and in their regional political strategy, instead of
exploring bilateral rivalry (Santos, 2014: 40-41).
Between 1907 and 1915, the idea was to establish a Treaty of Cordial
Intelligence between the three states in order to carry out the Brazilian
Baron of Rio Branco’s foreign policy. As Bueno points out, not only was
the Brazilian initiative important in that period, but Chile and Argentina also
worked on a common project, the Puga-Borné-Anadón (1907) in order to
encourage closer political ties. The Chilean-Argentine initiative carried out
by the Chilean Minister of Foreign Affairs (Puga Borne) and the official
Argentine representative in Santiago, Lorenzo Anadón, involved military
cooperation goals (Bueno, 2014: 562-563). Signing the treaty in Buenos
Aires in 1915, Brazil, Argentina and Chile agreed to facilitate the peaceful
settlement of international disputes. The ABC Pact was the historical
departure aimed at sustaining Brazil and Chile’s similar and interrelated
historical backgrounds that aspired for long-term bilateral relations.
Chile’s geographically isolated position behind the Andes, together with
Brazil’s location facing the Atlantic Ocean gave them both a shared specific
salient.3 The mutual perception of similar features is a determining factor
the military justice system, including the transfer of offences involving civilian victims
committed by soldiers to the ordinary justice system. “Bachelet prepara reforma a la justicia
military en Chile” (2014), El Mundo, 25th May 2014. http://www.elespectador.com/
noticias/elmundo/bachelet-prepara-reforma-justicia-militar-chile-articulo-494395.
3
The fact that Brazil was a monarchy (the empire of Brazil lasted from 1822-1889)
favoured the self-image of a supposed superiority in terms of civilization, similar to
European monarchies and despite the country undermining itself with the backward nature
of the slave regime. More information about Brazil rebuilding its self-image in Luís
Cláudio Villafañe G. Santos (2005), “A América do Sul no discurso diplomático
brasileiro”, Brazilian Magazine of International Politics, vol. 48, no 2. http://www.
94
when promoting closer ties and mutual respect. Despite their similarities as
two politically stable countries, Brazil and Chile’s social structure differ
significantly. Whilst Chile developed a feeling of citizenship early in the
nineteenth century due to the wars the country was involved in (the Chilean
Confederation War from 1836-1839; a naval battle against Spain in 18641866; the War of the Pacific from 1879-1883 and the Civil War in 1891),
the monarchy in Brazil was connected to a servile state.4 Chile’s early
recognition of republicanism demanded the proper positioning of the
nation’s image, along with the necessary differentiation from other
American realms.5 In contrast, slavery in Brazil became the subject of
republicanism debate late in the 1880s.6
From a political-economic viewpoint, Chile has adopted state
interventionism since the 1920s, which turned into drastic regional
economic reconstruction. According to Lockard, although the military
seized power for short periods, Chileans generally elected democratic
governments and supported several political parties. The Great Depression
favoured the emergence of reformist parties and social movements gained
support (Lockard, 2015: 623). However, the inedited nature of the Chicago
Boys neoliberal reforms opened up the economy by encouraging the
country’s competitive advantage in export markets attracting greater interest
scielo.br/scielo.php?pid=S0034-73292005000200010&script=sci_arttext&tlng=es.
4
The nineteenth century is a fundamental period in Chile’s history since it was the century
of independence, of the organisation of the republic, of territorial expansion and of nation
building. Rafael Sagredo Baeza (2015), “The end of the Chilean history in the nineteenthcentury”, Historia, vol. 48, no 1. http://www.scielo.cl/scielo.php?script=sci_arttext&pid=
S0717-1942015000100009&lng=en&nrm=iso&tlng=en.
5
Chilean civic republican traditions were regarded as an exception in the Latin American
context. Carmen McEvoy (2012), “Civilización, masculinidad y superioridad racial: una
aproximación al discurso republican chileno durante la Guerra del Pacífico (1879-1884)”,
Revista de Sociología Política, vol. 20, no 42.
6
The Brazilian state of Pernambuco held a debate to take an initial look at antislavery
politics. This demonstrates how the issues of emancipation in the 1870s and abolition in the
1880s were significant to the abolition movement. Celso Thomas Castilho (2008),
Abolitionism matters: The politics of antislavery in Pernambuco, Brazil 1869-1888.
Berkeley: University of California Press, p. 10. However, Liberals, Conservatives and
Republicans in Porto Alegre (the state in southern Brazil) all agreed about the need to end
slavery. However, the deep rooted antagonism between them made it difficult for one group
to ally themselves with another. Roger A. Kittleson (2006), The practice of politics in
postcolonial Brazil: Porto Alegre 1854-1895. Pittsburgh: University of Pittsburgh Press, p.
122.
95
from other Latin American states.7
Brazil’s economy from 1500 until the late 1930s relied on the production
of primary products.8 Significant structural transformations were only
carried out in the 1930s, thus taking the first steps towards the semiindustrialisation process. 9 Brazil’s present status as an emerging economic
power has attracted international attention, given the country’s welldeveloped industries (aircraft, manufacturing, petrochemical, mining and so
forth) and the fact that it is a net exporter of commodities and energy.10 Both
countries are consolidated democracies and Brazil and Chile have
established economic ties based on the foundations of mutual respect,
allowing investment and trade.11
Since the beginning, the formation of the nation’s image has been crucial
7
Like Chile, the Brazilian Finance Minister was also a ‘Chicago Boy’ since President
Dilma Rousseff named Joaquim Levy as Finance Minister in her second term. He was a
leading Brazilian proponent of orthodox neoliberalism, having earned a PhD at the
University of Chicago, the same institution from which Augusto Pinochet drew his
principal financial and economic officials”. Bill van Auken (2014), “After Brazilian
election, Dilma taps ‘Chicago Boys’ as Finance Minister, World Socialist Web Site.
https://www.wsws.org/en/articles/2014/12/02/braz-d02.html.
8
In fact, Portugal was faced with the issue of finding economic gains in their territories in
the Americas. This would justify the costs of defending large territories such as Brazil.
Celso Furtado (1971), The Economic Growth of Brazil: A Survey from Colonial to Modern
Times. Berkeley: University of California Press, p. 5.
9
From 1800 to 1913, per capita gross domestic product (GDP) grew by more than 50% in
Mexico and not at all in Brazil. Stephen Haber (1997), “Introduction: Economic growth and
Latin American economic historiography”, in Stephen Haber, How Latin America fell
behind: Essays on the economic histories of Brazil and Mexico, 1800-1914. Stanford:
Stanford University Press, p. 2.
10
Brazil suffered significant changes in its industrialisation process between 1959 and
1998. These structural changes occurred due to the industrialisation of the economy and the
increased concentration of income. See Manuel A. R. da Fonseca and Joaquim J. M.
Guilhoto (2002), “Mudanças estruturais na economia industrial do Brasil, 1960-1995” in
Werner Baer, A economia brasileira. São Paulo: Nobel, pp. 458-459. Today, the service
industry is a growing sector of the Brazilian economy and the country has more
opportunities for growth in tourism and the information services. Multinationals have a
strong presence in advertising, computer services and management consultancy. Brazil for
Foreigners, “The service industry in Brazil”. http://www.brazil-for-foreigners.com/serviceindustry-in-brazil/.
11
Since the end of the 1990s, Chile has also had important economic interdependence on
Argentina. However, bilateral interdependence was much higher in the early 1970s than in
the 1990s. David R. Mares (1997), “Exploring the impact of economic cooperation on
political and security relations between Argentina and Chile”. http://www.stimson.org/
images/uploads/research-pdfs/mares.pdf.
96
to Brazil and Chile historical backgrounds, although the need to distinguish
itself from other Latin American realms was much more prominent in Chile,
since Brazil had a monarchy. As Dawson highlights, at the time of gaining
independence, Chile was a relatively peripheral nation within the region. In
contrast, Peru and Bolivia were two of the most important domains of the
Spanish empire (Dawson, 2015: 50). Chile’s national image and projection
of a nation branding goes back to the nineteenth century, due to the
country’s urgent need to build a cohesive nation image.12 Although Chile
has maintained many of the original characteristics of this image, its current
nation branding strategy demands a modern approach.
2.1 Brazil-Chile Nation State Building
The contrast between Spanish-American and Portuguese-American
independence movements is important. Spanish America was devastated
after about 16 years of warfare. Mining centres collapsed, trade was
interrupted and agriculture damaged. The general perception that the BrazilChile independence process was achieved without significant setbacks does
not match the incontestable reality (Larosa and Mejía, 2015: 74). As
Pimenta highlights, from Brazil’s perspective, the prevailing idea that
nothing had changed in the nineteenth century because of the continuous
monarchical regime and the absence of large rebellions, needs cautious
analysis. Independence should be studied in a historical context, dating back
to the transfer of the Portuguese Court to Rio de Janeiro in 1808 at least.
The spatial importance of independence deserves attention as long as local,
12
Since the Church remained a predominantly conservative force in society, it was an
important actor in Latin American national identities. Brian H Smith (1982), The Church
and Politics in Chile: Challenges to modern Catholicism. New Jersey: Princeton University
Press, pp. 65-69. Prior to independence, Chile had been a remote and neglected Spanish
colony. Interestingly enough, the Jesuit order expelled from the Spanish empire in 1776
was never as important a landowner in Chile as it was in Mexico, for instance. Simon
Collier (1997), “Religious freedom, clericalism and anticlericalism in Chile, 1820-1920” in
Richard Helmstadter Freedom and religion in the nineteenth century. Stanford: Stanford
University Press, p. 303. However, as its wealth increased the Church invested in land. It
also loaned money to ranch and mine owners at the standard 6% interest. John L. Rector
(2005), The History of Chile. New York: Palgrave Macmillan, p. 41.
97
provincial and regional spaces play a significant role as a huge dimension of
the independence process.13
From Chile’s standpoint, the perception that there were not many
episodes of confusion and revolt led to misconceptions about its historical
background. In Brazil, the people who wanted independence did not think
about this homogeneously, since they disagreed about the political structure
around which the state would be organised. In other words, neither Brazil
nor Chile’s historical background should be limited to a generalised
analysis, since each country had its own peculiarities as a result of its
different experiences.14
To begin with, it should be considered that the timing of Brazil’s
independence was different regarding Spanish America. The ten years gap
made a big difference in terms of the new values introduced. The
Portuguese revolution of the 1820s created a totally different context, since
it belonged to a different kind of European political conjecture. Indeed,
Brazil’s emancipation linked the past and the future by taking into account
the arrival of the Portuguese Court as a decisive aspect of the formation of
the Brazilian state and to Brazil’s historical destiny. As Cardoso argues, the
opening of the ports and its significance within the context of a broader
aperture and liberalisation of the Brazilian economy created new
opportunities for the development of greater economic and political
autonomy (Cardoso, 2009).
In contrast to the Spanish independence process, which was associated
with maintaining loyalty to the captive King in Spain, Portuguese
constitutionalism was a reaction to a fear of renewed absolutism. In this
way, constitutionalism brought the idea of progress to the new nation. The
Portuguese king, who had remained in Brazil during the war returned home
seeking to secure the Crown after the death of his mother, Queen D.
13
See João Paulo G. Pimenta (2009), “The independence of Brazil: a review of the recent
historiographic production”, JPH, vol. 7, n 1. http://www.brown.edu/Departments/
Portuguese_Brazilian_Studies/ejph/ html/issue13/pdf/jpimenta.pdf.
14
Nation-building is a multi-step concept. It lacks a scientific foundation, but encompasses
very practical steps after a violent conflict or a war has ended. Usually, nation-building has
already started before the actual end of a conflict. For further discussion, see Andrea K.
Riemer (2005), “The concepts of state building, nation building and society building”,
AARMS, vol. 4, n o 3, pp. 367-379. Vienna: Institute for Strategy and Security Policy.
98
Maria.15 As Hespanha highlights, the Portuguese constitutionalism
recognised the shifting role of sovereignity as long as the nation embrace
the role to promulgate the constitution (Hespanha, 2012: 479).
The return of the king to Portugal because of a liberal and constitutional
revolution led to an upsurge of movements in support of the liberal
Portuguese courts. As a result provisional government juntas were created in
Brazil. The courts aimed to return Brazil to its colonial status in order to
avoid the commercial disadvantages of the past few years. In practical
terms, the fear of recolonisation led to the emergence of a new group of
interests and diverging opinions either in favour of or against emancipation.
In the 1820s, there was a tension between the Portuguese courts and the
regente prince left Brazil (Fausto, 1999: 76-9).
It must be recognised that Brazil and Chile have, since the nineteenth
century, been considered examples of countries in the region with political
and institutional stability. Since the beginning, Chile has shown political
maturity, illustrated by the fact that it is a stable and remarkable state
consolidated under the 1833 Constitution.16 According to Bulmer-Thomas,
the history of Brazil-Chile after independence can be characterised by its
possession of a relatively high degree of stability throughout the centuries in
comparison to other Latin American states (Bulmer-Thomas, 2014: 461).
Therefore, ‘stability’ is a key word to understanding why both countries
have significant elements in common, even though they do not share
common borders or a strong relationship. From this perspective, political
stability has created mutual respect between the two countries and is an
important component when building their bilateral ties.
2.1.1 Chile image background
Besides stability, another significant concepts when looking at Chile are
‘singularity’ and ‘commerce’, which are essential elements for under15
See Patrick Wilcken (2010), Império à deriva: a corte portuguesa no Rio de Janeiro
(1808-1828). Rio de Janeiro: Objetiva.
16
US Library of Congress. Constitutional History. Development and breakdown of
democracy, 1830- 1973. Available in: http://countrystudies.us/chile/85.htm. Consulted on 1
February 2013.
99
standing the construction of the nation brand as explained in the first
chapter. Therefore, the prevailing idea that Chile is a country oriented
towards commerce dates back to the nineteenth century and is key to
understanding our study (Lederman, 2005: 34-35). Chile’s consolidated
nation brand has its roots in the country’s self-perception, which defined
itself without seeking outside parameters. This means that nation building
began in the nineteenth century and from this period onwards, the country
considered itself a Modern Republic and the model of economic expansion
and ethics.17 The general perception of internal order contributed to it
considering itself a model for other countries in the region. 18
It should be considered that Chile’s image goes back to the eighteenth
century. In contrast to other Latin America states, the new Bourbon
administrative organisation that assumed power in 1707, aimed to centralise
power in the monarchy. 19 The main goal of the dynasty was to create a
bureaucratic administration and absolute government. From isolated
provinces, Chile ended experiencing an increase flux of commerce due to
the open of new trade routes and direct contact with Spain. Simultaneously,
the boom of the mining industries was also associated with the Bourbon
period.
In this way, the Bourbon administration briefly caused a balance between
the internal and the external sector of the economy. Rising silver production
helped to finance the Crown’s military expenditures and the import of
17
Another important point to help understand Chile’s image is to observe Chile ties with
its neighbours such as Peru. More information in Felipe Costa Santarosa (2012), Rivalidade
e integração nas relações chileno-peruanas: implicações para a política externa brasileira
na América do Sul. Brasília: Alexandre Gusmão Foundation. See Simon Collier (2003),
Chile: The Making of a Republic, 1830-1865. Cambridge University Press, particularly
Chapter 7, ‘Model Republic’.
18
Despite Chile’s internal particularities and isolated position, the country encountered
worldwide communist and anti-communist ideologies even before the outbreak of the
Russian Revolution. Ironically, Chile’s isolated nature did not distance from the
international facts that exerted an important influence on the country’s domestic field. See
Joaquín Fernandois (2011), Chile: crisis imperial e independencia, 1808-1830. Madrid:
Fundación MAPFRE, Taurus.
19
The Bourbons adopted few colonial measures to deal the immediate problems of defence
and administration. Early reforms focused on coastal defence and contraband trade
problems. These adopted measures gave way after 1763. Adrian J. Pearce (2014), The
origins of Bourbon reform in Spanish South America, 1700-1763. New York: Palgrave
Macmillan, p. 9.
100
European products to the region increased. As a result, jobs were created in
the colony, which helped to create an active market for industry and
domestic agriculture. The creation of the complex and diversified internal
economy paved the way for a new and complex colonial society (Bethell,
1998: 413-412).
The beginning of the eighteenth century coincided with the crowning of
Spain’s first Bourbon king. The new Bourbon administration that assumed
power focused on structural changes to Spain’s government. In this context,
the colonies also received significant attention, particularly regarding
defence and the economy. During this period, the Andean region relied on
precious metal to finance its overseas trade. To a large extent, the Chilean
mining industry originated in this period, when the price of precious metal
increased (Bethell, 1998: 413-414).
However, neither the years before independence nor the period thereafter
can be classified by an absence of warfare. The fact that Chile did not
suffered an abrupt rupture between the colonial and the republic period
played an important role in generalising the idea that it did not face
significant conflicts, although the absence of consensus over the
organisation of the new republic caused internal political instability. 20 In this
sense, the prevailing thought was that independence was achieved by the
conservative landowning oligarchy, even though what this actually meant
needs cautious study.
According to the traditional interpretation, independence was a result of
the growing contradiction between the Creole elites because the colonial
system did not allow them to expand, for obvious reasons, such as the
conflicts that occurred between the Creole oligarchy and Spanish officials of
the Crown, the interests of the Viceroyalty of Lima and the population of
the Captaincy General. 21 Furthermore, liberalisation of Spain’s imperial
policies should be taken into account during the transition to independence,
since the decline of Spain as a hegemonic power to the detriment of British
trade and other European nations played a key role in Chile’s
20
See Diego Barros Arana (2003), Historia General de Chile. Biblioteca Virtual Universal:
Editorial do Cardo.
21
After independence, a small oligarchy of Creoles and European Spaniards consisting of
about 200 families dominated the Chilean society. Timothy R. Scully (1992), Rethinking
the Center: Party Politics in Nineteenth Century and Twentieth-Century Chile. Stanford:
Stanford University Press, p. 21.
101
independence.22 According to this view, independence is seen as a
secondary consequence of external factors such as the European war and the
deposition of Ferdinand VII. The combination of these two factors led to the
establishment of the local government juntas that ruled the country as an
Executive branch of government.
Local government juntas originated in the periphery of the viceroys, due
to the fact that these viceroys aimed to keep the empire’s organisation
centralised. As Sutter highlights, “the juntas represented the first statement
of independence and reflected the underlying conflicts between the Colonial
Metropolis and their trade dependencies, which means between Lima and
Santiago”. In addition the juntas became places where local conflicts
between Creoles and Spanish administration occurred. Local problems
contributed to the Wars of Independence (Sutter and Sunkel, 1982: 22).
Chile’s independence came through the army led by José de San Martín.
The patriot victory in the Battle of Chacabuco in 1817 expelled Casimiro
Marcó del Pont (the Spanish governor) and brought General Bernardo
O’Higgins back to power as a Supreme Director. He declared Chile
independence in February 1818. As Pamplona and Stuven point out, his
position as chief director did not mean much in terms of the political
system, given that, in the beginning there was not consensus on
republicanism.23 Debate took place about the system that should be adopted,
republicanism or monarchy. O’Higgins first aim was to win over the
Spanish in the south of the territory in order to carry out expeditions to Peru.
According to him, independence had to be consolidated with a strong
government (Pamplona and Stuven, 2010: 85).
In the beginning, O’Higgins rule (1817-1823) contributed to creating
consensus among the upper class, although his authoritarianism, particularly
after 1820, led to a lack of support from the upper class in the long run. This
22
In the nineteenth century, Britain had the largest empire the world, although was
expensive to maintain and was based on economic sacrifice to the mother country. Matthias
Morys (2014), “Cycles and depressions” in Roderick Floud et al The Cambridge economic
history of modern Britain, vol. II 1870 to the present. Cambridge: Cambridge University
Press, p. 283.
23
For the debate on Chile’s nation branding building, it is important to understand the
country’s historical backgrounds as well as to explore the conceptual aspects of public
diplomacy. See Margaret G. Hermann (2002), “One field, many perspectives: shifting from
debate to dialogue”, in Donald J. Puchala (Ed.), Visions of International relations:
assessing an academic field. Columbia, SC: University of South Carolina Press.
102
was the result of two aspects: aristocratic circles never recognised the
supreme director with a landowner’s background as someone who could
strengthen the representation of their interests and the personal nature of his
administration did not favored upper class participation.24 Furthermore,
O’Higgins encouraged religious tolerance, provoking discomfort among the
Roman Catholic Church’s priests, despite its status as the official state
religion. Chile’s republicanism arrived in not particularly stable
circumstances, similar to Brazil’s parliamentary constitutional monarchy
political system. Exploring the two countries’ different historical
backgrounds includes important components to help understand both
countries’ nation branding projections.
During the six years of the O’Higgins administration, the issue over
which political system should be adopted continued. In order to avoid what
had occurred in other Latin American states, O’Higgins set up a preparatory
conference in 1822, made up of provincial deputies, in an attempt to
establish the constitution. According to White, O’Higgins’ term provides
core elements to help understand Chile’s history, given that the president
established a pattern of democracy that lasted until the coup that overthrew
Salvador Allende in 1973 (White, 2014: 29).
Adopting pragmatic evidence of the significant aspects of Chile’s became
an important element in the country’s brand construction. The Chilean
pragmatic approach provides an important foundation to explain BrazilChile’s stable approach. Chile’s historical backgrounds contributed to its
branding as a stable pragmatic nation. For obvious reasons, pragmatism
does not mean that the transition to independence is without conflicts.
However, the absence of the definition of Chile as a republic combined with
the establishment of a strong Executive power allowing for re-election,
encouraged O’Higgins attempts at staying in power.25 He aimed to deploy
dictatorship and got the support of the aristocracy in the first time. As the
24
O’Higgins was the first governor of Chile to attempt to personally to visit every part of
the country. William Edmundson (2009), A history of the British presence in Chile: From
Bloody Mary to Charles Darwin and the decline of British influence. New York: Palgrave
Macmillan, p. 60.
25
The Creole hero Bernardo O’Higgins declared in 1818 that he could make Chile “the
England of South America” and contributed to the long-permeated idea of exceptionalism
in Chilean political culture. Jonathan Haslam (2005), Nixon’s administration and the death
of Allende’s Chile: A case of assisted suicide. New York: Verso, p. 3.
103
result, the City Council of Santiago asked for his resignation and supported
General Freire as supreme director.
According to Edwards, the aristocratic ruling class overthrew O’Higgins
because of the lack of constructive dialogue. Although the political system
issue remained, republican roots needed to be put down in the new nation,
so the Chilean aristocracy carried out a process of republicanism. Therefore,
the political strength of aristocratic interests remained, in the same way as
the Church maintained its privilege and power. The ruling class acquired
power based on land and trade. The power and authority of the Chilean
Catholic Church was closely tied to the colonial government and contribute
to the legitimisation of the state.26
Interesting enough, in the early years of the regime there was a lot of
evidence of O’Higgins’ suspicious links to Argentina and San Martín. His
membership of the shadowy Lautaro Lodge (the semi-Masonic secret
society founded by San Martín) was pointed out as the reason for the
violence that befell some of his most vocal adversaries (Collier and Sater,
2004: 47). O’Higgins’ plan to devise a constitution in 1818 in order to
legitimise his government failed, enabling him to stay in power. Indeed, his
dictatorial behaviour favoured discontent in the provinces and the growth of
opposition movements. Despite the Wars of Independence leading to
Chile’s emancipation from the viceroyalty of Peru and modifying the
26
Although the struggle for independence raged, the authority of the Catholic Church was
never in question. After independence, Church and State relations remained closely tied.
The Constitution of 1833 established the Catholic Church as the Church of Chile and gave
it exclusive jurisdiction over education and family affairs. Given that the interests of the
Church and the ruling elite were so closely connected, the Catholic hierarchy generally
supported the agrarian oligarchy and the Conservative party until the 1920s. In the early
1920s, the Catholic Church and the government negotiated an amicable separation of
Church and State without significant resistance from the public or Church hierarchy. The
separation became official in 1925, with the enactment of a new constitution. The smooth
transition of the Church’s status led to its more progressive role in Chilean society.
Eliminating most ecclesiastical privilege placated Leftist groups as well as preventing the
growth of anticlericalism. As opposed to other Latin American states in which religion was
a significant source of tension, this led to the alignment of the Catholic Church and
conservative parties. Chile’s pragmatic policy led to the ruling class moving more
according to considerations of power than according to religious commitment. Religion was
a counter to the game, sometimes a very important counter. Simon Collier (1997),
Religious freedom, clericalism, and anticlericalism in Chile, 1820-1920 in Richard
Helmstadter (ed.), The making of the modern freedom: freedom and religion in the
Nineteenth Century. Stanford: Stanford University Press, pp. 302-304.
104
country’s political situation, the emerging new nation was characterised by
conservative settlements in the 1830s. The political-historical dynamics of
the new nation-state paved the way for its unusual institutional continuity, in
contrast to other Spanish America territories. As Collier and Sater state:
“If Chileans form, as they do, a distinctive branch of the Spanish American family,
the key to understanding their distinctiveness is, precisely, in their long isolation –
mitigated to an extent by the steamship in the second half of the nineteenth century,
and more so by the jet airliner in the second half of the twentieth century” (Collier
and Sater, 2004: 3).
The political modernity that the republic should represent was not the result
of a new emerging social class, but was carried out by traditional
oligarchies. Escobedo highlights that the attitude during the early stages of
independence was more aligned with anti-monarchy sentiments and the
result of internationalising republican principles. In this way, the ruling
class adopted the republican system as an alternative to dismantling the
metropolis, even though there was no clear consensus over the adequate
political approach for governing the nation at that time. The short-term goal
was to expel the Spaniards and changing the political regime was necessary
to consolidate the new scenario (Escobedo, 2000: 125).
2.1.2 Chile’s independence and the process of nation building
As a result, the first years after independence did not see the development of
new economic activities. In this scenario, industrialisation and
manufacturing initiatives would come later. However, influenced by
European thinking and American republicanism, liberalism was shaped by
one of the liberal politicians of the moment, José Miguel Infante, focused on
the idea of federalism.27 Infante’s thoughts were very much influenced by
American federalism and the constitution was to be the formal mechanism
to start implementing republican law. He was elected to the newly created
27
The Liberal party won the majority of provincial votes in 1829. See Diego Barros Arana
(2005), Historia General de Chile, vol. 16. Santiago de Chile: Editorial Universitaria, p.
250.
105
National Congress at a time that did not favour radical changes. Problems
between the National Congress and the Executive power arose to the extent
that neither of Freire’s two successors as president was able to deal with the
unstable political scenario.28
In this context, a new constitution was passed in 1828, which denoted a
certain coherence on different aspects. In theory, the president had most of
the power of the Executive branch. The Legislative branch consisted of two
chambers, the Chamber of Deputies elected by the people, and the Senate
directly appointed by provincial assemblies elected by citizens. Lastly, the
Supreme Court supervised the judicial system. In doing so, the new
constitution gave more power to the Legislative than the Executive power,
to the extent that the chambers not only passed general laws and taxes, but
also appointed public officials. The constitution that was passed intended to
protect individual liberties against centralised authoritarianism, since it was
endowed with significant prerogatives (Escobedo, 2000: 143).
However, from the beginning the Chilean elite assumed moderate
nationalism as the mechanism for maintaining territorial integrity and sociopolitical cohesion. The national political project in the nineteenth century
could not afford to put into liberal thinking into practice, despite continued
attempts by liberal opponents within the same ruling class. The
Conservative coalition took power in 1830 and laid the foundation for the
country’s recognised political stability. The idea of the centralised elites as
part of the nation-state was not re-established prior to victory over the
Peruvian-Bolivian Confederation in 1839. 29 More than being a simple
question of territorial sovereignty, carrying out nation building requires
28
O’Higgins was eventually defeated by regional leader General Freire and was forced to
resign and go into exile. This conflict was relevant to understanding the period of
constitutional experimentation between 1823 and 1829. Javier Couso et al. (2011),
Constitutional law in Chile. Alphen aan den Rijn: Kluwer Law International, p. 20.
29
Much has already been written about the important role played by Diego Portales, the
Conservative leader of Valparaíso who imposed the idea of Chile as an austere nation
beyond any possibility of social openness. Despite controversial opinions on Portales, there
is to some degree, agreement about the importance of this public leader in unifying the
country. Thus, his murder was a key component to bringing people together against the
enemies of Peru and Bolivia. The cohesion that came from the fusion between pragmatic
colonial Conservatives and liberal constitutionalism, combined with the passing of the 1833
Constitution, laid the groundwork for a strong national identity. The 1833 Constitution had
a conservative nature and was very president-orientated. See Leslie Bethell (1993), Chile
since independence. Cambridge: Cambridge University Press, pp. 4-5.
106
complex interaction between different levels of domestic processes and
foreign affairs. The role of nation building becomes clear in the scenario of
public diplomacy, in which interaction between public-private actors comes
to redefine their participation in contemporary foreign policy goals.
In the Chilean context, rural property was the key factor to understanding
nation building as an elitist centralised project. The importance of rural
property persists up to the present time, even though its power has declined
over the years.30 Another important historical event for national identity was
the Battle of Rancagua led by O’Higgins, given the fact that the defeat had
important consequences that gave way to the idea of what was national. The
defeat at Rancagua was significant because unified different sectors of
society towards anti-Spanish sentiment. According to Chasteen, Rancagua
was Chile’s first experience of the collapse of self-rule and the core element
that encouraged the country’s independence in the long-run (Chasteen,
2008: 113).
As already mentioned in Chapter 1, external factors paved the way for
the nation building and identity cohesion that are essential to understanding
Chilean foreign policy. In this same way, the nature of Chile’s social
conflicts and contradictions helps us to understand the unique nature of
Brazil-Chile ties as well as the fact that bilateral links go beyond statecentric relations. Therefore, public diplomacy, nation branding and
presidential diplomacy are fundamental concepts that need to be observed in
the two countries’ current bilateral relations. Despite different national
development policies, the two countries share important state intervention in
economic development strategies.
The 1830s were emblematic in terms of nation building, since the last
local resistance to central government was won over in the south and the
country faced a period of internal stability combined with economic
prosperity. As Scully points out, during the elections in 1858, political
parties began to emerge in the country. In January 1858, the Conservatives
and Liberals formed a non-ideological alliance with the common idea of
maximising their political leverage. This was a unique experience for Chile,
30
The importance of the rural elite can be understood from a political perspective. For rural
landowners, modernisation represented a threat and investment in mining and industry
intensified the process. John L. Rector (2003), The History of Chile. New York: Palgrave
Macmillan, p. 121.
107
in which two opposing political parties made a common effort to oppose the
government’s control over the electoral process (Scully, 1992: 41).
However, it took longer for the Liberals to achieve power with this only
occurring in 1871 and promote constitutional reform. According to Saylor, a
series of intra-elites fusions led to the Liberal-Conservative fusion from
1861 to 1891 (Saylor, 2014: 83). Chile’s response to social tensions, along
with its economic prosperity, created the basis for the long-term relationship
of Brazil-Chile. Moreover, Brazil and Chile have shared well-coordinated
state economic development strategies throughout history as core elements
of both two countries’ development policies (Taylor, 2008: 68). Public
diplomacy, nation branding and presidential diplomacy involve greater
interaction between various actors in order to perpetuate and project the
country’s image in increasingly interdependent international relations.
Exploring the historical backgrounds of both countries during the nineteenth
century reveals interesting elements for the analysing of Brazil-Chile links
from the 1990s onwards.
2.1.3 Brazil’s historical roots
For four centuries, Brazil was steeped in colonial history. During the three
first centuries, the country remained politically linked to Portugal as a
colony. After the arrival of the Portuguese royal family (1808) and
independence (1822), Brazil strengthened its economic and financial ties
with England. From this period onwards Brazil became increasingly
dependent on England (Schneider and Woolf, 2011: 441). During this long
period of history, the interests of the planter class dominated national
policy.31 Economic and political power was concentrated in the hands of
31
However, the perception of Brazil’s stable independence process gave way to a more
sophisticated analysis. Not only is the international context taken into account, but also the
particular details of each independence movement and the participation of diplomacy, the
level of political ideas and economic particularities. For instance, the slavery that
configured the conservative order and occupies current studies not only concentrates on
slaves and freed slaves, but also on their representation in the new political order. João
Paulo G. Pimenta (2009), “The independence of Brazil: a review of the recent
historiographic production”, E-Journal of Portuguese History, vol. 7, number 1. http://
www.brown.edu/Departments/Portuguese_Brazilian_Studies/ejph/html/issue13/pdf/jpiment
a.pdf.
108
this same landowning class. Traders were dedicated to either importsexports or the slave trade, established in the major port cities of the coast
that also played an important role in determining domestic political strategy.
Like its Chilean counterpart, Brazil’s rural aristocracy was the ruling
class. Neither political emancipation, nor the abolition of slavery led to
changes in colonial social structure. Internal revolts and rebellions did not
have an effect on domestic social structure, since social revolts were isolated
phenomena in terms of historic periods and geographic space. 32 Like Brazil,
Chile’s trade activities were strongly linked to Britain’s commercial empire.
As long as Britain’s industrialism advanced, so did demand for Chile’s
mining and agricultural products. Despite investment in modern
transportation facilities, the pre-capitalist ways of production did not allow
access to new technology.
In spite of the existence of social movements, Brazil did not face
important changes concerning social inequalities. Like Chile, the country is
considered stable without the unified and intense social conflicts that took
place in other Latin American states. Although the Brazilian revolts showed
a high level of domestic social problems, the rebellions were isolated
(Skidmore, 1999: 20). The revolts mostly represented either local or
regional interests without posing a real threat to the nation’s social structure.
On one hand, the dominant structure of the states and state oligarchy did not
support the struggle to make the case for independence. On the other, there
was never any opposition to the political-administrative centralisation of the
empire. The isolated revolts were invariably fought with rigour and crushed
in the name of the current order and national unity.
It is easy to assume that those with power and privilege were not
32
The most important revolts was that of the movement Quilombo of the Palmares
movement in the state of Alagoas in the seventeenth century. The Quilombos functioned as
communities of runaway blacks who had escaped their owners’ control. Other slave
movements attempts at revolt occurred: the Mining Inconfidencia in Minas Gerais in 1789,
the Revolt of the Tailors in Bahia in 1798, the Pernambuco revolution in 1817, the
Cabanagem in Pará in 1835-1840, the Sabinada in Bahia in 1837-1838, the Balaiada in
Maranhão in 1838-1841, the Ragamuffin revolution in Rio Grande do Sul in 1835-1845, the
Praieira revolution in Pernambuco in 1849, the Canudos in Bahia in 1893, the revolt in
Contestado on the border between Santa Catarina and Paraná in 1912-1915 and the
movement of Father Cicero against the federal government in Ceará for many years from
1913 onwards. Brum, Argemiro J. “O desenvolvimento econômico brasileiro/Argemiro J.
Brum. – 29.ed. – Petrópolis, RJ: Vozes, Ijuí, RS: Ed. Unijuí, 2012, pp. 115-116.
109
interested in removing the root causes that led to the outbreak of such social
movements. Mostly, the elite in Brazilian society presented historical facts
according to their own interests. Moreover, the international context of
Brazil’s occupation did not give way to a new society seeking to create an
independent state. There is no consensus among historians about workingclass participation in Brazil’s independence process. It is difficult to define
the working-class in that period and the extent to which it exerted influence
on the country’s independence (Malerba, 2006: 36). On the contrary, land
use and occupation by Portuguese colonisers through exploration considered
the colony the largest extraction company. This means that Brazil was
integrated into the mercantile system, exploited by the metropolis to provide
raw materials to supply fuel to European markets.
As part of the Portuguese empire, Brazil had neither political nor
administrative autonomy, since it was integrated into the metropolis. The
colony functioned according to foreign interests as a source of primary
materials. Hence, the Portuguese empire’s policy and its political
administrative apparatus sought to maintain the situation of colonial
dependency. Likewise the metropolis sought to curtail the development of
education, culture and science, preventing or hindering the emergence of a
local intellectual elite. The lack of local elite favoured the emancipation
process that would come later (Brum, 2012: 115-116). In fact, the politicaladministrative structure of the colony would only emerge with the arrival of
the royal family, with national policy after that being structured to meet
local needs.
Some researchers argue that the idea of allocating the seat and structure
of the Portuguese government to the colony already existed, despite the
arrival of the royal family in Brazil in 1808. Nevertheless, the importance of
the royal family to cultural and artistic life in Brazil should be taken into
account (Baeza, 2008: 270). The project also had English support, even
though the invasion of Portugal by French troops under Napoleon’s
command had accelerated the process.
This fact is a key component to understanding the colony’s economic
aperture and Brazil’s independence process. Brazil’s context should not be
disassociated from the Latin America process. In the course of the
nineteenth century, Latin America acquired machinery, railroads, electricity,
steamships and so forth. However, Latin America was no better at the end of
110
the nineteenth century than it had been at the beginning of it, since
prolonged and underdeveloped methods of capitalist production plunged the
region into deeper dependency (Burns, 1983: 11).
The measures taken by Dom João when he arrived in Brazil, particularly
regarding the abolition of trade constraints for the colony through opening
up the ports laid the groundwork for trade liberalisation. Some authors
considered this the emblematic event that ended the colonial period, since
the basic premise that trade must be restricted to the metropolis was
destroyed (Lima, 1996: 136). This measure was unpopular among
Portuguese traders, even if the lower tariffs were better for them. Given that
Chilean independence was the result of a series of contradictions during the
colonial period and that the Bourbon state in Spain collapsed, Brazil did not
exert its independence until 1822.33 It should be remembered that Spanishspeaking nations broke off their relationship with Madrid on several
occasions between 1810 and 1822 (Burns, 1983: 7).
Trade liberalisation brought a new economic outlook to Brazil vis-à-vis
the international market. The consequences of this cycle lasted until 1816,
when Brazil became a united kingdom like Portugal. The new political
status made it possible to diversify the input from other states, bringing
lucrative gains to traders. In this respect, Brazil achieved a certain
administrative local autonomy that later led to political power. The
bureaucratic measures adopted during the Portuguese Court’s presence
paved the way for the formation of the Brazilian ministries. 34
33
Despite Brazil and Chile’s ethnic formation, the two countries underwent a stable
independence process. Republican Chile was essentially a country in which a small Creole
upper class - with an aristocratic elite at its core - co-existed with the huge mass of the
working class poor, who were predominantly mestizo peasants. In contrast to Brazil’s
heterogeneous population, the two countries underwent a smooth transition to
independence. Politically, the struggles which followed independence in Chile reflected
disagreements within the upper echelons of the upper class rather than deeper conflicts in
mainstream society. Simon Collier (1993), “From independence to the War of the Pacific”,
in Leslie Bethell (ed), Chile since Independence. Cambridge: Cambridge University Press,
pp. 1-32.
34
Political stability can be illustrated by the Brazilian tradition of lengthy constitutions. On
25th March 1824, the Political Constitution of the Empire of Brazil laid the legal
groundwork for the country’s stable society. Augusto Zimmermann (2010), “Constitutions
without constitutionalism: The failure of constitutionalism in Brazil”, in Mortimer Sellers
and Tadeusz Tomaszewski, The rule of law in comparative perspective. New York:
Springer, p. 106.
111
From Brazil’s perspective, independence was only consolidated over
several years. Although there was resistance from Portuguese troops in the
Cisplatine Province, these left in November 1823. As in Chile,
independence was not accompanied by maintaining continuous internal
social stability, although Brazil and Chile have maintained prolonged
periods of this. Brazil’s independence process had its own features, as the
nation emerged as separate entity and became a monarchy while the rest of
the Latin American nations chose the republican system. With the arrival of
the Portuguese royal family in the colony in 1808 and the subsequent
transfer of the headquarters of the Portuguese monarchy, significant steps
towards independence started to be taken.35
Within Brazil, the main reason for the relative continuity between the
two periods was twofold: first, because of the presence of the royal family
in national territory and second because of how the independence process
was carried out. As Fausto says, “there still remained much discontent with
the court in Rio, but it was nothing compared to the dissatisfaction in some
regions of the north-east, where ideas of a republic first appeared” (Fausto,
1999: 77-78). It remains to be seen whether social stability does indeed
correspond to the circumstances of independence themselves or to
movements for autonomy, which rose to the surface and had deeper roots.
Like the Chilean elite, their Brazilian counterparts had no interest in
breaking with the old consolidated colonial system. In the first few years
after independence, the monarchy became a symbol of authority and
stability and a way of containing insurgent groups.
Despite the consensus that Brazil achieved independence without
undergoing significant upheaval, the Portuguese liberal revolution in the
city of Porto in 1820 had consequences on the other side of the Atlantic. As
a result of the revolution, the Portuguese formed the so-called ‘Juntas
Constitucionais’ with Brazilians in several of the territory’s provinces.
Given that the Portuguese defended Lisbon’s interests, there was
widespread armed conflict in different regions of the country, especially in
Bahia, Maranhão, Piauí and the Cisplatine Province. Consensus in Brazilian
35
The presence of the Court in Rio de Janeiro determined the conservative result, the
creation of an empire and a nation under the auspices of the Portuguese monarchy itself.
Kirsten Schultz (2001), Tropical Versailles: empire, monarchy, and the Portuguese royal
court in Rio de Janeiro 1808-1821. London: Routledge.
112
provinces over distancing Brazil from Portugal in order for it to become
politically independent was widespread (Slemian, 2007: 177). The workingclass masses played an active role in the movement in favour of
independence, since Brazil had no official military personnel.
However, the arrival of the Portuguese court provoked opposing
reactions. On one hand, there was the sector that defended maintaining links
with Portugal and turned the nation’s focus towards autonomy. On the other,
there was the group that advocated in favour of total autonomy for the new
nation. In this sense, the scenario is similar to that of Chile, with affluent
rural and urban sectors seeking to convince the Emperor Dom Pedro to
become emancipated from Portugal without a radical break, in other words
without the participation of the working-class (Porta, 2004: 10-11).
The Brazilian aristocratic elite aimed to protect their rural property by
marginalising the working-class from the independence process (Funari and
Manduca, 2009: 216). Historical circumstances offer some interesting
insights into the analysis of Brazil-Chile bilateral ties, since both countries
have similar options for avoiding radical changes after independence. One
way of exploring public diplomacy and nation branding is through looking
at the country’s position on a particular problem. Brazilian and Chilean
policies during the course of the nineteenth century have demonstrated that
they share important values, which in turn are important components when
exploring the two countries’ links from the 1990s onwards.
In Brazil, the central political debate in the first two years after
independence focused on drawing up the constitution. In this respect,
elections for a constituent assembly had occurred months before
independence and an official summit had been held in Rio in May 1823.
Constituents in 1823 were greatly influenced by the French Revolution and
the independence of the North American colonies. These ideas exerted a
significant influence on Brazil’s political order (Lira, 2014: 25). There was
disagreement between Dom Pedro and the assembly on which powers to
bestow to the Executive branch. Moreover, differing perspectives on the role
of the Executive – in other words the power of the emperor - and the power
of the Legislative also led to disagreements. The assemblymen thought that
the emperor would not be able to combine power to dissolve the Chamber of
Deputies and call new elections (Macaulay, 1986: 157). According to them,
the emperor should not have the power of absolute veto, since this gave him
113
the power and right to deny the validity of whatever law the legislature
might approve.
In contrast, the emperor and his supporters wanted a strong Executive in
order to contain democratic tendencies. This powerful Executive would help
to deal with the period’s political uncertainty. As a result, this discord
brought about Dom Pedro’s dissolution of the constituent assembly. In this
scenario, the first Brazilian constitution came from above and was imposed
by the king on the people, who represented white and mixed-blood
minorities who had participated in political activities. The new constitution
represented progress in terms of organising jurisdiction and allocating
powers. Civil rights were not even considered in practical terms, although in
theory they were guaranteed. Like Chile, Brazil was still a nation in which a
great part of the free population depended on large rural landowners.36
With only minor modifications, the 1824 Constitution remained in effect
until the end of the empire. It describes the political system as monarchical,
hereditary and constitutional. The empire had nobility without aristocracy,
which means that titles were not passed on in order to avoid a blood
aristocracy. The Legislative branch consisted of the Chamber of Deputies
and the Senate. Introduction of the Legislative branch meant that both
houses were elected. Election to the Chamber was temporary, while election
to the Senate was for life. This means that the Senate consisted of the
emperor’s lifelong appointees. A key element in this political framework
was the Council of State, composed of those appointed by the emperor.
What was unique was the institution of the moderating power, which
illustrated the powerful features of the Executive branch. As Fausto
highlights, “the king would not intervene in politics and day-to-day
administration, but he would have the right to moderate more serious
overarching disputes, where he would determine what the nation’s will and
interests were” (Fausto, 1999: 79). In practice, there was no clear definition
of where the Executive power started and ended, which resulted in power
being over concentrated in the hands of the emperor. The absence of
mechanisms that allowed for radical breaks in Brazil and Chile have shown
that both states were searching for political-social stability as a crucial part
36
Additional information in Matthew Racine (2011), The capítulos of Gabriel Soares de
Sousa: court politics, Jesuits and the exploration of Brazil. Berkeley: University of
California Press.
114
of their state policy. The option for social stability is significant to
understanding the two states’ long-term links. Brazil-Chile political-social
stability brought important consequences for the building of the two
countries’ nation brand, as well as public diplomacy foreign policy
insertion.
2.2 Chile Economic Evolution During the Nineteenth Century
There is a consensus that the 1830s were characterised by Chile’s
consolidated political stability. Although the 1833 Constitution consolidated
the power of the oligarchy as political stability was achieved, other factors
played an important role in creating a stable domestic scenario. The 1833
Constitution solidified the political domination of the most traditional
landed upper class of colonial origin. Therefore, the Constitutions
established income and property requirements that restricted voting rights,
with some exceptions for relatively wealthy men (Valenzuela, 1996: 3).
Beyond the political context, economic factors should also be considered in
this study. During the colonial period, Chile acquired the status of a major
exporter of agricultural products to Peru, developed gold and silver mining
and to a lesser extent, exported copper (Chester, 2008: 10). Internal conflicts
in the country caused significant debts and expenditures. The absence of a
serious social revolution led to less destruction of its agricultural production
capacity and mining activities.
This favourable political-economic background - combined with the
introduction of new copper mining techniques – led to prolonged boom
period for production. An increase in mining activities led to an increase in
demands for agricultural products and as a result the country underwent
significant domestic economic development. As already mentioned, the
domestic context cannot be separated from the international one: the
Spanish colonial trade monopoly was attenuated by internal liberalisation in
combination with increasing British economic and ideological influence.
Only since independence has Chile aimed to integrate itself into the
dynamic capitalist international economy. In doing so, trade between the
colony and the metropolis, especially through Peru, was eliminated. This
allowed for the establishment of direct links with international trade.37
37
In Chile’s integration into the capitalist system, it is also important to analyse its
115
English dominance during the nineteenth century led to the expansion of
commodity markets as a result of population growth, methods of production
and an increase in the income of an emerging middle-class of core countries.
This also meant the creation of capital surplus and a working class in these
nations and their involvement in exploiting the natural resources necessary
to the development of central states. Chile entered the nineteenth century
with a predominantly pre-capitalist social structure dominated by the landed
oligarchy alongside the raising mercantile commercial class. The country
also contained a mining and agro-commercial bourgeoisie (Pregger-Roman,
1991: 115).
Chile’s independence mainly meant the elimination of the institutional
barriers for the colony that had prevented it from joining the international
development process. Trade liberalisation had two goals: to overcome the
restrictive practices of Spanish trade policy and expand domestic production
to foreign markets. Since 1830, Chile’s trade expansion has experienced
highs and lows, with the economy mainly based on natural resources. For
obvious reasons, the English economy played an important role in the
process, taking into account the remarkable development of the flow of
trade together with the development of communication and transport. The
rapid integration of the Chilean north and south allowed access to Britain’s
informal empire of trade and investment, encouraging a more rapid change
to pre-capitalist production relations (ibid). A new national society had to be
built in order to reflect the shifting economic context. Since politicaleconomic historical circumstances favoured a more stable internal scenario
than other Latin American states, Chile’s context ensured a stable and longlasting national image.
Political independence had little effect on the country’s class structure
and together with the modernisation of production that accelerated
contemporary nation building projection as it involves complex interactions between the
role of the capitalist state and emerging actors. Its historical economic backgrounds favours
understanding the country’s development of productive forces as well as the influence of
global and social processes in a coherent projection of a national image. Alongside nation
building, public diplomacy assumes a prominent role in foreign affairs and encompasses
aspects of historical memories in an effort to distinguish the country from other states.
Wilson P. Dizar Jr. (2014), “The future of public diplomacy”, in Wilson P. Dizar Jr., The
story of the United States information agency, p. 219. Bolder: Lynne Rienner Publishers.
See also Cristián Gazmuri (2012), Historia de Chile, 1891-1994: política, economía,
sociedad, cultura, vida privada, episodios. Santiago: RIL Editores.
116
economic development, laid the groundwork for a coherent nation brand.
Chile’s prevailing stable internal context has lasted for decades, whilst
managing to transform the projection of the country’s modern nation
image.38 Chile’s international insertion has been based on the following
economic activities: mining exploitation of gold, silver and copper, subject
to the ups and downs of the market and agricultural exports of wheat to
Peru. The key feature to understanding the period is ‘domestic institutional
restructuring’, which fostered increasing economic activities in the foreign
market. Several wars provoked a rupture within the institutional framework,
giving the nation the task of creating a new one. In contrast to the majority
of Latin American states, Chile experienced a relatively short period of
anarchy considering that, in 1833 the institutional foundations were already
firmly established.
Chile’s short period of anarchy led to the long-standing perception of the
country as one of the most stable in the region. Different degrees of
integration between nation branding and public diplomacy can be identified
based on historical roots.39 The two concepts include integration and
cooperation in multiple areas since nation branding and public diplomacy
encompass aspects of international relations, marketing and history.
Nevertheless, public diplomacy is related to different levels of integration
between actors and nation branding involves much more than the idea of
image cultivation, both of which have emerged from a historical approach.
The importance of Chile’s political stability and the growth of traditional
areas of the economy – in other words, mining and agricultural exports provide important information to understand the nature of the Brazil-Chile
bilateral relationship (Collier and Sater, 2004: 60-62).
This economic background set the stage for the mobilisation of different
38
More information about Chilean history and how its society was formed, in Cristián
Gazmuri (2012), Historia de Chile 1891-1994: política, economía, sociedad, cultura, vida
privada, episodios. Santiago de Chile: Pontifícia Universidad Católica de Chile / RIL
Editores.
39
The Venezuelan humanist Andrés Bello as one of the first in Latin America to study
Private International Law argued in his Principios de Derecho das Gentes (1832) book that
international contracts should adopt the law of the place they were signed in, except when
the obligation was to be performed in Chile, in which case the contract should adhere to
Chilean law. Chile’s image as a trustworthy and stable country has important historical
roots. See Nadia de Araujo (2009), Contratos internacionais: autonomia da vontade
Mercosul e convenções internacionais. São Paulo: Renovar, pp. 157-158.
117
sectors towards Chile’s development strategy. Rapid production expansion
accompanied by growing exports, imports and trade in 1832 led to
important changes in the tax structure. The unification of customs
procedures combined with discipline in organisation and management led to
a sharp increase in fiscal revenues. Organising regulatory initiatives,
including the repayments of debts inherited from previous periods, obtained
a significant surplus. Sutter and Sunkel (1982: 26) point out that the state
played a central role in Chile’s economy, in the same proportion as external
factors. International trade was a major source of government tax revenue,
since tax collected on exports and imports remained key to the country’s
economy.
The trend in Chile of moving closer to international integration had
mercantile and nationalistic features. In this respect, the Decree of Trade
Liberalisation of 1811, passed in 1813, opened up Chile’s major ports to
trade and introduced a general tariff on imports. Moreover, prohibition and
special protection played a significant role in helping important sectors
avoid being affected by free importation. The decree was an emblematic
measure to ensure new trends in the nation. As colonial monopolist power
decreased, agricultural exports and mining power were strengthened. 40 Since
the later aimed to expand its markets and lower the purchase price of
imported products, opening ports and eliminating traditional import
monopolies were key elements for promoting exports. The new state sought
fiscal financing to honour its commitments allowing for the government to
be maintained. The measures were carried out through protectionist policies
such as high tariffs.
The conservative ideology of mercantilism prevailed at the beginning of
the republic. Therefore, the State had to take responsibility for encouraging
and protecting domestic production activities and in particular
manufacturing and the merchant navy. The State directed its policies
towards education, science, techniques and knowledge of national natural
resources. The mercantilist approach demanded state central, authoritarian
and hierarchical organisation as crucial elements to sustain the 1833
40
Chile is the world’s leading mining producer not only because of its natural resources,
but also because of its political and economic situation, which is stable and because of its
export-oriented transport infrastructure. See José Pablo Arellano (2012), “Copper mining
and its impact on Chile’s development”, @journal, no 35, vol. 16, p. 51. http://idbdocs.
iadb.org/wsdocs/getdocument.aspx?docnum=37317800.
118
Constitution.
Growing trade activities in Chile relating to international trade led to the
emergence of a new sector as an alternative to the traditional oligarchy. The
first cycle of economic expansion was characterised by the role of national
business groups and their entrepreneurial spirit. In this context, some
families enhanced their good fortune through mining, trade and finances.
The economic cycle refers to the period of expansion of certain products,
benefiting international economic centres at that time. The dynamics of
international centres exert an influence on different parts of the world
attracting economic forces, capital and workforce, causing changes in all
other major sectors of society (Basu and Taylor, 1999: 3). Mining’s
accumulated capital assets were invested in agriculture. Some families
gained large rural areas and introduced new methods of crop harvesting. As
some authors explained, the changing scenario was the result of changes to
tax laws introduced during the administration of President Manuel Montt
(1851-1861).
Chile reaffirmed its policy of commercial supremacy in the Pacific,
assigning Valparaíso’s port a privileged position. The new policy approach
focused on protecting the merchant navy, constructing storage warehouses
in Valparaíso and included the war against the Peruvian-Bolivian
Confederation. Another significant consequence of Valparaíso’s increasing
importance as a navigation route and trade hub was what happened to the
population in the country’s far south.41 Chile’s heavy involvement with
commerce led to a political strategy with greater access to markets. The
country’s strategic tool to differentiate their products has deep roots in
history, since trade has been a core element in its foreign affairs (Weiner,
2007: 196). Despite the fact that the role of commerce was not consciously
dealt with as a key component of international relations in the nineteenth
century, the importance of trade is evident in shaping Chile’s contemporary
nation branding.
With respect to education, the liberal influence also played an important
41
Today Valparaiso is one of the South Pacific’s most important seaports. China has
become its first-ranked import partner and second-ranked export partner, with the port
helping to increase the amount of trade between the two countries. Business, “Port of
Valparaíso brings Chile and China close together”, Wednesday 30 September 2015.
http://www.scmp.com/presented/business/topics/2015-chile-businessreport/article/1862715/ port-valparaiso-brings-chile.
119
role during the term of President Montt, when he was both a minister and
then as president. His administration coincided with the presence of the
Argentine Domingo Faustino Sarmiento in Chile. Therefore, the Argentine
influence on many aspects of Chile’s history can easily be seen. Argentina’s
relationship with Brazil and Chile is an important part of this study. 42
Spanish American education should be viewed as much more developed
than its Brazilian counterpart. In contrast to what occurred in Brazil, the
Spanish colonies had created their educational system a long time ago,
seeking to generate a sense of belonging and obedience to the king.
Nevertheless, ethnic and cultural differences between those people who
made the vast Hispanic American empire and their connection to the king’s
fostered a stronger sense of citizenship among the Hispanics (Colvero,
2011: 311).
As a result of the growth of mining activities, navigation, railways, wheat
exports, public-private construction partnerships and the urbanisation
process led to the development of manufacturing. In fact, the government
created a mechanism to ensure that these sectors were protected. The
importance of other sectors to the national industrialisation process – such
as textiles, coal, gas, sugar and breweries among others – should be
highlighted. Furthermore, the government created the Banking Act in 1860
to enforce a very liberal policy. This 1860 Banking Act facilitated access to
credit and reports from mining areas, which led to the purchase of the first
stock and arrival of bond brokers in Santiago and Valparaíso (Jones and
Lluch, 2015: 49). This reflects a certain institutional development, since the
increased economic activity demanded the opening of private and public
banks. After the war with Spain, Chile experienced overwhelming financialeconomic development as a result of agricultural exports and the mining
boom, due to the discovery of nitrate in Antofagasta in 1866.
However, the first economic cycle faced serious difficulties because of
the international context combined with local problems. In the 1870s, a long
recession in the world economy began, leading to falling prices, which
42
Sarmiento was appointed director of the Normal School of Teachers founded in 1842 and
he carried out significant work in primary education. Sarmiento was among a group of
Argentine émigrés who had fled from the tyranny of Rosas. These circumstances
contributed to the cultural flowering of Santiago in the 1840s. Pigna, Felipe; Domingo
Faustino Sarmiento, 1811-1888. Biografías. http://www.elhistoriador.com.ar/ biografias/s/
sarmiento.php. Consultation held on 11 October 2012.
120
directly affected the main Chilean exporters.43 According to Harvey and
Press, the drop in wheat prices in the world markets because of new
technical methods introduced from other countries and the decline in copper
prices which counted for more than half of Chilean exports were some of
the factors that caused economic problems. Studies of copper prices and
markets explain that an unsuccessful attempt to fix prices was due to the
copper producers’ lack of a monopoly. Despite some of the beliefs about the
copper producers' monopoly, prices fluctuated significantly between the
1870s and the 1930s (Harvey and Press, 1990: 9). A foreign trade crisis
began in 1873, with the falling prices and afterwards production of the main
export goods. Strategic place marketing concerns understanding the
country’s prevailing economic model as long as historical circumstances
that project the most beneficial aspects of its nation image.
Chile historical backgrounds help to understand the importance of mining
activity until present time. The country economic growth is clearly
connected with the value of natural resources international prices. Mining
strategic relevance for domestic economy justifies natural resources
importance for nation branding strategy with the aim of attracting foreign
direct investment. Nation brand and public diplomacy goes also about the
recognition of historical aspects to formulate the country current foreign
policy goals. The multiple dimensions of public diplomacy demonstrate the
interaction of different levels in Brazil-Chile relationship as well as help to
understand their similar historical roots.
2.2.1 Chile’s second economic cycle and its consequences
Nitrate activity was the mainstay of the second economic cycle initiated in
43
The British were the chief exporters of capital, followed at some distance by the French
and at the close of the century, by the Germans. As early as the 1840s, half the annual
increase in wealth in Great Britain was going into foreign investments. By 1914, the British
had US$ 20 billion in foreign investments, the French about US$ 8.7 billion and the
Germans about US$ 6 billion. A quarter of all wealth owned by the inhabitants of Great
Britain in 1914, consisted of holdings outside the country. Almost a sixth of French
national wealth lay in investments outside of France. All three countries had been made
hostages to fortune and fortune proved unkind, for in the First World War the British lost
about a quarter of their foreign investments, the French about a third and the Germans lost
everything. R.R. Palmer and Joel Colton (1995), A History of the Modern World.
Columbus: McGraw-Hill, p. 599.
121
1860, which lasted from the War of the Pacific to the Great Depression of
1930. Some authors argue that industrial expansion occurred during the
second cycle, as a result of the domestic market expansion derived from the
nitrate boom. Indeed, protectionist government policies played a significant
role in Chile’s industrial development. Furthermore, the nitrate industry
represented economic and political power to a higher degree than silver,
copper and wheat in previous periods. The nitrate industry represented a
boom period in Chile and nitrate reserves transformed the country’s
administration. These changes occurred as a result of Chile’s acquisition of
vast nitrate fields in its second great war with Peru. The exports of nitrate to
Europe generated taxes that provided important revenues for the State’s
growth (Hutchison, 2001: 3). In contrast to the first economic cycle and its
exports by entrepreneurs, nitrate cycle activities were conducted using
foreign, particularly English, capital.
Another important point to mention is that participation of foreign capital
in nitrate activity integrated Chile into international economic system. On
one hand, North American investments in the new copper industry and
investments in nitrate later contributed to increasing the United States’
influence to the detriment of England. On the other, after the First World
War, economic investments were redirected towards and renegotiated with
the consolidated North American influence in mind. However, apart from
nitrate, other mining activities also advanced technically procedures and
remained as important as nitrate.44
Moreover, in the first decade of the twentieth century large mines
emerged in different areas of the country. Again, foreign capital played a
key role, with copper mining being considered the major industry in this
period. As nitrate’s importance declined, increasing copper exports led to
significant changes in terms of Chile’s main export product. Another
component of the contrast between the first and second economic expansion
cycles was the predominance of nitrate income in the national budget and in
external financing commitments.
The instability caused by a primary export subject to the capital of an
international monopoly negatively affected the country’s economic stability.
44
Chile ranked as the top natural nitrate producer, although world production of synthetic
nitrates reduced its share of nitrate output. International Business Publication, Mineral,
mining sector, investment and business guide. Washington D.C., p. 47.
122
On one side, this instability led to a boom in exports. On the other, the
country’s debt exerted pressure on the currency, which had consequences in
terms of domestic economic development (Sicotte, 2008: 97). The
expansion of the nitrate industry provided a new, emerging and wellconsolidated work force, as well as a rail network and port development in
the north and the proletariat creation of an inspired work-force in the centre.
Within the emerging nitrate scenario, social conflicts began to occur,
especially in nitrate provinces. Therefore, pressure and tensions inside the
country emerged as a result of nitrate economic expansion (Weber, 2015: 9).
The fact that other sectors remained underdeveloped contributed to internal
conflicts. The denationalisation of Chile’s output was consolidated through
their purchase by North American capital. Three decades of parliamentary
irrelevance, intensified social tensions, unstable financial circumstances and
the lack of state intervention regarding the decrease of Chile’s
predominance vis-à-vis other Latin American states laid the groundwork for
an unstable scenario, which culminated with the election of President Arturo
Alessandri Palma in 1920. 45
Chile’s second economic cycle ended with the international economic
crisis and its consequences for nitrate exports. German technological
developments led to falling nitrate output, since the use of new synthetic
products replaced it as a raw material for producing explosives and
fertilizers. As Medina and Soto point out, in contrast to the second cycle, the
end of the first expansion cycle in 1870 involved increase in nitrate exports
to the detriment of silver, copper and wheat. Historically, business cycles in
Chile have been associated with the fluctuations in this commodity’s price,
which represents approximately 40% of total exports and about 10% of
public revenue (Medina and Soto, 2006: 18-19). However, at the end of the
second economic cycle, copper emerged as the main export.
2.2.2 Chile’s political roots and physical framework
In the late twenty years of the nineteenth century, two events had
45
During the first three years of his government, laws were passed aimed at protecting
industry and the working class. See Simon Collier and William F. Sater (1996), A History
of Chile 1808-1994. Cambridge: Cambridge University Press.
123
consequences on the construction of the Chilean society: the War of the
Pacific (1879-1883) and the Revolution of 1891.46 The revolution
encouraged the civil spirit and democratic forms of government and brought
with it a parliamentary regime. The contextualisation of public diplomacy
and national image has demonstrated that both concepts are influenced by
the history of the particular country and therefore historical backgrounds
improves our understanding of foreign policy targets in the long-run. Public
diplomacy also refers to the government’s goals of consistent mid and longterm targets in a historical context. Since history helps understand current
international relations, historical circumstances are relevant components of
foreign affairs and bilateral links. In Chile, economy and trade play
significant roles in explaining the country’s foreign policy strategy. The role
of non-state actors as highlighted by the public diplomacy perspective represents a core element to the study of Chile’s foreign policy targets.
In the Chilean economic context, the Treasury obtained its greatest
income from indirect taxes, for example, customs on imported articles and
on nitrate exports combined with other mineral products.47 Furthermore, in
recent years, new taxes were introduced, with high proceeds resulting from
commercial sales and industrial production. An increase in fiscal income led
to domestic prosperity, which was evident in all sectors of national
productivity. As already mentioned, foreign commerce was the key element
to understanding domestic economic dynamics. Highly important products
in the export trade were fertilizers, principally nitrate; metallic bullion,
above all copper; cereals, especially wheat and some animal products, such
as wool (Abreu, 2006: 105). Mercantile growth was illustrated by the
development of national industry.
In this scenario, agriculture, cattle raising, lumber, fishing, mining and
the industries derived from these commodities benefit from emerging labour
For additional reading, see William F. Sater (2002), book review of Bruce W. Farcau’s
book. “The ten cents war: Chile, Peru and Bolivia, in the War of the Pacific, 1879-1884”,
Hispanic American Historical Review 82, pp. 199-200.
47
Chile’s current indirect tax system includes VAT (IVA or Impuesto sobre el Valor
Agregado), sumptuary taxes, a beverage tax, a tobacco tax, a fuel tax, a tax for legal
services and a tax for international business. Niall Campbell and Maria Menzel (2011),
“Latin America Indirect Tax Country Guide”, Global Indirect Service. Switzerland: KPMG
International Cooperative, p. 17. For additional discussion on Chile’s tax policy see
Edgardo Boeninger (2009), Chile rumbo al futuro: propuestas para reflexionar. Santiago:
Uqbar Editores, pp. 103-105.
46
124
and the great display of energy. According to Chilean customs authorities,
Chile’s exports are divided into 5,000 product categories, of which 1,000
are foodstuffs exported to 182 countries. Of this total, 10% comes from the
salmon industry, which has transformed itself over the last 20 years into a
global salmon producer. Chile supplies a third of all worldwide production,
preceded by Norway and followed by Great Britain and Canada. 48 The
government also played an active role in the policy of state protection.
Firstly, the state has focused on indirect protection by spending part of
public income on the opening of new roads, bridges and railroads, on
improving harbours, on extending telegraph lines, on improving maritime
communications and on the creation of public services like the police.
Therefore, for many years, railroads building projects were carried out,
with rapid improvements in infrastructure. The Trans-Andes Railway in
Central Chile, linking Buenos Aires and Santiago, was consolidated. Indeed,
as part of the great project called the ‘Longitudinal Railroad’ uniting Tacna
and Puerto Montt, the railway lines crossing the country were finished.
Nevertheless, the capacity of the roads to deal with traffic did not grow in
proportion to the rising demand. Therefore, the national Treasury did not
earn the profits it wanted, producers tended to tighten their belt and in
practical terms, individuals had to pay a high price because of the scarcity of
products. Despite several implementation problems, the country benefitted
from the connection provided by more than ten thousand kilometres of steel.
In the context of an emerging framework, highway and commercial aviation
served to connect the lines of communication (Galdame, 1941: 412-417).
Regardless of the state’s liberal approach, investments in infrastructure
demanded the government protect economic interests. Various laws were
passed in order to establish legal support for those initiatives; among them
the surcharge on customs tariffs in order to tax some products and
industries. Customs duties on animals imported into the territory promoted
cattle-raising. A protectionist trade policy for industrial products
manufactured in Chile was adopted, with the old free trade system being
intervened. Despite the fact that the Treasury lost profits due to the
implementation of protectionist policies, the benefits of encouraging the
industrialisation process were obvious (Lederman, 2005: 34-35).
The policy aimed at gaining energy sources was an important component
48
Salmon Chile, “Production”. http://www.salmonchile.cl/en/produccion.php.
125
of the execution of the national manufacturing initiative and a decisive
factor in determining its rapid and constant progress. A system of paper
money was established in order to complement this protectionist measure.
According to economic policy, bank notes were forced into circulation as
legal tender and were considered as a last resort in a passing crisis.
However, paper money was indicated as the main cause of the raising cost
of living, since the amount in circulation increased over thirty years (18951925) (Galdame, 1941: 416-418). Therefore, everyone who lived on fixed
incomes - like employees - and those paid daily – like manual labour
suffered the consequences. As a result, labourers sought a wage increase.
Such was the order of things that, in 1926 the government opened the
Central Bank of Chile, which was the only institution authorised by the
State to issue paper money with a sufficient guarantee in gold. 49 The Central
Bank’s opening favoured the stabilisation of the value of money. Despite
the vicissitudes mentioned, the economic situation was stable, which was
important for laying the groundwork for industrial development and
domestic trade policy. The ideas of public diplomacy and nation branding
are connected to historical analysis, since transforming the goals and image
of a particular country is based on its historical roots and a multidisciplinary
approach.
2.3 Brazil’s Historical Economic Evolution
The so-called Brazil Company, as Darcy Ribeiro classified it, comprised
four types of corporate actions: a) the slave company (the sugar mills and
auriferous enterprises) that helped integrate Brazil into the world economy
and ensured the prosperity of the rich; b) Jesuit community enterprises
which despite competition from slave companies and conflicts with the
colonial system that led to the expulsion of the Jesuits, were highly
important within the context of the colonial system of production. The
Jesuits created an alternative type of colonisation, relocating the Indians
away from their tribes and seeking to integrated them into society, softening
49
According to the Central Bank of Chile’s first annual report on 21 March 1927, the
country maintained a stable rate of exchange with insignificant fluctuations and helped
lower the rate of interest. Above all, its moral effect was of great importance to the country,
“First Annual Report of the Central Bank of Chile”, Federal Reserve Bullettin, September
1927, p. 653.
126
indigenous resistance; c) the multiplicity of micro-production subsistence
enterprises combined with livestock enterprises, which complemented the
sugar mills and mining, incorporating mestizos; d) the formation of a core of
urban bankers, upwardly mobile ship-owners and the emergence of
export/import traders and slaver traders, leading to the development of the
colonial economy (Darcy, 1995: 176).
During the colonial period, the development of manufacturing favoured
the growth of industry. Official encouragement of industrialisation came in
1890, when a tariff revision provided slight protection for local
manufacturing from foreign competition and also lowered the duties on the
capital goods required for production (Skidmore and Smith, 2001: 149). The
sugar mills themselves were an agro-industrial company. Interestingly
enough, they were the largest and most complex world economic enterprises
of the period. Despite the emergence of these enterprises, the slave
mentality prevented the diversification of activities and economic
development in general terms. Links between Portugal and England were
strengthened, with the latter granting economic benefits to the former in
exchange for political and military protection. 50 The Treaty of 1654 also
guaranteed the British the right to negotiate directly with Brazil.
During the nineteenth century, Brazil adapted to an economic order
controlled by Great Britain. The latter assumed the role of industrial
economic leadership, which meant exchanging manufactured goods for raw
materials from abroad. In this way, a large part of international trade
consisted of the exchange of raw materials from developing countries for
manufactured goods from developed nations. Brazil fitted perfectly into this
process, since its economy depended on coffee exports and other secondary
goods like sugar, cotton and cocoa among others. During the nineteenth
century, the Brazilian economy was open to foreign-made, mainly English,
goods and capital which were intended to build a financial, transport and
trade framework with the goal of linking the country to the international
economic order. For instance, coffee was the third most valuable
international trade commodity at the end of the nineteenth century (Topik,
2004).
Since early colonisation, economic activities have been directed towards
50
See BBC Homepage, “A influência britânica atingou o ápice no século XIX”, 27th July
2001. http://www.bbc.com/portuguese/noticias/2001/010727_ukhistoria.shtml.
127
exports. This orientation was the result of the colonial situation and
mercantile self-interests. The internal market was neither created nor
encouraged at a certain point and in this way, the absence of a domestic
market inhibited the industrialisation process. Colonialism and mercantilism
encouraged economic growth towards foreign trade. Economic orientation
towards foreign markets still existed, even after independence and after
mercantilism was abandoned. During the nineteenth century, its share of
exports that generated global income was slowly reduced, despite it
remaining high until 1930.51
Since the 1930s, the decline in exports has been accentuated, to the
extent that exports between 2001 and 2007 represented an annual average of
less than 15% of the gross national product (GNP). Decreasing exports
reflected the inward-looking domestic economic scenario. The percentage
loss of exports in the national income was congruent with the gradual
diversification of economic activities, industrial advances and internal
market expansion. In this way, a key policy for gaining economic benefits
was promoting the construction of railroads in the second half of the
nineteenth century. Railway construction was expected to free up hundreds
of workers engaged in a system of transport based on mules and bullocks
(Lamounier, 2000). English companies financed railway investments and in
1870, four British companies were the owners of 72% of the railway lines.
Unfortunately, the railroad network did not achieve substantial results, since
it was built and operated by several different companies, which showed the
network’s deficiencies regarding connecting remote areas with ports. As a
result, the railroad lines did not transform the country into a unified market,
even though the growth of railway lines was remarkable with Brazil having
14 kms in 1854 and 3,302 kms of line being opened in 1884.52
Moreover, during the nineteenth century, the central administration
supported policies to encourage immigration and colonisation. However, a
large-scale immigration process began after the abolition of slavery in 1888
and the Proclamation of the Republic in 1889. The goal behind this initiative
51
See Jerry Dávila, “Culture wars in Brazil: the first Vargas regime, 1930-1945”, Hispanic
America Historical Review 82, pp. 398-399.
52
During the Proclamation of the Republic in 1889, the federal government aimed to
implement a railroad construction plan, although the financial crisis made it difficult to
carry out that initiative. João Bosco Setti (2008), Ferrovias no Brasil: Um século e meio de
evolução. Rio de Janeiro: Memória do Trem, p. 24.
128
was to create positive economic effect, based on immigrants’ ambitions. In
addition, attracting immigration was a political way of improving the quality
of human resources in the economy without directly investing in formal
education (Smith, 1997: 88). Some similar aspects of Brazil-Chile
immigration will be pointed out in the following sections.
At the end of the nineteenth century, the government’s aim was to protect
strategic export sectors. Equipment exempt from import duties was offered
by the government as a way of encouraging investment in the highly
capitalised sugar mills. Specific policies for coffee were also implemented.
If domestic coffee production surpassed international demand, coffee’s
value declined. These circumstances laid the groundwork for the first
valorisation policy of export products. Three major, successive cycles that
were particularly important to Brazil’s economy were those of sugar, gold
and coffee (United Nations Human Settlements Programme, 2010: 13).
Along with these, the economy experienced minor cotton, rubber and cocoa
cycles. Commercial exploitation of brazil wood (pau Brasil) was the first
colonial activity and has been maintained for three centuries. In addition, the
sub cycles of cattle and tobacco complemented the main cycles.
Decade
1821-1830
1861-1870
1891-1900
1901-1910
1921-1930
Coffee
18.6%
45.2%
63.8%
51.4%
69.5%
Cotton
19.9%
18.3%
2.4%
2.1%
2.4%
Cocoa
0.4%
0.9%
1.5%
2.8%
3.1%
Rubber
0.1%
3.1%
15.8%
17.9%
2.5%
Sugar
32.2%
12.0%
5.6%
1.2%
1.4%
Source: Mircea Buescu (1958). História do Desenvolvimento Econômico do Brasil. Rio de
Janeiro, A Casa do Livro, pp. 24-25.
The above table shows the percentage of country exports of the main
cyclical products from 1820-1930. At the beginning of the cycle, sugar
reigned supreme, followed by cotton and coffee (Baronov, 2000: 18-19).
Afterwards, coffee ranked first in exports, while sugar as well as cotton
faced a sharp decline in exports. The rubber cycle was short-lived and cocoa
was a regional cycle from southern Bahia.53
53
The state of Bahia is Brazil’s largest cocoa producer and accounts for around 60% of the
country’s production. Vladimir Pekic (2014), “Back to the future: Brazilian federal bill re-
129
National manufacturing production faced significant difficulties given the
open-door policy for British goods in the post-independence period. Besides
British goods, which enjoyed a privileged position, European and North
American goods, also increased their participation in the domestic market in
1820, after trade agreements were made. The 1828 tariff set import duty at a
rate of 15% and proceded the most liberal period. Thereafter, tariffs
increased to a rate of 30% until 1844. Although Britain pursued an opendoor policy in its colonies, the country continued to dominate trade through
informal instruments. Britain assured direct channels between colonial
administrators and home states in order to conduct trade in appropriate
directions (Lake, 2000: 131). Although increasing tariffs were aimed at
raising government revenue, this measure led to the emergence of textile
companies. Central administration encouraged the creation of firms through
the tax exemptions granted in order to import raw materials and machines.
Baer points out that most of the early industrialists were importers who at
a certain point, changed their minds and opted to produce goods instead of
importing them. This occurred mainly with textile products, but coffee
producers also started to finance entrepreneurial activities (Baer, 2002: 47).
However, the protection tariff policies adopted since 1840 did not have
substantial results in terms of their contribution to industrial development.
In practical terms, industrial development occurred when the government
began to invest directly in specific initiatives like special concessions and
subsidies for railways and foundries among others.54 Devaluating the
Brazilian currency against the British pound also played an important role in
advancing the industrialization process. Brazil’s industrial policy plan had
its roots in the country’s early history, regardless of the high impact of
capital investment on industrialisation policy during the military regime
(Hanley, 2010: 251-252). Brazil’s industrialisation experience helps us
understand its nation branding as far as selling a diverse range of
manufactured products is concerned.
In 1920, coffee production reached a high level, to the extent that the
product’s participation in exports was 56% in 1919 and 75% of exports in
discovers sustainable cabruca bean production”, Confectionarynews.com. http://www.
confectionerynews.com/Processing-Packaging/Brazil-protects-sustainable-cabruca-cocoabean-production.
54
Additional information in Fernando Sarti and Célio Hiratuka (2011), “Desenvolvimento
industrial no Brasil: oportunidades e desafios futuros”, no 187. Campinas: IE/UNICAMP.
130
1924. Exports as a share of the GDP rose from 5.7% to 12.5%. The
country’s favourable balance and payments situation during the decade
brought about as a result the valorisation of the exchange rate combined
with an increase in domestic price levels. This led to disadvantage when
competing with foreign goods. Moreover, the Wall Street Crash of 1929 had
a negative impact on Brazil’s exports, with a decline in value from $ 445.9
millions in 1929 to $ 180.6 millions in 1932. In 1906, 82% of the world’s
coffee harvest came from Brazil. From 1929 to 1932 the value of Brazil’s
exports and coffee beans declined by 75% (Levine: 1999: 21).
In 1931, coffee prices were at a third of the average price that they had
reached between 1925 and 1929. Besides the fact that exports revenues
declined, the entry of foreign capital into the country diminished
significantly in 1932. Chile’s economy was also affected as a result of the
1929 crisis, which led to a devaluation of products’ value. The devaluation
of copper and saltpetre exports had serious consequences for the domestic
economy, with falling tax revenues and declining stocks. Chile was one of
the countries greatly affected by the Great Economic Crisis, forcing the
suspension of the payment of its foreign debt for the first time on 16th July
1931 (Toso and Feller, 1983: 47).
At the same time, the constraints on imports, together with the continued
domestic demand generated by the revenue from the coffee programme, led
to a shortage of manufactured goods and an increase in prices. As occurred
in the First World War, increasing industrial production during the first half
of the 1930s was based on making better use of existing capacities. Steel
capacity rose because of the emergence of small firms and the capacity to
produce cement and paper rapidly increased. Furtado pointed out that “the
maintenance of domestic income and purchasing power accompanied by the
fall in imports and the rise in prices, led to a dynamic domestic market”
(Furtado, 1972: 188). As long as the country reined in industrial
overcapacity and the small capital goods industry grew, rising domestic
demand fostered domestic industrial production. The result of all this was
growth in domestic income.
In our view, public diplomacy incorporates some of the aspects of nation
branding, given that they share common grounds vis-à-vis complex foreign
policy goals. Trade, infrastructure development and industrialisation are
core elements for developing the basis for Brazil’s and Chile’s economic
131
policies. Economic-historical aspects have important implications when
evaluating the differences and similarities in the two countries’ trajectories.
Exploring historical backgrounds binds together significant elements,
providing a broader view for analysing public diplomacy and a nation
branding multi-faceted approach. Instead of addressing complex
relationships based on traditional diplomacy, historical facts identify key
elements that gave rise to Brazil and Chile’s contemporary foreign policies.
Major historical events contribute specific means for understanding the
nature of Brazil-Chile bilateral links throughout history. Historical
understanding of the past is relevant, as it creates a better understanding of
Brazil and Chile’s current public diplomacy, nation branding and
presidential diplomacy.
2.3.1 Brazil’s industrialisation during the First and Second World
Wars
As in the First World War, the Second World War also led to a rise in
production, although investment activities went into decline. However,
foreign investments bounced back in 1945, mainly due to the imports of
capital goods during the war. An increase in investments provided the
opportunity to build the Volta Rendonda foundry. The Brazilian National
Steel Company (Companhia Siderúrgica Nacional or CSN) was the main
state-owned company and its main industrial enterprise in the mid-twentieth
century. During the Estado-Novo government (1937-1945), President
Getúlio Vargas developed the company to encourage the import-substitution
industrialisation model (ISI) and laid the groundwork for an expansion of
domestic industrial production (Dinius, 2011: 14-15).
Apart from the cement and foundry industry, there was little creation of
capital during the war. At the same time, an intense use of existing
equipment increased production. The post-war period was characterised by
the deterioration and obsolescence of industrial capital. During the war, the
export of manufactured products grew significantly, although the reemergence of traditional supply sources led to a fall in Brazil’s exports
(Coes, 1995: 8-9). The result of the dismal performance of domestic exports
- caused by delivery delays and inadequate quality controls – was a fall in
132
manufactured goods ‘share of exports.
The start of Brazil’s industrialisation process, initiated in 1890, was not
smooth. In this sense, the sustainable industrial growth in the three decades
that preceded the First World War can be seen, even though the lack of
investments in that period should be highlighted (Curado and Cruz, 2008).
The import-substitution development model encouraged the industrialisation
process in Brazil and Chile as will be seen, despite their domestic
differences and differences in how they responded to international economic
crise.55 Brazil’s industrialisation process was not marked by continuity since
the sector relied on agricultural exports and the country did not experience
the necessary structural shifts in the economy.56 The country’s industrial
base would be only shaped once and for all when it was considered the
foremost economic sector.
It should be pointed out that the period from 1919 to 1939 focused on
light industries, which meant a more consumer-oriented than businessoriented industry, at first seeking industrial development rather than
industrialisation per se. In this context, textiles, clothing, food products, the
beverage industry and tobacco were to be found among the main domestic
industries. However, since 1939, heavy industry sectors have experienced
significant growth, given the rise of metallurgical products, machinery and
electrical products. Heavy industry’s increasingly important role in the
economy contributed to industrialisation as a driving force behind domestic
growth. However, Brazil’s economy at that time was dominated by simpler
55
The same can be said about Mexico. The 1940s heralded important changes in this
country. Despite an authoritarian administration, the post-revolutionary period was
characterised by public policies aimed at industrialisation using the import substitution
model. Mexico’s policy strengthened its domestic market in the post-war period and the
manufacturing sector gained importance within the country’s economy. The import
substitution industrialisation model provided internal market protection, economic
expansion and the opportunity for resources to be channeled into development policies. In a
social sciences’ context, Mexico, Chile, Brazil, Argentina and Uruguay experienced a
research boom through the strengthening of and increase in the number of research
institutions. José Luis Reyna. “A institucionalização das ciências sociais no México”, in
Hélgio Trindade. As Ciências Sociais na América Latina em perspectiva comparada: 19302005. Porto Alegre: Editora UFRGS, 2006, p. 269.
56
Among the sectors involved in the industrialisation process, credit financing with the
North-East Bank played a significant role in encouraging industrialising initiatives in the
region. Arnaldo Santos. “Industrialização do Nordeste: impactos da parceria BNB-Sudene
no desenvolvimento regional”. BNB 60 anos. 2005. IDESPP, p. 6.
133
consumer goods. The most important industrial sector, the cotton industry,
had fewer than fifty factories in 1885. Only in the 1930s did Brazil begin to
invest in industrial development (Hanley, 2010: 12). The development of
the heavy industry field created an important segment for Brazil’s nation
brand identifying the country as an exporter of manufactured products.
2.3.2 Chile’s economic roots
It should be remembered that, during the colonial period, Chile consolidated
itself as an important exporter of agricultural products to Peru, combined
with developments in the mining of gold, silver and to a lesser extent,
copper. However, the decrease in gold production was overcome by the
discovery of silver in Chañarcillo in 1832. This made up a significant part of
Chile’s economy. Indeed, the new extraction techniques implemented using
the English system contributed to long-term mining production. The
expansion of mining activities in the northern provinces caused economic
development and a growing demand for agricultural products (Miller, 2002:
18).
Chile’s industrialisation came later and lacked the depth of
industrialisation in Brazil. CORFO played a central role in Chile’s
industrialisation process and like other Latin American states the country
implemented an import-substitution industrialisation model (ISI).57 In Chile,
three initiatives paved the way for the industrialisation process:
guaranteeing a domestic energy supply as a prerequisite for powering new
industries, creating steelworks as key elements to laying the groundwork for
industries and establishing new industries. 58
The search to safeguard the energy supply was considered a key factor in
57
CORFO is an agency that carries out government policy in the field of entrepreneurship
and innovation. CORFO, http://www.corfo.cl/sobre-corfo
58
In contrast, Colombia was one of the first countries in the continent to implement the ISI
in the 1950s, although Colombian industrial policy was not accompanied by significant
social reforms. Fernando Urrea Giraldo. “Dinámica de reestructuración productiva,
cambios institucionales y políticos y procesos de desregulación de las relaciones
asalariadas: el caso colombiano”. In: Enrique de la Garza Toledo and Julio César Neffa
(eds), Trabajo y modelos productivos en América Latina: Argentina, Brasil, Colombia,
México y Venezuela, luego de la crisis del modo de desarrollo neoliberal. Buenos Aires:
CLACSO, 2010, p. 143.
134
the execution of the industrialisation policy. In 1944, the creation of
ENDESA (Empresa Nacional de Electricidad or the National Electricity
Company) to harness hydroelectric energy served as a mechanism for
carrying out the industrialisation programme. State policy also encouraged
the development of the coal industry. Another significant step towards
industrialisation was reducing the country’s dependence on foreign oil. As
Collier and Sater argue, “thanks to CORFO, the oilfields satisfied threequarters of the country’s petroleum requirement by the 1960s” (Collier and
Sater, 2004: 270). Diminishing the dependence on foreign oil led to an
increase in Chile’s exportation of by-products such as butane and propane
gas. Energy and the economy are key factors to understanding Chile and
Brazil’s special relationship, since both areas exert an overwhelming
influence on the approach to bilateral foreign policy. Chapter 5 describes the
growing importance of energy issues in international relations in more
detail, since energy supply has become a crucial element in strategic foreign
policy. Faced with ever-rising demands for energy resources, increasing
import dependency occupies an important position in Chile’s domestic
agenda. At the same time, Brazil’s position as an emerging energy
superpower because of the diversity of its energy matrix has enabled BrazilChile bilateral dialogue.
Despite their territories having different dimensions, the differences in
their socio-economic structure, their Iberian and Portuguese backgrounds,
political differences and so forth, Brazil and Chile share historical
similarities, opening up opportunities for dialogue and interaction. Their
similar immigration policies demonstrate the same concerns about territorial
occupation, as well as common strategic policies to solve similar problems.
Brazil and Chile’s option for German immigration differentiates them from
other Latin American states and created certain historic similarities that
facilitate mutual understanding. Both governments encouraged German
immigration - as opposed to the region’s other countries - adopting similar
political views to deal with domestic issues. German immigration illustrates
a similar pragmatic approach to domestic matters.
2.3.3 Brazil-Chile similarities to German immigration aspects
German immigration to Latin America began after the region gained
135
independence. The governments of the newly emancipated Republic of
Chile and the Empire of Brazil shared common concerns about their
unoccupied regions in central and southern Chile and in the south of Brazil.
Another similarity between both German colonisation processes is that they
were made up of communities of smallholders that survived by subsistence
farming several basic commodities.59 Smallholdings primarily sought to
ensure their family’s survival and then to supply the market with food and
other raw materials. This type of colonisation was a counterpoint to the
states that led the trend for a monoculture, especially in the case of Brazil.
This substrate gave rise to a subsistence economy to supply urban
consumers, forming organised communities and a rural middle class.
The German presence in Chile emerged after independence and was
extended to the whole country. Later on, other German immigrants laid the
foundations for an ambitious immigration settlement, with families setting
up in the south from the mid-nineteenth century onwards. Immigration to
the south became legal through the Colonisation Law of 1845, which added
security to the process. Immigrants came to Chile or Brazil from all over
Europe where there was a so-called ‘German order’. As in Brazil, no
German community in Chile was ever a national colony or German
protectorate (Heberlein, 2008: 22). According to a report in 1940, Germans
or their descendants occupied about 1.5 million hectares, equivalent to 7.5%
of the country’s arable land. Until 1898, legislation prevented
autochthonous Chileans from colonising the south. This is one of the
reasons for the predominance of German immigration in the region.
Among Latin American countries with German immigration
programmes, Brazil was the first country to implement colonisation projects
for German immigrants. The reason for choosing Germans, Italians and
others was summed up by their tradition of old peasant smallholdings and
the fact that they never threatened the country’s sovereignty.60 However,
German colonisation predominated in entire regions of parts of the country,
59
See Margrit B. Krewson (1991), Immigrants from the German-speaking countries of
Europe: a selective bibliography. Washington D.C.: Library of Congress.
60
Additional debate on German immigration in Charles R. Haller (1993), Across the
Atlantic and beyond: the migration of German and Swiss immigrants to America. Berwyn
Heights Maryland: Heritage Books. Charles R. Haller (2000), The ABCs of GermanAmerican migration: annotated guide to German-American migration records. Asheville,
N.C.: Money Tree Imprints.
136
particularly in the three southern states: Rio Grande do Sul, Santa Catarina
and Paraná. Europeans occupation of large empty areas was part of Brazil’s
project of projecting the empire, which focused on systematic and intensive
land colonisation, the setting up of smallholding, the formation of the rural
middle class, increasing production of different types of food, whitening the
race, providing supplies for troops involved in border wars and
consolidating national borders (Rombo, 2003: 107-125).
Since the nineteenth century in Brazil and Chile, immense economic,
social and political areas beyond the central government can be noted. In the
context of Chilean state sovereignty, given that the country was newly
independent, the consolidation of the southern border assumed an urgent
nature. German colonisation in Chile and in Brazil fulfilled the same
function: it populated empty regions with immigrants, making them
productive, putting these regions on the national map, encouraging an
agricultural model as an alternative to the existing one and attempting to
reduce social inequalities through building a strong middle class.
2.4 The Triple Alliance War and the War of the Pacific: Brazilian
and Chilean Positions
2.4.1 The Triple Alliance War (1864-1870)
The consequences of the Paraguayan War influenced Brazil-Chile relations
during the War of the Pacific, as will be studied in the following section.
The result of Brazil’s most significant external conflict led to a cautious
approach to subsequent explicit war alliances. Before getting into a brief
analysis of the Paraguayan War, the national nature of this war should be
considered since it helped consolidate the national identity of the Empire of
Brazil. In contrast to Chile, the existence of the region’s only monarchy did
not bring with it prior discussions on national identity. The national issue in
Brazil was attributed to a set of circumstances, namely ideas originating
from Europe, the development of new sectors of domestic intellectual elites,
the impact of the Triple Alliance War and the influence of the abolitionist
movement (1880-1888).
As Salles highlights, in the context of the Empire of Brazil, the
137
Paraguayan War was closely related to three facts: first, the conflict
occurred during the expansion of the capitalist economy – particularly
British capitalism in the Platine region – although its influence was indirect.
Secondly, the conflict followed a period of consolidation of the imperial
government’s stability. Thirdly, Brazil’s government provided a series of
modern technological resources for the war effort. The conflict helped to
strongly consolidate the Empire of Brazil, given national scale mobilisation
(Salles, 2010: 125-7).
As should be remembered, the Viceroyalty of the River Plate did not
survive as a political entity after Spanish colonialism ended early in the
nineteenth century, with diverse struggles occurring in the area and it being
absorbed into the nations of Argentina, Uruguay, Paraguay and Bolivia. 61
As opposed to the stable scenario in which the nations of Brazil and Chile
emerged, the Republic of Argentina emerged in fits and starts, as well as
amid internal conflicts and fights between Federals and Unitarians.
The old province of Paraguay was largely occupied by the descendants of
Guarani Indians who would not submit to the Buenos Aires’ bourgeoisie.
The Paraguayan people began to govern themselves in the second decade of
the nineteenth century. 62 However, the country’s independence was not
recognised by Buenos Aires, which reacted by attempting to stop
Paraguayan commerce with the outside world. Buenos Aires blocked the
Plate estuary, which was Paraguay’s natural route to the sea. As a result, the
Paraguayan leader José Gaspar de Francia isolated Paraguay and became its
dictator.
The government expropriated lands belonging to the church and to a
sector of the elite and became the main manager of production and
commerce in Paraguay. The most influential clergy in Paraguay were the
Jesuits. The Jesuit province of Paraguay spread over the colonial
jurisdictions that became the modern nations of Brazil, Argentina, Uruguay
61
By the end of the eighteenth century, the Spanish Crown had created the Viceroyalty of
the River Plate in order to deal with smuggling and violations of the colonial trade system.
The idea was to give centrality to the city of Buenos Aires. Alejandro Grimson (2012),
“Nation, nationalism and ‘borderisation’ in the Southern Cone” in Thomas M. Wilson and
Hastings Donnan (eds), A companion to border studies. Malden: Wiley Blackwell, p. 196.
62
Brazil’s recognition of Paraguay’s independence was announced by its envoy José
Antonio Pimenta Bueno on 14th September 1844. Andrew Nickson (2015), Historical
dictionary of Paraguay. London: Rowman & Littlefield, p. 307.
138
and part of Bolivia (Saeger, 2007: 16). The country was formed by small
landowners under the command of a visionary state administrated by
Francia as a dictatorship. After Francia’s death, Carlos Antonio López
became president and declared Paraguay independent in 1842. His son,
Francisco Solano López, came to power in 1862 after the death of his father.
Solano López saw Brazil and Argentina as countries with expansionist aims,
which would suffocate Paraguay in the foreseeable future. He decided to
take a risk and on 11 November 1864, a Paraguayan gunboat captured the
Marquês de Olinda, a Brazilian ship on the Paraguayan River.
The act marked the break of relations between both states. War
operations were put into practice on 23 December 1864 summarized by
Solano López offensive in the Brazilian state of Mato Grosso. As Fausto
points out, “there is much speculation about why Solano López was moved
to begin the conflict, seeing that it could bring a union against Paraguay of
two old rivals, Brazil and Argentina”. The fact is that Solano López might
want to turn Paraguay into an active participant in regional geopolitics
(Fausto, 1999: 120-3).
What in fact happened was that Brazil put Venancio Aires - the Colorado
- in charge. In March 1865, Paraguay also declared war on Argentina and on
1st May 1865 the Brazilian, Argentine and Uruguayan governments signed
the Triple Alliance Treaty. From Brazil’s point of view, Caxias’s
appointment as commander of the Brazilian forces in October 1866 was
important. At the beginning of 1868, Caxias also took command of the
allied forces because of Presidente Mitre had been obliged to return to
Buenos Aires to deal with internal matters. This meant that the Brazilian
troops carried the defence almost single-handedly (ibid: 124).
The Triple Alliance War had undesirable consequences for both sides.
Paraguay was devastated by the conflict and lost part of its territory to
Brazil and Argentina. Brazil ended the war with a large public debt to
Britain and it had a disastrous impact on the national economy. However,
the Brazilian army emerged from the conflict with a definite form and its
own aims. The war served to reinforce Brazil’s national identity through the
presence of a true external enemy. Chile, on the other hand, was neutral
during the Paraguayan War. In diplomatic circles, some authors defended
Chile’s support of Brazil, although the existence of this alliance has never
been explicitly proved. Before the Triple Alliance War, Paraguay was
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Brazil’s strongest regional ally. However, after the war, the Empire of Brazil
sought to achieve strategic alliances with other countries, such as Chile.
According to Canaveze, the Brazil-Chile alliance was never explicit because
the Empire of Brazil decided to maintain external neutrality instead of
promoting new regional alliances and counter-alliances (Canaveze, 2008: 3).
Whether Chile backed Brazil or not and to what extent gains importance in
the analisis of the War of the Pacific, since Brazil-Chile’s ‘apparent
neutrality’ was significant in this context.
2.4.2 The War of the Pacific
The War of the Pacific, which pitted Chile against the Peruvian-Bolivian
alliance and lasted from 1879 until 1883, had a significant impact on
regional geopolitics. The acquisition of the Peruvian province of Tarapacá
and the Bolivian province of Antofagasta by Chile should not be
underestimated, since it caused changes to the map of South American and
denied Bolivia access to the ocean. The War of the Pacific is of
overwhelming importance to the study of Brazil-Chile links, given the
diplomatic situation between the two countries, either prior to or during the
conflict. Chile’s position, which attempted to neutralise Argentina activity,
was important since it assured the benevolent neutrality of Brazil or even its
active cooperation. One Chilean minister reminded the Emperor that Brazil
and Chile could form a powerful alliance based on their common
predominance in the southern regions (Burr, 2013: 56). Moreover, the War
of the Pacific, showed that Brazil and Chile had a kind of political alliance,
although it could not be said that they had an explicit partnership.
According to Chilean diplomatic sources, prior to the war, Brazil’s
intelligence operations informed Chile about the secret pact between Peru
and Bolivia, establishing cooperation in a war.63 Indeed, Brazil’s
information about building warships like the Huascar was important
63
Chile’s war with Peru and Bolivia had its origins in the severe Peruvian economic crisis,
as a result of the decline of guano resources for fertilizers, combined with their
mismanagement. Rory Miller (2013), Britain and Latin America in the Nineteenth and
Twentieth Centuries. New York: Routledge. p. 64. At the end of the nineteenth century,
Peru feared the ramifications of a Brazilian-Chilean alliance, given its interests in the
Amazon basin on the border of Brazil. João Resende Santos (2007), Neorealism, states, and
the modern mass army. Cambridge: Cambridge University Press, p. 163.
140
intelligence information for Chile at the time. The Brazilian Emperor Dom
Pedro II provided vital information that was essential for creating Chilean
military strategy. In this section, the isolated circumstances that help to
sustain this perception of Brazil-Chile ties before and after the conflict will
be explored. This episode demonstrated that enduring friendship was a
crucial characteristic of their bilateral affairs. However, at present, the
bilateral relationship encompasses a broader range of actors and sectors,
prompting the adoption of dynamic concepts such as public diplomacy and
nation branding to address the multi-faceted aspects of Brazil-Chile links
(Bruit, 1985: 132).
The Paraguayan War and the War of the Pacific should be considered as
the most important military conflicts in the region’s history. Nevertheless,
the War of the Pacific shed light on the Brazil-Chile relationship and
contributed to understanding their bilateral links in the long-run. In fact,
some authors argue that the War of the Pacific should not be studied as
Chile’s war against Peru but England’s war against Peru, under which Chile
served as a tool for executing English interests. Those interests were based
on the ownership of nitrate companies, which had been nationalised by the
Peruvian government. However, less contradictory topics existed, such as
the clear interests of Chile’s bourgeoisie, who sought to protect their
investments in Bolivia and Peru, with the country aiming for an
international monopoly on nitrate exportation.
In this way, authors such as Bruit indicate that the Chilean bourgeoisie
did not, in the war, act to carry out imperative extra-national interests. He
argues that Chile’s participation in the war did not occur because of English
diplomatic pressure, but rather because the State sought to defend its own
economic interests. This means that Chile played an active role in the war to
sustain its own economic goals, which, in previous years, had been
concentrated in the north, first on silver exploitation, then on copper and
lastly on nitrate (Bruit, 1985: 132).
The military conflict began due to the struggle between Chile and Bolivia
for the Atacama Desert from 1842 onwards. The desert was unimportant
during the colonial period, but emerged as a significant economic territory
due to the exploitation of guano and nitrate deposits.64 Despite Peru’s
64
The agreement of 1874 protected Chilean capitals and investments in the Bolivian
Atacama. Nevertheless the decision of the Bolivian Congress in 1878 to impose new taxes
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attempts to mediate in the conflict, given the secret treaty of 1873, the lack
of guarantees about its neutrality contributed to the failure of the
peacemaking initiative. The quickness with which the war occurred was
unexpected from a Brazilian diplomacy viewpoint. The military conflict
caused surprise, since Brazil thought Chile-Argentina tensions were the
main problem faced by Chilean diplomacy.65 In contrast to Brazilian
diplomatic interpretations, Chile confronted Bolivia instead of Argentina,
despite Chilean boundary disagreements with the former. Brazil’s formal
answer to the invasion of Bolivian territory in February 1879 was that the
Chilean government should seek a peaceful solution to the conflict between
Bolivia and Peru.66
Brazil assumed its neutrality in the war and reaffirmed the absence of a
secret treaty with Chile. Brazil’s chancellery in Santiago was not indifferent
to the warfare and without actually taking part offered support to avoid war.
Brazil’s support came later to such an extent that the conflict had already
begun (Haas and Schmitter, 1994: 55-56). For the Chilean government, the
peaceful solution suggested by Brazil did not apply to the current
circumstances of war. Brazil’s support provided the conditions for a longterm harmonious relationship between the two states.67
Chile’s chancellery insisted on asking Brazil for support in the conflict to
the extent that the Chilean minister asked what Brazil’s reaction would be
vis-à-vis Argentina’s support for Bolivia and Peru against Chile. Again,
Brazil avoided getting explicitly involved in the conflict and did not make
any public pronouncement on the war. In 1883, Brazil took a decisive step
on nitrate output caused discomfort and the subsequent occupation of the Atacama Desert
by the Chilean military.
65
Like the Triple Alliance War, the War of Pacific brought significant development in
terms of network telegraph expansion and technology in general. Leonardo Ferreira (2006),
Centuries of silence: The story of Latin American journalism. London: Greenwood, p. 104.
66
Territorial disputes in the Atacama Desert were temporarily absent after 1826, while
Bolivia and Peru attempted to form union. Initiatives were carried out between Peru and
Bolivia to create a confederation which ended with the defeat of Peruvian forces at Ingavi
in 1841. Ronald Bruce St John (1994), “The Bolivia-Chile-Peru dispute in the Atacama
Desert”, Boundary & Territory Briefing, vol. 1, number 6. Durham, p. 4.
67
Bolivia was not the only country affected by the border dispute with Chile, with a War of
the Desert being started by Buenos Aires in the 1870s Argentines believed that Chileans
occupied large portions of Argentine land, so Buenos Aires claimed not only Patagonia but
also the eastern mouth of the Strait of Magellan. William F. Sater (1990), Chile and the
United Sates: Empires in conflict. Athens: The University of Georgia Press, p. 32.
142
towards challenging Chile’s position as the leading naval power in the
region and at the same time as the Peruvian diplomat made an official visit
to Rio de Janeiro, Chilean diplomat José Manuel Bamaceda attempted to
pressure the Argentine Congress to be able to sanction the Fierro-Sarratea
pact ratified by Chile (Sondhaus, 2001: 153). This pact restricted the
boundaries between Chile and Argentina.
Santiago nominated Lastarria as a plenipotenciary minister in May 1879
in Brazil and Uruguay. This minister intended to form an alliance with the
Empire of Brazil, diminishing Peru’s diplomatic actions while also
attempting to buy a warship (Fernandez, 1959: 89-90). Therefore, the
Chilean diplomat paid an official visit to Rio, seeking to form a military
alliance with Brazil. From Brazil’s perspective, the difficulties of the
national treasury combined with economic problems as a result of the Triple
War reinforced the tendency towards a peaceful approach (Reyes and
Sawyer, 2016: 30-31). In this scenario, even the sale of warships could have
led to the end of Brazil’s neutrality, therefore this sale was cancelled and
Brazil’s support of Chile made itself felt in a much more implicit way.
However, the Chilean chancellery considered the presence of the minister
in Rio as a symbol of the strong intelligence approach of both states. In
August of that year, the Argentine Congress refused to sign the FierroSarratea pact, increasing tension between the two countries. It should be
remembered that Argentina was key to understanding Brazil-Chile links and
the geopolitical balance relied heavily on the quality of the relationship
between the three states (Shelley, 2013: 181). Chile’s tensions with the
neighbour caused the country to establish closer ties with Brazil. BrazilChile bilateral links were profoundly influenced by Argentina’s separate ties
to each country. A potential alliance between Argentina, Peru and Bolivia
would have disastrous consequences for Chile, hence the last-ditch attempt
to strengthen Chile-Brazil bilateral links.
Despite Brazil’s insistence on not taking part in the Pacific conflict, the
country’s declaration of neutrality demands cautious analysis. The precise
interpretation made by Alvaro Díaz is that:
“Brazil had neither the economic resources nor the political power to declare explicit
support for its Chilean counterpart. Within the post-war scenario, Brazilian foreign
policy opted to announce its neutrality. Brazil and Chile can summarise their ties
143
during the conflict as ‘neutralidad con preferencias’ taking into account both
countries attitudes towards each other”.68
After Chile’s occupation of the Atacama Desert, the War of the Pacific
meant there was military conflict between Chile and Peru. It was almost
impossible to gain Brazil’s support for the war as a strategy to lessen
Argentina’s influence in the conflict, since the Brazilian Empire had internal
problems, which, in fact, would lead to its end. Internal difficulties would
have made achieving the consensus necessary for political support unlikely
and for this reason, neutrality was the easiest and the most comfortable
position to adopt. Moreover, the Triple War caused a serious deficit in
public finances, as well as political instability.
The War of the Pacific was clearly economically motivated and was not,
therefore, the result of deep-rooted values, but of, evident economic
considerations. The military conflict occurred in an attempt to gain a
monopoly over nitrate and guano. The acquisition of the provinces of
Antofagasta and Tarapacá determined Chile’s international nitrate
monopoly. Nitrate exports were essential for tackling the economic crisis
that had existed in the country since 1874 and a new prosperous phase for
the economy began (Aftalian, 2001: 100). Nevertheless, Chile had to take
into account the large sums of foreign capital in the production sector in
contrast to the previous model.
At the end of the 1880s, the denationalisation of the nitrate industry was
a consolidated fact. The War of the Pacific is a perfect example of how
economic factors exerted an influence over foreign affairs, at the same time
economic circumstances encouraged diplomatic bilateral dialogue between
Brazil and Chile. Given that economic aspects exert an influence over
diplomacy, public diplomacy offers a broader interpretation of international
relations, since it embraces the interrelated relations between different actors
concerning foreign policy goals.
At the end of the War of the Pacific, four courts of arbitration were
created in order to deal with European complaints about the conflict. Brazil
contributed one judge to the court to analyse the complaints of the countries
that had declared their neutrality in the war. The choice of the Emperor Dom
68
Interview with Alvaro Díaz, former Chilean Ambassador to Brazil during the
administration of President Michelle Bachelet. Brasília, 24 January 2013.
144
Pedro II as Baron Aguiar de Andrada - the ancient representative of Brazil
in Santiago - reinforced the idea of a bilateral alliance between both
countries (Dennison, 2006: 206-207). Although it was not formally
consolidated, the alliance did have an informal and secret nature during the
war.
Curiously enough, the end of the conflict led to the perception of Chile as
the South American military power. Chile insisted on showing Brazil as its
closest ally. From an international perspective, there were signs of the
Brazil-Chile partnership on isolated occasions. For instance, the North
American minister in Lima Christiancy, remembered that the houses that
had the Brazilian flag outside were not burned down during Chile’s
occupation of Lima.69
In practical terms, the perception of an informal alliance between Chile
and Brazil was convenient for both sides. Chile’s government sought to
obtain Brazil’s help in order to contain Argentina, preventing the latter from
siding with Peru and Bolivia in the conflict. According to Chile, Argentina’s
association with Bolivia and Peru would have had disastrous consequences
for regional geopolitics. Despite the absence of an explicit Brazil-Chile
partnership, the apparent nature of the association contributed to sustaining
balance in the region (Dennison, 2006: 207-208).
The situation of the Brazilian Empire discouraged the opening of new
fronts for the war. The difficult economic situation produced by the Triple
War did not favour the adoption of an explicit position regarding Argentina.
Despite the tensions in Brazil-Argentina relations since the Triple War, the
costs of military conflict did not favour any kind of participation in the War
of the Pacific. In contrast, Argentina took advantage of the benefits of the
new international division of labour, since meat and wheat exportations led
to a prosperous economic cycle in foreign trade.
The idea of an informal alliance between Chile and Brazil was also
convenient for both countries. The boundaries between Brazil and Argentina
were not totally consolidated, therefore maintaining the idea that a BrazilChile alliance was a strategic part of foreign policy. The fact that Chile
emerged from the War of the Pacific as a military power encouraged
69
LIB em Lima. In: AHI (231/2/13). Despacho n. 17, de 1/06/1882 apud Santos, Luis
Claudio Villafañe Gomes. “O império e as repúblicas do Pacífico: as relações do Brasil
com Chile, Bolívia, Peru, Equador e Colômbia. Curitiba: UFRP, 2002, p. 145.
145
Brazil’s interest in closer bilateral ties. However, the weakness of the
Brazilian Empire did not favour the creation of stronger links with Chile and
so, Brazil opted not to make their bilateral ties obvious, given the difficult
economic situation vis-à-vis Argentina.
The study of the Brazil-Chile approach goes beyond the analysis of
exclusive bilateral ties, since Argentina is important to understanding why
both states were reluctant to externalise closer ties at some point. The
importance of Argentina within the Brazil-Chile relationship should not be
overestimated, although it does play a significant role in regional geopolitics
and therefore should not be underestimated. With this in mind, we believe
that the study of Brazil-Chile bilateral links needs a conceptual foundation
(public diplomacy, presidential diplomacy, para-diplomacy and nation
branding) and concern to be shown about the fact that Argentina is a key
partner for Brazil and Chile. One of public diplomacy and nation branding’s
most important influences are the historical background that helps us
observe the importance of strategic sectors to a particular country. For
obvious reasons, historical facts are connected with the current foreign
policy context.
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Chapter 3
Brazil-Chile Bilateral Relations since the 1990s
This chapter explores the ways Brazil and Chile take their relationship
beyond traditional diplomatic links. Both countries have indeed developed
significant links in terms of political, scientific, energy, multilateral and
decentralised cooperation. Brazilian and Chilean links have also been
gradually adjusted to strengthen ties with non-official groups, such as
public-private partnerships, in which the private sector assumes a key role in
bilateral relations. Beyond the democratic regimes of Brazil and Chile in the
1990s, other aspects have also helped strengthen bilateral links. Brazilian
President Cardoso (1995-2002) had a longstanding friendship with Chilean
President Ricardo Lagos (2000-2006) and this was an important element
that strengthened bilateral cooperation. Moreover, in the governments of
President Lula (2003-2007) and President Bachelet (2006-2010), important
pragmatic policies were set out in terms of trade cooperation and
infrastructure projects between Brazil and Chile, such as the Brazil-ChileBolivia bioceanic corridor. Since the 1990s, Brazilian-Chilean links have
not been restricted to traditional diplomacy and public diplomacy has also
been carried out by decentralised actors, such as NGOs, civil society and the
private sector, who all play a key role in bilateral affairs.
3.1. Linking the ABC Pact with Brazil-Chile Ties from the 1990s
Onwards
The origin of previous cooperation initiatives between Brazil and Chile goes
back to 1904 and the Friendly Intelligence Policy Treaty - the well-known
ABC Pact - in which Brazil sought to foster cooperation between the three
main Southern Cone countries of Brazil, Argentina and Chile. However, as
a Brazilian foreign policy initiative, the ABC Pact was not supported by the
opposition and the latter’s opinion on the subject was reported in the media.
Creating a more appreciative diplomatic environment was connected to
counterbalancing the United States’ power in the region (Almeida, 1998:
51). The ABC Pact served to maintain peace in South America by
147
developing a relationship of trust between the three actors. Strengthening
southern ties provided an effective context in which to agree on a common
policy of resistance against the United States. The strategy of Brazil’s
foreign policy was that a good relationship with Chile should be maintained
to guarantee the geopolitical balance of power within the region (Gardini,
2010: 20). Moreover, the Brazil-Chile partnership was important as a
diplomatic mechanism to contain neighbouring Argentina.
Brazil-Chile’s stable friendship was demonstrated in the episode when,
the rights to exploit mining territories of a company from the United States,
Alsop & Co., were transferred from Bolivia to Chile because of the War of
the Pacific (1880-1883). The United States sent an ultimatum to force Chile
to pay an indemnity of one million dollars in ten days, given that the latter
did not recognise the company’s mining rights. The Brazilian Minister of
International Relations, Rio Branco, decided to defend the allied country
and Brazil even threatened to break diplomatic ties with the United States.
To settle the dispute, Chile proposed that Brazil act as arbitrator, but that
idea was rejected by the United States. As a result of Brazil’s diplomacy, the
United States withdrew their ultimatum and the topic was submitted to the
international arbitration of the King of England, Edward VII.1 Thus, the
Alsop episode served to strengthen Brazil-Chile links.
Although the ABC Pact was not ratified, it became a key element in the
analysis of Brazil-Chile links since it encouraged a closer friendship
between the two countries. The importance of the ABC Pact was twofold: it
contributed to the geopolitical balance among the three main actors of the
Southern Cone and provided a strategic perception of Chile as a reliable ally
for Brazil in the region. The ABC Pact also had strong support from
Argentina and Perón argued in his articles the need to strengthen BrazilArgentina ties through the pact (Cavlak, 2008: 171). Since the pact played a
fundamental role in Brazil-Chile ties and showed that their relationship was
characterised by mutual trust, it is mentioned in the second and third
chapters. Understanding the pact allows us to connect the countries’
historical backgrounds to the current Brazil-Chile relationship.
The issue of a partnership with Chile was a long-standing concern of
1
See Adelar, Heinsfeld. “As relações Brasil-Chile: o pacto ABC de 1915”. ANPUH,
Simpósio Nacional de História – Fortaleza, 2009. pp. 6-8. http://anpuh.org/anais/wpcontent/uploads/mp/pdf/ANPUH.S25.1436.pdf. Accessed on 12 April 2013.
148
Brazil’s foreign policy targets. Although Brazil’s ambition of a leadership
role in South America has gone through a number of phases and at certain
times in history seems to be more related to rhetoric rather than substance,
the components of fostering regional ties have played an important role
since the emergence of its very first foreign policy aims (Bonis, 2008: 12).
The ABC idea contributed to maintaining Brazil’s long-term interest in
Chile. Concordantly, it created the perception of Chile as an important ally
and part of Brazil’s long-term broad geopolitical strategy. Therefore, the
role of Chile within Brazil’s geopolitical plans should not be
underestimated, given that the former was part of later traditional diplomacy
goals.
Since the nineteenth century Brazil and Chile have built up a good longterm relationship, with the official Chilean diplomatic presence in Rio de
Janeiro illustrating this point. As the current Chilean Ambassador in Brazil,
Jaime Gazmuri, argued, “Brazil and Chile share stable diplomacy, they have
developed a trusting relationship since the nineteenth century and they have
lived through military periods cooperation in ‘Operation Condor’.2 The
democratic-period strengthened bilateral links, given that both states shared
similar values and exerted an active role in Latin America through
initiatives such as the Community of Latin America and Caribbean States
(CELAC) and the Union of South America Nations (UNASUR)”. 3 Their
historical background has strengthened their partnership in the long-run and
their stable bilateral relationship has increased their multilateral political
ambitions.
Therefore, the ABC theory has borne fruit by shaping geopolitical
strategy and situating Chile as a significant actor in the regional sphere.
Regardless of prior initiatives, Brazil-Chile bilateral relations have long
been determined by the absence of strong links, limiting the scope of
possibly stronger ties. At the same time it has been argued that the lack of
conflicts encouraged further steps forward to improve the bilateral
relationship. A spirit of mutual understanding and respect has permeated the
relationship between both countries in the long-run. The mutual perception
2
Finished by the early 1980s, Operation Condor involved the cooperation of the
intelligence services of Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay. Rocío
Montes (2015), “O horror da Operação Condor”, El País, 11th September. http://
brasil.elpais.com/brasil/2015/09/10/internacional/ 1441836066_190161.html.
3
Interview with the Chilean Ambassador, Jaime Gazmuri, on 12 September 2015.
149
that each is a reliable partner has laid a firm foundation for developing
further cooperation within the democratic period. In this sense, the period
from the 1990s onwards has been described as being at the heart of
increased cooperation efforts between Brazil and Chile.
3.1.1 The Brazil-Chile decentralised approach
This study considers that a profound transformation of both countries’
military regimes on the road to democracy in the 1990s was a key
component of Brazil-Chile bilateral ties. The new democratic order
facilitated the development of closer relations between the two countries.
Furthermore, the combination of democratic restoration in the 1990s and the
strength of formal and informal integration mechanisms laid the
groundwork for more cooperational initiatives between Brazil and Chile. In
other words, promoting official and non-official actors within the
international arena paved the way for understanding Brazil-Chile ties from a
public diplomacy perspective.
The difficulties of the Brazil-Chile relationship mean that there are no
formal specific links between the two states. This means that Brazil’s
approach to Chile has been dissolved in the context of Brazilian continental
policy. Despite its abstract character, Brazil-Chile interaction is pragmatic
and this is an essential component of their bilateral ties. Due to the absence
of strict formal links, it is difficult to make a distinction vis-à-vis Brazilian
foreign policy towards that of South America as a whole. 4
In this sense, dynamic new forums of dialogue like UNASUR, CELAC
and the Rio Group played a crucial role in building a new structure for
regional and possible bilateral relations. They represented the possibility of
constant dialogue and participation, in which strengthening and widening
links on an increasing number of issues demanded further cooperation
4
The difficulties of the Brazil-Chile relationship mean that there are no formal specific
links between the two states. This means that Brazil’s approach to Chile has been dissolved
in the context of Brazilian continental policy. Due to the absence of strict formal links, it is
difficult to make a distinction vis-à-vis Brazilian foreign policy towards South America as a
whole. Ángel Soto; Rogelio Núñez and Cristián Garay. Las relaciones chileno-brasileñas:
de la amistad sin límites al pragmatism del gigante (1945-1964). Santiago: RIL Editores,
2012, pp. 18-19.
150
efforts (Knight, 2014: 23). In this way, regular presidential summits have
also played an important role in creating constant and distinguished cycles
of regional participation.5 The convenience of frequent summits has
represented the most significant step forward in strengthening Brazil-Chile
bilateral relations, since they gave rise to the meetings needed to strengthen
cooperation links.
However, the difference between Brazil and Chile’s foreign policy
strategies must be stressed, since Chile’s foreign policy has clearly been
oriented towards the outward-market. Chile’s decision to adopt ‘neutral’
policies without having a strong political influence in foreign policy was
illustrated by the negotiation of bilateral agreements worldwide. While
Chilean foreign policy focuses on trade, public diplomacy favours the
analysis of Brazil-Chile ties, given the importance of non-state actors in
bilateral relations. Chile’s focused policy was the result of a coordinated
trade reform and the elimination of trade barriers. Chile’s rapid negotiation
of trade agreements worldwide can, at some point, be explained by its
professional government bureaucracy. However, the existence of a business
association with trade expertise played a core role in Chile’s foreign policy
strategy (Bull, 2008: 195-196). Working with this is the core element to
explaining the differences between how Brazil and Chile carry out their
foreign policies. Obviously, the nature of Chile’s policy has a direct
correlation with the obstacles it faces to regional insertion. In other words,
Chile would not give up the openness of its regional project, even if this
threatened the regional integration programme.
From the point of view of Brazilian foreign policy, the protectionist
economic model highlights a different approach to that of its Chilean
counterpart. The logic behind Brazil’s policy is to protect domestic industry.
However, the different nature of their economic models does not mean that
mutual trade and investment links between both states are reduced (Baer,
2001: 3-4). Instead of bilateral trade decreasing, Brazil-Chile commercial
activities are in a state of flux, which is a sign of their complementary
economies. High-level bilateral trade dialogue demonstrates what some
5
Presidential diplomacy occupies an important role in a democratic context. Brazilian
President Cardoso’s support of the anti-democratic regime of Peruvian President Alberto
Fujimori garnered criticism in Brazil. BBC Brazil (2000), “Vargas Llosa diz que Brasil é
cúmplice da ditadura peruana”, 25th October. http://www.bbc.com/portuguese/ noticias/
2000/001025_vargasllosa.shtml.
151
specialists argue as a conflict-free relationship. Increasing trade brings with
it the advantage of intensifying cooperation in the business sector, either
directly or indirectly to the extent that some people use the term ‘business
diplomacy’.
Chile’s Exports to Brazil (Millions of US$)
Exports
Destination
Brazil
2011
Fourth
Quarter
1,083,2
2011
(Total)
2012
First
Quarter
4,489,6 976,2
2012
Second
Quarter
1,206,6
2012
Third
Quarter
935,1
2012
Fourth
Quarter
1,188,0
2012
(Total)
4,305,9
Source: Central Bank of Chile. Foreign Trade Indicators. http://www.bcentral.cl/index.asp.
Brazil’s Exports to Chile (Millions of US$)
Exports
Destination
Chile
2011
First
Quarter
1,548,0
2011
(Total)
6,225,2
2012
First
Quarter
1,296,9
2012
Second
Quarter
1,185,6
2012
Third
Quarter
1,228,1
2012
Fourth
Quarter
1,479,0
2012
(Total)
5,189,7
Source: Central Bank of Chile. Foreign Trade Indicators. http://www.bcentral.cl/index.asp.
The Most Important Destinations of Chile’s Exports (Millions of US$)
Countries
China
United
States
Japan
South
Korea
Brazil
2011
First
Quarter
5,501,5
2011
(Total)
18,600,9
2012
First
Quarter
4,259,5
2012
Second
Quarter
4,142,2
2012
Third
Quarter
4,299,3
2012
Fourth
Quarter
6,120,9
2012
(Total)
18,821,8
1,941,8
9,047,0
2,632,8
2,365,3
1,877,3
2,660,4
9,535,9
2,540,8
9,009,4
2,218,8
2,241,1
1,836,5
2,059,2
8,355,6
1,124,0
4,448,4
1,235,7
1,167,8
1,051,8
1,091,5
4,546,8
1,083,2
4,489,6
976,2
1,206,6
935,1
1,188,0
4,305,9
Source: Central Bank of Chile. Foreign Trade Indicators. http://www.bcentral.cl/index.asp.
In general terms, Brazil is the fourth-ranking destination of Chilean exports,
which situates it as one of Chile’s main markets. It should be observed that
no country deserves to have political problems with strong trading partners.
152
Trading links exert an influence by spreading the relationship into other
areas. It should be remembered how difficult it is to establish definitive
boundaries between the political and economic aspects of bilateral relations.
The adoption of public diplomacy, paradiplomacy, nation branding and
presidential diplomacy serve to show the tenuous dividing line between
Brazil-Chile ties, sustaining the idea that ignoring their bilateral links leads
to misconceptions in the Brazil-Chile approach.
Chile’s Imports by Main Countries of Origin (Millions of US$)
Countries
United
States
China
Argentina
Brazil
2011
First
Quarter
2011
(Total)
2012
2012
2012
2012
2012
First
Second Third
Fourth (Total)
Quarter Quarter Quarter Quarter
4,034,6
15,092,3 4,095,1
4,462,0
4,532,3
4,796,2
17,885,6
3,346,7 12,696,0 3,103,6
1,312,5 4,750,3 1,263,3
1,5048,0 6,225,2 1,296,9
3,511,0
1,227,1
1,185,6
3,953,7
1,307,3
1,228,1
3,875,5
1,493,4
1,479,0
14,443,8
5,291,0
5,189,7
Source: Central Bank of Chile. Foreign Trade Indicators. Selected and sorted by amount
imported over $ 30 million in 2012. Source: Statements of Income. http://www.bcentral.cl/
index.asp.
The restoration of democracy in 1990 began a new period in the history of
Chile’s international insertion. After 17 years of international isolation,
Chile started its reintegration into the world economy. The reestablishment
of the democratic regime was accompanied by talks with the members of the
ALADI in an attempt to strengthen the integration process.6 From Chile’s
perspective, the possibility of developing some kind of broader integration
did not go any further, therefore the country focused on building bilateral
agreements with ALADI members separately. With regard to Brazil, there
6
The Latin America Integration Association is the largest Latin American integration
group. It contains 13 member countries: Argentina, Bolivia, Brazil, Chile, Colombia, Cuba,
Ecuador, Mexico, Panama, Paraguay, Uruguay, Peru and Venezuela. The ALADI
encourages the creation of an area of economic preferences in the region, with the ultimate
goal of achieving a Latin American common market. Asociación Latinoamericana de
Integración. Acerca de ALADI ¿Quiénes somos? http://www.aladi.org/nsfaladi/ arquitec.
nsf/ VSITIOWEB/quienes_somos.
153
were several instances of dialogue, such as the Bilateral Trade Commission,
the Consultative Committee on Agriculture and the Executive Work Group
on Trade Promotion of the Programme for the Competitive Substitution of
Imports.7 The rapidly growing bilateral trade relationship should also be
analysed in order to consider its impact on other areas of Brazil-Chile
relations. The trade relationship between the two countries is broad,
significant and has seen unprecedented growth in trade and foreign direct
investment (FDI), which means commerce is an important way of
understanding their bilateral affairs.8
From 1974 until the beginning of President Aylwin’s administration the
aperture of Chile’s economy involved a unilateral liberalisation policy
(Foxley, 2005: 133-134). In fact, multilateral commitment to economic
liberalisation began through the GATT and at that time bilateral negotiations
had very little weight.9 During the Concertación administration, unilateral
and multilateral policies were maintained through a specific policy of
bilateral trade negotiations. Since 1991, signing economic bilateral
agreements has reinforced trade strategy and what occurred in the 1990s
was twofold: recovering the growth of Latin America countries after the lost
decade of the 1980s and generalised structural reforms in the region’s
economies that favoured an opening towards trade liberalisation. These
policies were implemented during a period of economic recession, in which
protectionist policies were implemented in the region with negative effects
on Chile.10
As observed in the second chapter on historical backgrounds, the history
of their relationship is linked to the way both countries strongly complement
7
Embajada de Chile en Brasil. “Bilateral Relations”. http://chileabroad.gov.cl/brasil/
en/relacion-bilateral/comercio-relaciones-bilaterales/.
8
As long as international economic relations are relevant in diplomatic sphere of influence,
so-called ‘economic diplomacy’ plays a significant role in the Brazil-Chile relationship.
More information about economic diplomacy in Peter A. G. van Bergeijk (2009), Economic
diplomacy and the geography of international trade. Cheltenham: Edward Elgar
Publishing.
9
After seven and a half years of protracted negotiations, the Uruguay Round of GATT was
finally completed in April 1994 with 111 of the 125 participating states signing the final
document. See Peter Malanczuk (1997), Modern introduction to international law. New
York: Routledge, p. 231.
10
Dirección General de Relaciones Económicas Internacionales, Direcon, Ministerio de
Relaciones Exteriores de Chile. “Chile 20 años de negociaciones comerciales”. Santiago:
B&B Impresores, 2009, p. 73.
154
each other in commerce. Increasing trade has provided the opportunity to
strengthen ties on major political, diplomatic and economic issues. This
extensive network has also influenced para-diplomatic ties for instance.
However, from Brazil’s perspective para-diplomatic policies are
fundamentally connected to central foreign policy, as will be studied in the
following sections. The absence of political conflicts and existing similar
political values serve to measure the possibility of strengthening bilateral
relations. Given that the two countries had not gone into serious political
issues and shared similar positions in the multilateral field, their bilateral
approach allowed the development of further multi-faceted links (Brands,
2010: 3-4). The special relationship between Brazil and Chile goes hand-inhand with the fact that public diplomacy’s perspective is not state-centric.
The important role played by nation branding in Chile’s foreign policy
strategy helps explain the nature of the Brazil-Chile approach.
3.1.2 Brazil’s international insertion vis-à-vis Chile
The Brazil-Chile relationship should go well beyond mere trade issues,
since the current regional scenario has profoundly modified in the way in
which Brazil becomes the new emerging global power. Brazil’s deeper
integration into the global economy has produced important changes
regarding Chile’s perception of this huge South American country and has
demanded the reformulation of Chilean foreign policy vis-à-vis Brazil’s
current geopolitical position. Some authors believe that Brazil will be one of
greatest global powers by the year 2030, given that it is the world’s fifth
largest country and seventh largest economy (Reid, 2014: 110-111). There
is room for strengthening bilateral links by understanding the mutual
benefits generated by stronger long-term partnership. For obvious reasons,
the fact that Brazil has become an object of fascination among diverse
actors, such as academics, economists, policymakers and business groups
encourages the need to recreate the Brazil-Chile approach.
The new context has led to certain aspects of Chilean and Brazilian
foreign policies converging as far as the region is concerned with both states
having gained a respected visibility worldwide. The highs and lows of South
America’s complex issues have not allowed for a regional bloc to be
155
continually projected, given the idea that strengthening a common position
with other Southern American countries would have high costs to the
detriment of domestic and international aims. Now that everything points to
luck being on Brazil’s side and the country has achieved a major say in
global affairs, the elites’ perception of regional gains has decrease.
According to the neo-functionalism theory, regional integration is a product
of many and varied forces, as will be observed (Mattli, 1999: 3). However,
Brazil’s public debt and the need for long-term economic reform requires
solid political measures.11 The disappointing results of the Brazilian
economy during President Dilma Rousseff’s first term (2011-2014) shifted
the diplomatic focus towards a more active foreign policy in her second
term.12
Defining all its borders as part of the BRICS, IBSA and G20 and its
position - as an energy power with pre-salt discoveries and as a sugar-cane
ethanol exporter - has demonstrated the political and economic
consequences of Brazil’s international insertion.13 The increasing prices of
11
Brianna Lee (2015), “Brazil economic crisis: Rousseff impeachment talks grows, but
potential presidential replacements garner little enthusiasm”, International Business Times,
8th November 2015. http://www.ibtimes.com/brazil-economic-crisis-rousseff-impeach
ment-talk-grows-potential-presidential-2104323.
12
The Economist, “Brazilian waxing and waning”, 30 October 2015. http://www.
economist.com/ blogs/graphicdetail/2015/10/economic-backgrounder.
13
G20 is the bloc of twenty developing nations that was created at the fifth ministerial
WTO conference, held in Cancún, Mexico. As some sources show, the origins of this
coalition can be traced back to the Brazilian Declaration signed between Brazil, India and
South Africa in June 2003. Others argue that the coalition emerged as an immediate
response to the EU-United States text on agriculture despite the fact that cooperation among
some of the G20 has precedents in both trade and other issues. Amrita Narlikar and Diana
Tussie. “The G20 at the Cancún Ministerial: Developing countries and their evolving
coalitions in the WTO”, p. 5. http://www.flacso.org.ar/rrii/publicaciones/g20-developingwto.pdf. The creation of BRICS in 2011 by Goldman Sachs’ Jim O’Neill, became a symbol
of the perceived rise of emerging nations and their increasing economic power. In contrast
the BRIC (latter BRICS), the so-called BIITS (Brazil, India, Indonesia, Turkey and South
Africa) showed that investors’ concerns about emerging markets defined BIITS as the most
vulnerable emerging markets. In Brazil, the solvency problems of former billionaire Eike
Batista and his various businesses resulted in large losses for lenders as well as for the
state-owned Brazilian Development Bank. Brazil’s 2014 Football World Cup and the 2016
Olympic Games, have absorbed resources at the expense of essential infrastructure.
However, policy makers do not want to believe that an emerging market crisis is possible.
Also see also Satyajit Das. “The return of the emerging market crisis”. Economonitor. 25th
September 2013. See Shobhana Chandra. “BIITS replacing BRICS as emerging markets
not a blanket by”. Blomberg. 21 October 2013.
156
agricultural commodities show that the world market has not reached a
desirable equilibrium between agricultural raw materials for food, feed and
fuel. There is no correlation between the world shortage of agricultural
commodities and structural shortages of food. On the contrary, selfsufficiency has become a necessary condition for guaranteeing the food
security. As Nassar points out, “We will see in the next few years countries
with an availability of natural resources (like land and water), competitive
agricultural sectors, and non-users of discriminatory policies against
agriculture (the use of export taxes) responding higher prices by increasing
production. Brazil fits into this group” (Nassar, 2009: 55). In this scenario, it
can be argued that Brazil and Chile are in privileged positions within the
world commodity debate - Brazil as an agricultural energy power and Chile
as a mining power – meaning that both countries can take advantage of the
current change in the world’s commodity prices.
Another important multilateral initiatives also occurred with the meeting
of the so-called G8+5, when Brazil, India, China, Mexico and South Africa
participated as guests at a meeting of the most influential international club
on the economy. 14 Their participation was hoped to consolidate a stronger
and well-represented group that would encourage trade talks at Doha and
focus on the need for better cooperation on climate change. Despite there
being little evidence of significant results, Brazil is a permanent participant
of another international club, the other G20, the Group of 20 Finance
Ministers and Central Bank Governors.15
Brazil has played an active role in G20 summits through the participation
of its Labour and Finance Ministers. Brazilian foreign policy places G20 as
14
Membership of the G8 is made up of the main industrialised countries. It is not an
international organisation, nor does it have and administrative staff with a permanent
secretariat; rather it is a process that culminates in an annual summit at which the heads of
state and government of the member countries hold talks with a view to finding solutions to
main world issues, which are summed up in the Final Statement. http://www.
g8italia2009.it/G8/Home/Approfondimenti/G8-G8_Layout_locale-1199882116809_Come
FunzionaG8.htm. Over the years the G7/G8 duty presidencies have begun inviting a
number of emerging countries to specific sessions of talks on an ad hoc basis.
http://www.g8italia2009.it/G8/Home/Summit/Partecipanti/G8-G8_Layout_locale-119988
211 6809_PaesiG5.htm
15
The G20 was created as a response to both the financial crises of the late 1990s and a
growing recognition that key emerging-market countries were not adequately included in
the core of global economic discussion and governance. About G20, Origins,http://www.
g20.org/about_what_is_g20.aspx
157
the foremost international forum for discussing world economic matters.16
Among other issues, an exchange of information about lowering
dependence on fossil fuels has taken place at various seminars during G20
meetings. The initiative to lower the use of fossil fuels in Brazil’s energy
matrix has gained special attention in the last few years, as seen in the
chapter on energy. 17 Thus, Brazil encourages adopting policies that increase
the use of alternative energy sources and currently face difficulties because
of strong dependence on non-renewable energy sources.
Given that the energy sector is one of the most politicised in the Brazilian
economy, the perfect scenario is created to help understand how other
sectors permeate foreign policy. Brazil’s ethanol brand certainly has a
significant influence worldwide, to the extent that Brazil-Chile relations
cannot be considered without Brazil’s international insertion. Rebranding
Brazil’s projection promotes Chile’s growing interest in strengthening
dialogue with this new emerging international power. For obvious reasons,
Brazil’s new international position has altered Chile’s perception of the
importance of establishing closer bilateral ties and changes to the BrazilChile international position greatly influence their bilateral approach.
3.1.3 Brazil-Chile dialogue within the multilateral perspective
The 1990s led to fundamental changes on a global scale, which cannot be
underestimated given the end of the Cold War and the introduction of new
technologies. The connection of computers worldwide and the emergence of
the internet brought new actors onto the international scene. As previously
analysed, the technological revolution encouraged companies to invest in
other states, creating new instruments for international relations. The
16
Globalism poses a severe challenge to the nation state, most dramatically expressed in the
global financial crisis of 2008-2009, in which the questionable lending practices of a
number of United States’ banks ended up enveloping much of the world global economy
and triggering the greatest financial crisis in eighty years. It was this very crisis that led to
the creation of the G20 at a leaders’ level - the ‘steering committee of the world economy’ as it became apparent that only collective action could deal with fall out from the crisis, and
attempt to prevent the eruption of new ones”. Jorge Heine, “From club to network
diplomacy”, in Cooper, Andrew F.; Heine, Jorge and Thakur Ramesh. The Oxford
Handbook of Modern Diplomacy. Oxford: Oxford University Press.
17
Ministry of Foreign Affairs, “Financial-G20”, http://www.itamaraty.gov.br/ temas/
governanca-global/g-20-financeiro
158
emerging context shows that politics is not the only way to achieve power
within the international arena, since it gives way to other mechanisms for
profits, as well as the growing role of non-officials in foreign affairs.
Distance is now irrelevant to communications because of the internet and
the change in telephone tariffs. At the same time, new forces such as
globalisation and international migration have changed people’s perception
of distance (Cairncross, 2001: 11-12). The rapid effects of increasing
connectivity have led to the rapid strengthening of interstate relations and
demanding new forms of international approach.
The 1990s can be portrayed as the decade of the legitimate route taken to
the creation of globalisation patterns – in other words - the international
effort to discuss global issues on a wider scale. Globalisation brings together
different sectors that interact, making things faster, cheaper and better than
ever before requiring constant cooperation between sectors that used to be
isolated from each other.18 The conferences that took place at the United
Nations from the 1990s onwards on diverse matters illustrate this point
(Fonseca, 2006: 128). Multilateralism exerts an overwhelming influence on
the Brazil-Chile approach since the two countries have similar standpoints
regarding international values. As Lazarou argues, beyond official state
actors, NGOs and regional and civil society organisations demanded
participation in international relations (Lazarou, 2014: 14). In this
contemporary environment the foreign policy of the two countries was
formed.
In that context, it is important to stress that President Lagos accepted an
invitation from President Lula to join him in his announcement of the
Initiative to Fight World Hunger on January 2004 in Geneva. Fonseca
highlights the strength of their common positions in a multilateral context,
in which President Chirac and the Secretary-General of the UN Kofi Annan,
also participated, contributing to the creation of horizontal links between
18
“Both law and economics largely ignored the norms until the 1990s, with norms
remaining the exclusive province of the social sciences. Norms include patterns of
behaviour, impulses, and spontaneous ordering initially enforceable by non-legal sanctions
(they cannot initially be adjudicated and are passed by private parties)”. Juliet Kostritsky.
“The law and economics of norms”. Texas International Law Journal, vol. 48, Summer
2013. Number 3. Texas: The Universiy of Texas School of Law, p. 467. Additional
information in Caroline Bouchard and John Peterson (2014), “Conceituando o
multilateralismo”, in Elena Lazarou (Ed.), Multilateralismo nas relações internacionais.
Rio de Janeiro: Elsevier, pp. 1-29.
159
both countries (Fonseca, 2006: 130). The fact that both countries supported
the nomination of Farouk Hosny, the Minister of Culture of Egypt as
General Director of UNESCO in October 2009 shows how they maintained
the defence of their common positions. 19 Furthermore, it means that their
relationship was not restricted to trade issues, due to the way this initiative
cemented relations in the multilateral arena. In this study of bilateral
relations between Chile and Brazil, it can be demonstrated that the two
states share certain features, reinforcing their closer relations and indicating
changes to regional geopolitics.
Among other things, Diamint indicates that “the addition of social
concerns to issues of political stability and governance enlarges the security
agenda, transforming social matters into state security matters” (Diamint,
2004: 48). In this context, the armed forces, who considered citizens their
enemies for many years, are nowadays more inclined to protect people and
even promote peacekeeping operations outside their countries. Another way
to state the same point is by saying that the Chilean and Brazilian military
played the role of democracy exporters within a multilateral context. It is
interesting that, in order to carry out a peacekeeping mission, the military
needs to act in the same terrain as NGOs, health workers, observers from
multilateral organisations and soldiers.20 The new tasks undertaken by the
armed forces require they adopt a more cooperative attitude to offer
humanitarian assistance, health care and the demobilisation of combatants
(Diamint, 2004: 48-49). In this way, security can be considered an important
field of cooperation between Chile and Brazil, with the cooperation of both
countries in Haiti illustrating this point (Fonseca, 2006: 131).
Since 2004, both countries have looked for solutions to the Haitian crisis,
with its roots in the failure of the Haitian state together. As Hirst states, the
active participation of Chile and Brazil helped create a new structure for
hemispheric cooperation initiatives, regarding the new paradigm of
19
Folha de São Paulo, Saturday, 30th May 2009, caderno Brasil, “Egípcio divide países, e
9 vão disputar Unesco”.
20
Since its foundation, the UN has undertaken 53 peacekeeping missions. Given that not
every fight involving armed groups is a civil war, various qualitative measures are
necessary to help distinguish mere conflict from war. Moreover, different types of civil war
require different solutions. “How to stop the fighting, sometimes”, The Economist, 9th
November 2013, pp. 26-29. See Ricardo Seitenfus (2013), Relações internacionais.
Barueri: Manole.
160
multilateral action in local situations of institutional collapse (Hirst, 2008:
53-54). Thus, it is impossible to confine Brazilian-Chilean bilateral relations
to traditional diplomacy, reducing them to the domain of interstate relations
like Chile-Argentina cooperation through United Nations peacekeeping
missions worldwide, which led to stronger links among the military sector
illustrated by the creation of the Permanent Chile-Argentina Security
Committee (COMPERSEG).21 Bilateral cooperation within the United
Nations’ peacekeeping missions created a new form of dialogue between
Brazil and Chile. 22 Thus, a social perspective was also introduced in this
new context regarding military missions, which have a strong civil
component and involve many different military and civilian agencies
logistically and in communications and medical support (Diamint, 2004:
45). Indeed, when Brazil performs well in these military missions, it gains
legitimacy before other countries in the international arena.23
As already stated in this chapter, new topics are currently emerging in the
international agenda such as environmental degradation, organised crime,
migration, human rights, and energy issues. Therefore, traditional
diplomacy alone cannot deal with the current domain of foreign affairs,
taking concepts such as public diplomacy, nation branding, presidential
diplomacy and paradiplomacy as prerequisite for the study of bilateral
relations between Chile and Brazil. Briefly, it is possible to generalise by
saying that, in broad terms, this set of concepts is an increasingly standard
component in the analysis of foreign affairs. An increasing number of
interdependent situations demand harmonisation to reach a certain level of
consensus in the dialogue.
21
Strengthening military cooperation boosts greater bilateral ties between Chile and
Argentina. Ministerio de Relaciones Exteriores de Chile. Subsecretaria participa en
inauguración de Reunión del COMPERSEG. Tuesday, 30th August 2011.
http://www.minrel.gob.cl/prontus_minrel/site/artic/20110830/pags/ 20110830143332.php
22
See C.F. Amerashinghe. Principles of Institutional Law of International Organisations.
New York: Cambridge University Press, 2005.
23
Debates over a variety of subjects such as human rights, social development, the
environment and women rights were held. An attempt to define special rules for the flow of
economics (the Uruguayan Rond) also emerged in this context. Additional information
about human rights in Chile in Deborah Thomas (1995), “Human rights and the politics of
agreements: Chile during President Aylwin’s first year”. USA: An American Watch Report,
p. 36.
161
3.1.4 Redefining the Brazil-Chile bilateral approach
Sharing democratic values influenced the stability of both countries’
democratic institutions. Their respect for democratic values, together with
the lack of contentious issues between them, meant there was a chance to
strengthening their relationship. Brazil and Chile share universal values and
have policies that promote the interests that other countries share, like
democracy, human rights, a mutual interest in regulating the WTO’s
financial flow and similar positions on various issues in the international
agenda among others. Brazil and Chile had already built up a partnership in
the multilateral context with similar opinions on significant matters.24 The
lack of a strong political relationship between the two countries led to a
pragmatic approach when building horizontal links between the diverging
sectors.
As Ambassador Jaime Gazmuri argues, “Brazil and Chile have effective
cooperation on logistical issues, in other words, trade, infrastructure and
science and technology. Common bilateral scientific research projects in
Antarctica show that both countries have similar interests in the area”.25 The
Brazilian military base in Antarctica (called Comandante Ferraz) and the
Chilean military base (called Eduardo Frei) carry out common research
projects.26 The bioceanic corridor is another relevant point of bilateral
cooperation, considering that the project was officially launched by
Presidents Bachelet, Lula and Morales in 2000. According to Ambassador
Jaime Gazmuri, “Bolivia’s demand for the exclusive use of Bolivian
transport, which is against Mercosur clauses, is a point of conflict with
Brazil. Indeed, the lack of planned economic investments has led to a delay
24
Not only in the democratic period, but also during the military regime Brazil was a
permanent presence in multilateral forums bringing together states with the most diverse
perspectives, from cultural to economic. See Shiguenoli Miyamoto (2000), “O Brasil e as
negociações multilaterais”, Revista Brasileira de Política Internacional, vol. 43, n o 1.
Brasília: UnB Editora, pp. 119-137.
25
Interview with the Chilean Ambassador in Brazil, Jaime Gazmuri, on 12th September
2015.
26
Brazil and Chile were among the countries that ratified the Antarctic Treaty. Together
with Argentina and Australia, Chile was one of the last three countries to simultaneously
ratify the Antarctic Treaty on 23rd June 1961, on which date the Treaty came into force.
Davor Vidas (2000), Implementing the environmental protection regime for the Antarctic.
Dordrecht: Kluwer Academic Publishers, p. 339.
162
in implementing the initiative”.27 However, the bioceanic corridor project
demonstrates the pragmatic nature of the Brazil-Chile bilateral relationship.
Furthermore, it should be considered that the two countries have a
positive nation brand worldwide, which means that strengthening bilateral
ties benefits them both. The two states share convenient nation brand
projections, which are recognised in the international community. Despite
natural differences between each country’s brand, they are similar because
they do not emphasise regional roots.28 Neither Chile nor Brazil Latin
America and their respective countries, since both present themselves as
disconnected from the region. Obviously, Brazil occupies the position as the
only Latin America country with Portuguese roots, which has contributed to
its sense of isolation. Chile, on the other hand, insists on presenting itself as
a pillar of stability in a volatile region.
At the same time, President Dilma Rousseff (2015-2016) paid her first
official visit to Chile on 26th February 2016 during the term of President
Michelle Bachelet (2014-2018), which illustrates the long-term relationship
between the two countries. Although Brazil and Chile do not share
particularly strong relations with Latin America, the Bachelet administration
sought to strengthen relations with Brazil and other Latin American states.
Moreover, increasing trade between Brazil and Chile had laid the
groundwork for encouraging economic relations. Brazil is the main
destination of Chilean investments. Since 2010, the favourable balance of
bilateral trade to Brazil, together with the lack of import tax on Brazilian
goods in Chile, has promoted a pragmatic approach to strengthening
bilateral links.29
As opposed to the idea that Mercosur and the Pacific Alliance are
opposing initiatives, President Bachelet considered the possibility of
strengthening bilateral relations. The Chilean attitude of ‘convergence in
27
Interview with the Chilean Ambassador in Brazil, Jaime Gazmuri, on 12th September
2015.
28
In Chile, the partnership of both private and public sectors were strategic concerning
wine and salmon exports. The government provided a stable economic environment to
promote a national brand for wine. Jean-Philippe (2004), Trade and competitiveness in
Argentina, Brazil and Chile. Paris: Organisation for Economic Cooperation and
Development, OECD, p. 186.
29
See Portal Brasil, “Visita da presidenta Dilma ao Chile coroa parceria entre os dois
países”, Relações Internacionais, 26/02/2016. http://www.brasil.gov.br/governo/2016/02/
visita-da-presidenta-dilma-ao-chile-coroa-parceria-entre-os-dois-paises.
163
diversity’, which means the opportunity to strengthen Brazil-Chile bilateral
links despite the countries belonging to two different regional projects,
encouraged a closer bilateral approach. President Rousseff’s official visit
illustrates the quality of current bilateral relations, embracing policies,
encouraging trade and providing significant tax benefits. In 2015, Brazil
was Chile’s third most important trade partner.30 The development of closer
economic links has shown the continuing importance of the bilateral
relationship beyond traditional diplomacy.
Therefore, the most important concept for understanding Brazil-Chile
relationship is not traditional diplomacy, but the focus on the decentralised
standpoint. This also means that more inter-sector topics are up for
discussion, such as public diplomacy, presidential diplomacy and
paradiplomacy. The increasing importance of public diplomacy should not
be underestimated, since the Itamaraty recognised the important role played
by public diplomacy in the formal foreign policy approach.31 As mentioned
in the first chapter, the concept of nation branding also plays an important
role in explaining both states’ mutual perception and to what extent the
particular message injected into each country’s domestic field corresponded
to its aspirations. Moreover, the new multilateral agenda implied widening
Chile-Brazil cooperation in world affairs. The new world order demanded
thinking and acting globally, establishing increasing new foreign policy
issues in the multilateral field (Bernal-Meza and Christensen, 2012: 19-20).
At the present time, Brazil and Chile share similar values on international
insertion, promoting the defence of human rights, social development,
women’s rights and environmental topics among others. The two countries
behaviour turned from regionally-oriented to globally-oriented and their
new ties highlighted the complex new international agenda.32 Together with
30
See Jornal do Brasil, “Dilma inicia visita ao Chile em meio à reaproximação”,
Internacional, 26/02/2016. http://www.jb.com.br/internacional/noticias/2016/02/26/dilmainicia-visita-ao-chile-em-meio-a-reaproximacao/.
31
On 11th June 2013, the Brazilian Ministry of Foreign Affairs announced a new tool for
promoting dialogue with the Brazilian community, as well providing information on
foreign politics and the Itamaraty’s proceedings in a platform that allowed readers to
interact by posting comments, questions and suggestions. The blog called “Diplomacia
Pública” (Public Diplomacy), can be assessed at http://diplomaciapublica. itamaraty.
gov.br/.
32
With respect to civil rights, Brazil also signed up to all the regional and international
human rights protocols and conventions, is an active backer of the UN system of human
164
this come emerging new regional issues in the foreseeable future, such as
drug trafficking, immigration, energy sources, preventing phytosanitary
diseases and money laundering among others.33 The new regional agenda
requires constant dialogue between both states, due to the countless
transnational issues that have emerged in the last few years. Beyond
cooperation initiatives, the harmonising methods and tools to tackle
common problems demand a stronger partnership between Brazil and Chile.
The big shift from the past means that the present context brings new
actors to the forefront and go-it-alone policies are replaced by enthusiasm
for fostering regional and bilateral ties. The fact that Brazil and Chile do not
share a partisan foreign policy can be seen as a sign that not only short-term
bilateral alliances can be formed, but that long-standing coherent bilateral
links can also be built. Indeed, Brazil and Chile’s foreign policies are
characterised by the continuity of essential courses of action, despite the
particular emphasis they are given by each government. Although Brazil
and Chile are stable and trustworthy countries in the region, major steps
must be taken towards constructing pragmatic bilateral cooperation. In
addition, Brazil’s new status as an emerging power on the international
scene should encourage Chile to build closer relations with the giant of the
south, seeking substantial benefits from this partnership.
3.2 The Background of the Latin American Context During the 1980s
Before the 1980s, the traditional hypothesis of conflict in the Southern Cone
prevented any possibility of cooperation in the region. At that time, each
rights protection and has been engaged in a gradual rapprochement with the Inter-American
system. Fiona Macaulay. “Human rights in context: Brazil”; In Mónica Serrano and
Vesselin Popovski. Human rights regimes in the Americas. New York: United Nations
University Press, 2010. p. 133. Historically, Chile had been one of the most active Latin
American players in international forums on human rights, as demonstrated by its
significant role in the drafting of the Universal Declaration of Human Rights and the
American Convention on Human Rights. Felipe González. “Human rights and democracy
in Chile”. In Mónica Serrano and Vesselin Popovski (2010), Human rights regimes in the
Americas. New York: United Nations University Press, 2010, p. 159.
33
Issues such as the adoption of new regional industrial policies to promote enhanced
specialization, based on knowledge, is also part of the regional dialogue. Ninth World
Economic Forum for Latin America in Panama City from 1-3 April 2014.
https://agenda.weforum.org/2014/03/three-big-issues-facing-latin-america/.
165
country perceived the other as its main rival and a potential military
aggressor, which led to difficulties in building a cooperative environment in
regional security matters. Indeed, the debt crisis of the 1980s, with high
rates of inflation prevented any economic and political cooperation in the
region.34 The abrupt macroeconomic over adjustment, as a result of the
shifting abundance of external funding, led to serious economic debt.
Decreasing regional production capacity, reduced revenue from tax
collection, currency devaluation and weak financial transfers caused a
conjuctural regional crisis (Moniz Bandeira, 2010). Given these economic
problems, countries were less inclined to support cooperation initiatives and
placed greater emphasis on the domestic market.
Given the absence of significant regional dialogue between Latin
American states, the international context of the 1980s transformed
cooperation efforts through the creation of a favourable environment for
building partnership. During this period, the international scenario chipped
away the Berlin Wall, which led to the end of the Cold War. Consequently,
international affairs became less defensive to some extent, which led to
foreign policies worldwide being expanded. However, the top exporters and
importers in world trade were the United States, Germany, France, Japan
and the United Kingdom, accounting for 39% of world exports and 40% of
world imports. At that time, the trade of goods accounted for 81% of total
trade.35
Moreover, in the late 1980s, interest in the regional approach with a
focus on trade liberalisation increased. The substantial changes that took
place in that period also had their origins in the emergence of information
and communication technology, which led to a reduction in transport and
communications costs. The participation of emerging markets has grown
rapidly in recent decades, leading to a quadrupling of trade volume in goods
34
In this context, the start of the 1990s led Latin America to attempt international
reinsertion into the global economy and abandon the import-substitution economic model.
Andrew Crawley (2006), “Europe-Latin America relations: towards interregional coalition
building”, in Heiner Hänggi et al Interregionalism and international relations. New York:
Routledge, p. 177.
35
Department for Business Innovation & Skills, Department for International
Development.“Global Context – how has world trade and investment developed, what’s
next?, p. 4. https://www.gov.uk/government/ uploads/system/uploads/attachment_data/file/
43309/11-722-global-context-world-trade-and-investment.pdf
166
between 1980 and 2008.36 As a result, the phenomenon of the
transnationalisation of companies occurred at the same time as the growth of
intra-company trade. This combination caused an increase in total world
trade (Van Rompay, 2001: 6).
From the Latin American perspective, the United States’ rising dollar
policy combined with increasing interest rates led to a problem with the
growth of debt services duties, which increased foreign debt.37 Another case
in point that explains South America’s lost decade in the 1980s is due to the
fact that the region had to confront a situation in which the continent was no
longer considered as strategically important to the United States as it was
during the Cold War.38 Moreover, a decrease in foreign direct investment,
the slow economic rise of developed countries, the instability of the world
economy and a fall in the number of primary products, among others,
contributed to the effects of the recession the Latin American states lived
through in the 1980s (Marangoni, 2012). Another interesting aspect is that
the 1980s caused an increase in international links between states and
subnational actors as will be seen further on. As a result of this period’s
difficult economic features, states, provinces and municipalities turned to
international relations to minimize the domestic economic consequences of
the crisis.
Therefore, the democratic transition of Latin American states should be
considered a consequence of the economic crisis, worsened by the second
oil shock, the recession that came afterwards and the general crisis in
society, in combination with the systematic collapse of policies in the
region. The disastrous economic performance demanded macro and
structural policy reforms. In general terms, the military governments’ lacked
the resources to deal with social issues and the plurality of diverging society
36
Ibid.
As a consequence, in August 1985, the Contadora Support Group was established, with
its first members being Brazil, Argentina, Peru and Uruguay. Shortly thereafter, its
members started to act as a group in relation to other countries. This situation led to the
establishment of the Group of 8, expanding its sphere of influence to many of the problems
faced by Latin America, especially foreign debt (Ayerbe, 2002: 206).
38
During the Cold War, the United States destabilised governments in Argentina, Brazil,
Chile, Uruguay, British Guyana, Bolivia, the Dominican Republic, Ecuador, El Salvador,
Guatemala and Nicaragua. Stephen G. Rabe (2013), “Cold War memories: Latin America
versus the United States”, Análisis Político, vol. 26, n o 79, Sep/Dec 2013. Bogotá: UN
Periódico, pp. 5-18.
37
167
interests in the economic, political and social scope (Ayerbe, 2002: 210211). These difficulties sidelined the relationship between the Latin
American countries. The urgent reforms varied from country to country but
in general included a combination of fiscal and monetary tightening of belts,
greater aperture to foreign trade, privatisation and deregulation.39
As well as aforementioned situation, the lack of attention paid to South
America is linked to the collapse of the Eastern bloc, which meant
diplomatic efforts were focused on Eastern Europe. Moreover, other
international circumstances also served to divert attention from the
continent, such as the war in the former Yugoslavia and the Gulf War. In
summary, these circumstances led to South America occupying a lower
profile in international affairs (Mullins, 2006: 105). In this scenario, Latin
American countries had to look to one another as possible partners because
of the unfavourable international context. The combination of these
circumstances provides the context for the fostering of closer regional ties
and obviously created the scenario for Brazil-Chile bilateral relations.
3.2.1 The military influence in the transitional period
By analysing the Chilean-Brazilian foreign policy in the transitional period,
the topic of whether or not the armed forces maintained their extensive
functions and privileges during civilian governments should be addressed,
depending on the nature of those transitions. There has not been a sudden
institutional rupture in Chile and Brazil’s transitional process. As a result,
after the withdrawal of the military from power, the two countries’ foreign
policies did not go through remarkable strategic changes. In this way, both
countries adopted a low profile in foreign affairs, which means that civilian
governments did not engage in confrontational foreign policies.40
39
Arminio Fraga. “Latin America since the 1990s: Rising from the sickbed?” Journal of
Economic Perspectives, Volume 18, Number 2, Spring 2004, pp. 89-106. http://faculty.
nps.edu/relooney/00_New_23.pdf
40
As some authors point out, only a few countries in Latin American can be considered as
increasingly stable, such as Chile, Costa Rica and Ecuador, despite these countries also
having political divisions and conflicts. See Laura Tedesco and Jonathan R. Barton (2004),
The state of democracy in Latin America: Post-transitional conflicts in Argentina and
Chile. New York: Routledge, p. 1.
168
Nonetheless, it is essential to mention that Brazil’s democratic constitution
passed in 1988 produced a formal rupture between the military regime and
the democratic government.
When studying the Chilean transitional period, it should be highlighted
that no other country in the region has been so influenced by the past.
Chile’s foreign policy throughout the transitional period was overly focused
on trade, an emphasis inherited from Pinochet’s regime. Although there was
a degree of continuity between the economically focused military foreign
policy and the civil foreign policy that came afterwards, there are some
remarkable differences. The main one lies in the defence of human rights as
the most important focus since the restoration of democracy, although it
should be remembered that the civilian government remained concentrated
on the economic foreign policy of the former regime and even reinforced
it.41
One way of understanding the transitional period is by observing that
Aylwin’s government pursued a strategy of maintaining a low profile on the
international stage, due to Chile’s international political isolation during the
military regime. In this respect, the transitional period’s complex foreign
policy had its origins in the domestic political scene and the military’s
continuing influence. Hirst stresses that “not only is regime change
important, but the nature of any transition to democracy is also critical. In
terms of the creation of foreign policy making among the principal countries
of the Southern Cone, the nature of the transition to democracy is seen as a
crucial determinant of foreign policy in the 1990s” (Hirst apud Martin,
2006: 104).
Another concern for Chilean foreign policy was that the military retained,
to some extent, their political influence in the system of governance, even
though they were not key to driving the political system. In this regard,
Chilean political reform processes have been consistently low-profile and
cautions. Military influence was exercised through political allies in the
Chilean Congress, this lasted until 2004 when the constituion’s mechanisms
were reformed (Mulins, 2006: 104). In this way, the main difficulty in
41
It is important to remember that, unlike other countries in Latin America, Chile had
significant experience in human rights. Chileans generally expected the State to respect
civil and political liberties. Darren G. Hawkins (2002), International human rights and
authoritarian rule in Chile. Lincoln: University of Nebraska Press, p. 67.
169
establishing closer links with other Latin American countries arose from the
fact that the military still retained a high degree of autonomy, which
constrained civilian authorities’ options in foreign policy. 42
Similar to Chile to some extent, Brazil also adopted a low-profile foreign
policy, which tended not to align itself to government by the armed forces.
After Brazil’s military regime, power was peacefully transferred to civilian
rules in 1985.43 Interestingly, the Itamaraty’s long-term strategy of
maintaining a low-profile consisted of outlining issues instead of
confronting them directly. The Itamaraty sought to delay difficult decisions
and avoid creating new areas of conflict. However, it should be highlighted
that Brazil’s position as a global player has changed this strategy somewhat,
given the country’s new aspirations, as will be analysed in more detail, later
on.
In Brazil, the military still played an important role during democracy, as
demonstrated by their participation in President Itamar Franco’s government
(1992-1994). Itamar Franco expanded the number of military ministers from
five to seven military officers (Codato, 2005). Furthermore, the civilian
Ministry of Defence was created in 1999 and as a result, many of the
Brazilian democratic government’s tasks remained in the hands of the armed
42
In Chile, the military period ended on 11th March 1990, when the first democratic
authorities since 1973 were elected. The post-dictatorial regime gave way to democratically
elected governments, Parliament expressed partially popular volition. This meant that the
arbitrary electoral system imposed by the military government allowed the military to have
the same number of deputies and senators as the majority of the Concertación coalition.
Despite maintaining of the democratic government, it cannot be concluded that Chile had
largely democratic institutions. Although this situation improved with the constitutional
reforms in 2005, it did not generate a completely democratic system. Manuel Antonio
Garretón. “Reflexiones sobre la democratización política chilena”, pp.167-168 in Cave,
Rose. Brazil y Chile: una mirada hacia América Latina y sus perspectivas. Santiago: RIL
Editores, 2006. The military’s importance not only extended to politics, but also exerted an
important influence on investment measures. The Taxable Profit Funds or FUT, a
mechanism set up by the military government in 1984 to encourage investment – still
exists. This mechanism allows companies to indefinitely defer payment of some of the tax
on their retained profits. “Reform in Chile: the lady’s for turning”, The Economist, vol. 411,
24 May 2014, p. 32.
43
The military dictatorship in Brazil lasted for 25 years, from 1964 to 1989 (only in 1989
did the country hold direct presidential elections). This period included six different
presidential administrations, one of which had a civilian at its head. Adriano Nervo Codato
(2006), “A political history of the Brazilian transition from military dictatorship to
democracy”, Revista de Sociologia e Política, vol. 2. Curitiba: Relume-Dumará, pp. 83106.
170
forces and diplomacy did not suffer restrictions as it had in the Chilean
foreign affairs during the Pinochet government.44 In contrast, Brazil’s
foreign policy was carried out by the Itamaraty, distinguishing itself from
the military’s influence in Chile on the construction of foreign policy
strategy. It is important to bear in mind that the military played a much more
significant role in Chile’s foreign policy aims than in those of its Brazilian
counterpart.
There are considerable similarities between Brazil and Chile’s military
periods, in the sense that the two countries inherited their economic
foundations from their military years. However, the totally different
economic focus each country has adopted should be highlighted. What is
important in this study is that Chile has continued to adopt the same
neoliberal model that was initiated in 1975.45 Interestingly enough, the
Concertación government not only maintained the same economic system,
but also sought to strengthen the existing neoliberal policy. Like Chile,
Brazil also built up its economic structural base of domestic development
during the military years and Brazil’s military policy focused on the need to
develop domestic industry.
Brazil and Chile shared a strategy of not creating a rupture with the
military government particularly regarding the economy. During the
military period, Brazil achieved the so-called economic miracle (19681973), with the country experiencing spectacular economic growth. As
opposed to the Argentine military regime that led to financial disaster, the
Chilean Chicago Boys’ economic strategy helped the regime gain some
legitimacy in the international financial community. In the economic realm,
the economic model involved imposing a rigid free market system with
privatisation becoming a key tool. The other economic measures taken by
44
In countries with civilian defence ministers such as Brazil, Chile, Argentina and Uruguay
relevant changes took place. Therefore, civilian management of the defence policy was
considered a prerequisite of democracy. Uruguay, for instance one of the countries in which
civilian state institutions remained the strongest, established full civilian supremacy in its
defence policy. Rut Diamint (2003), “The military”, in Jorge I. Domínguez and Michael
Shifter (eds), Constructing democratic governance in Latin America. Baltimore: The Johns
Hopkins University Press, p. 63.
45
The fact that Chile has maintained the same economic model since the military years led
to students making demands for fundamental changes in the economic model and more
democracy for the country in 2011. See Andrés Solimano (2012), Chile and the neoliberal
trap: The post-Pinochet era. Cambridge: Cambridge University Press.
171
the government were designed to deregulate the economy and to encourage
trade using the concept of comparative advantage (Oppenheim, 2007: 11314).
Independent of whether Brazil’s foreign policy is carried out by the
Itamaraty, it can be seen that the military is still considered an important
actor in the country’s foreign affairs. It should be pointed out that General
Pinochet won a tightly controlled referendum to institutionalise his regime
in 1978. He won another tightly controlled referendum in 1980, which
approved the constitution that continues to govern Chile today.46 Although
Brazil did not face significant problems during the transitional period, the
fact that Chile’s constitution has been the same since the military period is a
fundamental argument for understanding the strong connection between the
military and foreign policy strategy. The fact that Chile has maintained
strong military links within foreign policy up to the present time should be
taken into account when studying Brazil-Chile bilateral relations. As Pizarro
says:
“The consensus around the importance of the military is shared among the
Chileans. The military possess relevant background knowledge, which is essential
to understanding Chile’s foreign policy up to the present time. Understanding
Chile’s foreign policy demands the study of the military perspective, since the
sector has formulated and conducted foreign policy in the recent past. Considering
that the country did not undergo complete rupture with the military regime, the
military are still significant actors in Chile’s foreign affairs. Moreover, in Chile,
we don’t have a traditional diplomatic academy like Brazil’s venerable Itamaraty.
Therefore, the military plays a major role in explaining Chilean foreign policy
strategy throughout the years (interview with Roberto Pizarro, Santiago de Chile,
24th August 2011)”.47
From Brazil and Chile’s perspectives the transitional period was not
46
In 1982, the international environment was an important factor that led to the downfall of
the Pinochet regime, as well as the subsequent rise of democracy. Alejandro Ortega (2010),
“International effects on the democratic onset in Chile”, Stanford Journal of International
Relations, vol. XI, no 2. https://web. stanford.edu/group/sjir/pdf/Chile_11.2.pdf.
47
Roberto Pizarro is an economist, academic, consultant and Chilean socialist politician
and former Minister of State during the government of President Eduardo Frei-Ruiz Tagle.
He currently serves as President of the Universidad Academia de Humanismo Cristiano.
172
accompanied by a significant rupture with the military regime. From both
countries’ view, there was a kind of consensus about not making dramatic
changes to the previous organisation, especially concerning the economy.
Interestingly, the two countries did not significantly modify their military
foundations, showing to some extent a certain degree of continuity with
their military roots. It is important for our analysis that Chile has maintained
the same commercial foreign policy focus during the democratic period and
has tended to prioritise economic links to the detriment of political
cooperation ties.
3.2.2 Brazil and Chile’s regional policy during the 1980s
The international context explains Brazil’s redefinition of its foreign policy
throughout the 1980s. The difficult international scenario helped Brazil to
direct the focus of its foreign policy towards strengthening its ties with Latin
America. From Chile’s perspective, the 1980s did not usher in significant
changes to the country’s foreign policy strategy. It should be stated that the
transitional period brought with it key changes to Chile’s international
reinsertion, even if the country tended to maintain the theoretical discourse
of strengthening regional ties to the detriment of definite attitudes towards
integration (Mares and Aravenas, 2001: 20-21). In practical terms, Chile
maintained its isolation during the military years and began to develop
cooperation ties with the region afterwards, maintaining a low profile and as
will be studied as part of the following topics.
From Brazil’s perspective, the lack of attention to central states shifted
the focus of its foreign policy towards building up regional ties. Brazil’s
positon on foreign policy had two aims, the first of which was related to the
difficulties faced by its attempt to maintain relations with central countries.
The inflationary process as well as the foreign debt crisis demonstrated
Brazil’s vulnerability in the international system. Secondly, increasing
inflation and the protectionism of industrialised countries at that time
contributed to a worsening debt crisis (Altemani, 2005: 201). The
unfavourable international context set the stage for changing Brazil’s
regional perception and therefore promoted cooperation initiatives among
the continent’s countries.
173
As a result, Brazil tended to adopt a more autonomous position in
commercial and economic fields. Adoption of an independent position is
also reflected in Brazilian bilateral relations with the United States, which
were characterised by a defensive approach from that period onwards.
Indeed, the Falklands War brought with it the perception that the interAmerican defence system only came into effect when attending to the
United States’ regional interests (Ayerbe, 2002: 210). In this context, Brazil
opted to carry out a policy of ‘encapsulating the crisis’, which meant that
the respective crisis with the United States would be encapsulated in order
to avoid crisis from one sphere overflowing into another.
With the re-establishment of democracy Brazil attempted to minimise the
negative image of the country generated during the military years. Shifting
the national image was an important factor that contributed to redirecting
foreign policy strategies towards the continent. In other words, it
contributed to changing the nation branding and distancing it from past
perceptions. The democratic period urged the reformulation of Brazil and
Chile’s nation branding to project an attractive national image.48 The two
countries had to distance their image from the military period and build a
modern democratic image approach.
Furthermore, it should be taken into consideration that the difficulties
imposed by the international system on maintaining foreign relations with
Africa and the Middle East also contributed to redirecting Brazil’s foreign
policy towards the continent (Altemani, 2005: 194). Given the changes in
global geopolitics, it is not surprising that improvements to South American
relations led to peace and the region’s countries began to look to one
another as both diplomatic and possible trading partners.49
48
Despite the 30th anniversary of the return to democracy in Brazil, the second mandate of
President Dilma Rousseff will have important effects on its future. David Rockefeller
Center for Latin American Studies, “Brazil+30: The legacy of 30 years of democracy and
challenges to come, 18th April 2015. http:// drclas.harvard.edu/event/brazil-30-legacy-30years-democracy-and-challenges-come. Unpopular economic measures carried out by
President Dilma Finance Minister Joaquim Levy, led to internal problems among the
National Congress and population. Edna Simão et al. (2015), “Levy: Dilma paga o preço
politico do realinhamento da economia”, Valor Econômico, 11 November 2015. http://
www.valor.com.br/brasil/4311864/levy-dilma-paga-o-preco-politico-do-realinhamento-daeconomia.
49
See for a detailed approach to the nature of the present international system, see Joseph
Tulchin and Ralph Espach (Eds). Latin America in the new international system. Boulder:
174
Like Brazil, Chile also underwent significant changes regarding its
foreign policy image, though to a much greater degree. This means that
Chile’s process of rebuilding its image occurred at a much more profound
level. During the military period, Chile’s complete isolation from
international affairs should be considered, which led to its foreign policy
being considered as ice age. Facing a domestically declared war against
communism and internal subversion in the Cold War context, Chile’s
internal policy went hand-in-hand with its foreign policy scope (Neack,
2003: 194). This means that the result of the almost complete absence of
foreign policy strategy during the period led to difficulties in carrying out
regional alliances. This explains the lack of any possibility of building links
with other countries in the region.
In contrast to the military period, the main goal of Chile’s foreign policy
after the dictatorship was its focus on international reinsertion. As will be
stated in this chapter, due to a well-coordinated effort, Chilean democratic
reconstruction policy gained a lot of foreign support, to the extent that the
country sought to rapidly recover its international status vis-à-vis the
previous period. Chile’s reforms promoted neutral policies and the
negotiation of bilateral agreements that led to important trade reforms.
These reforms included the elimination of trade barriers, a tariff reduction
and the introduction of the uniform tariff policy, aimed at promoting
development based on integration into the world economy. 50 In this regard,
bilateral agreements function as a key tool to promoting international
insertion. As Parker states:
“Moreover, the congruence between Chile’s economic development policy
and its international insertion strategy illustrated by several trade
agreements worldwide laid the groundwork for creating rapid international
links. Chile’s focus on trade as the development mechanism to liberalise
trade policy has had significant results for its economy. The strategy was
complemented by a strong commitment to the multilateral trade system,
which encompassed a wide number of free-trade agreements worldwide.”51
Lynne Rienner, 2001.
50
Dirección General de Relaciones Económicas Internacionales (Direcon). “Chile 20 años
de negociaciones comerciales”. Impresión: B&B impresores, November 2009.
51
Interview with Carlos Parker, Santiago de Chile, 23 August 2011. Carlos Parker
dedicated 18 years to working for the Ministry of Foreign Affairs. He held the post of
175
In this context, cooperation among South American nations improved
substantially, with agreements made, constructive dialogue and economic
integration initiatives renewed, as well as the capacity to enforce
arrangements and treaties. Latin American interstate commerce grew with
the aim of fostering industrialisation and domestic development during the
1980s. Promoting trade was a result of the opposite perspective that free
trade and privatisation were essential for guaranteeing sustainable economic
growth. Moreover, industrialisation was not to be left to the market, but was
to be the product of government intervention. The existing complementary
nature of primary production and industrialisation meant that the
manufacturing sector was not to develop at the expense of agriculture. The
strategy used was to promote exports of primary products in order to allow
financial resources to buy imported capital goods, machinery and
equipment, for instance, which were indispensable to sustaining
industrialisation policies.52 Dialogue existed between Brazil and Argentina
in the early 1980s, since closer ties between the two important regional
actors paved the way to strengthening Latin America integration.53
As Fonseca highlights, at a regional level, two essential facts come into
play. First is the emergence of the previously mentioned democratic regimes
Chilean Ambassador to Romania and Bulgaria.
52
Brid, Juan Carlos Moreno and Caldentey, Esteban Pérez. “Trade and economic growth: a
Latin America perspective on rhetoric and reality”. ECLAC, Sub-regional Office in Mexico,
D.F., December 2009, p. 9. http://www.eclac.org/publicaciones/xml/3/38143/L945.pdf
53
It should be remembered that, until 1979, rivalry and a lack of friendship were the key
components to Brazil-Argentina relations. From the 1980s onwards, an alliance between
Latin American countries has been the mechanism for encouraging States insertion into the
international system. Regional agreements – even without integration projection models –
play an important role in linking the region to the international scenario. The new type of
relationship that emerged between Brazil and Argentina, which was symbolised by a
summit in Buenos Aires in November 1981, had wider implications for regional
geopolitics. Firstly, the initiative was carried out by the Argentine Council for International
Relations with the cooperation of the Getulio Vargas Foundation and the ArgentineBrazilian Business Council. Second, closer bilateral dialogue occurred not only between
official diplomacy, with the business sector and academics also participated in the process.
Cavalheiro, Carmela Marcuzzo do Canto. “Desde la ALALC hasta el Mercosur: la
integración entre Argentina y Brasil desde la perspectiva brasileña”. Departamento de
Estudios Latinoamericanos (TCLA), Universidad de Leiden, June 2004. Supervisor Prof. P.
Silva, pp. 29-30. The reformulation of Argentina-Brazil ties laid the groundwork for BrazilChile ties, given the importance of multifaceted analysis within the latter’s.
176
and the second is the enforcement of integration mechanisms in
combination with the expansion of Latin American conferences. This new
scenario facilitated closer relations and dynamic dialogue between the
countries in the region and moreover, created a common diplomatic
language, which was important for generating a trusting environment
(Fonseca, 2006: 128). As was already stated in the first chapter, the
emergence of presidential diplomacy during the 1980s meant that
presidents’ foreign policy was more active and dynamic. The advantages
and disadvantages of this fact is that periods of presidential affinity tended
to lead to fruitful gains, while a lack of affinity translated into a lack of
prospects. In the following sections, how presidential diplomacy exerts an
influence on the Brazil-Chile bilateral context will be studied.
Therefore not only presidential diplomacy, but also public diplomacy,
nation branding and paradiplomacy contribute to the analysis of the way in
which these concepts involve the participation of different actors, apart from
the already well-known and traditional entities in Brazil-Chile bilateral
cooperation. Indeed, successful nation branding creates significant rewards
for fostering cooperation links between countries, with far-reaching
consequences for other areas and influence exerted on public diplomacy,
presidential diplomacy and paradiplomacy. In our opinion, these theories
provide a more realistic approach to understanding the transformation of
both states’ bilateral relations from the 1990s to the present. The
misconception that in periods in which there is a predominant lack of
official links there is also an absence of any ties between Chile and Brazil
should be avoided.
3.2.3 The development of Brazil-Chile links from the 1990s
onwards
The 1990s should be highlighted as the period in which a dual process of
change occurred in the Latin American context: the economic recovery of
the region’s states after the lost decade, as well as the general economic
structural reforms adopted by the countries, which facilitated the aperture
and liberalization of trade. As has been mentioned, this took place at a time
when industrialised countries faced a recession, which led to protectionist
177
policies towards other countries like Chile and Brazil. The adoption of trade
aperture policies within the context of the LAIA contributed to widening
and strengthening intra-regional relations. The 1990s were marked by
increasing levels of trade and the creation of a favourable environment for
emerging integration initiatives such as the Mercosur.
Many facts laid the groundwork for strengthening links between Brazil
and Chile from the 1990s onwards, although the key element was the
restoration of democratic regimes in both states. A consolidated democracy
should be considered a key element for studying long-term Brazil-Chile
cooperation. As already pointed out, Brazil and Chile do not share as
profound a sense of cooperation as has been developed with their neighbour,
Argentina and they probably never will. However, since the democratic
government, the gap between Brazil and Chile has narrowed significantly
and, despite some ups and downs during this period, the possibility that they
will improve their ties cannot be underestimated.
Brazilian-Chilean trade intensified from the 1990s onwards, in synch
with the emergence of both countries’ democratic governments. The return
to democracy was the main element for understanding the increase in
bilateral trade.54 The fall of Pinochet’s government in Chile marked the end
of disagreements between both countries’ regimes and the end of 17 years of
military government and international absence. The success of the
transitional period was significantly connected to economic indicators, so
Chile sought international insertion through increasing trade (Gamboa,
2011: 57). The need for high levels of economic development was a
favourable context for the development of Chilean-Brazilian bilateral
relations, particularly regarding trade.
Another way of explaining the lack of bilateral relations between the two
countries before the 1990s is Chile’s neoliberal economic model,
implemented since the 1970s and which prioritised relations with developed
countries (Leite, 2016). This policy tended to distance Chile from other
Latin American countries. In contrast, Brazil redefined its foreign policy
54
Since the 1990s, Brazil’s foreign trade policy has gone through important changes. The
trade liberalisation that began during the Collor administration and was extended to the
administration of President Fernando Henrique Cardoso integrated Brazil into the new
globalised world order. André Averbug (2000), “Brazilian trade liberalisation and
integration in the 1990s”, BNDES-PNUD. Associationhttp://www.bndespar.gov.br/
SiteBNDES/export/sites/default/bndes_en/Galerias/Download/studies/trade.pdf.
178
throughout the 1980s and tended to prioritise closer relations with other
Latin American countries, especially Argentina, as already pointed out.55
Moreover, both countries initially focused on establishing relations with
their neighbours instead of aiming to strengthen bilateral ties. The
development of Brazil-Chile ties was, at some point, the result of Brazil’s
foreign policy, which had encouraged dialogue with other Latin America
states since the 1980s.
However, since the 1990s, President Patricio Aylwin’s government
programme sought to establish Chile’s regional reinsertion. The initiative
was a step towards the project of incorporating the world into Chile’s
development plans. The fact that the Latin American Free Trade Association
(LAFTA) was updated with the Treaty of Montevideo in 1980, transforming
LAFTA into the Latin America Integration Association (LAIA), helped
strengthen the cooperation process. The LAIA oversees bilateral agreements
between these countries and favours the creation of a preferred market
within the region. The LAIA organisation made an important contribution to
fostering intra-regional trade, since it created a more flexible mechanism of
cooperation. The LAIA encouraged bilateral agreements between Chile and
other Latin American countries, for example Chile’s complementary
economic and free trade agreements with Mexico signed in September 1991;
with Venezuela in April 1993 and with Colombia in November 1993. Chile
also signed an agreement with Argentina in August 1991 that did not
involve free trade but focused on other commitments, particularly physical
integration.56
In contrast to the perception that Chile made no effort to integrate itself
55
The neoliberal model in Mexico emerged in the 1980s, characterised by stabilisation
policies such as measures to control inflation, the public deficit, restrictions on domestic
consumption and public spending. In this context, the productive restructuring of large
companies was carried out in Mexico. Such restructuring policies led to the introduction of
modern technologies and new forms of labour organisations. The neoliberal model was
implemented in Mexico - as in other Latin American countries - through the idea of
productive restructuring. Enrique de la Garza Toleto. “El modelo económico neoliberal y
los límites de las configuraciones productivas en México”. In: Enrique de la GarzaToledo
and Júlio César Neffa. Trabajo y modelos productivos en América Latina: Argentina,
Brasil, Colombia, México y Venezuela luego de la crisis del modo de desarrollo neoliberal.
Buenos Aires: CLACSO, 2010, pp. 53-54.
56
Dirección General de Relaciones Económicas Internacionales (Direcon). “Chile, 20 años
de negociaciones comerciales”. Impresión: B&B impresores, November 2009, p. 124.
179
regionally, it should be considered that to re-establish democracy, talks on
integration were conducted with members of the LAIA. The new framework
for action facilitated agreement among the region’s states on certain points
and allowed Chile and Brazil to build up regional links contributing in an
important way to strengthening their bilateral ties. In this sense, the LAIA’s
institutionality has provided legal protection in the negotiation of many
agreements. LAIA’s aim is to implement in a gradual and progressive way
the Latin America common market gradually and progressively, mainly
characterised by the adoption of tariff preferences and the elimination of
non-tariff restrictions. 57
It should be highlighted that integration projects in Chile were to a
certain extent limited. Instead of carrying out integration initiatives, Chile
opted to close bilateral agreements as its core foreign policy strategy. The
return of democracy can be explained through the re-establishing of
traditional relations with central countries, which means emphasising links
with Europe and the United States, as already studied in the second chapter.
However, re-establishing ties with central states does not indicate that there
was lack of attention paid towards Latin America, since trade agreements
were reached with Mercosur (1996), Peru (1998) and Central America
(1999). This study will focus on the analysis of Mercosur (Direcon, 2009:
67). Indeed, Chile’s foreign policy strategy seeks to establish regional
agreements as a mechanism to broaden trade and investments, which
facilitate networks between non-state actors. In this way public diplomacy
became a fundamental concept for observing Chilean foreign policy.
Furthermore, it can be argued that the process of regional integration was
not homogeneous, since it was more intense on the eastern side of the Andes
and between Brazil and Argentina. In this respect, Chilean foreign policy
was different to other countries in the continent, since after Pinochet’s term
the re-establishment of ties with its neighbours was not automatic process,
as will be seen in this chapter. Chile needed to formulate a nation brand in
order to invest in a positive international image to benefit from economic
gains. According to Maira:
57
INTAL, Institute for the Integration of Latin America and the Caribbean, Inter-American
Development Bank. http://www.iadb.org/intal/detalle_articulo.asp?idioma=eng&aid=121
&cid=789
180
“Chile’s foreign policy with diplomats without academia led to foreign policy being
carried out conservatively and as a consequence to a cautious approach to
international affairs. Chile lacks a strong connection with the Ministry of Foreign
Affairs and with civil society”.58
In this sense, Chile’s relations with the regions’ countries and with
Mercosur were somewhat reticent and did not improve immediately. On the
one hand, Chile’s foreign policy was not subject to as many ups and downs
as other policies in the region and as has been pointed out, a stable Chilean
foreign policy scenario favours the development of Brazil-Chile long-term
bilateral relations. On the other, the country’s foreign policy strategy
maintained conservative forms of international trade insertion. Insulza, the
Foreign Minister in the mid-1990’s, said:
“We think that Chile has to define itself as a Latin American country, not just for
historical reasons or due to values, but also for the national interest in this period of
democracy. Chile, due to its size, economic capacity and geographical location
cannot function isolated in the world.”59
While studying Brazil-Chile bilateral relations, it is important to bear in
mind in the first place that Chile has its own economic development strategy
and the country’s go-it-alone policy does not lead to regional integration
being prioritised. Secondly, since the restoration of democracy, Chile has
sought to strengthen its ties with the region, even though multilateral and
permanent dialogue with Europe and the United States has to be
considered.60 It has been argued that, even when adopting regional
integration policies, Chile did not give up its decision-making autonomy to
58
Interview with Luis Maira, Santiago de Chile, 30th August 2011. Luis Maira. Minister of
Planning and Cooperation, 1994-1996 during the administration of President Eduardo Frei
Ruiz-Tagle, Ambassador to Mexico, 1997-2003 and Ambassador to Argentina, 2004-2010.
59
José Miguel Insulza, Ensayos sobre Política Exterior de Chile (Santiago, 1998), p. 64
apud Mulins and Martin (2006: 105).
60
The Chilean government signed the Rome Statute of 1998 which created the International
Criminal Court, and under Pinochet’s regime, signed the United Nations Convention
against Torture. As a democratic government Chile had to act in accordance with the rule of
law. Many Chilean citizens demanded that justice be done in the case of the Pinochet
regime. See Laura Neack (2003), The new foreign policy: U S. and comparative foreign
policy in the 21st century. Maryland: Rowman & Littlefield.
181
focus on integration. At the same time, Chile has had to maintain and
strengthen its ties with South American countries, ensuring some kind of
relationship with regional actors.
However, the United States is key to understanding Chile’s foreign
policy and the correlation between traditional ties between the United States
and Chile and the capacity to enforce Latin American links.61 For obvious
reasons, the extent of the Chile-United States relationship has shown some
correlation with the former capacity to strengthen its links with Brazil.
Another important issue is that Mercosur represents the possibility of
strengthening ties with Southern Cone countries. Indeed, Mercosur
illustrates the total impossibility of incorporating Chile as a permanent
member for several reasons, the most important of which is the country’s
inability to raise its external tariffs. As Chilean Ambassador Gazmuri
argued, “Brazil suggested a special regime for Chile’s incorporation as a full
member of Mercosur, however there was opposition from the group’s
smaller members”. 62
The nature of Chilean foreign policy does not mean the lack of a bilateral
relationship or the impossibility of strengthening ties between Chile and
Brazil. Importantly, the theories explained in the first chapter help
understand why Brazil-Chile links cannot be examined from a traditional
diplomacy perspective, but why horizontal links should be considered
instead of main lines of cooperation exclusively. In this scenario, public
diplomacy, nation branding, presidential diplomacy and paradiplomacy play
an important role in the direction of this study and demonstrate the
establishment of cooperation initiatives between the two countries from the
1990s up to present time.
Therefore, the focus is not only a state-centric view and new players are
introduced into the agenda of bilateral cooperation between the two
countries. This does not mean that diplomacy is not carried out by diplomats
or that their activities are relegated. In fact, opinion shared is that the
importance of public diplomacy for this study lies in considering the
61
Chile has maintained friendly relations with the US since its transition back to civilian
rule in 1990. Bilateral commercial relations are particularly strong and total trade in goods
and services has more than tripled since the implementation of a free trade agreement in
2004. Peter J. Meyer (2014), “Chile: political and economic conditions and United States
relations”, CRS Report, Congressional Research Service.
62
Interview with the Chilean Ambassador in Brazil, Jaime Gazmuri, 12 September 2015.
182
emergence of new actors as an important component in the development of
world affairs. In brief, according to public diplomacy special relationships
between countries can be constructed on the basis of diplomacy, even
though diplomats are not the only actors allowed to retain control over the
process.63
Moreover, the dynamism of the international scenario has undeniable
implications for the way foreign affairs are carried out. Thus, the traditional
diplomacy perspective is limited due to the changing world scenario. Given
the shifting global context, there are emerging topics in the international
arena that cannot be treated exclusively from a nation-state perspective. The
new reality groups together topics such as the energy crisis, pandemic
concerns, environmental discussions, transnational organised crime, civil
society organisations and NGOs among others which demand a multisector
partnership beyond the idea of states as single actors. Therefore, ChileanBrazilian bilateral relations should not be studied from an intra-state
standpoint and non-central actors should be taken into account as concepts
of public diplomacy and paradiplomacy.
3.3 Mercosur vis-à-vis Brazil-Chile Bilateral Relations
The complementary N° 35 (ACE N° 35) economic agreement between
Chile and Mercosur was signed on 25th June 1996 and came into force on
1st October of the same year. The main explanation for Chile’s inability to
be incorporated as a permanent member of the bloc was that total
membership would limit its autonomy concerning its trade policy and the
ability to continue reducing general tariffs unilaterally. Assuming the role of
a full member would also imply subordinating future trade negotiations to
Mercosur interests, which was vehemently opposed to Chile’s foreign
policy strategy. Moreover, a position of full membership contradicted
Chile’s access to NAFTA negotiations.
What is fundamental to the approach in this study is the role played by
63
It is important to note that public diplomacy does not imply a decrease in the diplomats’
role, on the contrary, they remain a key players in foreign affairs and in turn, other actors
like groups and leaders in authority may also implement their decisions in the public
sphere. Luis Melo Lecaros. “El Estado, fuente único de la diplomacia”. Lecaros, Luis Melo.
Diplomacia contemporánea: teroría y práctica. Santiago de Chile: Adica/RIL Editores,
2004.
183
trade in terms of Brazil-Chile bilateral ties and the degree of influence trade
exerts over this relationship. Of course, the public diplomacy concept serves
to help understand the importance of these links in developing greater
bilateral cooperation in a range of areas beyond trade. Like Brazil, Chile
would also take advantage of Mercosur as an export market especially for
manufactured products given that, according to both countries’ a growing
trade in manufactured goods occurs within the common market. For
instance, in the mid-1990s, around 60% of manufactured Chilean exports
were destined to Mercosur. Among the manufactured goods that Chile
exports are chemicals and metallurgical and transport equipment (Dirección
General de Relaciones Económicas Internacionales or Direcon, 2009: 97).
Although Chile became an associate member of Mercosur, it can be
argued that any form of economic integration demands negotiation. Indeed,
Chile’s foreign policy on free trade, backed by its neoliberal development
model was not aligned with Mercosur integration. However, Chile’s
associate membership cannot be linked to lessening interest in intensifying
relations with the region. According to Baeza:
“The perception of Chile was that there was a state of insensitivity on the part
Mercosur members with regard to Chile’s particularities. Therefore, harmonising
Chile’s aims with those of other Mercosur members would be a step towards greater
cooperation. Chile viewpoint is based on the argument that its economic features
were not taken into account by either Mercosur or Brazil. The fact that Chile
adopted a free trade policy does not mean a lack of interest in regional approach
projects. On the contrary, it is possible to think about reformulating mechanisms to
take into consideration the country’s special situation. It is easier to argue about
Chile’s neoliberal policy as an impediment to regional integration.” (Jaime Baeza,
professor at the University of Chile, interviewed on 30 August 2011, Santiago de
Chile).
Chilean demands received very little attention during the negotiation
process because of the country’s high external tariffs. In this situation, the
manufacturing export sector voiced concern about Mercosur’s high tariffs,
since these meant a lack of opportunities for manufacturers. That is why
Chile sought full association with Mercosur from the very beginning
through the signing of a complementary economic agreement in the LAIA.
184
The ACE would serve as a mechanism for negotiating a broad integration
agenda of topics, which comprise: incorporating methods to achieve a
reciprocal liberalisation of trade, basic disciplines to regulate goods and
services and complementarity economics between the members.
However, differing perceptions accounted for difficulties within the
negotiations. Chile aimed to negotiate with each member separately and
bilaterally, whereas Mercosur stated that negotiations must occur
multilaterally. 64 The bloc’s vision stated that different levels of tariff
reduction would interfere with the rules of the common external tariff,
therefore tariff levels needed to be the same for each member. Among other
issues, Chile argued that, after the negotiations, no good would come from
lowering access conditions even more. This was one of the most significant
points of the negotiation process.
In practical terms, the 4 + 1 negotiation form implies that each proposal
first had to be studied by Mercosur members that, afterwards, all of the
members had to agree on a common proposal. The problem with this was
the lack of flexibility within the bloc, making it impossible to achieve
reasonable result. The need for total consensus within the bloc caused
signficant barriers in terms of the negotiation process with Chile. Several
rounds of negotiations were transformed into summits among Mercosur
members, with a large range of responses to the Chilean delegation.
Therefore, the downside to this kind of negotiation process was very visible,
especially regarding the invisible benefits of using this way to segment
negotiations.65
Despite the difficulties concerning the negotiation process, it should be
remembered that there is no quick way of negotiating a preferential
agreement. Furthermore, the importance of public diplomacy when
analysing Brazil-Chile bilateral relations is essential to this study, since the
64
Chile’s external negotiations with Mercosur had similar rules for the bloc in the area of
non-trade barriers, rules of origin, safeguards and dispute settlement and physical
integration protocols. Paolo Giordano (2003), The external dimension of Mercosur:
Prospects for north-south integration with the European Union. Washington D.C.: INTAL,
p. 7.
65
The Complementary Economic Agreement between Chile and Mercosur became part of
national legal internalisation on July 17th 1996 and was approved on 12th September of the
same year. The ACE Nº 35 was passed by Supreme Decree Nº 1,441 on 30th September
1996 and published in the Official Gazette on 14th October 1996. This agreement was
stipulated in its text, entering into force on 1st October 1996. Direcon: 115
185
role played by trade in their bilateral ties is highlighted. The international
multilateral environment characterised by multiple links demands a new
focus for analysing Brazil-Chile bilateral ties. The question is raised as to
what extent trade influences the political relationship between the two
countries. In other words, is it possible to correlate two distinct sectors
based on the argument that intra-sector cooperation should foster intersector links? How do intra-sector ties affect inter-sector relations? This is
crucial for studying whether trade relations are separate from policy issues
within the Brazil-Chile relationship.
As discussed in the first chapter regarding the importance of nation
branding in Chile’s foreign policy strategy, a new perspective should be
adopted when studying Brazil-Chile bilateral links, placing the work of
public diplomacy and nation branding into a perspective of traditional
diplomacy. As already stated, Chile foreign policy mechanisms require the
engagement of various sectors to carry out foreign policy goals. In the same
way, Brazil’s foreign policy strategy demands a growing inter-sector
partnership in order to coordinate core interests ranging from economic
issues to energy policies. The different dimensions of the two countries
explain the decision to try and understand inter-sector coordinated efforts
from Chile’s standpoint. Chile illustrates the work of many sectors
regarding foreign policy, making advocacy its objectives.
Furthermore, in the case of Chile, it is easier to see the concise and
systematic propagation of the country’s foreign policy, since many of the
reforms the country underwent in the 1990s were actually implemented in
the 1970s.66 The fact that Chile has achieved a sustained expansion of its
economy goes hand-in-hand with the country’s projected foreign policy
image. Chile’s strategic planning included the participation of various actors
and paved the way for understanding public diplomacy campaigns, which
were goal-oriented and needed private-public partnership. Since Chile’s
economic reform was strongly associated with its international insertion
strategy, an increase in the strength of financial, technical and marketing ties
can be highlighted, helping to build a coherent foreign policy strategy.
66
Economic reform in Chile according to free-market principles started in the 1970s and
was endorsed by social emphasis in the 1990s. Andrés Solimano et al (2000), “Introduction
and Synthesis” in Andrés Solimano, Distributive justice and economic development: The
case of Chile and developing countries. Ann Arbor: University of Michigan Press, p. 1.
186
Harmonising Chile-Brazil trade was a significant step towards greater
bilateral cooperation, in accordance with the role played by public
diplomacy in strengthening bilateral links between both states. In this way,
the ACE Nº 35 was a mechanism to stimulate bilateral trade with business
between the two countries experiencing considerable growth. The ACE No
35 benefits specific sectors such as agriculture by means of increasing
existing quotas for some products. The liberalisation of the chemical sector
within the agreement was another important step. Bilateral dialogue seeking
access to automotive products demonstrated the growth of the reciprocal
trade partnership.67 According to Camargo:
“Increasing trade between Chile and Brazil in the last few years is due to two
factors: first, the implementation of the ACE Nº 35 which delimited the legal
mechanisms and second the entry of Chilean companies to Brazilian market,
taking advantage of the latter’s colossal south Chilean private investors and
companies identify trade opportunities in Brazil. The first group of Chilean
companies encountered difficulties due to Brazilian law. By tackling initial
barriers, investors understood the real benefits of local opportunities. For instance,
the entry of the Cencosud Group to North-east Brazil through the acquisition of the
supermarket chains, G. Barbosa in Sergipe, Superfamília in Ceará, and Perini in
Salvador.”68
Following the trend of Chilean investments in Brazil, the Cencosud Group
expanded by acquiring the Bretas supermarkets in Minas Gerais in 2010.69
In this regard, the ACE Nº 35 helped form a free trade zone and encouraged
reciprocal investments. In 1999, important advances in terms of improving
the architecture of the ACE No 35 were achieved, with the approval of
procedures providing safeguards and dispute resolutions. From 1st January
2006, 97.7% of goods were free from taxation which meant a preference of
100%. Goods (2.3%) reached a zero tariff from 1st January 2011 onwards,
67
Ministério das Relações Exteriores, Brasil. “Reunião bilateral Brasil-Chile”, nota no 301.
Accessed on 3rd May 2013. http://www.itamaraty.gov.br/sala-de-imprensa/notas-aimprensa/2001/08/09/-bilateral-brasil-chile/?searchterm=ACE%2035
68
Álvaro Camargo, Interim Director of ProChile São Paulo/SP and Representative of
ProChile Salvador/BA- interviewed on 26th July 2011, São Paulo.
69
Cencosud. Accessed on 30th July 2011. http://www.cencosud.cl/eng/unidades_
gbarbosa.htm
187
with the exception of products which were more sensitive for Chile which
reached preference margins from 1st January 2012 (sugar) and 1st January
2014 onwards (wheat and wheat flour).70
Despite the growth in Brazil-Chile trade in the last few years, it is
necessary to take into account that a certain degree of cooperation in the
political field is required for bilateral relations, although the question is to
what extent. It can be seen that Brazil-Chile trade has grown enormously
and therefore the question is whether or not policy has played an important
role in commerce. Some argue that while there is an intense level of BrazilChile bilateral trade, progress has been made without policy influence. In
this analysis, questions about the impossibility of cooperation based on only
one sector are raised.
Indeed, it should be remembered that no country wants political problems
with a strong trading partner.71 Although there has been little visible effort
to strengthen political ties between the two countries, the states have never
faced major conflicts.72 The lack of serious conflicts in the past and up to
the present has encouraged the growth of bilateral trade. In this sense, a
stable political relationship contributes to promoting trade links between the
two countries instead of discouraging the building of trade ties. Since the
foremost aspect of public diplomacy is its coordinated campaign with
various sectors of society, trade and policy cannot be studied as separate
institutions as if they did not exerted any degree of influence over each
other.
Therefore, both policy and trade are considered as significant elements of
long and short-term foreign policy aims within the study of public
70
Ministério das Relações Exteriores, Brazil.“Mercosul-Chile ACE 35”, accessed on 3rd
May 2013. http://www.itamaraty.gov.br/temas/mercado-do-sul-e-integracao-regional/aladi/
mercosul-chile-ace-35/?searchterm=ACE%20n%2035
71
When a country opens itself up to trade, there is a capital and labour shift towards
industry and these are used more efficiently. Brad McDonald (2012), “International trade:
Commerce among nations”, International Monetary Fund. http://www.imf.org/external/
pubs/ft/fandd/basics/trade.htm.
72
Even stable bilateral relationships change the level of the relations. For instance,
Obama’s foreign policy with traditional allies such as Brazil and Argentina has been cordial
but, at the same time, tension has arisen. The United States has refused to accept the
increasing independence of Brazil and to a lesser extent, Argentina in foreign affairs. Gary
Prevost and Carlos Oliva Campos (Eds) (2011), Cuban-Latin American relations in the
context of a changing hemisphere. New York: Cambria Press.
188
diplomacy. According to the analysis of public diplomacy, trade and policy
- along with informal sectors - play an important role in explaining the
Brazil-Chile bilateral relationship. Since public diplomacy involves the
desire to create a positive image of the advocating country and is clearly tied
to foreign policy aims, trade and policy can be considered as
complementary actors focused on the same target. Therefore, the absence of
the influence that trade exerts over policy and the fact that each sector could
be studied separately may not be considered.
Considering this liberal perspective, countries are less inclined to enter
into conflict with those with whom they can do business. Therefore,
business can serve to prevent conflict and, to a greater extent, foster political
cooperation. It should be remembered that public and traditional diplomacy
serve the same purposes and should be used in a coordinated fashion in
order to lead to significant gains. What is most interesting for this study is
that no one concept implies the exclusion of the other – in other words traditional diplomacy and public diplomacy are totally complementary.
Indeed, trade pertaining to the idea of multi-criteria analysis can play a
supporting role, making traditional diplomacy more persuasive when
building an approach to foreign policy. The increasing role of other actors in
foreign affairs helps create strong links through diverse ties.
The fundamental issue for this study is whether Chile restricting political
aims affects its relationship with Brazil or whether there is a misconception
about Chile’s participation in the regional agenda. Chile exerts political
diplomacy by participating in some multilateral events, for example, the
country has been an active participant of the OAS and supported the
formation of the UNASUR. Along with Chile’s participation in the
multilateral field, presidential diplomacy plays an important role in building
up bilateral relations. It can be argued that presidential diplomacy helps to
either foster trade ties in a way that cements relations between various
sectors or has a negative effect on trade. To illustrate this point, the ChileMercosur negotiation process will continue to be analysed. From Chile’s
perspective, it is essential to understand how the negotiations were
conducted. As Pizarro argues:
“Negotiations to establish the conditions and timetable for Chile’s entry as a full
member began in September 2000. The negotiations were carried out to create the
189
document which would be submitted for approval by the XIV Presidents Summit
of Mercosur scheduled for December 2000, in Florianópolis, Brazil. However, the
possibility of full membership was jeopardised by Chile’s negotiation of a free
trade agreement with the United States. The occasion brought about unpleasant
consequences for Brazil-Chile diplomatic relations, since Brazil found out about
Chile’s actions via the US during the Florianópolis summit. For obvious reasons,
Chile’s actions caused an unpleasant reaction within Brazilian diplomatic circles”
(interview with Roberto Pizarro, 24 August 2011, Santiago de Chile).
The consequences were two-fold: first, Brazil found out about Chile’s
actions from the United States. This fact aggravated the consequences in
terms of Chile’s relationship with Mercosur members, especially Brazil.
Secondly, Chile chose to favour its relationship with the United States
instead of strengthening regional links.73 For obvious reasons, Chile’s
decision to start FTA negotiations with the United States, accompanied by
how Brazil became aware of Chile’s actions led to Brazilian diplomatic
bemoaning, particularly taking into consideration the fact that the
negotiations occurred during the government of President Lagos and
President Cardoso in a period of supposed closeness between the two.74
Interestingly enough, diplomatic reticence remained up until Chile’s support
of Brazil as a permanent member of the UN Security Council.
The fact that President Lagos announced the negotiation of a FTA with
the United States in California on 29th November 2000 did not fit in well
with Brazilian diplomacy, which remembered that Chile had interrupted its
Mercosur negotiations to negotiate a Chile-United States FTA, which it had
73
An interesting aspect about the integration of the United States, Canada and México into
NAFTA is that the agreement encompasses the only example so far of a economic
integration scheme involving two advanced economies and one emerging or developing
economy. Prospects for trade growth have been good for all three countries. However,
considerable volatility has characterized their trade. When the Mexican economy was
recording growth in 1994, the United States had a US$ 5 billion trade surplus with Mexico.
Robert N.Gwynne (1999), “Globalization, neoliberalism and economic change in South
America and Mexico”, in Robert N. Gwynne and Cristóbal Kay (eds) (2014), Latin
America transformed: globalisation and modernity. London: Arnold, p. 93.
74
Ibid. Cardoso and Lagos were colleagues at Flacso and were together in the Latin
American Council of Social Science. The close friendship between the two presidentes can
be observed on the occasion of the lunch offered for the President of Chile on 13th July
2000. http://www.itamaraty.gov.br/sala-de-imprensa/notas-a-imprensa/2000/07/13/discurso
-do-presidente-fernando-henrique-cardoso.
190
found out through the United Sates causing a certain amount of diplomatic
discomfort between Brazil and Chile. In this context, the Chilean Minister
Soledad Alvear stated that negotiating with the United States did not mean
that the Mercosur Project was lagging behind, highlighting that Chile’s aim
was not incorporation into NAFTA, but to sign a bilateral free trade
agreement with the United States. Although the bloc was kept informed
about negotiations with the United States, Chile’s policy towards the United
States shifted their focus somewhat.
Despite the difficulties with the Mercosur negotiation process, some
benefits of Chile-Brazil trade links were already visible. In May 2008 the
administrative procedure of the ACE Nº 35 amended Article 12 of the
agreement allowing products from free zones located in member countries
to be eligible for the liberalisation programme of tariff benefits. Therefore,
Chile negotiated bilaterally with each member country of Mercosur about
which goods could be included in this provision.75
After the ACE Nº 35 came into force, Chile made progress in its political
negotiations with Mercosur. Much of this progress was due to the
incorporation of a mechanism for consultation and political coordination in
the bloc - not the ACE Nº 35 per se – but something that was related to it.76
This association was strengthened in December 1998 with the creation of
the Mercosur Forum for Political Consultation and Concertation in which
Chile participated seeking to widen the political cooperation between
member states and associated members. Its main aim was to coordinate
issues regarding foreign policy and common policy agenda.
From Chile’s perspective, the ACE Nº 35 is not only significant because
of trade, but also because policy plays an important role in the integration
process. In this way, Chile’s membership of Mercosur brought with it the
possibility for the country to play a more active role in regional dialogue.77
75
Ministério do Desenvolvimento Indústria e Comércio Exterior. Acordo de
Complementação Econômica No 35, Quinquagésimo Terceiro Protocolo Adicional,
accessed on 3rd May 2013. To that date only Chile and Brazil had managed trade
harmonisation. www.desenvolvimento.gov.br/arquivos/dwnl_1244571281.doc
76
Chile has participated in this since the second summit of political dialogue for Mercosur
members held in Asunción, Paraguay on 23rd July 1997.
77
Chile also aims to expand the group’s economic and political field to include the
liberalization of services and investment. Global Investment & Business Center (2015),
“Chile: Investment, trade laws and regulations handbook”, vol. 1, strategic information and
basic laws. Washington D.C.: International Business Publications, p. 60.
191
The Mercosur association paved the way for constant dialogue on diverse
topics such as: migration issues, public safety (a working group on
firearms), international security and humanitarian affairs among others. This
means that Chile considers Mercosur a relevant part of the regional
integration process and a valuable tool for coordinating positions in
multilateral agencies and the country has demonstrated its interest in
maintaining and increasing its participation in the Mercosur agenda.
Efforts to build up regional links were more visible during President
Bachelet’s government, since substantial progress was made in terms of
strengthening bilateral and multilateral ties in Latin America and the
Caribbean. This does not mean that a certain degree of regional cooperation
was not achieved by her successor. During President Bachelet’s term, Chile
addressed Mercosur as a very relevant opportunity for encouraging the
regional integration process. According to Riquelme and Gusmán:
“Mercosur also plays a major role in coordinating positions in the multilateral
field. For example, Mercosur has requested the redefinition of positions between
countries, taking a common approach to critical issues in the United Nations’
agenda. Beyond strengthening trade cooperation, Mercosur also promotes
fundamental dialogue about bilateral, transnational and multilateral topics in the
international agenda.”78
Chile’s participation in Mercosur through the ACE Nº 35 is a clear example
of how public diplomacy works together with traditional diplomacy in order
to offer tangible gains to a country’s foreign policy within the Southern
Cone. The ACE Nº 35 contributed to creating of more diverse environment,
bringing trade and policy into the same sphere of importance when
strengthening bilateral ties between Chile and Brazil. Most importantly, a
coordinated effort from various sectors is seen in order to create foreign
policy goals. Increasing trade helps build up common positions with regards
to diverse issues, from trade links to civil society topics. 79 The new foreign
78
Jorge Riquelme, Official from the Multilateral Policy Office/Ministry of Foreign Affairs
of Chile, professor at the University of Chile. Alvaro Gusmán, Official of International
Security/Ministry of Foreign Affairs of Chile. Interviewed on 29 August 2011 at the
Ministry of Foreign Affairs, Santiago de Chile.
79
The strategic importance of trade has grown over the years. In general terms, trade
includes investment, shipping, tourism and the management of enterprises. Michael B.
192
policy agenda demands the coordinated mobilisation of diverging areas,
which cannot be achieved by conventional diplomacy.
One of the most interesting aspects of this study is that public diplomacy
varies from country to country, to the extent that, in some countries it can be
seen that advocacy demands much of the State’s attention, while, in others,
branding programming deserves the majority of the efforts. What probably
makes the creation of Brazil-Chile ties easier is the coherence of Chile’s
public diplomacy message, demonstrated in the congruence between the
three activities traditional diplomacy, relationship-building between diverse
sectors and branding programming and cultural events.80 Chile’s wellcoordinated policy helps develop possible long-term bilateral links.81
In the public diplomacy context, the benefits of the Mercosur Forum for
Political Consultation and Concentration were visible in shaping political
ties and enforcing regional links. 82 Together with fostering regional
cooperation, the strengthening of Brazil-Chile bilateral relations in the long
run can be seen as an opportunity for constant dialogue between regional
actors. Building cooperation in diversified areas has emerged as a key factor
for strengthening bilateral ties, as well as creating indirect closer links.
Having said that, diverse cooperation links are prerequisite for any longterm progress in bilateral aims.
Froman (2014), “The strategic logic of trade: New rules of the road for the global market”,
Foreign Affairs. November/December. New York: William S. Hein & Co.
80
Public diplomacy in the twentieth century has its origins in two world wars and the Cold
War between the communist east and the capitalist west. The twenty-first century is a postSeptember 11th environment dominated by military invasions, information and
communication technologies. Nancy Snow and Philip M. Taylor (2009), “Preface and
introduction” in Nancy Snow and Philip M. Taylor (Eds), Routledge handbook of public
diplomacy. New York: Routledge, p. 9.
81
The new public diplomacy demands a national reputation strategy. In its beginnings
public diplomacy was conceived as propaganda, whose idea was to persuade and coordinate
social consensus. Today, public diplomacy has to take into account the participation of
social networks in foreign policy. Aleix Sanmartín (2015), “Chile: Nueva diplomacia
pública para una mejor reputación”, Diario Financiero, Thursday, 19th November.
https://www.df.cl/noticias/opinion/columnistas/chile-nueva-diplomacia-publica-para-unamejor-reputacion/2014-09-30/212606.html.
82
Two new forums emerged within Mercosur, the Forum for Political Consultation and
Concertation with three working groups and the Forum for Consultation with
Municipalities, Federal States, Provinces and Districts. Olivier Dabène (2009), The politics
of regional integration in Latin America: Theoretical and comparative explorations. New
York: Palgrave Macmillan, p. 98.
193
3.3.1 The potential benefits of UNASUR regarding Brazil-Chile
relations
A analysis of the Union of South America Nations (UNASUR) is twofold,
since the initiative is extremely important for encouraging integration
among its 12 members, creating a multilateral space for dialogue. Another
positive feature is that UNASUR illustrates the relevant aspects of
presidential or summit diplomacy within regional integration projects.
Presidential politics provide the fundamentals for facing contemporary
issues, serving as a priceless tool for strengthening the dialogue between
regional actors (Acosta, 2009: 97). The combination of these two aspects is
remarkable encouraging Brazil-Chile cooperation, because of UNASUR’s
pragmatic features.
UNASUR has its origins in a sequence of summits of heads of states,
heads of governments, foreign ministers, council delegates and working
groups, which, at that time, gave the union an institutional character that is
still recognised as the South American Community of Nations, later known
as UNASUR.83 With its roots in leader-to-leader diplomacy, UNASUR
reshaped regional relations by exploring new areas of cooperation. 84 The
lack of trade in UNASUR conferred great importance on cooperation, since
the initiative is focused on strategic political partnerships. The idea of a
South America institution that could tackle transnational issues with a view
to ensuring greater regional dialogue is something new.
At the Second Summit of Heads of State and Governments, in Brasilia in
May 2008, the sub-region’s members signed the Constituent Treaty, which
formally institutionalised the Union of South American Nations
(UNASUR). The institutionalisation of UNASUR occurred without
prejudice and still had to be approved by the Chilean National Congress to
fully enter into force. At the same time, Chile assumed pro tempore
presidency of the body (2008-2009). The UNASUR Constituent Treaty was
83
“Perspectivas, proyecciones y desafios de la política exterior de Chile”. Gobierno de
Chile, February 2010, p. 40.
84
The convergence of integrationist positions in the three regional powers of Argentina,
Brazil and Venezuela led to the emergence of the bloc. See João Carlos Amoroso Botelho
(2013), La evolución y la creación de UNASUR. Paraná: Juruá Editora.
194
approved by the Brazilian Senate on 7th July 2011. This step ended the
legislative procedure, allowing Brazil to participate as a full member.
UNASUR emerged because of the need for a transnational body in which
to discuss issues that could not be relegated to the domestic field, because of
the national limitations to facing complex matters. In this scenario, the
formation of cooperative links was necessary to deal with strategic topics,
making countries increasingly interconnected. Transnational demands stress
the need to create public opportunities for facing issues pertaining to new
phenomena that will be ineffective if only treated within the nation-state
(Jácome, 2010: 21-22). It should be pointed out that transnational demands
not only deal with economic globalisation topics, but also with safety, the
environment, energy, health, infrastructure and drug trafficking among
others. Moreover, the transnational agenda has to deal with fundamental
rights’ issues related to the survival of human beings.
UNASUR provides a coherent regional voice, seeking to strengthen the
mechanisms and the rule of law in international relations to achieve a
multipolar, balanced and fair opportunity for the sovereign equality of states
in a world of nuclear weapons and mass destruction. One of UNASUR’s
most effective policies is that of helping to solve problems that affect the
region, such as poverty, exclusion and social inequality. 85 Indeed, UNASUR
bring matters such as energy and infrastructure to the foreground, serving to
complement initiatives like IIRSA, whose goal is to create a common
agenda related to infrastructure, energy and communications.86 Interestingly
enough, neither UNASUR nor IIRSA has strong presidential diplomacy as
its core element for carrying out these initiatives.
Brazil assumed its role as regional leader within the field of UNASUR.
Even though many regional matters arose, UNASUR provided a more
appreciative and focused scenario in which to deal with regional issues.
Indeed, President Lula exerted his regional leadership role there more than
the international sphere. For obvious reasons, the settlement of centre-left
85
Nota: Tratado Constitutivo da UNASUL 14.02.pdf.p.1. http://www.itamaraty.gov.br/
temas/america-do-sul-e-integracao-regional/unasul
86
In Chile the IIRSA includes the region of Coquimbo, Valparaíso, Libertador O’Higging
and Maule. In Brazil it includes Rio Grande do Sul, Santa Catarina, Paraná, São Paulo and
Minas Gerais. Iniciativa para la Integración de la Infraestructura Regional Suramericana,
IIRSA, “Mercosur-Chile hub”. http://www.iirsa.org/Page/PageDetail?id=124&menuItemId
=57.
195
governments in the region in the last few years, combined with the
increasing role played by presidential diplomacy, advocated for shared
priorities to be established. In this context, presidential diplomacy paved the
way for common positions from which to face regional issues (Yopo, 2010:
222).
Personal interactions has shown itself to be an important way of
strengthening bilateral foreign policy, especially considering the possibility
of establishing a more intense dialogue within the Southern Cone. Bringing
foreign policy affairs closer to civil society is congruent with public
diplomacy, nation branding and paradiplomacy, highlighting approaches to
new areas of issues as a way of creating new cooperation ties. Actions taken
by the president and reported by the press go hand-in-hand with the
increasing public interest in foreign policy. Moreover, the president’s more
active role encourages domestic actors to get involved in international
affairs and leads, therefore, to the closer participation of inter-sector players
foreign policy strategy.87
In a similar way, Chile and Brazil have assumed a kind of intermediate
degree of presidential diplomacy, to the extent that the concept has
translated into a more active role for the president. As has already been said,
the fact that the two countries had centre-left governments favours the
building of closer bilateral links during periods when policy is headed in a
similar direction. Of course, the charismatic figures of President Lula and
President Bachelet have largely contributed to the establishment of
increasing cooperation between the two countries.88 Increasing presidential
ties has laid the groundwork for strengthening regional links and for
embarking on cooperation initiatives such as UNASUR.
However, this does not mean that in the context of Brazil-Chile foreign
policy the president takes over foreign policy replacing the function of the
Department of Foreign Affairs. On the contrary, neither the creation of
Chilean foreign policy making nor Brazilian foreign policy strategy
87
Souza, Matilde and Ramos Bahia, Bernardo. “Democratisation and the new deliberative
and contested spaces in Brazil’s South America Policy.” 2011: 2. http://www.
saopaulo2011.ipsa.org
88
Lula and Bachelet were often said to be part of Latin America’s responsible left, whilst
Chávez and Morales represented the radical or popular left. Ted G. Goertzel (2011),
Brazil’s Lula: The most popular politician on earth. Boca Raton: Brown Walker Press, p.
151.
196
indicates that foreign policy is based on short-term perspectives or subject to
the ups and downs of foreign policy. At the same time, it cannot be denied
that presidential diplomacy has been influential and that it cannot be
supplanted without major consequences for the strengthening of regional
ties. In this respect, UNASUR is similar to other hemispheric initiatives,
such as the Contadora Group, the Contadora Support Group, and later the
Rio Group, which means that, despite their cooperation and multilateral
cooperation links, all share a kind of informal character.89
Since the beginning, UNASUR has aimed to converge with other systems
of Latin American integration such as Mercosur and CAN (the Andean
Community). UNASUR does not attempt to duplicate cooperation efforts,
but rather strengthen country’s participation in regional concerns. Chile
considers UNASUR an important opportunity for carrying out integration.90
In this regard, through the creation of a multilateral environment in which to
deal with concrete issues, UNASUR accounts for the development of further
bilateral links due to closer relations between the countries when facing
regional issues.91
UNASUR can be seen as one of the core mechanisms for establishing
cooperation between the regions’ countries. As opposed to the European
89
The aim of Latin American unity in the peace process was to find an indigenous solution
to regional problems, such as the Contadora Group in 1987. The idea was that Central
America’s upheavals were primarily indigenous and therefore the conflict needed a regional
solution. Mary K. Meyer (2009), “Cooperation in conflict: The Latin American diplomatic
style of cooperation in the face of foreign threats” in Douglas P. Fry and Kaj Björkqvist
(Eds), Cultural variation in conflict resolution: Alternatives to violence. New Jersey:
Psychology Press, p. 168.
90
Ministerio de Relaciones Exteriores de Chile. “Hitos de la política exterior 2006-2010.
http://www.minrel.gob.cl/prontus_minrel/site/artic/20091230/pags/20091230083503.php
91
The UNASUR has made definite progress in solving regional conflicts, such as the
solution of the internal crisis in Bolivia in 2008. The South American diplomatic reaction to
this conflict was markedly different, demonstrating the importance of new emerging actors
such as UNASUR in regional politics. “The Bolivian crisis, the OAS&UNASUR”.
Densidad regional de América del Sur. September 2008. http://www.densidadregional.
com/?p=29. Moreover, in response to the institutional crisis that occurred in Ecuador in
September 2010, the heads of state of UNASUR decided to incorporate an additional
protocol into the Constitutional Treaty, which established concrete measures to be adopted
by the member states of UNASUR in case of the breakdown of constitutional order.
“UNASUL”, Ministério das Relacões Exteriores. http://www.itamaraty.gov.br/temas/
conteúd-do-sul-e-integracao-regional/unasul
197
Union or other global integration models based on a single solid institution,
the South American integration process is made up of countless networks of
different sizes and scopes, each with a different function. In fact, UNASUR
has not replaced Mercosur as the main Southern Cone body for integration
and on the contrary, Mercosur and UNASUR should be studied as
complementary regional institutions. Furthermore, both UNASUR and
Mercosur are relevant to regional integration and create a valuable
multilateral arena in which to coordinate common positions and discuss
diverse issues.
In addition to its convergence when facing regional matters, it should be
pointed out that the importance of UNASUR is linked to Brazil’s ability to
strengthen its role as a regional power. Brazil’s capacity to exert its
authority as a regional leader is aligned with that confirmed by integration
bodies such as UNASUR. Chile’s support for Brazil’s regional leadership
represents a significant step forward in Brazil-Chile relations, even if Chile
did not make relevant changes to its foreign policy goals as a result of its
support. For authors such as Malamud, Brazil would probably consolidate
itself as a middle global power before achieving its aim of being a regional
leader (Malamud, 2011: 3-4). Despite this, Chile recognises Brazil’s
leadership as long as it does not interfere in its own international insertion
strategy. The core element to understanding Chile’s support – apart from
being supportive in itself – is related to its cooperation aims.
However, Chile’s international insertion does not signify a lack of
support for regional integration projects or Brazil’s initiatives. Their mutual
trust and perception of each other as stable partners commits the two
countries to working towards common ground, even though isolated
positions may cause concerns about their foreign policy targets. However, it
should be remembered that, during their bilateral relationship, Brazil and
Chile have never been through serious conflicts and both states share a longterm foreign policy strategy. These two elements should be considered as
important features for fostering bilateral links within UNASUR. Indeed,
UNASUR encourages closer dialogue in different areas, which goes handin-hand with the features of public diplomacy, presidential diplomacy,
nation branding and paradiplomacy that serve as core elements for our
study.
198
3.3.2 Brazil-Chile relations in the democratic context
Under democratic governments, Brazil and Chile strengthened their bilateral
relations. Due to the new international and regional multilateral agendas, the
two countries had to define their relationship one way or another. The fact
that the two countries shared similar values and had libertarian vocation
helped strengthen bilateral ties. Indeed, Chile and Brazil underwent a
transitional period that was crucially important, since both countries needed
to consolidate their strategic international reinsertion in order to prevent
regressing to an authoritarian regime. Sharing common demands for
consolidating democratic regimes marked both countries’ foreign policy and
therefore, the way bilateral ties were created. The combination of a
favourable regional context and their commitment to multilateral institutions
made room for the development of bilateral relations.
Brazil and Chile share similar values regarding social, political and
economic multilateral issues in the debates within the field of the United
Nations. The defence of democratic values facilitated closer relations
between the two countries. In this context, they agreed on the importance of
rules and norms to establish a harmonious and stable order in international
relations. The construction of common positions in diverse and sensitive
topics like the environment, human rights, social development, women
rights and reproductive health can be seen. Thanks to the proliferation of
inter-sector cooperation in the twenty-first century, broadening horizons
connected more sectors of the two countries as pointed out by the concept of
public diplomacy and paradiplomacy. Most importantly, emerging new
issues proved that the nation-state as a single actor had been unable to deal
with present international relations (Agirreazkuenaga, 2009: 209).
The long-term stable relationship between the two countries was
illustrated by Brazil’s rapid assistance after the earthquake that took place in
Chile on 27th February 2010. President Lula sent rescue units and medical
equipment, including dialysis machines, to assist Chile in its relief efforts,
after one of the biggest earthquakes in Chilean history.92 Brazil also
announced the deployment of a field hospital to help treat victims. The
92
The Wall Street Journal, U.S. Edition. Posted by Jeff Fick and Charles Roth. “Brazil
sending rescue teams and equipment to Chile”, O Globo Mundo. 1st March 2010.
http://blogs.wsj.com/dispatch/2010/03/01/brazil-sending-rescue-teams-equipment-to-chile/
199
rescue team was transported on an Aircraft from the Brazil Air Force (Força
Aérea Brasileira or FAB) and was mobilised by the National Secretary for
Civil Defence.93
In this respect, Brazil and Chile not only held similar positions in terms
of vital standpoints, but also shared a positive attitude towards a consensus
on the discussion of emerging new issues.94 The most important point on
which they agreed was that Brazil and Chile had similar views about the
reform of the United Nations, particularly in what the amplification of the
Security Council and the creation of the Peace and Human Rights Councils.
Moreover, Chile supported Brazil’s aspirations of occupying a permanent
seat on the UN Security Council, revealed for the first time by Chancellor
Insulza support of Brazil in 1997 and reconfirmed by the state visit of
President Lagos to Brazil in 2003. In fact, Chile also supported expanding
the UN Security Council to include Germany, Japan, India and Brazil.
Chile’s support for Brazil’s aspirations can be understood as an important
element for the climate of trust that has existed since the 1990s.95
Like Brazil, Chile argued that the Security Council should adapt to the
new realities of the present and therefore should become more democratic.
Its static structure, which had existed since the Second World War and
which maintained the Cold War’s power framework urged a rapid change,
as a way of renewing public confidence in the UN by almost quadrupling
93
O Globo, Mundo. “Lula promete ajuda ao Chile e resgate aos brasileiros”. 1 March 2010.
http://g1.globo.com/Noticias/Mundo/0,MUL1511096-5602,00.html
94
The sharing of common positions can be demonstrated in initiatives such as the Cairns
Group, which was created in 1986 to establish the liberalisation of agricultural-trade.
Among the founding countries were Chile and Brazil, coming together as a third force and
working during the Uruguay round, in response to the United States and European Union’s
policies. The idea behind this group was a commitment to achieving free and fair trade in
agriculture that would provide real and sustainable benefits for the developing world.
http://www.cairnsgroup.org/introduction.html
95
President José Mujica of Uruguay, made a declaration supporting of Brazil as a
permanent member of the UN Security Council. Curiously, Argentina did not support
Brazil’s aspirations to be a permanent member. Martín Pintos. La ruptura: historias
secretas del conflicto con Argentina. Montevideo: Fin de Siglo Editorial, 2010, pp. 285290. Brazil’s aspirations for a permanent seat on the UN Security Council lay in the
perception that developing countries should play a more central role on international
agenda, assuming credentials to the maintenance of international peace and security.
Virgílio Arraes, “O Brasil e a ONU, de 1990 a nossos dias: das grandes conferências às
grandes pretensões”, in Henrique Altemani and Antônio Carlos Lessa. Relações
internacionais do Brasil: temas e agendas. vol. 2. São Paulo: Saraiva 2006, p. 28.
200
the number of countries affiliated to it. The inability of the current Security
Council to represent the emerging multipolar order demanded a new
structure and the inclusion of new members. In this context, Yopo
highlights:
“Chile’s support for Brazil as the Latin American permanent member of the Security
Council, goes hand-in-hand with its regional weight and the history of trust between
the two countries. Indeed, Chile supported a rotating chair for the region, sharing the
same view as Argentina. There were speculations that Chile’s support occurred in a
scenario of exchanging favours, since we see a parallel between the support of the
latter and Brazil’s support for Insulza as a candidate for the OAS.”96
President Piñera reconfirmed his predecessors’ view and shared the same
opinion as President Dilma concerning the need for an urgent reform of the
UN Security Council and other international institutions such as the World
Bank and the International Monetary Fund (IMF). According to him, there
was an urgent need to modernise international organisations, starting with
the Security Council and then expanding to other organisations (Josephson,
2013). Like Brazilian diplomacy, Chile foreign policy sustains the same
political values and both countries claimed there was a need for the redemocratisation of the UN.97
What is missing is not only the lack of studies on Brazil-Chile bilateral
relations, but also the analysis of the factors which led to their closer
96
Mladen Yopo Herrera, Deputy Director of the National Academy of Political and
Strategic Studies (ANEPE), Chile. Interviewed in Santiago de Chile on 4 November 2011.
97
Brazil’s international insertion as an emerging global power demands a different
approach on Chile’s part. Understanding Brazil’s changing role in foreign affairs is the core
element for re-establishing foreign policy strategy. Among other global issues, the
important role played by Brazil in international organisations should be highlighted. For
instance, the removal of Brazil’s Ambassador, José Maurício Bustani, from the
Organisation for the Prohibition of Chemical Weapons (OPCW) needs cautious analysis.
Eduardo Salgado, “Briga com os EUA”. Revista Veja, 1st May 2002. São Paulo: Editora
Abril. Today, the head of the OPCW’s inspectors is a Brazilian engineer, which shows the
country’s participation in multilateral forums. Lidy Nicolasen, “Onbekende international
club met een opmerkelijk snel succes”. Profiel Organisatie voor het Verbop op Chemische
Wapens (OPCW). De Volkskrant. Saturday 12th October 2013. p. 6. Rob Goor. “VS steekt
lont aan in OPCW”, Haagschese Courant, 20th April 2002 in Crisis in de OPCW: de
verwijdering van Directeur-Generaal Bustani. PENN-NL Facts and Reports Nr. 6, May
2002.
201
cooperation, combined with a growing convergence on aspects of their
foreign policy. These points are valuable in order to understand
contemporary Chilean-Brazilian foreign affairs. From Chile’s standpoint,
the apparent resistance to strengthening political ties could not continue
over the following years, given Brazil’s regional influence and the country’s
new status as an emerging global player. From Brazil’s perspective, Chile
represented an opportunity for access to the Pacific with it, worth
remembering that Brazil is the only BRIC without an outlet to the Pacific. In
this context, infrastructure integration plays a major role in terms of BrazilChile foreign policy priorities.
3.3.3 Brazil-Chile cooperation in infrastructure
Analysis of international trade flows demonstrates that the main route that
today is still the Atlantic Ocean will shift to the Pacific in the foreseeable
future because of the growth of China and other Asian nations. Moreover,
trade with the Middle East is becoming more intense. Therefore, the goal of
bioceanic routes is congruent with international demands, backed by the fact
that Brazil regained its ability to invest in infrastructure through the Growth
Acceleration Programme (PAC). This means that new investment in
transportation received specific attention from the Brazil government’s
political strategy that sought to promote infrastructure integration in the
region.98
The implementation of the bioceanic corridor project constitutes a series
of investments by governments in partnership with national and
international transport infrastructure (road, rail and waterways). After being
deployed, the corridor would connect Brazil and Chile to both the Atlantic
and Pacific coasts. Therefore, the origin of the ‘bioceanic’ concept refers to
98
See Gelson Fonseca Jr. (2004) “A visita do Presidente Luiz Inácio Lula da Silva ao
Chile, 22 a 24 de agosto de 2004”, Embajada de Brasil en Chile. Concha y Toro: LOM
Ediciones, pp. 9-10. However, infrastructure initiative face costly and difficult bureaucratic
procedures. Internal administrative problems of Mercosur illustrates this point considering
the lack of consensus towards fuel tax distribution, tax collection, dimensions and wights of
vehicles among others. See Clarissa Dri and Maria Eduarda Paiva (2012), “Parlasul, um
novo ator no processo decisório do Mercosul”, 36o Encontro Annual da ANPOCS, Política
Internacional, p. 12.
202
the possibility for moving goods (exports/imports) and capital through the
two oceans. The logic inherent to the project is based on the search for a
greater movement of goods and capital to expand geographically, whilst
disrupting political boundaries and physical and cultural order by spreading
a nexus of consumption and money.
The systematic study of the bioceanic corridor was executed during the
administration of President Fernando Henrique Cardoso in 1996. The study
supported the idea of trans-oceanic corridors that allowed access to the ports
of Brazil and Chile, from where the Brazilian products would be moved to
Asia and the Middle East.99 More recently, during the two terms of
President Lula (2003-2006 and 2007-2010), the project gained consistency
and public-private investments. The project also facilitated market access
and the countries involved achieved economic growth, taking advantage of
regional comparative advantages to expand their presence in international
markets.100
In this sense, building up new connections tackles real demands. Such an
approach recognises that Brazil and Chile share a pragmatic vision of
cooperation and demonstrates that substantial initiatives are carried out in
order to expand physical links. The restoration and modernisation of ports
reduces logistic costs, boosts competitiveness and improves operational
efficiency (Ding, 2008: 119). Reducing geographical proximity represents a
core element to bridging the gap in Brazil and Chile’s relationship in the
long-run. Furthermore, transportation links promote private-public bilateral
dialogue, sustaining the argument that Brazil-Chile ties deserve a much
broader and deeper interpretation than that highlighted by traditional
diplomacy.
Importantly, Brazil’s new role as an emerging global power demands
99
The IIRSA emerged as a cooperation initiative of President Fernando Henrique Cardoso
at the South American Presidential Summit held in Brasília on 30th August 2000. The aim
of the initiative was to build corridors that serve as multinational strips to concentrate on
potential and current flows of trade. Manuela Garza Ascencio and Raúl Zibechi (2006),
“Brazil-the difficult path to multilateralism”, Alterinfos América Latina, 7 April 2015.
http://www.alterinfos.org/spip.php?article282.
100
On 23 May 2015, China’s Prime Minister Li Keqiang, met with Peruvian President
Ollanta Humala to sign the implementation of feasibility studies on a bioceanic railway
corridor through the Amazonian rainforest, connecting Brazil to Peruvian ports. Martin de
Angelis (2015), “South America’s bi-oceanic railway”, Global Risk Insights, 31 May 2015.
http://globalriskinsights.com/2015/05/south-americas-bi-oceanic-railway/.
203
more investment in infrastructure. In this way, the need for a physical
regional connection assumes two directions: on one hand, the need for
Brazil to develop closer regional ties, which includes fostering the BrazilChile relationship with the goal of strengthening their economies and
political dialogue.101 On the other hand, Brazil’s rise on the international
scene promotes the need for an organised and efficient network of
infrastructure to deal with increasing foreign demands. Therefore, an
efficient infrastructure network is a prerequisite for expanding bilateral and
inter-regional links, besides being a critical element for determining Brazil’s
new geopolitical position.102 In this context, the PAC is a mechanism for
Brazil to carry out its management initiatives.
In this scenario, the PAC was a crucial tool for engaging in definite
initiatives regarding physical regional integration efforts. The PAC 2 is one
of the largest strategic projects carried out by the Brazilian government,
making significant changes to how investments are planned and executed.
Likewise the first phase of the programme, the main goal of the PAC 2 was
to boost the economy and maintain sustainable growth, taking advantage of
the great potential for business expansion and the favourable historical
climate in the country. The PAC 2 seeks to promote public-private
investments in a rapid build-up of infrastructure to leverage economic
development. In road and railway sector construction, growth was six times
higher than the average in previous administrations. Public-private
partnerships have advanced on the topic of credit policy and the contracts of
services concessions. Indeed, the PAC 2 also helped the country face the
international crisis of 2008-2009. While other countries had to mobilise
public investments, Brazil was already planning the work-in-progress.103
101
The IIRSA goes beyond an infrastructure approach and is part of a wider case of southsouth integration, as an instrument to encourage higher productivity, equity and growth.
Mauricio Mesquita Moreira (2007), Trade costs and economic fundamentals of the
initiative for integration of regional infrastructure in South America (IIRSA). Buenos Aires:
INTAL ITD, p. 3.
102
At the turn of the century, strengthening integration in Latin America under the initiative
of the Free Trade Area of the Americas (FTAA) and United States hegemony seemed
unthinkable. However, two regional initiatives emerged in this scenario, the Union of South
America Nations (UNASUR) and the Bolivarian Alternative for the Americas (ALBA). See
Paul Kellogg (2007), “Regional Integration in Latin America: Dawn of an alternative to
neoliberalism”, New Political Science, vol. 29, Issue 2. New York: Routledge.
103
Ministério dos Transportes, Relatório 1-PAC 2, pp. 6-7, http://www.transportes.gov.br/
204
For obvious reasons, territorial planning combined with bilateral publicprivate coordination paved the way for Brazil-Chile relations this century.
The first and foremost effect of the bioceanic corridor on their bilateral ties
was twofold: the focus on pragmatic diplomacy regarding the way BrazilChile interact and the multi-criteria analysis that demands infrastructure
coordination efforts, taking into account the partnership between several
diversified sectors in order to carry out such an initiative. In our view, the
context of the bioceanic corridor demands the use of the public diplomacy,
nation branding and paradiplomacy theories to understand how various
actors interact in Brazil-Chile links. 104 In summary, the bioceanic project
combined management initiatives and public administration as core
mechanisms for executing contemporary dynamic bilateral links.
Bioceanic corridors involve a series of investments made by national
governments and international organisations, led by a coordinated initiative
in the infrastructure and transport sectors (road, railways and waterways).
The investments aim to link opposite sides of the region, linking the Pacific
with the Atlantic Oceans through a multimodal transport system. The
project relies on public-private partnerships and serves to reinforce the idea
that Brazil-Chile ties demand a broader approach in order to explain
bilateral connections. In this sense, the project is to be carried out with the
support of the following financial institutions: the Andean Development
Corporation (CAF), the Initiative for the Integration of the Regional
Infrastructure of South America (IIRSA), the Inter-American Development
Bank (BID), the Plata Basin Financial Development Fund (FONPLATA)
index/204onteúdo/id/38152
104
Local governments are increasingly important for infrastructure projects, wich illustrates
the growing role of paradiplomacy in foreign affairs. For instance, central governments are
uninformed about local needs and unable to monitor service allocations. Pranab Bardhan
and Dilip Mookherjee (2006), “Decentralisation and accountability in infrastructure
delivery in developing countries”, The Economic Journal, vol. 116, Issue 508. Malden:
John Wiley Sons. pp. 101-127. Decentralisation should also take into account efficiency
and corruption levels. Theoretical literature makes ambiguous predictions about this
relationship, despite the cross-country relationship between fiscal decentralisation and
corruption being measured by criteria such as a number of different index. Fiscal
decentralisation in government expenditure is strongly associated to lower corruption.
Raymond Fisman and Roberta Gatti (2002), “Decentralisation and corruption: Evidence
across countries”, Journal of Public Economics, vol. 83, Issue 3. London: Elsevier, pp. 325345.
205
and the actions of the Integrated Zone of the Center West of South America
(ZICOSUL).105
As will be seen, the continental structure, which is made up of the
bioceanic routes has mainly been supported by IIRSA, which offers the
opportunity for a coordinated approach to infrastructure. The fact that
IIRSA is the main executor of the route means that it helps governments set
priorities for integration and trade while strengthening regional dialogue, as
well as promoting regulatory and legal harmonisation. It is interesting how
various sectors interact to consolidate the bioceanic route and other
infrastructure projects to the extent that new councils were created to
expand logistical networks. Once again the fact that in Brazil-Chile foreign
policy dialogue, political-economic aspects are interrelated brought into the
discussion. 106
The bioceanic corridor project embraces four bioceanic corridors. One of
the bioceanic corridor projects was launched in 2010 during the
administrations of Presidents Bachelet, Morales and Lula and UNASUR
prioritised five regional integration projects based on infrastructure. 107 In
105
The corridors are segments of the transport system, linking areas (producers/consumers)
to operating systems integrated between two or more methods (waterways, rail or road).
The main purpose of the bioceanic corridor is the possibility of accessing Brazilian exports
and imports from the Chilean coast, specifically the ports of Iquique, Antofagasta and
Mejillones on the Pacific coast. The integration of transport infrastructure would allow
Brazilian exports, which are currently confined to the Atlantic Ocean (the Port of Santos-SP
and Paranagua-PR) to have a direct route to the Pacific and easier access to Asian and
Middle Eastern markets. Valquíria de Araújo Oliveira. “A infraestrutura de transportes
como política governamental para o desenvolvimento regional e a integração SulAmericana: uma análise sobre as rotas bioceânicas em Mato Grosso do Sul”. Universidade
Federal de Grande Dourados, 2010, p. 16.
106
For instance, the South American Council of Infrastructure and Planning (COSIPLAN)
is linked to UNASUR and was created in August 2009 to meet existing demands. The
council intended to replace the Executive Steering Committee of the IIRSA by a Council of
Ministers level within the institutional structure of the UNASUR. By adopting this
measure, the countries sought to give greater political support to activities in the area of
infrastructure integration, to ensure investments for the implementation of priority projects.
Conselho de Infraestrutura e Planejamento (COSIPLAN) da UNASUL, Rio de Janeiro,
28th April 2011. Ministério das Relações Exteriores. http://www.itamaraty.gov.br/sala-deimprensa/notas-a-imprensa/conselho-de-infraestrutura-e-planejamento-cosiplan-da-unasulrio-de-janeiro-28-de-abril-de-2011
107
Gabriela Mañana (2014), “UNASUR priorizará el corredor bioceánico que incluye a
Bolivia”, La Razón, Economía, 8 December 2014. http://www.la-razon.com/economia/
Unasur-priorizara-corredor-bioceanico-Bolivia_0_2176582349.html.
206
practical terms, the Chilean-Bolivian-Brazilian bioceanic corridor faces
investment problems.
PAC 2 INVESTIMENTS in US$ billion (R$ billion)
PAC 2 INITIATIVES
2011-2014
POST 2014
BETTER CITY
31.3 (57.1)
BRINGING
CITIZENSHIP TO
12.6 (23.0)
THE COMMUNITY
HOUSING
152.5 (278.2)
WATER AND
16.6 (30.6)
LIGHT FOR ALL
TRANSPORTATION
57.3 (104.5)
2.4 (4.5)
ENERGY
255.3 (465.5) 343.9 (627.1)
TOTAL
526.0 (958.9) 346.4 (631.6)
TOTAL
31.3 (57.1)
12.6 (23.0)
152.5 (278.2)
16.6 (30.6)
59.7 (109.0)
599.2 (1,092.6)
872.3 (1,590.5)
Source: Growth Acceleration Programme. Ministério do Planejamento, Desenvolvimento e
Gestão.http://www.planejamento.gov.br/servicos/faq/pac-programa-de-aceleracao-do-cresci
mento/visao-geral
As the Chilean Ambassador Jaime Gazmuri points out, “Bolivia’s demands
for exclusive transport rights increased the difficulties faced by the project,
since Brazil wanted transportation to be carried out by the Brazilian
counterpart. Brazil argued that Bolivia had to respect the legal provisions of
Mercosur which allowed transportation to be conducted by Brazil”. 108 The
main problem with regard to the Chilean-Bolivian-Brazilian project lies in
the Brazil-Bolivia conflict. Brazil and Chile, on the other hand, enjoyed a
long-term relationship and had been developing a stable partnership in
infrastructure initiatives.
Despite Brazilian-Bolivian issues, the road linking Brazil and Chile has
made significant progress and will link the Brazilian ports of Santos and
Mato Grosso with the Chilean terminals of Arica and Iquique. Brazil has
already finished constructing their connections to the border of Bolivia and
Chile has complied with the section that corresponds to the bioceanic
corridor that will link the country to Brazil across Bolivia. Work on the
108
Interview with the Chilean Ambassador in Brazil, Jaime Gazmuri, on 1 September
2015.
207
bridge over the Isluga River has been completed, which will benefit trade
and tourism between the two countries.109 Infrastructure cooperation is
meaningful in the way that it demonstrates that there is planning to physical
integration and that it does not only involve theoretical projects that are
never applied. As opposed to the road corridor, the establishment of a
railway line between the two states demands further study and effort.
Source: Ecologia e Ação (ECOA), “Corredores Ferroviários Bioceânicos na América do
Sul”.http://riosvivos.org.br/a/Noticia/Corredores+Ferroviarios+Bioceânicos+na+America+
do+Sul/18999.
Regardless in late 2009, a delegation of 18 Chileans visited the port of
Rio Grande to discuss the issue. Despite the debate on strengthening BrazilChile political bilateral dialogue, strengthening bilateral cooperation will
come in the following years. Inter-sector connection will lead to publicprivate partnerships, especially in the domain of infrastructure. Brazil’s
international insertion as an emerging global player demands an efficient
infrastructure to reduce transport costs. The current scenario encourages a
pragmatic bilateral approach to new market demands. As the Brazilian
Ambassador to Chile, Frederico Cezar de Araujo argues:
109
Clarise Árduz. “Chile termian seu trecho de corredor bioceânico”, Construção Latinoamericana, 12th January 2012. http://www.khl.com/magazines/construcao-latinoamericana/ detail/item70195/Chile-termina-seu-trecho-do-corredor-bioceanico/
208
“In one way or another, Brazil and Chile took major steps towards bilateral
infrastructure cooperation, regardless of their respective governments and foreign
policy targets. Therefore, the two countries pushed forward pragmatic cooperation
in order to achieve closer ties. Both countries’ long-term foreign policy aims
contribute to strengthening their ties in the following years. For obvious reasons,
the idea that Brazil-Chile would not become close partners should be replaced by
the fact that physical proximity is their goal and would bring closer bilateral
dialogue” (Brazilian Ambassador Frederico Cezar de Araujo, interviewed on 23rd
August 2011 at the Embassy of Brazil in Santiago de Chile).
President Dilma Rousseff and her counterpart, President Sebastián Piñera
complied with their promise of inaugurating the bioceanic corridor (road
corridor) linking the port of Santos in São Paulo with Arica and Iquique in
Chile in 2012. This initiative expanded and strengthened the ties between
Chile, Brazil and Bolivia with direct benefits for these countries’
economies. Firstly, physical integration allows for more dynamic trade
between the three states. Secondly, the project promotes economic
development, social progress and quality of life, through access to health
care and better economic conditions.110
It is worth mentioning that the bioceanic corridor is more than 4,000
kilometres long and involves railroads and highways that are part of the
IIRSA. One of the bioceanic corridor projects is the creation of a railway to
link the ports of Brazil and Chile, as already mentioned. 111 One of the
proposed routes for these railway lines connects the Brazilian ports of Rio
Grande, Paranagua and Santos or some part of Santa Catarina. The Chilean
proposal involves connecting the cities of Valparaíso in Chile, Mendoza and
Cordoba in Argentina, Montevideo in Uruguay and Rio Grande do Sul and
Santa Catarina in Brazil. Another route considered by Brazil is the
110
“De Leste a Oeste de oceano para oceano”. Odebrecht Informa Online. http://www.
odebrechtonline.com.br/materias/01801-01900/1872/
111
Among the obstacles mentioned by experts is each country’s bureaucracy related to the
project. At the same time, the project will reduce the trip from the port of Santos to the port
of Arica to around 11 days. Soy Arica, “El corredor bioceánico Chile-Brasil reducirá de
once a dos días el viaje terrestre entre los puertos de Arica y Santos”, 6 December 2012.
http://www.soychile.cl/Arica/Sociedad/2012/12/06/139322/El-corredor-bioceanico-Chile
Brasil-reducira-de-once-a-dos-dias-el-viaje-terrestre-entre-los-puertos-de-Arica-ySantos.aspx.
209
construction of a railway to connect the ports of Santos and Paranagua to the
Chilean ports of Antofagasta and Mejillones, across Paraguay and
Argentina. This route is only a project and has not been started.112
As already stated, IIRSA is an important institutional mechanism for
coordinating intergovernmental actions and the physical integration of
Brazil and Chile. It comprises a series of projects organised around the
concept of integration hubs, the environment and social sustainability. The
IIRSA project was organised around five main parameters divided into ten
integration zones, conferring a pragmatic dimension to the project. In this
respect, most of the axes are interconnected. For instance, the MercosurChile axis shares a common territory with five other ones (Andino do Sul,
Capricórnio, Hidrovia Paraguai-Paraná, Interoceânico Central and Eixo do
Sul). Brazil gave special attention to projects linking Mercosur and Chile,
which includes nine railroads and bridges and six ports and airports.
It should be considered that either the road or the railway corridor would
generate important savings for the logistics of exports. The development of
the road corridor serves to illustrate that infrastructure cooperation existed,
even though South America’s huge territorial dimensions make
governmental decisions crucial when deciding on specific initiatives
(Luchetti, 2015: 96-97). Of course, the consolidation of democracy in Brazil
and Chile, accompanied by the process of an aperture to trade, the
multiplication of regional agreements, the growth of bilateral trade and the
impact of government policies ranging from sub-national governments to
local authorities, play a critical role in developing physical integration. In
this sense, cooperation initiatives are not only implemented by governments,
but also by subnational entities, a fundamental element in the networking
process.
From Chile’s perspective, an infrastructure partnership seeks to
strengthen soy and rubber trade relations from Brazil towards the Chinese
market.113 The bioceanic corridor would allow exports from Brazil to reach
112
Although the port of Santos’ terminal operations planned to invest in order to foster
efficiency and cut load times, there is little room at Santos port for expansion. Even after
Paranagua’s expansion to 32 berths from the previous 20, the port’s capacity is below that
of Santos, which has 63 berths. American Journal of Transportation (AJOT), “Paranagua
ports plan major expansion”, 24 July 2011. http://www. ajot.com/news/paranagua-portplans-major-expansion.
113
China’s goal of obtaining raw material with a lower added value and of processing grain
210
boarding platforms at the port terminals in Chile. The COSIPLAN of which
Chile is a member, announced at the summit that took place in Brasília in
December 2011 that it would invest $ 994 million to enable the corridor
between Paranagua (in southern Brazil) and Antofagasta (in northern
Chile).114 Resources would be allocated to construct and improve the
railway network in Chile, Bolivia, Argentina, Paraguay and Brazil, as well
as investments in roads and ports.
Chile is committed to carrying out a regional infrastructure project in the
context of COSIPLAN. In this new phase, Chile will focus on three
projects: the Paranagua-Antofagasta bioceanic rail corridor, the Christ the
Redeemer border-crossing system and the bi-national Black Water Tunnel.
The development of these projects promotes regional economic-political
integration and brings Chile in to closer contact with regional actors. One of
the advantages of this project is the possibility of transferring loads to AsiaPacific ports in northern Chile. The mayor of Antofagasta argues that the
project has been under discussion since 1990-1993, with the city taking
specific measures and implementing infrastructure initiative. The port of
Mejillones features that facilitate further investments in technology. The
investment of US$320 million already made in concession routes in
Antofagasta, Mejillones and Sierra Gorda illustrates this point.115
Since coordination initiatives would first be decided directly by national
governments, without any prior understanding of private stakeholders, there
could be clashes during the railway negotiation process. However, attracting
private investment is critical element to ensuring a stable regulatory
for domestic consumption increased Brazilian imports. Valdemar João Wesz Junior (2011),
Dinâmicas e estratégias das agroindústrias de soja no Brasil. Rio de Janeiro: E-papers
serviços editoriais, p. 50.
114
Ministério das Relações Exteriores, “Conselho de Infraestrutura e Planejamento
(COSIPLAN) da UNASUL – Rio de Janeiro, 28th April 2011”. http://www.itamaraty.gov.
br/index.php?option=om_tags&view=tag&id=836-cosiplan-conselho-sul-americano-deinfraestrutura-e-planejamento&lang=pt-BR.
114
“Anuncian inversiones por US$ 944 millones en Corredor bioceánico que Unirá
Antofagasta y Brasil”, LosTiempos.com, Economia, Wednesday 7 March 2012,
http://www.lostiempos.com/diario/actualidad/economia/20111202/anuncian-inversionespor- us-944-millones-en-corredor-bioceanico-que-unira_151810_315273.html
115
“Anuncian inversiones por US$ 944 millones en Corredor bioceánico que Unirá
Antofagasta y Brasil”, LosTiempos.com, Economia, Wednesday 7 March 2012, http://
www.lostiempos.com/diario/actualidad/economia/20111202/anuncian-inversiones-por-us944-millones-en-corredor-bioceanico-que-unira_151810_315273.html
211
framework for the railway operation. The public-private sector has to reach
a consensus in order to tackle the major obstacles involving the
heterogeneity of the agents involved, covering the instruments of grant
holders (Brazil) and holders of railway lines (Chile).116 Indeed, the
bioceanic partnership is a complex issue, which demands the participation
of political-judicial sectors to regulate the concession contracts already
signed and in force. In summary, infrastructure cooperation requires multisector coordination efforts to execute its projects. As a result, the bioceanic
route would strengthen Brazil-Chile bilateral dialogue, building trust
between its partners.117
Although the railway corridor demands further steps, studies are being
carried out to quantify the route’s socio-economic impacts. A clear benefit is
helping trucks and private vehicles to load. Another advantage would be the
reduction of road accidents. The significant benefits obtained by the
reduction of accidents are typical of major investments in rail, particularly
regarding developing economies like Brazil’s.118 Brazil’s position as an
emerging power demands a change in regional political strategies, which
means that ideological theories gives way to a pragmatic approach and a
strengthening of initiatives involving physical integration links.119 The point
116
The ways public-private partnerships embrace the contracting-out of services, the
business management of public utilities and the formation of hybrid organisations for risksharing and co-production between government and private agents. Chris Skelcher, “Public
management: The word, the movement, the science” in Ewan Ferlie et al. (2005), Publicprivate partnerships and hybridity. Oxford: Oxford University Press.
117
Infrastructure projects demand a high level of investment. The bi-national railway
corridor between Brazil and Peru illustrates this point, since the initiative has investment
from China. Portal do Governo do Estado de Rondônia, “Comitê integrador e empresários
debatem a ferrovia binacional Brasil-Peru”, 23rd November 2015. http://www.
rondonia.ro.gov.br/2015/09/85106/.
118
Economic benefits together with the importance of paradiplomacy to carrying out the
bioceanic corridor initiative are clear. The region of Coquimbo is carrying out the project in
Chile. Portogente Transporte/Logística, “Corredor bioceânico central ampliará logística
para produtos do Sul”, 1st June 2015. https://portogente.com.br/noticias/transportelogistica/corredor-bioceanico-central-ampliara-logistica-para-produtos-do-sul-86282.
119
Brazil’s pragmatic approach towards Latin America has been pointed out. Brazil favours
a market-oriented position, whilst Venezuela has developed a state-orientated approach.
Brazil’s neo-structuralist option is congruent with a pragmatic vision, as opposed to
Venezuela’s state-centric approach. See Sean W. Burges (2007), “Building a global
southern coalition: The competing approaches of Brazil’s Lula and Venezuela’s Chávez”,
Third World Quarterly, vol. 28, Issue 7, pp. 1343-1358.
212
is that Brazil and Chile share the same pragmatic values, grounded in trade
benefits, as an essential ingredient for the future of long-term bilateral ties.
The greater movement of goods and geographical capital expansion would
disrupt political boundaries, boost potential socio-economic benefits and
expand cultural links.
Public diplomacy aims to answer many practical questions about bilateral
cooperation ties and inter-sector partnerships. The gap between foreign
policy and domestic policy is closing, to the degree that the Brazilian PAC
focuses on the benefits of domestic infrastructure projects, while working
together with the IIRSA initiative. This means that the increasing
participation of non-official groups in international affairs demands another
analytical perspective, studying foreign affairs from the perspective of the
constant communication between asymmetrical actors.120 The significant
developments made in transport infrastructure serves to show how publicprivate partners from different countries interact when building diplomatic
links.
The responsibilities of the actors in international relations are not clearly
defined, given that foreign policy strategy is not only carried out by
diplomats, but also by a variety of emerging actors who play an important
role in the scenario.121 Increasing economic-political and public-private
interdependence brings up new issues to be addressed and changes the
approach of international affairs. In this sense, cooperation in critical sectors
cannot be considered less important than security cooperation, considering
that trade, investments, infrastructure and transportation are also core
elements in the relationship between the two states. The combination of all
these sectors promotes substantial links for fostering and sustaining longterm partnership.
The infrastructure that has begun to be constructed has caused a profound
shift in the way regional actors interact, strengthening cooperation and
showing the importance of decentralisation in international affairs. The
120
When practising public diplomacy, politics highlight common interests and global
public goods. Specifically, non-official actors play an increasing role in public diplomacy.
Jan Melissen (2013), “Public diplomacy”, in Andrew F. Copper et al. (2013), The Oxford
handbook of modern diplomacy. Oxford: Oxford University Press, p. 450.
121
New instruments of communication favour a closer dialogue with civil society. Eduardo
Mello (2015), “Relatos de motocicleta-ator global”, Jovens Diplomatas, 15th November
2015. https:// jovensdiplomatas.wordpress.com/.
213
physical connection between Brazil and Chile by means of railroads,
highways, ports and waterways, linking the Atlantic Ocean to the Pacific,
serves a purpose beyond trade, to the extent that it offers an opportunity to
rebuild the Brazil-Chile relationship in a much broader way. This new
physical infrastructure is essential to embracing mid and long-term growth
prospects. Another significant aspect is that Brazil and Chile demand further
interaction in terms of fiscal-tributary policies, public-private partnerships
and political-subnational dialogue in order to make substantial progress on
bilateral relations. The bioceanic route has played a strategic role in shaping
consistent and increasing dialogue between the partners.
3.3.4 Brazil-Chile background of paradiplomacy
The transformations that occurred in international relations in the 1990s laid
the groundwork for the emergence of new forms of integration, as illustrated
by the institutionalisation of intergovernmental and regional organisations.
In this scenario, subnational and local powers strengthened the legitimacy of
participating in international affairs. Multilateral organisations recognised
sub-local entities as being able to participate in international discussions,
even though subnational governments are not considered the subjects of
international law. From the 1990s onwards, the increasing participation of
provinces and municipalities gaining legal and administrative powers is
seen, although some claim that the term already existed in the 1980s. In fact,
the concept paradiplomacy means the international relations between states,
provinces and municipalities, which reflect the participation of autonomous
subnational entities in the external scenario.122 The key word for
understanding paradiplomacy is as a ‘partnership’ between different actors
within the international arena.
Like the concept of public diplomacy that has already been studied, the
idea of decentralised cooperation was brought into effect in the 1980s and
early 1990s in OECD donor countries, firstly in countries such as the United
122
The concept of paradiplomacy has grown in Brazil, even though in developed countries
the idea is already widespread. Fábio Pereira Ribeiro (2014), “Paradiplomacia: Enfoque
estratégico para Estados e municípios”, Exame, Brazil no Mundo, 28/05/2014. São Paulo:
Editora Abril.
214
States. Like public diplomacy, the approach’s key element is the growing
conviction that the State should not be in charge of every international links
at a national level. In this context, the proliferation of public-private
partnerships in sectors such as public goods and social services such as
water, energy and health among others can be seen.123 This was
accompanied by a greater emphasis on reducing poverty and on social
development favoured by the creation of agencies such as the Human
Development Index in 1990 by the United Nations Development
Programme. This initiative boosted micro-enterprise activities and
intervention from donor countries to recipient countries. In practice, new
actors have emerged on the international scene such as NGOs, specialised
consulting companies, chambers of commerce and local governments.124
The idea of multi-sector partnerships is congruent with the concept of public
diplomacy, nation branding and presidential diplomacy, which confer a new
dynamic on foreign affairs.
For obvious reasons, Brazil and Chile benefit from the growing influence
of paradiplomatic ties, since such links contribute to fostering inter-sector
partnerships to the extent that they create a more ambitious approach to
connecting the two countries. Brazil and Chile’s paradiplomatic links create
political-economic opportunities that emerge from the diverse networks
developed, given the relationship’s dynamism. 125 Therefore, paradiplomacy
has significant implications insofar as it deals with several issues concerning
123
Public-private partnerships have increased their participation in Latin American public
administration. M. Rivas (2014), “Parcerias público-privadas, solução para as turbulências
econômicas?” El País, August. http://brasil.elpais.com/brasil/2014/12/04/economia/
1417729410_750723.html.
124
Hafteck, Pierre. “An introduction to decentralised cooperation: definitions, origins and
conceptual mapping”. Published online on 28 July 2003 in Wiley InterScience. www.
interscience.wiley.com, p. 337.
125
Paradiplomatic cooperation has been developed by the Brazilian Department of Federal
Affairs. Paula Ravanelli Losada (2015), “Cooperação descentralizada do Brasil”, III
Reunião da Cooperação Descentralizada do Brasil, Subchefia de Assuntos Federativos/SRI.
http://www.relacoesinstitucionais.gov.br/portal-federativo/articulacao-federativa/assessoriainternacional/eventos-e-reunioes/ii-reuniao-da-cooperacao-internacional-descentralizadado-brasil-2013-brasilia-df/apresentacao_saf__cooperacao_internacional_descentralizada.pdf. Chile also emphasises the importance of
paradiplomacy for boosting regional integration from the perspective of decentralized
actors. Loreto Schnake (2015), “Paradiplomacía en Chile: El caso de la región
metropolitana”, Relaciones Internacionales: Análisis y Propuestas. Friedrich Erbert
Stifitung. http://library.fes.de/pdf-files/bueros/chile/08521.pdf.
215
the economy, politics, culture and business. In practical terms, Brazil and
Chile are already involved in some form of paradiplomatic relationship. It
should be borne in mind that paradiplomacy is not dismantled by traditional
diplomacy aims, since it maintains links with official foreign policy ones.
In general, the term subnational/local governments refer to units of the
federation that provide direct services to citizens. Despite the central role of
a high governmental level in foreign affairs, especially with regards to
Brazil’s long-term strategic targets, subnational entities become new actors
in a regional context. For instance, in the Brazilian context, the politicaladministrative organisation of the Federal Republic of Brazil comprises the
union, states, the federal district and the municipalities, all of which are
autonomous entities (Article 18 of the Constitution of the Federal Republic
of Brazil, 1988). Therefore, in principle, the already mentioned entities of
the Brazilian federation are entitled to exercise all the powers not reserved
to the central government. The Brazilian Constitution of 1988 encourages
discussion about the capacity of decentralised international intervention.
However, Article 21, item I of the Brazilian Constitution highlights that
the union (federal state) shall have the ability to maintain relations with
other states and participate in international organisations. This means that
subnational actors are not allowed to explore further aspects of foreign
affairs, although the increasing participation of decentralised entities in
transnational affairs is allowed. In this respect, a constitutional amendment
proposal is under discussion in the Brazilian National Congress (PEC
475/2005), which aims to add this paragraph to Article 23 to allow states,
the federal district and municipalities to engage acts and agreements with
foreign subnational entities. The proposal can only be passed with the
approval of the Plenary Assembly.126 Various studies suggest that a
significant element of paradiplomacy is the existence of a democratic
government, accompanied by the federal government’s organisational
structure.127 To a certain point, Brazil has fulfilled the prerequisites for
126
Projetos de Leis e outras Proposições, Câmara de Deputados. http://www.camara.
gov.br/proposicoesWeb/fichadetramitacao?idProposicao=305376
127
Within the context of the Chile-Bolivia relationship, paradiplomacy has become an
important tool to promote dialogue. The emerging participation of Chilean political and
social actors, which demanded greater integration with Bolivia, has increased the relevance
of paradiplomacy. Cristián Ovando Santana and Sergio González Miranda (2014), “La
relación bilateral chileno-boliviana a partir de las demandas tarapaqueñas: aproximación
216
strengthening paradiplomatic links and fostering subnational cooperation in
the coming years.
In Brazil, decentralised diplomacy began with Argentina-Brazil
integration initiatives in the context of Mercosur. Afterwards, decentralised
initiatives were also carried out with neighbouring countries such as
Paraguay and Bolivia. The most significant tool for Mercosur members for
strengthening paradiplomatic ties was the creation of the Advisory Forum of
Municipalities, Federal States, Provinces and Mercosur Departments, which
occurred during the XXVII Meeting of the Common Market Council in
December 2004. Curiously, Brazil first recognised its significant
paradiplomatic potential at a Mercosur level, while the idea of subnational
interaction was not meaningful in the domestic context.128
Lula’s administration sought to explore the possibility of decentralised
ties by strengthening certain health and education programmes that
promoted transnational dialogue. Moreover, Lula’s term invested more in
municipalities than in state interaction. Another important point is that
Lula’s administration paid more attention to the Federal Pact than that of his
predecessor Cardoso, to the extent that the former created the Office of
Federative Affairs, which built up a dialogue with the Civil House (the
Executive Branch). Subnational cooperation does not, however have the
same impact on other financial economic centres, since the most important
Brazilian ones are not located on the border and physical distance plays an
important role. At the same time, improving decentralised international ties
seeks to promote foreign trade, the search for investments and tourism.
Brazil’s new role as an emerging power has also contributed to changing
the process in some way, to the extent that municipalities and states have
increased their chances of interacting with international actors. The
teórica desde la paradiplomacia como heterología”, Estudios Internacionales, vol. 46, no
177. Santiago: Universidad de Chile, pp. 35-64.
128
The historical background of subnational entities within the Mercosur context led to the
need to integrate municipalities, federated states, provinces and departments in Mercosur’s
institutional structure. The initiatives and projects implemented by municipalities and states
in several areas, such as education, physical integration and trade boosted regional
integration aims. Therefore, the Consultative Forum focuses on a better articulation and
coordination of cooperation initiatives. This forum intends to foster direct participation by
helping to consolidate Mercosur as a coherent regional block. Mercosul, Foro Consultivo
de Municípios, Estados Federados, Províncias e Departamentos do Mercosul,
http://www.mercosur.int/msweb/ portal%20intermediario/pt/fccr/index.html
217
perception that subnational entities can be economic agents provides a
critical mechanism for the growing presence of decentralised actors in the
international scenario. According to a World Bank report, “Decentralised
decision-making can bring governments closer to the people, overcome
information asymmetries, enhance transparency and accountability, allow
for a better matching of local preferences (especially when these are
heterogeneous across locations) and make for a more responsive
government through competition between jurisdictions for investment.”129
Despite Chile and Brazil’s similar statuses as two of the most centralised
countries in the region, changes to decentralisation occurred in Chile’s
policy from the 1990s onwards. The redemocratisation period brought
significant changes in terms of the decentralisation mechanisms used for
subnational partnerships.130 According to Chile’s constitution,
“Municipalities are public-law corporations with a legal capacity and
patrimony of their own, whose aim is to satisfy the needs of the local
community and ensure its participation in the economic, social and cultural
progress of the district.”131 Interestingly, the authoritarian experience not
only changed the political elite’s perception of subnational entities, but
meant a commitment to organisational shifts that made the country more
decentralised in the 1990s. One key element concerning subnational actors’
legitimacy is that some rules allow for greater decentralised processes than
others. In general, indirect elections tend to weaken the ties between
subnationally elected officials and their constituents. In contrast, direct
129
Kai Kaiser, “Decentralization reforms”, World Bank Resources, p. 2, http://
siteresources.worldbank.org/INTPSIA/Resources/490023-1120
130
Interestingly enough, despite national politicians still having cause to avoid
decentralisation in the 1990s, there were divided partisan lines over the subnational changes
that Pinochet had introduced. Curiously, the conflict led to a historic aperture to
decentralisation as part of an interparty agreement to reform subnational institutions in
1991. Fearing exclusion from the national government, the right sought to bolster regional
governments as political entities it could use to create a new democratic environment in
Chile. Despite the lack of interest showed by the governing coalition, it acquiesced to these
changes in exchange for the right’s support for the reintroduction of municipal elections.
Pinochet sought to bolster his regime’s legitimacy and therefore channeled substantial
resources towards municipalities. The decentralisation strategy made it politically risky for
national political actors to recentralised changes after his government. Kent Eaton,
“Designing Subnational Institutions: regional and municipal reforms in post-authoritarian
Chile”, Comparative Political Studies, vol. 37, no 2, March 2004, pp. 220-221.
131
Article 107, Constitution of the Republic of Chile, Santiago de Chile, 21 October 1980.
218
elections promote the legitimacy of subnational officials with regard to
national authorities, seeking broader bargaining and legal power.
Both Brazil and Chile have had to deal with the idea that paradiplomacy
leads to a strong commitment from decentralised actors to fitting this
activity into the official foreign policy context. The role played by
paradiplomacy in foreign policy strategy should not be underestimated,
since there is controversy over how to link decentralised diplomacy to
national government aims. 132 Not all subnational entities approach
international relations in the same way and with a central government scope,
meaning the implications of paradiplomacy in traditional foreign policy
strategy need further study. At the same time, Brazil and Chile’s regions are
already involved in some form of paradiplomacy in accordance with official
foreign policy strategy, which has a consolidated process for encouraging
subnational interests. The fact that subnational actors have engaged in
transborder issues deserves much more attention from history and
international relations. According to the public diplomacy approach,
“diplomatic communication is only a flimsy part of the dense and
multilateral transnational communication processes” (Melissen, 2005: 20).
Contemporary foreign affairs embrace a multifaceted approach to deal with
the increasing participation of actors that are not state-centric.
In Brazil, what guarantees convergence between subnational entities and
central diplomacy is the Special Assistance for Federate and Parliamentary
Affairs (AFEPA), which is responsible for promoting coordination between
the Ministry of Foreign Affairs and the National Congress. In the context of
federal issues, AFEPA aims to coordinate between the Ministry, the State
and local governments and between states and municipal assemblies to
assist them with external initiatives. To encourage dialogue between states
and municipalities, AFEPA is aided by Representative Offices of the
Foreign Ministry that must coordinate and support local authorities in their
132
Local authorities’ initiatives created the Mercocities as a Mercosur version of the
Eurocities in the European Union that demonstrated the significance of local governments
in paradiplomatic activities. Latin America states boost the participation of decentralised
actors in international affairs, particularly Brazil and Argentina. See Felipe Cordeiro de
Almeida (2011), “O Mercosul, a paradiplomacia e as políticas nacionais para atuação dos
governos subnacionais no processo de integração regional”, 3o Encontro Nacional
Associação Brasileira de Relações Internacionais. http://www.proceedings.scielo.br/
pdf/enabri/n3v2/a08.pdf.
219
areas of jurisdiction. 133 In this sense, AFEPA illustrates the importance of
paradiplomacy in contemporary Brazilian foreign policy. The initiative
demonstrates a more flexible approach to traditional diplomacy policy
strategy regarding decentralised actors.
Like Brazil, Chile has the Ministry of Foreign Affairs Regional
Coordination Directorate (DICORE), acting in the framework of
institutional policy. DICORE supports international activities in the country
of origin based on Service Order No 145 from 7th June 2000, which
establishes regional coordination mechanisms. The aim of this initiative is to
support regional government as they carry out projects in the international
field, linking the regions and departments of the Ministry of Foreign Affairs,
either in Chile or abroad. In practical terms, DICORE cooperates with
regional governments, providing assistance and institutional support to
authorities and regional bodies. 134
Paradiplomacy boost subnational development to the extent that
decentralised actors demand greater political and economic autonomy as a
result of business opportunities in the context of globalisation.
Paradiplomacy has a positive effect on development, as do the economic
opportunities that emerge from networking with other decentralised entities.
Furthermore, decentralised diplomacy can build bridges between politics
and the economy, favouring cooperation and connection and creating a more
comprehensive political relationship. In this sense, paradiplomacy should be
considered as another mechanism for strengthening Brazil-Chile’s
relationship from a broader perspective.
Moreover, informal networks help strengthen formal international
bilateral links, since they contribute to the promotion of several inter-sector
partnerships, which can be transplanted into the context of Brazil-Chile
foreign affairs. Moreover, informal initiatives have an enormous potential to
expand sectors such as tourism, business and trade, for example.
Strengthening informal relations brings different sectors into constant
dialogue, which is important for sustaining relations. Indeed, informal ties
produce multifaceted relationships, creating a significant potential for
133
Assessoria Especial de Assuntos Federativos e Parlamentares, AFEPA,
http://www.itamaraty.gov.br/o-ministerio/o-ministerio/afepa-assessoria-especial-deassuntos-federativos-e-parlamentares.
134
Paradiplomacia, Ministerio de las Relaciones Exteriores. http://paradiplomacia.
wordpress.com/page/2/
220
strengthening links and promoting closer ties. Informal connections pave the
way to easier dynamic relations between both countries and it plays an
important role in building up each other’s nation branding perception. 135
The growing importance of paradiplomacy represents a significant step
forward in Brazil-Chile cooperation links, since the dynamics of this is
relevant to the cultivation of the harmonious scenario in which bilateral ties
are shaped. Thus Brazil-Chile cooperation ranges from formal links in terms
of foreign policy strategy - carried out by the Ministry of Foreign Affairs to informal networks between Brazilian and Chilean counterparts. Such
considerations help explain the endorsement of ‘cooperation twinnings’ in
our study in order to elaborate the current scenario in which Brazil-Chile
relations existed. The most important aspect of paradiplomacy is the
dilemma faced by both countries, on the one hand, the alignment with
national governments and close coordination with the Ministry of Foreign
Affairs and on the other, the relatively autonomous way in which
subnational actors operate in order to meet their specific requirements.
Within the bilateral cooperation scenario, economic and trade policies are
essential ingredients for Brazil-Chile links. Another important aspect is the
role played by foreign direct investment (FDI) in bilateral affairs, as will be
seen in the following sections. In this sense, decentralised diplomacy helps
attract FDI, luring international companies to a local level. This means that
the so-called ‘business diplomacy’ works in congruence with
paradiplomacy, targeting profitable local markets to expand investments and
producing multifaceted relationships as argued in the context of our study
on public diplomacy. Simply put, the authority of subnational actors cannot
be separated from that of central governments, since both are critical bridges
towards strengthening Brazil-Chile relations.
3.3.5 The growing para-diplomatic approach to Brazil-Chile
bilateral affairs
Before going further into the construction of Brazil-Chile paradiplomatic
135
An interesting example of Brazil-Chile informal ties is the network of ‘Chilenos en
Brasil’, which establishes dialogue between different areas and fosters a mutual
understanding of each other’s culture. More information in Chile en Brasil,
www.chilenosenbrasil.net
221
ties, some important aspects of the idea of decentralised diplomacy should
first be considered. First, the term ‘para-diplomacy’ identifies the generic
international relations of municipalities, provincies and states.136 Secondly,
Brazil tends to differentiate between federal foreign policy and federal
diplomacy since the former refers to federal governments and the latter
highlights the autonomy of subnational governments. On one hand, the
study of federal foreign policy requires the parameters of democracy,
integration and globalisation. On the other, multilateralism played a critical
role in municipalities’ in the 1990s. As was pointed out in the previous
section, neither are disconnected from national targets and in this way
strengthening channels of cooperation and coordination are core elements in
the process.
Indeed, in the Brazilian context, globalisation and regional integration are
not considered sufficient for fostering political discussion about the role of
subnational governments in the international system. However, increasing
concerns about the influence of decentralised actors in the economy boost a
changing perception regarding the flexibility of these entities that enforce
international economic cooperation links. The similarities between Brazil
and Chile concerning the difficulties of creating a counterbalance to the
possible diverging aspects between central government and decentralised
entities should be mentioned. In contrast to Argentina, which instituted
constitutional reform in 1994 to give federal units a greater international
role, Brazil and Chile used political discussion about the importance of the
topic to promote regional dynamic dialogue.137 Moreover, strategic
decentralised diplomacy led to a beneficial bilateral relationship in the
economic-political scenario.
136
In Europe in the 1970s, a new process occurred the emergence of regional groupings.
These were defined as the associations formed between regional entities from different
states whose aim was to pressure groups in the European institutions. Cooperation was
based on common needs, aspirations and interests. More information over the origin of
paradiplomacy in Europe in Michael Keating (2013), “Regions and international affairs:
Motives, opportunities and strategies”, in Francisco Aldecoa and Michael Keating,
Paradiplomacy in action: The foreign relations of subnational governments. London:
Routledge.
137
Argentine constitutional reform went beyond re-election aspirations. Martín Dinatale
(2014), “La constitución de 1994: una reforma que cambió la política”, La Nación, 22
August 2014. Buenos Aires. http://www.lanacion.com.ar/1720805-la-constitucion-de-1994una-reforma-que-cambio-la-politica.
222
Therefore, Brazil and Chile faced a dilemma about how to legalise
subnational government’s foreign policies. Discussion about the
participation of subnational governments in international policy refers to
changing the law without altering constitutional limits. The Brazilian
Constitution of 1987 and 1988 added federalism as an immutable clause.
The impossibility of amending the Brazilian Constitution is a core element
to understanding the scenario for decentralised diplomacy. However, the
already mentioned PEC 475/2005 must be pointed out, which sought to
amend Article 23 of the constitution and encourage acts and agreements
with foreign subnational actors. The increasing role played by subnational
entities in the international context led to new forms of dialogue, even
though the pre-existing legal basis did not need any changes. The values of
common law served to boost changing elements in domestic legislation
(Vigevani, 2006: 14).
The ambitious para-diplomatic aspect can be illustrated as a result of
isolated initiatives carried out by subnational entities such as the north-east
state of Ceará, which is one of the most developed Brazilian states, in terms
of its commitment to paradiplomatic issues. The state has been characterised
by an extremely dynamic and inspiring performance regarding foreign links,
compared to other states. The initiative to foster paradiplomatic links was
established during the administration of Tasso Jeiressatti in 1995. Since
then, the state has worked to strengthen its international relations with
various countries, including Chile.
The state of Rio Grande do Sul (southern Brazil) has also established
significant para-diplomatic ties with South American provinces. The
geographical position of Rio Grande do Sul also favours this kind of
initiative, given that it is a border state. Thus, the southern Brazilian state
feels the effects of regional integration more intensely, considering that
Mercosur’s impact on the production matrix is particularly strong. The state
of Rio Grande do Sul has an active relationship with Mercosur members,
especially the governments of Uruguay and Argentina. According to Núñez:
“In 2011, the government of Rio Grande do Sul began a dialogue with the Chilean
province of Coquimbo. The latter already had a connection with the Argentine
province of San Juan because of the project of the Black Water Tunnel project.
The Argentine-Chilean project paved the way for the feasibility of a bioceanic
223
corridor, which would leave from Porto Alegre/RS reaching the Pacific region of
Coquimbo.”138
The fact that other states do not have advisory committees does not mean
that they are indifferent to building international links. In any case, many
states have boosted their exports and sought to attract foreign investment.
Even states without long-term tradition of exports, such as Roraima and
Acre, are already focused on programmes in the international area. For
instance, Bahia (the state in the north-east) has been significantly dynamic
in international political strategy, without having a specific advisory board
for international affairs, although not necessarily a lack of foreign links. At
the present time, Bahia has cooperation ties with the US, South Korea, Italy,
Germany, Portugal, Malasia, Indonesia, Argentina and interestingly Chile.
The Bahia International Business Centre part of the Secretariat of Industry,
Commerce and Mining, plays an active role in attracting investments and
promoting exports (Saraiva, 2004: 53).
However, the relations of Brazil’s Federal States are not restricted to
business, since the state government has engaged in five areas of
international affairs, as Nune highlights:
1) international articulation: maintaining relations with international
actors, mostly with an economic, political and cultural focus;
2) attracting productive investments: a policy to explore potential possibilities to attract foreign investment;139
3) fostering trade and tourism: encouraging the export of culture, the
138
Tarson Núñez, Governor Adviser, Coordinator of International Relations. Interviewed
on 15 February 2013. See also Mariano Alvarez, ‘Paradiplomacia en las relaciones chilenoargentinas: La integración desde Coquimbo y San Juan’, PhD Thesis, Leiden University,
September 2016.
139
In a broad sense, investment is usually understood as a sum of money or other resources
– including knowledge or time – spent with the expectation of a future return. Investments
may, however, be viewed more narrowly and in different ways, depending upon the context
and purpose. Although there are some differences regarding productive investments, some
authors have adopted the idea that financial assets purchased by investors are newly issued
by firms to raise funds to create productive capacity. In this context, the acquisitions of
assets for non-profit purposes not used in production (for example, buying a house) are not
considered investment. “Foreign Direct Investment and Transnational Corporations:
concepts definitions and measurements”, IIA-International Investments Agreements,
UNCTAD – Virtual Institute on Trade and development, pp. 4-7. http://vi.unctad.org/
224
conquest of new markets, support for micro, small and medium-sized local
business and their insertion into the international economy, as well as
promoting the potential of tourism;
4) international cooperation: a relationship with organisations and
international governments to obtain financial and technical resources to
support regional development projects and;
5) institutional: defence of regional interests with regards to federal
government and support for international actions by other state institutions.
The increasing role played by para-diplomacy in regional foreign policy
goes hand-in- hand with the current scenario of the interdependence in
which foreign affairs are carried out. In this context, subnational entities
assume a crucial role in the international reorganisation of the Southern
Cone regional ties. The so-called ‘federal diplomacy’, as pointed out at the
beginning of this section, recognises the autonomous focus of subnational
governments as an important element for conducting regional cooperation
initiatives. The idea of para-diplomacy means foreign policy is carried out
by non-central actors, which like traditional diplomacy’s foreign policy, are
part of the country’s national interest. Combining the interests of states and
municipalities with central government targets changes the scope of current
foreign policy strategy.
Para-diplomacy is an essential mechanism for analysing the Brazil-Chile
bilateral approach, insofar as Chile’s foreign policy does not prioritise
special links with the regional integration process as an international
insertion strategy. Chile’s foreign policy focuses on bilateral agreements
with the United States to the detriment of stronger Latin American ties and
causing the perception of a lack of interest on the part of the former in
regional integration initiatives. Para-diplomatic relations between Chile and
Argentina together with the two countries’ closer ties in other areas as has
been studied, shows the possibility of strengthening subnational links with
other countries like Brazil. The bioceanic corridor project illustrates this
point, since the official national governments’ project is combined with
decentralised actors engaged in the initiative. Beyond the para-diplomatic
standpoint, the increasing participation of the business sector sustains our
argument about studying the Brazil-Chile relationship based using a
decentralised approach.
225
In contrast to the previous realist theory, which considers the State as
central actor in the international arena, the current dynamic international
scenario demands a more complex organisation to tackle its elaborate issues.
Since contemporary states develop interdependent relationships, the new
context endeavours to create a decentralised approach to the emerging
international order. From an economic perspective, decentralised
cooperation plays a significant role regarding the possibility of attracting
foreign investment, increasing trade, investing in infrastructure and
accessing markets. Moreover, the increasing importance of subnational
actors helps to embrace key concepts such as public diplomacy, nation
branding, presidential diplomacy and paradiplomacy, which have all laid the
groundwork for an analysis of Brazil-Chile bilateral links.
3.4 Brazil-Chile Relations within the Economic Context
3.4.1 The Brazil-Chile relationship: economic background
As mentioned at the beginning of this chapter, hyperinflation in the lost
decade of the 1980s caused considerable difficulties for Brazil-Chile
cooperation in the business sector. Unstable inflation did not help promote
bilateral cooperation efforts, since the lack of a long-term perspective
discouraged both countries from building up an entrepreneurial approach or
creating ongoing trade links.140 A long-term vision was essential for a
transnational corporation to enter a foreign market, therefore hardly any
businessmen invested in projects abroad without defining the political
economic context of the target country for the next few years.
The implementation of policy action by both states to tackle inflation
brought strengthening of bilateral links. Chile was the first Latin American
country to adopt the ‘inflation target model’ and as a result the country
embraced transparency measures, which helped put inflation levels into a
steady decline. Brazil is one of the emerging economies that opted to control
inflation through the same model used by its Chilean counterpart, even
140
During the late 1980s and early 1990s, the price of goods in Brazil went up several times
a week or even a day. Robert Plummer (2010), “Colour-code clue to Brazil’s inflation
past”, BBC News, 27 October 2010. http://www.bbc.com/news/business-11477974.
226
though the model varied according to the different domestic policies
implemented by each state.141 However, the inflation target model needed
more regulation through central banks, which meant important action from
the latter with a view to controlling inflation. It should be state that inflation
rates do not fall rapidly, but rather steadily and gradually.
There are many reasons for a rise in inflation, but the consequences are
almost always the same worldwide: a worsening of income distribution and
the deregulation of the balance of payments and public finances along with
limits to long-term planning, with uncertainty hampering the establishment
of bilateral ties between countries and the development of foreign policy
strategies. The inflationary period in the 1980s led to difficulties for exports
because of the increasing prices of national goods compared to foreign ones.
The unfavourable circumstances for exports led to a currency devaluation to
promote exports. Indeed, a consequence of currency devaluation is a rise in
import prices, which is related to the prices of goods and services, causing
an increase in inflation.142 For obvious reasons, regarding Brazil-Chile
bilateral links we had at that period the worst context because of the
political circumstance combined with unstable economic scenario.
The role played by the chaotic economic circumstances in the 1980s and
at the beginning of the 1990s in the process of strengthening the BrazilChile partnership cannot be underestimated. Importantly, the economic
situation combined with the military dictatorship gave way to a period with
an uncertain scenario for the building of bilateral relations. The core element
for understanding this in our study is the difficulty in establishing the
boundaries between politics and the economy, given the tenuous border line
between the two concepts that can lead to misconceptions about their
importance when explaining foreign affairs. The stable economic scenario
141
The Inflation Target model was first adopted in New Zealand in 1990. Chile was the
second country to adopt the same model in 1991. The implementation of the model
occurred in Brazil in 1999 through presidential decree and its mechanisms serve as
guidelines for monetary policy. José Claudio Securato, Economia brasileira: história,
conceitos e atualidade. São Paulo: Saint Paul Editora, 2011, p. 88.
142
During the second half of the 1980s, fiscal accounts in Argentina, Brazil and Peru did
not show any significant improvement. The core element for hyperinflation is the loss of
the government’s decision-making capacity in driving economic policy. Gustavo H. B.
Franco (1993), “Brazilian hyperinflation: The political economy of the fiscal crisis” in
Maria D’Alva G Kinzo, Brazil: The challenges of the 1990s. London: British Academic
Press.
227
boosts initiatives that seek to establish ties and a long-term bilateral
relationship.
3.4.2 The shifting scenario of the 1990s and the emerging power of
the business sector
The favourable economic context laid the groundwork for the increasing
participation of business actors in foreign policy strategy. In Chile,
businessmen began to organise themselves in order to address the
opportunities that arose during negotiations associated with the transition
from LAFTA to LAIA. They started to attempt to influence foreign policy
strategy, taking on a substantial role in the negotiation process. In this way
and since the Treaty of Montevideo (1960), the business sector has had a
different perspective to regional development regarding the visible benefits
of increasing trade (Direcon, 207). In Chile, it was obvious how the publicprivate sector interacted to promote the country’s interests abroad, as
already studied and cooperation became visible particularly regarding the
Chilean nation branding strategy. Better public-private collaboration
embraced the cooperative idea of public diplomacy to respond to the
dynamic international scenario.
In Brazil, the perception of the need for public-private interaction did not
arise particularly early, but a shift in the context is seen during the
administration of President Lula (2002-2010) which brought about the
increasing participation of the private economic sector in foreign affairs.
Since then, the critical role played by the private sector in that period is
congruent with the concept of public diplomacy, which illustrates
contemporary international affairs and the development of Brazil-Chile ties.
Brazil’s continued integration into the world economy includes the private
sector’s more active participation in foreign policy (Oliveira, 2007: 12-13).
Moreover, Brazil’s economic success combined with the speed of
globalisation and the shifting international agenda demanded the
participation of corporate actors as an essential new constituency.
The late participation of Brazilian private actors in international policies
when compared to Chile can be explained by two points: the monopoly of
Brazil’s Foreign Ministry in carrying out foreign policy and the totally
228
different organisation of Brazil’s economic policy in comparison to that of
Chile as already stated.143 A parallel study of Brazil and Chile serves to link
important public-private sectors. The bilateral relationship embraces
complex aspects and mutual respects as important elements. Therefore, the
current growing role of the private sector has to do with certain factors: the
influence of other ministries beyond the Itamaraty in foreign affairs and the
influence of several private sector actors; the need for greater cohesiveness
between domestic policies and foreign policy, due to growing international
repercussions and the growing networks which expand continuously with
the emerging demands of new economic actors.144
Since the international arena has become more dynamic several new
topics have emerged and nowadays today transnational matters are
accompanied by a high flux of trade and investment, which urges many
actors to interact in order to face contemporary issues. As a result, the way
foreign policy is carried out has changed, adapting to the current
international scenario. The present context demands public-private
interaction to tackle complex issues, hence powerful private sector
economic actors with a global reach cannot be relegated to a secondary role
in foreign affairs. President Lula’administration understood that private
sector actors retained important responsibilities in foreign affairs and
therefore, so-called ‘business diplomacy’ tended to play an increasing role
in his foreign policy strategy.
The absence of studies considering the important role played by the
private sector in Brazil-Chile ties is not linked to the present scenario,
whereby the two countries’ private sectors exert influence on how foreign
143
Only a comparison between Brazil and Chile’s different business environments allows
for an understanding of Chile that encompasses a much more efficient investment
environment, compared to that of Brazil. Chile has moved to deregulate the economy,
attempting to rationalise prices, taxes and labour regulation and deregulation and privatise
the financial sector. Chile has created the nation brand image of a liberal economy. Given
the complexity of Brazil’s formal law, legal and regulatory processes, this country at some
point limited the entry and growth of outsiders. The domestic system puts Brazilian
industry at a competitive disadvantage compared to nations that have efficient legal and
regulatory systems. Andrew Stone, Brian Levy and Ricardo Paredes. “Public institutions
and private transactions: a comparative analysis of the legal and regulatory environment for
business transactions in Brazil and Chile”. In: Leed J. Alston et al. (Eds), Political economy
of institutions and decisions. Cambridge: University Cambridge Press, 1996, p. 102.
144
Joseph Marques. “Brazil: growing pains of an emerging power”. E-International
Relations. Editorials. December, 2011. http://www.e-ir.info/?p=15713
229
affairs are conducted. Obviously, the presence of the private sector in
foreign policy is much more active in the case of Chile, since its direct
influence began early in the 1960s in accordance with the country’s strategy
of open regionalism. The lack of explicit participation in geopolitics does
not mean that there is no foreign policy or an absence of bilateral links with
Brazil. At the same time, it makes little sense to speak of idealism among
Chile diplomacy since commerce and economy play an overwhelmingly
important role in the country’s foreign policy. As an important exporter and
a country with trade agreements worldwide, Chile’s national interest is
congruent with how foreign policy is carried out.145
From Brazil’s perspective, the private sector’s more active participation
occurred during the term of President Lula, favouring the initiative of a
business mission between Chilean-Brazilian private actors. The bilateral
relationship cannot only be observed from a public sector perspective.
Importantly, private actors cannot be excluded from Brazil-Chile bilateral
relations, given the growing trade and flow of investments in the last few
years between the two countries and investment and trade activities account
for a significant share of the two countries’ links.
Thus, the Brazil-Chile business mission, a platform for integration’
project was launched between 1st-3rd April 2009 to promote the expansion
of bilateral trade, with Brazil recognizing the role of Chile as a natural
export platform for Brazilian products. The existing Chilean bilateral FTA
worldwide had a clear set of benefits for Brazil’s economy in its quest to
ensure the diversification of exported products and expand its destinations.
The majority of these Chile FTAs are still in force while a few are still being
negotiated. Aperture to trade has long been considered key element for local
and multinational firms to be able to export goods and services to foreign
countries while benefitting from the country’s FTA. 146 As we will see in the
145
Among the Chilean international agreements, the Canada-Chile Free Trade Agreement
includes sanitary and phytosanitary measures. Since it came into force in 1997, trade has
more than tripled and Canada has become the largest source of new direct investment in
Chile. Foreign Affairs, Trade and Development Canada (2015), “Canada-Chile Free Trade
Agreement”. http://www.international.gc.ca/trade-agreements-accords-commerciaux/agracc/chile-chili/index.aspx?lang=eng.
146
It should be highlighted that products exported from Chile do not have to be completely
made in Chile to benefit from these agreements. The aim of using Chile as a platform
includes the possibility that companies can import products from one country under
preferential tariff conditions, add value to them in some way and afterwards export them to
230
following sections, the benefits for Chile of acting as a platform go hand-inhand with its policy of attracting foreign investment, paving the way for
economic growth and employment.
Indeed, the fact that Brazil is the only BRIC country without access to
the Pacific demands physical infrastructure to be built, given that the largest
flux for trade is located on the Pacific Rim. Like Chile, China is Brazil’s
main trade partner and beyond facilitating access to the Chinese market,
improvement to transport infrastructure between Brazil and Chile is key to
enhancing physical links and strengthening bilateral ties. In this sense,
physical integration between the two states seeking pragmatic links is
carried out regardless of the political circumstances. This means that
harmonising infrastructure is a critical mechanism for increasing access to
regional and global markets.
Chile, for its part, benefits from the huge Brazilian market, strengthening
its export capacity. Given the impressive economic development of Brazil in
the last few years and its market dimensions, the country has become an
important market for Chilean products, such as copper, salmon, wine, fruit,
cellulose and nitrates.147 For Brazil, Chile’s domestic market benefits
several sectors of Brazilian industry, such as food, metals and industrial
equipment. Moreover, Brazil can take advantage of the phytosanitary
agreements already signed by Chile. Technical discussions aside, the
prospects for the expansion of Brazil and Chile’s export market are
encouraging and are part of a joint effort between the private and public
sectors to boost bilateral trade relations and resize their strategic
partnerships.148
In addition, the coordination of bilateral partnerships favours Chile
other countries. Multinational firms that comply with the rules of origin in Chile’s export
markets can take advantage of zero or low import duties in many countries. Nora Balzarotti,
“Platform Chile”, Magazine Business Chile, August 2010. http://www.businesschile.cl/
en/amcham/enfoque/platform-chile
147
Since the restoration of democracy in both countries, it must be stressed that BrazilianChilean trade has increased remarkably, especially in 2007 and 2008, when trade reached
US$ 111.635 and US$ 124.065 million dollars. See Banco Central de Chile, Series de
Indicadores. Accessed on 10 December 2012. http://www.bcentral.cl/estadisticas-econo
micas/series-indicadores/index_se.htm
148
See “Parceria Brazil-Chile requer análise das regras de origem”. International Centre for
Trade and Sustainable Development. Pontes Quinzenal vol. 4, número 6, April 2009.
http://ictsd.org/i/ news/pontesquinzenal/44935/
231
finding new trade partners through Brazil, such as Africa. In this sense
through close relations with Brazil, Chile improves relations with other
Latin American countries and gains access to African markets.149 As stated
earlier, an important factor that contributes to developing closer ties
between Latin America and other countries is the continent’s regional
stability. 150 From a Brazilian standpoint, Chile’s market dimensions are not
attractive, although Chile’s preferential trade agreements worldwide serve
as a bridge for Brazilian exports. In this way, Chile can be used as an
export-platform for Brazilian trade (López and Muñoz, 2008: 28). Although
the idea of Chile as a Latin American export platform is not new, the
recognition of Chile as an export platform is illustrated through the initiative
of the business mission organised by the Ministry of Development, Industry
and Foreign Trade. With the aim of strengthening business ties between
both countries and exploring new partnerships, the mission in Chile also
seeks greater market diversification as a way to mitigate the effects of the
crisis as well as to decrease the effects of stoppages by the World Trade
Organisation. A Brazil-Chile partnership in the business sector creates
alternative markets for Brazil’s exports.151
At present, the liberalisation of the flow of trade and investment,
149
Even though there is not a consensus that Chilean foreign policy seeks access to African
markets through Brazil, some studies are being developed within academic circles that
explores Chile’s interest in Africa. Despite the lack of studies regarding this issue, the
possibility of widening ties with Africa has begun to be explored within Chile’s
international relations field.
150
Current foreign policy in the continent should be compared with the constant occurrence
of conflicts in the past in order to observe that today there is much more consent in
diversified areas, even if each country has its own targets. One way to understand how
Latin American foreign affairs became more stable is to examine the continent’s geopolitics
from a historical perspective. Argentine’s security measures in the past to avoid
simultaneous troubles with Chile and Brazil and Brazil’s attempts to construct the ‘informal
alliance’ with Chile as a way to constrain Argentine power demonstrate the development
that cooperation initiatives have acquired. More detail in: Luiz Alberto Moniz Bandeira.
Conflito e integração na América do Sul: Brasil, Argentina e Estados Unidos, da Tríplice
Aliança ao Mercosul. Rio de Janeiro: Revan, 2003.
151
The delegation headed by the Executive Secretary of the Ministry of Development,
Industry and Foreign Trade, Ivan Ramalho, was partnered with the Ministry of Foreign
Affairs, the Brazilian Trade and Investment Promotion Agency and the Federation of the
Industries of the State of São Paulo. Chile occupies the eighth place in the ranking of
Brazilian market targets. http://www.mdic.gov.br/sitio/interna/noticia.php?area=5&notici
=8907
232
economic competitiveness, technological changes and the intense search for
new platforms for production and export are important features of the
international business context (Veiga, 2004). In this sense, companies from
different countries seek to make gains in efficiency, either in their main
activities or by outsourcing specialist posses or internationalising their
operations. It is important to highlight that, in order to reduce costs and
achieve scale economies, the flow of foreign investment has increased in
different areas of the world. The rising influence of other actors in the
international arena as introduced in the first chapter can be recognised when
discussing the concept of public diplomacy.
Besides the multi-level cooperation implied in the concept, this trend will
come to exert even more influence over foreign affairs in the foreseeable
future. According to public diplomacy, foreign policy cannot be understood
solely as a state activity and in turn a broader coalition should be
encouraged between diplomats and other government officials in
combination with non-official agents. Despite the expected growth of the
role played by diverse actors in foreign affairs, it can be stated that the
balance between the state and business has already strengthened bilateral
cooperation. With the increased internationalisation of firms, there is a
greater probability that important economic actors affect the country’s
external policies, with it becoming increasingly difficult to maintain the line
between public and private influence on foreign affairs.
It should be pointed out that emphasis on the business sector played a
major role during President Lula’s term, more so than under the previous
government of President Cardoso. Lula’s term brought with it a closer
dialogue between the two countries’ business areas. In contrast to the term
of President Cardoso, whose foreign policy focused on regional
negotiations, Lula’s government stressed the internationalisation of
Brazilian industries (Oliveira, 2006: 405). Moreover, the growth of Chile’s
investments in Brazil is also inter-related to the economic growth
experienced under President Lula’s administration, which maintained the
previous administration’s low rates of inflation combined with a positive
evaluation criteria of country risk. 152
152
Country risks refers to the economic, political and business risks that are unique to a
specific country and that might result in unexpected investment losses. Usually investors
consider two factors: the economic risk which refers to a country’s ability to pay back its
233
This means that the private sector was now more clearly interconnected
with government policies than it had been in the past. However, this does
not mean that TNEs did not play an important role in Brazil-Chile bilateral
relations in previous administrations as will be seen in this section. Instead,
business partnerships are now much more fruitful than in the past, as
illustrated by ‘the Brazil-Chile business mission, a platform for integration’
in 2009. Furthermore, the increasing participation of the business sector in
diplomacy does not mean giving up traditional prerogatives to the detriment
of the private sector, but rather that international affairs in the twenty-first
century requires much more public-private coordination than in the past.
3.4.3 The growing influence of foreign direct investment on
bilateral affairs
Foreign direct investment cannot be relegated to a secondary position in
Brazil-Chile links, since economic ties do not only involve imports and
exports. Several actors come into play in bilateral economic-political
relations. In this respect, our main line of thought argues that the role played
by non-state relations in diplomacy is growing and therefore transnational
companies can be important partners in the context of strengthening BrazilChile bilateral ties. Transnational companies play a crucial role in current
foreign policy strategy, helping to increase the openness of borders and
foster bilateral links. The development of specific mechanisms favours
bilateral integration to the extent that both countries become attractive to
investors after signing trade and bilateral tax agreements153. In addition,
debts, with a country with stable finances and a stronger economy providing more reliable
investments than a country with weaker finances or an unsound economy; and the political
risk which refers to the political decisions made within a country that might result in an
unanticipated loss for investors. Even if a country’s economy is strong, if the political
climate is unfriendly to outside investors, the country may not be a good candidate for
investors. “Evaluating country risk for international investing”. Investopedia. 22nd October
2008.http://www.investopedia.com/articles/stocks/08/country-risk-for-international-invest
ing.asp#axzz1juk7FloR
153
On 2nd October 2003, Brazil and Chile passed an international agreement in which
labour income received in one of the contracting states would be exclusively taxable in the
country where it was performed. In Brazil, this was issued as Decree 4853. Ricardo
Alexandre (2009), Direito Tributário. Rio de Janeiro: Forense, p. 211.
234
economic closeness between the two states reflects a strong confidence in
both business areas that cannot be separated from the political context.
However, certain initiatives should be taken into account when
considering the reasons for the possible influence of FDI on Brazil-Chile
relations. In this context, the growing impact of FDI on bilateral ties
suggests that falling transports and communication costs help strengthen
links. Indeed, such investment tends to rise in accordance with the market
size of partner states and the possibility of reaping scale economies.
Moreover, participation in free-trade areas also plays a crucial role in
explaining private investment initiatives. In this regard, the gigantic
Brazilian market combined with Chile’s FTAs worldwide promotes the
creation of scale economies. Indeed, the importance of internationalisation,
particularly that of Brazilian companies to Brazil-Chile ties should not be
underestimated in the study of the initial steps taken towards mutual
investment networks.
The time when companies were only marginal players in the global
economy has passed and internationalisation is becoming relevant to
companies’ strategies. However, internationalisation is not an automatic
process, since it occurs when the company gets more involved in
international commerce, distribution and production.154 On the one hand,
direct investment depends on market imperfections in the host country. On
the other, the company must have certain skills and advantages over its
competitors in order to justify direct investment. Among other things, the
effects of FDI depend on the features of the country on the receiving end
and, in this sense, it relies on the circumstances of Brazil and Chile’s
domestic markets. FDI has a significant effect on both the receiving
economies, since it increases output and the volume of investment and on
the sending economies, since it reduces export costs, sustains internal
advantages abroad and provides knowledge of the other market.
In practical terms, most Brazilian companies first develop their
competitive advantages in the domestic market and then, after several years,
move to international markets via exports. Usually, companies opt to first
154
This involvement is usually based on the knowledge acquired after experiences that
involve a lesser commitment, such as exportations or licences. “Brazilian companies’
internationalisation: Brazil’s multinationals corporations cases and challenges”. São Paulo,
SP, July 2007, p. 23. www.factordesolucao.com.br
235
enter similar markets, for instance in Latin America, which shares similar
features such as culture, economic values, administrative aspects and
geographic facilities. In this scenario, the internationalisation of companies
has been carried out autonomously by Brazilian enterprises, paying special
attention to the federal government’s interests.155 In most cases, the
internationalisation process is slow and gradual and depends on the
interaction of various sectors, as well as a commitment to a particular
foreign market. The internationalisation of companies demands a politicaleconomic partnership such as the participation of the Ministry of Foreign
Affairs combined with the Ministry of Finance, which is a core element for
creating a business cooperation network.156
Although this recent phenomenon emerged in the 1990s, it has played a
major role in the twenty-first century. As mentioned above, there are several
reasons for this: (1) the relative size and ability of scale economies to
explore other markets, and (2) government support of a political and
strategic nature, through special forms of financing from the National Bank
of Economic and Social Development (BNDES), combined with logistical
and intelligence support from the Ministry of Foreign Affairs.
Internationalisation begins because of business interests, although the
decisive role played by state interests cannot be ignored. In this context,
large companies shaped by the public sector now belong to the private one,
as in the case of Vale do Rio Doce, now called Vale. Internationalisation
occurred either through direct funding or through external support. To
illustrate this point, the case of the large construction companies that
received funding from BNDES should be noted.157
155
In fact, Brazil’s economic aperture began in 1992 during the administration of President
Collor de Mello, who implemented a plan to gradually reduce the State’s role in the
economy. His administration began selling off state-owned enterprises, dismantling
protectionist trade policies and opening up the domestic economy to the world. Pran Tiku.
“O brilho dos emergentes: obtenha lucros investindo no Brasil, Rússia, Índia, China, Coréia
do Sul e México”; traducão Cid Knipel – Rio de Janeiro: Elsevier, 2009, p. 32.
156
The Office of International Affairs is an agency linked to the Finance Ministry that
handles matters involving the economy, trade, financial negotiations with other countries
and participation in negotiations on safeguards, antidumping and countervailing duty under
trade agreements, the WTO and other international bodies. SAIN (Secretaria de Assuntos
Internacionais- Ministério da Fazenda), http://www.fazenda. gov.br/sain/sobre_sain/
atribuicoes.asp
157
Ibid.
236
There is a consensus on the part of the federal government regarding the
relationship between the internationalisation of Brazilian enterprises and the
growing emergence of the country on the international economic scene.158
In today’s environment of market and trade liberalisation, the importance of
private enterprises in emerging economies as an engine of outward-oriented
growth is increasing, to the extent that they become core actors in
international affairs. Once domestic companies establish themselves as
investors abroad, financial vulnerability decreases due to the repatriation of
profits and gains related to overseas operations.159
The internationalisation process also contributes to building a nation
brand, since it allows Brazil to communicate a positive economic context in
the international arena, similar to that of Chile. Both public diplomacy and
nation branding portray the new context in which traditional diplomacy
turns dynamic. In the Brazil-Chile bilateral context, it should be
remembered that FDI also measures a country’s competitiveness in
infrastructure, macroeconomic stability and education. Therefore, it
accounts for closer Brazil-Chile financial and economic ties, since both
countries have to work out new ways of relating to each other.
In contrast, Chilean companies entered the region sooner than their
Brazilian counterparts, taking advantage of physical proximity and
benefitting particularly from the huge Brazilian market. A limited Chilean
market explains the rapid saturation of the domestic environment, which
means the country needs to expand abroad. Therefore, the search for larger
markets came to be a priority in the business sector, even though several
factors played an important role in consolidating transnational firms, such as
a consistent, good climate at home in combination with a stable
macroeconomic context and the country’s endowment of natural resources.
These factors served as key elements to domestic growth and allowed the
country to acquire the skills needed to penetrate other markets.160
158
The first Brazilian who aspired to present Brazil as an international player was the Baron
of Maua (Irineu Evangelista de Souza) who lived from 1813 to 1889. Afonso Fleury and
Maria Tereza Leme Fleury (2011), Brazilian multinationals: Competence for
internationalisation. Cambridge: Cambridge University Press.
159
Although greater economic interaction with the rest of the world means that the country
is more vulnerable to shocks from outside and swings in the sentiment of investors. Dean
Croushore (2007), Money and banking: A policy-oriented approach. New York: Cengage
Learning, p. 14.
160
Karen Paniachik, “Chile’s FDI policy: past experience and future challenges”. OECD
237
However, Chilean and Brazilian firms adopted similar strategies to
access the foreign-partner market, based on a strategy for expansion through
exports, with increased market knowledge and escalating commitments in
the form of more investment. Entering regional markets has similar
characteristics, such as proximity to consumer markets and similar cultural
aspects. Furthermore, the lesser physical distance between regional partners
is recognised as an important step towards managing the experience and
gaining a competitive advantage. With the goal being goal to
internationalise and compete in foreign markets, Chilean-Brazilian
companies take advantage of geographical proximity before adventuring
into more distant markets.
3.4.4 Nation branding within the foreign direct investment
environment
Before getting into an analysis of Brazil-Chile foreign direct investment
(FDI), the importance of nation branding in their bilateral ties should be
taken into account. According to the first chapter, a successful nation brand
can attract and sustain foreign investment, creating a wave of economic
benefits. Along with public-private partnerships, the nation brand is related
to how the country is seen and how it sees itself. Beyond the importance of
other countries’ perceptions, nation branding must describe the country’s
reality in order to achieve tangible gains. At the same time, it has to make
the country unique and express its dynamic and modern aspects, combining
different kinds of elements.
On the contrary to the nation image analysed as a result of the question
raised in the first chapter, which led to a stereotypical model of different
groups of Brazilan and Chilean citizens, the business view of nation
branding is the focus in this section. Instead of pointing out superficial
perceptions of each nation’s image, the nation branding approach leads to a
careful evaluation of the advantages of the country’s image building. It
seeks objective goals, whereas citizens’ opinions refer to generalised
perceptions.
Global Forum on International Investment, Shanghai 5th-6th December 2002, p. 3.
www.oecd.org/dataoecd/54/27/2764423.pdf
238
In sharing positive views on each other, Brazil and Chile’s nation brands
are associated with stable, dynamic and rapidly growing economies,
favouring closer economic dialogue between both states. From Brazil’s
perspective, Chile is considered an example of a sustainable economy that
acts rigorously regarding public accounts. Chile’s good reputation among
foreign investors shows that the country has both a complete and advanced
nation brand. According to the majority of Brazilian executives, “Brazil has
yet to create any contingency plans like the ones recently adopted in
Chile.”161 When considering the structural plan for dealing with any kind of
conflict, Chile’s image as the region’s Asian Tiger is clearly associated with
its pragmatic administration and we are reminded that it is an example of a
reduction in public spending that led to effective and long-lasting results
that helped tackle periods of crisis.
Beyond Brazil’s nation brand that sells any product oriented at
youngsters, holding two highly visible international events the 2014 World
Cup and the 2016 Olympic Games has guaranteed overwhelming exposure
for the country per se. This visibility has opened up an enormous market for
several sectors. Nevertheless, the World Cup and the Olympics cannot be
considered the only reasons for the fast-growing business environment,
since the current good economic performance has also played a major role
in the increase in foreign investment. Despite global turmoil in 2011, Brazil
has settled itself into the international scenario and has shown great
sensitivity when dealing with the global crisis (Cruz and Stefano, 2011: 36).
Since Chile and Brazil consider each other as countries that share
common values and similar features, such as democracy, human rights,
peace, stable diplomacy, orderly economic growth, political stability,
independent judiciaries, trade facilitation, competitiveness and the capacity
for regional economic negotiations, the perfect scenario exists for boosting
closer economic bilateral ties. The fact that both countries have positive
perceptions of each other through their nation brands guarantees a
favourable environment for strengthening bilateral relations.
In this respect, the ACE No 35 signed between Chile and Mercosur
161
The contingency plans adopted by Chile in December 2011 included measures to boost
employment and investment as ways of dealing with the crisis. “Chile põe em prática plano
de contencão para enfrentar a crise econômica internacional”. O Hoje. Goiânia, 14th
January 2012. http://www.ohoje.com.br/mundo/30-12-2011-chile-poe-em-pratica-plano-decontencao-para-enfrentar-a-crise-economica-internacional/
239
represented the most important step in bringing Chile closer to regional
partners. The ACE No 35 can be considered as an essential mechanism for
strengthening Brazil-Chile ties. Another important instrument for improving
Brazil-Chile relations was the agreement signed on 24th October 2004 to
avoid double taxation between Chile and Brazil, representing a significant
step towards facilitating business.162 The Brazil-Chile tax agreement also
served to encourage investments whilst promoting the abolition of double
taxation. This tax agreement is congruent with the need for import-export
sectors and in this way the absence of double taxation may favour gains
from additional investments. The Brazil-Chile agreement to avoid double
taxation demonstrates the increasing importance of bilateral relations,
insofar as Brazil does not have a double taxation agreement with every Latin
American country.
Although signing an agreement to avoid double taxation has several
benefits, the main interest lies in attracting and increasing a flow of foreign
investment into the country. Having signed the agreement, Brazil and Chile
not only had the task of preventing tax evasion, money laundering,
corruption and mispriced commercial transactions among others, but the
signing of this tax treaty also means enhancing economic relations between
both states. It also meant that a person who provided services in one country
was not taxed twice because of the Brazil-Chile agreement to avoid double
taxation. 163 In this economic context, Brazil and Chile began to establish
long-lasting ties from 1985 onwards, when both countries’ economies grew.
It should be pointed out that the trade balance has always been
unfavourable to Chile, because the goods imported by Chile from Brazil
basically consist of heavy machinery and highly industrialised products with
a high added value and amount. However, from Chile’s viewpoint, the
Brazilian market had always been considered extremely important not only
because its export value, but also due to certain comparative advantages. For
instance, the gigantic Brazilian market has common borders with other
Mercosur members and little demand for sophistication compared to
developed countries. Indeed, the percentage of value added to export goods
162
Doing Business in Brazil, “Double Tax Treaty Brazil and Chile. http://dbinbrazil.
com/international-tax-treaties/double-tax-treaty-brazil-x-chile/.
163
Brazil signed the treaty preventing double taxation, inspired by Article 7 of the OECD
Convention. Ricardo Lobo Torres (2013), Planejamento tributário: elisão abusive e evasão
fiscal. Rio de Janeiro: Elsevier, p. 70.
240
demonstrates that the use of technology and skilled labour directly favours
the development of domestic economic activities.
The importance of nation branding building must not be underestimated
in the FDI scenario, since the value of the brand as an asset is an important
indicator of the amount of foreign investment. Increasing bilateral FDI
means that good image promotion contributes to attracting and sustaining
foreign investment and therefore nation branding aspect plays a critical role
in the process. The high-speed growth experienced by Brazil and the idea of
Chile’s liberalised market go hand-in-hand with the policies of attracting
investment. Being able to launch and maintain a positive national brand is a
decisive element for increasing bilateral FDI.
3.4.5 FDI and the multi-faceted approach in bilateral affairs
Although the focus of this study is on the historical-political angle of BrazilChile bilateral relations, the economic field is important in terms of
strengthening the countries’ ties to the extent that it cannot be separated
from the historical standpoint. In this scenario, the interaction between the
public and private sectors serves as a bridge to help understand their
bilateral affairs. Trade and market liberalisation policies have made it
imperative for firms to look for foreign markets when seeking to enhance
their opportunities through economic dialogue. Being able to round up
cooperation in diverse areas has strengthened bilateral links, since no
country wishes to have political problems with a strong economic partner.
Nation branding highlights the relevance of the country’s image to attracting
trade and investments and serves as a central concept when analysing
Brazil-Chile bilateral relations.
FDI is one of the most controversial topics in international political
economics, so it is the first that should be defined: FDI means that company
shares or quotas in a country become the capital of non-residents. In other
words, one of the main features of FDI is the partial or total take over of the
company receiving the capital from foreign investors. Regarding FDI,
maintaining foreign capital tends to occur in the long run in order for
participation in productive ventures. Due to uncertainty about the returns of
invested capital and the time needed for this to occur, FDI is to a certain
241
point considered risky. 164
In this regard, two important facts should be explained: firstly,
transnational enterprises (TNEs) are considered the main agents for carrying
out FDI; secondly, TNEs have extraordinary sources of economic and
political power. Among other things, the high capability of TNEs to
mobilise resources on a global scale and their maintaining of close links
with the governments of their countries of origin should be stated
(Gonçalves, 2005 Reinaldo: 181). Moreover, both in developed and
developing countries, FDI plays an important role on the political agenda. 165
This means that FDIs are not only in state of flux among developed states,
investment flows among developing countries also show growth
worldwide.166
The direct investor may be an individual, an incorporated or
unincorporated private or public enterprise, a government or an associated
group of individuals or enterprises.167 Ownership of 10% of ordinary shares
or voting power is the main criteria for determining the existence of a direct
investment relationship. 168 Direct investment enterprises may be
164
Ministério da Fazenda, Banco Central do Brasil. Censo 2006 de Capitais Estrangeiros no
País, p. 7 http://www.bcb.gov.br/rex/censo2005/port/ManualCenso2005.pdf.
165
According to the IMF, a direct investment enterprise is an incorporated or
unincorporated enterprise in which a direct investor who is resident of another economy has
10% or more of the ordinary shares or voting power (for an incorporated enterprise) or the
equivalent (for an unincorporated enterprise). As UNCTAD statistical reports shown,
global FDI flows to developed countries rose by 37% in 2005 and those to developing
countries went up by another 22%. In percentage terms, developed countries attracted 59%
of global FDI and developing countries attracted 36%, UNCTAD, “Global FDI inflows rise
for second consecutive year”, UNCTAD/Press/PR/2006/026/16/10/06. http://www.unctad.
org/Templates/webflyer.asp?docid=7456&intItemID=1528&lang=1
166
The strong competitive pressures generated by the globalisation process forced firms to
internationalise increasingly early, sometimes even when they were first established.
Therefore the idea of being born global is an important concept that must be paid attention
to in the following years. Karl P. Sauvant, Wolfgang A. Maschek, and Geraldine
McAllister. “Foreign Direct Investment by emerging market multinational enterprises, the
impact of financial crisis and recession and challenges ahead”. OECD Global Forum on
International Investment, p. 4. www.oecd.org/dataoecd/9/2/44246197.pdf
167
A point made earlier on this topic is that the difference between financial investors and
non-financial investors should be highlighted. That said, while the financial investor
allocates resources marginally assigning risk ratings in Brazil, the non-financial investor the TNEs - consider the country a preferential destination for investment. Franco, Gustavo,
H. B. Franco (2006: 18).
168
International Monetary Fund, “Foreign Direct Investment Statistics, how countries
242
subsidiaries, associates or branches. A subsidiary is an incorporated
enterprise in which the foreign investor controls, either directly or indirectly
(through another subsidiary) more than 50% of the shareholders’ voting
power. An associate is considered an enterprise in which the control of the
direct investor and its subsidiaries varies, going from 10% to 50% of the
shares with a vote. A branch is a wholly or jointly-owned unincorporated
enterprise. The choice between setting up either a subsidiary/associate or a
branch in a foreign country depends on the existing regulations in the host
country (Duce, 2001: 3).
However, considering the role played by TNEs in terms of international
investment, Dunning describes the integrated development of diverse
constraints as the foremost agents for carrying out FDI instead of the TNEs.
Continuing in this vein, Dunning’s eclectic model is based on the
juxtaposition of three things: (1) the ownership advantages of existing or
potential companies; (2) country location advantages and (3) internalisation
advantages combined with external assets of the recipient country through
FDI. Therefore, according to Dunning’s model, advantages concerning
ownership are classified as specific advantages of the company itself, while
location advantages are designated as specific advantages of the FDI
recipient country (Amal and Seabra, 2007: 2).
In this way, foreign investment strategies cannot be solely attributed to
TNEs, but, more significantly to the combination of the diverse dynamics at
play, such as ownership and location advantages as well as the capacity to
form partnerships with local companies.169 Today, TNEs would rather focus
their entry strategies into other markets on the acquisition of already
operating local businesses. By acquiring local firms that have a consolidated
position in the domestic market, a more favourable investment atmosphere
is created (Lacerda, 2000: 130). Another idea is that multinationals help the
economy access specialised intermediate input, which tends to be produced
in developed economies and acquired abroad through multinationals. As a
result, labour and other factors of the host economy become more
productive.
measure FDI”, p. 24, http://www.imf.org/external/pubs/ft/fdis/2003/fdistat.pdf
169
Today’s FDI is quite different to that of previous years, in that is much more
concentrated on the service sector. For example, it includes many acquisitions of existing
companies whereas the old way considered entirely new ventures, such as FDI. Franco,
Gustavo H. B. p. 16- Antonio Corrêa de Lacerda.
243
Gonçalves points out two different aspects of FDI the objective, anchored
by the power of the FDI itself and the subjective, which implies a conflict of
values. The subjective perspective imposes the importance of nationalism as
a significant political aspect, either in terms of interstate relations or
disputes among the states in the FDI scenario (Hobsbawm 1998: 181).
Indeed, the domestic benefits of multinationals should be considered since
they increase competition for local firms, therefore helping to redistribute
income, the new technology that is brought to the host economy also
favours job training for local firms. However, before deciding to promote
FDI it is essential to evaluate possible sources of market failure associated
with TNEs.170 Another important point to consider is the need for
symmetrical information between domestic and foreign investors,
promoting interaction between diverse actors from both countries.
With this in mind, both FDI and TNEs play a significant role in ChileBrazil bilateral relations, since both countries share similar features
regarding progress in the liberalisation, deregulation and privatisation
processes. As mentioned in the first chapter, it is not that public diplomacy
is a new paradigm in international relations, although it does help analyse
foreign affairs from a dynamic standpoint instead of the state-centric focus.
The significance of public diplomacy encompassing public-private
cooperation in Brazil-Chile relations has become a core element to
understanding the two countries’ bilateral links. Public diplomacy combined
with nation branding fosters exports, attracts investments, promotes the
country’s image and determines the relevance of decentralised actors in
contemporary foreign affairs.171
However, the specific features of each country should be examined. FDI
is a key element to help understand the process of building up the real
economy, facilitating the transfer of technology and the management
170
Gordon H. Hanson. “Should countries promote foreign direct investment?” United
Nations Conference on Trade and Development, United Nations Publication, no 9, February
2009, Centre for International Development Harvard University, pp. 9-10.
www.unctad.org/en/.../pogdsmdpbg24d9.en.pdf
171
The significance of FDI goes back to the late 1980s, when it became a key component
for financing international current account imbalances. According to Graham and
Krugman, “in 1989, nearly half of the US current account deficit was financed by inflows
of direct investment”. Edward M. Graham and Paul R. Krugman (1993), “The surge in
foreign direct investment in the 1980s”, in Kenneth A. Froot, Foreign Direct Investment.
Chicago: The University of Chicago Press, p.14.
244
capacity of the two states. In many respects, it establishes links – whether
direct or indirect, commercial or financial – with the global economy overall
and last, but by no means least, regarding creation and production capacity
(Franco, 2006: 13). In contrast to speculative capital associated with
volatility, the high probability of loss and short-term investment horizons,
FDI potentially increases the recipient country’s savings and investments.
For this purpose, Brazil-Chile cooperation within a FDI context is an
important mechanism for establishing ties and strengthening the
relationship.
3.4.6 Brazil’s FDI in Chile
The degree of internationalisation of the companies in the business sector in
Chile and Brazil can be measured by the flow of foreign direct investment
abroad. Increasing bilateral business ties demonstrates the important role
played by decentralised links in bilateral affairs. With this in mind, the firms
that invest possess specific advantages that enable them to operate in foreign
markets where domestic companies already have the advantage of better
knowledge of the local market. Brazil aims to exploit Chile’s liberalised
market advantages and infrastructure support, providing an export platform
for the Asian market, with Brazil’s interest in international expansion
requiring more intense regional cooperation initiatives.
At the present time, Brazil is considered one of the countries with the
highest levels of production internationalisation. As a result of the
liberalisation process circumscribed by a series of measures such as
privatisation and deregulation, Brazil has witnessed an extraordinary
increase in the internationalisation of its production. In the international
scenario, this increase can be attributed to the re-establishment of world
economic growth in 1993, which led to a global economic surplus and the
expansion of FDI on an international scale (Gonçalves, 2005: 182). A shift
in the world economy affects how the world’s economic surplus is
distributed among countries and therefore their possibilities of carrying out
FDI.
Brazil’s participation in the set of FDI receiving countries increased in
the mid-1990s, largely due the privatisations. Nonetheless, like Chile,
investments were not continuous and there have been many ups and downs
245
in terms of the foreign investment flow.172 Thus, the reception of FDI in
Brazil has followed international standards and it can be seen that the main
form of income in recent years has been through mergers and the acquisition
of companies. There are parallels between the entrance of FDI and the
volume of mergers and acquisitions involving non-residents, which have
generally been as purchasers of domestic companies. This context shows
that the evolution of FDI incomes has strong links with exogenous
components and as a result the entrance of FDI to Brazil goes hand-in-hand
with international fluctuations. One key fact to understanding the entrance
of FDI in the country is that it consisted mainly of the transference of
ownership from residents to non-residents (Gonçalves, 2005: 187-8).
When analysing the proportion of Brazilian and Chilean FDI for each
country, the circumstances that sharply differentiate the two countries
should be studied. Brazil is Chile’s second direct investment destination in
the world, while Brazilian investment in Chile does not reflect the same.
Despite the increase in the flow of foreign capital towards Chile in recent
years, as already stated in the first chapter, Brazilian investment is limited to
a few sectors.173 This can be attributed to the following factors, in the first
place, the restricted size of the Chilean market goes hand-in-hand with its
lack of attraction for Brazilian companies. Secondly, Chile’s comparative
advantages in terms of natural resources and geographical location have not
attracted the interest of large Brazilian companies. Furthermore, all Latin
American countries are classified as late investors due to the 1980s crisis
and the costs that recovering from this crisis implied.174 At certain point,
172
During the 1990s in Chile, FDI represented an annual average of 8% between 1995 and
2000. After this surge, the amounts entering Chile dropped significantly. However, this did
not reflect a change in Chile’s competitiveness but was the consequence of a sharp
downturn in international economic conditions, which affected FDI in almost every
country, with the exception of China. Foreign Investment Committee. 23rd August, 2009.
“Foreign Investment in Chile/FDI Trends.tp://www.cinver.cl/english/ clima/inversion_
inversion.asp
173
To illustrate this point, it can be seen that both Chile and Brazil’s foreign direct
investment did not include, in most cases, the transport sector. Therefore, the transport
sector is not taken into account when analysing the FDI situation in both countries. Rolando
Avendaño, Gøril Bjerkhol Havro and Javier Santiso. “Oportunidades na Ásia? Perspectivas
para o comércio internacional da América Latina”. Política Externa, vol. 18, no 3, Dec/
Jan/Feb 2009-2010, São Paulo, p. 164.
174
Latin American governments decided to restrict capital movements seeking to avoid a
shortage of foreign currency. In addition to this fact, United States banks decreased the
246
this means that Chile was not a receptive environment for attracting
Brazilian enterprises’ investment flows.175
However, the first Brazilian enterprise that saw an opportunity to invest
in the Chilean market was the Gerdau S. A. metallurgic company in 1992.
Due to the rising demand for steel in the Chilean market, Gerdau S. A.
decided to invest in that market by purchasing domestic companies. 176 In
this way, the internationalisation process of Gerdau occurred through
acquisitions and was motivated by better access to financing conditions in
order to avoid Brazilian risks. The investment opportunity in Chile
enhanced Gerdau’s regional influence and led to proximity with consumer
markets, since inter-sector cooperation in business means a broader network
in terms of consumer destination, distribution channels and strengthening
bilateral dialogue between the countries.177
Furthermore, other Brazilian companies followed the same pattern of
investment and chose Chile as an important partner for business-to-business
cooperation. In this scenario, other firms entered the Chilean market, such as
Odebrecht, which worked on the tunnel of the Pehuence hydroelectric
adduction and in a consortium with other companies, built the new
passenger terminal at Santiago airport.178 Continuing along these lines, the
Brazilian Vale do Rio Doce mining company, whose work involved
transforming mineral resources into essential ingredients for daily use, also
amount of credits available to the region and also the opportunity for Latin American
companies to expand. Daniels, J.; L. “Foreign direct investment from Latin America and
the Caribbean” apud Dorotea López G. And Felipe Muñoz N. Inversiones Brasilenãs en
América del Sur. La perspectiva de los países andinos: el caso de Chile. Universidad de
Chile, Santiago, 2008, p. 22.
175
Another important point to consider is that a significant number of Brazilian enterprises
carry out transactions involving investment in fiscal paradises. Therefore, many projects
developed with Brazilian capital do not account as Brazilian investment through receiving
countries. As a result, it is difficult to quantify and measure the presence of Brazilian
capital in such transactions. Dorotea López G. And Felipe Muñoz N. Inversiones
Brasilenãs en América del Sur. La perspectiva de los países andinos: el caso de Chile.
Universidad de Chile, Santiago, 2008, p. 23.
176
Gerdau (Chile), http://www.gerdauaza.cl/Empresa_Grupo.asp
177
“Brazilian companies’ internationalisation: Brazil’s multinationals corporation cases and
challenges”. Kline affiliated company, São Paulo, SP July 2007, p. 11, www. Factor
desolucao.com.br
178
“A organizacão internacional”, Odebrecht. http://www.odebrechtonline.com.br/ mate
rias/00201-00300/249/
247
started to develop mining projects in Chile. 179
Unlike Gerdau S.A. and Vale do Rio Doce, however the Itau Bank is not
considered an interesting example of FDI, since it is not related to
traditional investment. In fact, Itau’s business operation does not involve the
direct participation of Brazilian capital in the Chilean market. Despite Itau
Bank’s appearance on the Chilean market, its expansion throughout Latin
America has been carried out in conjunction with the Bank of America. In
order to materialise Itau Bank’s expansion targets, shifting the control of
their operations from the Bank of America to the Bank of Boston in Brazil,
Chile and Uruguay was allowed. Whereas Itau Bank manages its operations
throughout the region, the Bank of America co-participates with a
percentage of the shares.
The most important Brazilian company, Petrobras, strategically
concluded the process of acquiring the distribution and logistics of
ExxonMobil in Chile, paying $ 400 million net in cash and cash equivalents
for the companies purchased. With this acquisition, Petrobras guaranteed its
participation in the Chilean fuel distribution market, with a network of
around 230 service stations, its presence in 11 airports, an interest in six
distribution terminal, (four of which are their its own and two of which are
joint ventures), a 22% interest in the Sociedad Nacional de Oleodutos and a
33.3% interest in the Sociedad de Inversiones de Aviación.180
One of the most remarkable aspects of business-to-business cooperation
between the two countries is the creation of LATAM, the company with the
most market value in the Americas. As argued, public diplomacy cannot be
separated from the business sector, since public-private cooperation is a core
element of Brazil-Chile relations. This airline was born as a result of the
fusion between the Chilean LAN and the Brazilian TAM. The fusion
between LAN and TAM occurred in August 2011 and generated a civil
aviation giant with revenues of $ 8.5 billion and flights to 23 countries.
LATAM will consolidate its position as the leader in passenger air transport
in the Latin America market. In fact, in the company, LAN holds 79.6% of
group’s shares and TAM has the other 20.4% informs a source close to the
179
Vale do Rio Doce. http://www.vale.com/vale_us/cgi/cgilua.exe/sys/start.htm?sid=6
“Petrobras in Chile”, Wikinvest, 19th November 2009. http://www.wikinvest.com/stock/
Petrobras_%28PBR%29/Chile
180
248
Brazilian company. 181 In brief, LAN’s share is larger than TAM’s.
After being approved by the Chilean body that regulates monopolies the
fusion still had to be evaluated in Brazil. The deal was authorised, although
11 conditions were imposed to ensure fair competition in Chile’s air
transport market. In Brazil, the Secretariat for Economic Monitoring (Seae),
the Ministry of Finance and the Secretariat of Economic Law of the
Ministry of Justice (SDE) were involved in authorising the deal.182 The
Vice- President of Finance of LAN, Alejandro de la Fuente, argued that “to
be a major player in the sector, Chile must have a presence in the passenger
business in Brazil”, explaining that TAM was the best option in this country
because both companies had cargo operations, among other things.183
López and Muñoz state that the process of transnationalising foreign
capital is something relatively new in Latin America. Putting this into
perspective, at the beginning, the increase in investments was related to
physical proximity rather than the consequence of a strategy to attract the
same. Furthermore, despite Brazilian investments adding up to a low
amount of the total, they had occurred in strategic economic sectors, such as
mining, building, chemicals, energy, rubber and plastic among others.
Brazilian investments come from companies of all different sizes. However,
in the last few years Brazil’s presence in the Chilean market has increased
and should not be underestimated.
However, although at first glance the Chilean market’s small size did not
appeared to be attractive, Brazilian companies thought that they could take
advantage of Chilean preferential trade agreements by using this country as
an export platform. Given Brazilian companies’ internationalisation aims,
Chile became an important ally in the region, supporting this process.
Nonetheless, another way of explaining the lack of investment is that
Brazilian companies looked to increase their market share, achieve scale
economies or explore natural resources. The precarious physical connection
181
“Latam é a aérea mais valiosa das Américas”, Estadão-Economia e Negócios, 14th
August 2010. http://www.estadao.com.br/noticias/impresso,latam-e-a-aerea-mais-valiosadas-americas,594868,0.htm
182
“Restricões do CADE não surpreendem a LATAM; aviacão decisão do Brasil seguiu
posicão já anunciada no Chile”, Valor Econômico-Empresas e Servicos, Thursday, 15th
December 2011, B5.
183
“Junta extraordinaria de accionistas de LAN aprueba fusión con aerolínea brasileña
TAM”, Emol-Economía. http://www.emol.com/noticias/economia/2011/12/21/518137/ac
cionistas-de-lan-aprueban-en-junta-extraordinaria-la-fusion-con-brasilena-tam.html
249
between both states has also contributed to hampering cooperation policies.
In this regard, physical connections function as a prerequisite for
transforming Chile into a platform for Brazilian exports towards Asia
(López and Muñoz, 2008: 30). Physical cooperation constitutes a significant
form of engagement beyond traditional diplomatic links with public-private
connections playing a central role in Brazil-Chile links, as pointed out by
public diplomacy.
Chile’s stable and liberalised market conditions, accompanied by access
to the Pacific laid the groundwork for the increasing presence of Brazilian
firms in the country. 184 Given that internationalisation activities generally
emerge in markets that are culturally and geographically close, Chile is the
natural market for FDI by Brazilian firms. Moreover, FDI demands a longterm partnership to strengthen business-to-business dialogue and encourage
bilateral cooperation ties. The firm’s relationship with other actors provides
a broader framework for opportunities in diverse sectors in Brazil-Chile.
The network approach infrastructure cooperation is congruent with the
decentralised perspective of public diplomacy and the importance of nation
branding to attracting business.
3.4.7 Chile’s FDI in Brazil
On the one hand, Chile is widely recognised by its policy of attracting FDI,
favoured by its stable and transparent policy framework. On the other,
Chile’s good domestic business climate has allowed the country to amass
the capabilities required for investing in other countries. Chile’s territorial
limitations mean that companies reach a saturation point fast, therefore a
real need for growth and an excess of profits paved the way for investment
abroad. The competitive advantage of physical proximity favours the entry
of Chilean companies into countries like Brazil. The huge Brazilian market
is obviously attractive to Chilean companies, since the possibility of
developing scale economies and gaining access to the consumer market is
clear.
184
The past decade was extraordinary for Brazil, considering the rapid growth in revenue of
most sectors of Brazil’s economy. See Masao Ukon et al. (2012), “Brazil: facing the
productive challenge”. The Boston Consulting Group.
250
Chilean firms pursue a high level of outward investment that can be
compared with economies such as Brazil. Chile has been one of the top
three sources of FDI outflows in the region, joined in the ranking by Brazil
and Mexico. Chile is also a major recipient of inward FDI, usually in third
place in the region after Brazil and Mexico. The fact that neither Brazil nor
Chile suffered dramatically during the international financial crisis of 20082009 created a more favourable scenario for continuing with and increasing
bilateral FDI flows. Another aspect is that most of the Chilean TNEs that
invest in the Brazilian market are restricted to sectors that did not directly
suffer from the effects of the financial crisis, such as food, forestry and
beverages. Among many Chile TNEs that direct their investments towards
Brazil, the most significant firms vis-à-vis the Brazil-Chile business
dialogue should be mentioned. In this scenario, the wood-sector is
increasing its investment in the Brazilian market, especially the CMPC and
Arauco companies, part of the COPEC conglomerate that has replicated a
model similar to the Chilean one in Brazil. It acts in a vertically integrated
structure that handles forest management and processing wood into
products. The wood is either sold in the host market or exported to other
markets.185
The Cencosud is another important Chilean investor in the Brazilian
market, given that the supermarket chain has superstores in north-eastern
Brazil and 46 stores, distributed between the states of Bahia, Alagoas and
Sergipe. This operation involved the transfer of all the companies’ shares
and the acquisition of the companies’ capital assets, stock, personnel,
marketing rights, brands and all assets guaranteeing the firm’s proper
management.186 Between November 2007 and November 2011, Cencosud
invested 3 billion reales in Brazil, buying 7 Brazilian retail chains ranked
185
CMPC is one of the largest Chilean companies with annual sales in 2010 of US$ 4.219
million and a market value of US$ 11.700 million. The company planned to invest US$ 600
million between 2011 and 2012, but that number ended up being more than double at US$
1.300 million. The firm’s investment plan is very dynamic and includes pulp mills, paper
and tissue in Chile, Brazil, Peru and Mexico. Entry into the Brazilian market was a very
important step for the company, since it allowed it to double its production and in the tissue
sector, represented an opportunity to access new markets. The company recently installed a
new paper conversion plant in Guaíba, which facilitates market access to the south of
Brazil. “CMPC: muchos productos del hemisferio norte no son viables”. El Mercurio,
Economía y Negocios. B7, 10 August 2015.
186
Cencosud. Business Units. http://www.cencosud.cl/eng/unidades_gbarbosa.htm
251
fourth among supermarket chains.187
In line with Chile’s increasing entry into the Brazilian market, the
Chilean company Embotelladora Andina has also consolidated its presence
in the Brazilian beverages market. Interestingly and unknown to most
Brazilians, Embotelladora Andina holds 57.5% of the market share of soft
drinks in Rio de Janeiro. Its operations in the Brazilian market have
enhanced the company’s standards of quality, whilst guaranteeing its
commitment to efficient processes.188
In technology, Sonda is an emerging actor in the Brazilian market.
Chile’s Sonda has operated regionally as a system integrator and IT service
provider. Its products and services include outsourcing, projects and systems
integration, software solutions, servers, PCs and specialised consultancy and
advice among others.189 According to Brazil’s Secretary of Economic
Monitoring (SEAE), the Sonda company holds more than 5% participation
in the social composition of companies operating in Brazil and Mercosur. In
the Brazilian market, the Sonda group, which controls the Huerta company,
provides solutions and services in the information technology sector aimed
at the development, implementation and commercialisation and sale of
hardware for companies.190
Transportation includes the Chilean company, Compañia Sud Americana
de Vapores (CSAV). Despite the difficulty in determining the geographical
location of their assets in the transportation sector, the company can be
considered part of the Brazil-Chile business cooperation dynamic for
fostering private partnership. Active communication within the transport
area, through the provision of haulage and freight services by sea to major
markets, should be considered as the infrastructure that led to proximity
between the two actors.191 Instead of considering business as an institution
isolated from the bilateral context, the Brazil-Chile cooperation ties are
sufficiently diverse so as to address the needs of the multi-criteria, more
187
The real is Brazil’s currency. See Thiago Bronzatto and Ana Luiza Leal. “Em quatro
anos, o varejista chileno Cencosud gastou 3 bilhões de reais em aquisições no Brasil”.
Revista Exame, 30th October 2013. Editora Abril, pp. 64-66.
188
Embotelladora Andina. http://www.koandina.com/
189
Sonda S.A., Business News Americas. http://www.bnamericas.com/companyprofile/en/Sonda_S,A,-Sonda
190
Parecer no 06797/2010/RJ COGCE/SEAE/MF, Ministério da Fazenda Secretaria de
Acompanhamento Econômico, 17 September 2010, pp. 3-4.
191
CSAV, http://www.csav.cl/index_en.htm
252
flexible approach of the study.
From the 1980 onwards, due to the reduced size of the country, Chilean
firms have concentrated on looking for other markets. As part of this
process, Chile’s natural resources provide a competitive advantage over
foreign competitors. Furthermore, the good domestic climate has helped
attract foreign investors, facilitating domestic firms’ development and
contributing to their expansion abroad. Along these lines, the well-achieved
entry into the Brazilian market is an important step towards achieving scale
economies, gaining more consumers and functioning as a platform for
Chile’s expansion in to other markets, for example Africa. Therefore, the
FDI bilateral approach between Chile and Brazil has led to long-term
benefits such as the transfer of technology, an increase in exports and the
fostering of regional integration and domestic competition. Bilateral
cooperation in different areas demonstrates the far-reaching focus of public
diplomacy when studying Brazil-Chile links, since bilateral ties go beyond
the state-centric approach.
3.4.8 The economic and historical FDI perspective
Although most studies focus on either the economic or historical perspective
without developing an interrelated dialogue between the two, a separate
analysis suggests that neither sector exerts influence on the other. Therefore,
they are not considered in most of the studies. However, the economic
context has social and historical roots which cannot be underestimated, to
the detriment of one of the focuses’ perspectives and a lack of sensitivity
regarding the historical influence on FDI, the tax system, imports and
exports, and the economy in general. 192 This study endeavours to understand
the history of Brazil-Chile bilateral affairs, given that historical background
is an important element for understanding public diplomacy and nation
branding concepts.
The increase in mutual foreign investment experienced by Chile and
192
The tax system important for understanding the pragmatic approach to Brazil-Chile
relations. In her second term, President Michelle Bachelet promised to implement a tax
reform. The government’s target was to raise an extra 3% of GDP to be spent on education.
“An agreement on tax reform mars a turning-point for Chile”, The Economist, 19 July 2014,
vol. 432. London, p. 32.
253
Brazil since the 1990s enforced the international tendency for developing
countries to become sources of foreign investment instead of mere recipients
of it. The lowering of barriers to foreign investment also played a significant
role in facilitating the flow of investment. Since Brazil and Chile have
strong historical institutions, both democratic regimes and social stability
help to provide a favourable scenario for mutual foreign investment.
Moreover, Chile is taken as an example of public accounts, while Brazil has
become a centre of international attention. In this context, strengthening ties
favours both countries’ economies and further strengthen partnerships in
other areas, such as cooperation in terms of macrocooperation (policy) and
microcooperation (cooperation between Brazilian and Chilean cities as socalled paradiplomacy).
When analysing a country like Chile, it is expected that the majority of
FDI focuses on the exploitation of natural resources, particularly in sectors
with major comparative advantages such as copper mining.193 At the same
time, the majority of the FDI of countries with larger domestic markets, like
Brazil, are supposedly to have most of their FDI orientated towards
production for the supply of their own market (Zabala, 2008: 19). The
following considerations endeavour to answer these assumptions.
Despite Brazilian tax system being complex and unfair and demanding
urgent reforms, this has not jeopardysed Chilean investments in the longrun. However, the first attempts at Chilean investment faced certain
difficulties about how the Brazilian system of tax collection worked. For
instance, the companies Iansa and Farmacias Ahumada faced several
obstacles when trying to carry out a long-term investment strategy.194 As
Camargo points out:
“The withdrawal of certain Chilean enterprises has to do with the difficulties of
recovering credit for the Brazilian tax on the circulation of goods and services. The
193
Between 1974 and 2008 in Chile, 27.1% of the net accumulated FDI corresponded to the
mining industry, followed by services (22.5%), electricity, gas and water (22.1%), transport
and communications (12.5%) and manufacturing (11.4%). Foreign Investment Committee.
23rd August 2009. “Foreign Investment in Chile/Net accumulated DL 600 investment”.
http://www.cinver.cl/english/clima/inversion_600.asp
194
Iansa is one of the principal agro-business groups in Chile and specialised in the sale and
production of sugar and sugar-beet-subproducts. Iansa, “Our company”. http://www.
iansa.cl/index.php/nuestra-empresa/?lang=en
254
complex Brazilian tax system in which certain taxes are levied by the federal
government, others by the state government and others by municipalities demands
a certain degree of understanding on behalf of the taxpayer. The Brazilian taxation
system complies with many taxpayer obligations and needs cautious analysis.”195
Although a discussion of Brazil’s complex tax system is the scope of this
study, it should be highlighted that even Brazilian companies that seek
internationalisation face the same problem. The major transformation that
international affairs have undergone creates a contemporary scenario in
which new topics and forms of interaction between diverse actors emerge.196
In this sense, the state-centre relationship has changed. Not only with regard
to the sectors directly involved in foreign affairs but also subnational
authorities have led a decentralised relationship between countries. This
means that decentralisation initiatives have allowed new actors to participate
in foreign policy, shifting the focus of bilateral relations somewhat and
encouraging an increase in more flexible network links. With this in mind,
cities, states and provinces also become critical actors in the international
arena. The decentralised approach goes hand-in-hand with the idea of public
diplomacy and paradiplomacy, given that both concepts highlight the
significance of decentralised actors in foreign affairs.
The Brazil-Chile bilateral approach encompasses a multi-criteria context
in which flexibility is a core element to understanding the relationship
between the two countries. Analysis from a political-economic perspective
has a significant potential to help understand that Brazil-Chile links go
beyond traditional diplomacy and that dynamic private sectors also play an
important role in bilateral affairs. Insofar as official actors are not the only
decision-makers in contemporary international relations, decentralised
networks become relevant mechanisms for conducting foreign affairs.
Moreover, Brazil-Chile relations provide a different picture of how
diplomacy works, given the relevance of economic sectors in bilateral links.
Another crucial point that must be considered is the importance of taxes
in bilateral affairs, since trade is an important sector in bilateral relations. In
195
Álvaro Camargo, Director of ProChile in Brazil. Interviewed on 13 February 2014.
More information available at: Deloitte, “Overview of the Brazilian tax system”.
Accessed on 6th May 2013. http://www.deloitte.com/assets/Dcom-Brazil/Local%20Assets/
Documents/Ind%C3%Bastrias/Petr%C3%B3leo%20e%20G%C3%A1s/ OverviewBrazilian
Taxation.pdf
196
255
this sense, initiatives that seek integration through the tax system and the
search for economic similarities between both countries’ values encourage
more efficient and effective tax collection procedures. In addition to
economic cooperation efforts, investment in infrastructure in order to bring
the countries into physical proximity produces clear benefits for bilateral
relations. This approach recognises other elements as critical when bringing
up broader cooperation between the two. The emerging role of non-official
actors is considered an essential argument of the public diplomacy concept,
which provides the central idea for understanding the Brazil-Chile
decentralised approach.
3.5 Brazil-Chile Ties during the Administrations of Presidents Rousseff
and Piñera
The persistent scepticism about Brazil-Chile relations during the term of the
Brazilian President Dilma Rousseff and the Chilean President Sebastián
Piñera compared to the previous governments of President Lula and
President Bachelet, in which a more consistent dialogue was achieved led to
misconceptions about how bilateral links were conducted. As observed in
previous chapters, Brazil-Chile bilateral relations are not as intense as the
relationship both states have with their common neighbour Argentina. At
the same time, the Brazil-Chile relationship is not the most important
bilateral partnership for either Brazil or Chile. In terms of foreign policy
goals, President Piñera focused on the Pacific Alliance as part of his
government’s platform. Brazil, on the other hand, prioritised its role as an
emerging global player, as well as a continental leader.
Piñera has defended the fact that the country’s foreign policy aim was the
Pacific Alliance. This ambitious project aimed to coordinate trade policies
of the Pacific Basin countries seeking better access to the Asian market.
Linking Chile, Peru, Colombia and Mexico, the project also aimed at
including Panama, Costa Rica and other Central American countries. The
targets of its members were set out in the Lima Declaration on 29th April
2011, in which the presidents of the four states expressed their commitment
to progressively moving towards the goal of achieving the free movement of
goods, services, capital and people.197 Its position as a regional leader and as
197
Infolatam, Información y análisis de América Latina, “A Aliança do Pacífico: o
256
an emerging global player and considering the structural changes that have
marked the country since the beginning of the 1990s, Brazil employed
diplomatic actions to achieve these aims. Brazil’s weight on the
international scenario led to its increasing participation in multilateral
forums and a foreign policy orientation that reflected its new role.
However, as argued in this study, the fact that Brazil and Chile did not
develop strong diplomatic ties does not indicate lack of bilateral relations.
On the contrary, during the administration of Presidents Rousseff and
Piñera, both countries signed agreements to share a military base in
Antarctica. According to the agreement signed on 26th January 2013, Brazil
was able to use the facilities provided by Chile’s military base while
rebuilding its base, destroyed by fire in February 2012. As part of the
announcement, Rousseff stated that this was a good opportunity to
encourage closer links between the two nations.198 Furthermore, the two
countries signed a memorandum of understanding between their Ministries
of Education, which allowed for exchanges at graduate level and in higher
and technical education, encouraging the learning of Portuguese and
Spanish. President Piñera pointed out the possibility of cooperating in the
bioceanic corridor project and in the area of generating ‘clean energy’. 199
The possibility for cooperation among various sectors provided the
circumstances for broadening and strengthening coordinated action.
A diverging diplomatic focus does not interfere with the possibility of
undertaking bilateral cooperation initiatives. The Brazil-Chile approach goes
beyond traditional diplomacy, with the interaction of private groups in the
two states, as well as of the new actors that emerged within the bilateral
relationship, who demanded a new way of studying current bilateral ties.
Public diplomacy encompasses the different dimensions in which bilateral
relations develop. The increasing domestic relevance of foreign policy in the
last few years shows that internal debate over foreign affairs has become
nascimento de um colosso”. Madrid, 5th June 2012. http://www.infolatam.com.br/2012/
06/06/a-alianca-do-pacifico-o-nascimento-de-um-colosso/
198
R7 Noticias, “Brasil e Chile assinam acordo para compartilhar base na Antártida”.
Accessed on 26th January 2013. http://noticias.r7.com/brasil/brasil-e-chile-assinam-acordopara-compartilhar-base-na-antartida-26012013-4
199
Emol.Chile, Felipe Vargas. “Presidentes de Chile y Brasil firman acuerdos bilaterales en
Educación, Cultura e Investigación”. Saturday, 26 January 2013. http://www.
emol.com/noticias/nacional/2013/01/26/581050/presidente-pinera-y-dilma-rousseff-firmanacuerdo-de-cooperacion-educacion.html
257
relevant in Brazil and that the importance of foreign policy in domestic
politics demands a multifaceted approach.
Strengthening Brazil-Chile dialogue will occur in the coming years
through bilateral links and in multilateral forums. Furthermore, the two
countries share the same values in the international arena and both want to
maintain their support for key issues in the United Nations Security Council.
The mutual perception they have of each other as stable allies provides the
context in which Brazil and Chile have developed their relationship from the
1990s onwards. Public diplomacy, nation branding, presidential diplomacy
and paradiplomacy sustain the multi-sector approach necessary to
understanding the Brazil-Chile relationship. The growing participation of
other actors beyond traditional diplomacy and the emerging role of
transnational topics have demanded new mechanisms for studying foreign
affairs.
Considering Brazil’s huge dimensions, the nature of the country’s role in
Brazil-Chile relations is of great importance. As long as Brazil exerts
regional leadership, it will be easier to strengthen bilateral relations with
Chile, since the latter will see solid benefits from the partnership. However,
it should be argued that important steps towards the development of bilateral
ties have already been put into action, through bilateral cooperation in
diverse sectors, as demonstrated in this chapter. Brazil’s emerging role as a
global player change Chile’s approach to the country at some point, insofar
as the latter recognised the need to strengthen ties.
258
Chapter 4
Brazil, Chile, the United States and Argentina
Managing their Nation Brands
The expansion of multi-level cooperation between states, as well as newly
emerging topics on the international agenda and the emergence of new
actors in the international community have produced a change in the focus
of international studies. The three topics described in the first chapter have
gone beyond the limits of traditional diplomacy. Today’s message to think
and act globally has become a key element to promoting a better
understanding of international affairs. Since there are increasingly
interrelated issues facing governments worldwide, traditional diplomacy has
proven to be ineffective when dealing with current international relations.
Diplomacy cannot be restricted to a state’s activity, so the focus has shifted
from the exclusive campaigns of state actors to inclusive participation and
the increasing engagement of non-state actors. Foreign affairs increasingly
stems from horizontal links, to the extent that not only is the Brazil-Chile
relationship built on a decentralised base but the United States and
Argentina cannot be studied exclusively from a traditional diplomacy
perspective. The interaction between private groups should not be
underestimated in the context of the ties between the United States-Brazil
and the United States-Chile, as well as those between Argentina-Brazil and
Argentina-Chile.
Public diplomacy and nation branding are a two-way process in which
the participation of citizens increases and it is not only official actors who
play an active role in foreign affairs. It should be taken into account that
both concepts highlight a deepening public-private interaction. Indeed,
public diplomacy and nation branding is top-down perception, setting the
stage for a broad-based dialogue. The importance of inter-sector
participation cannot be underestimated, since mutual support plays a
decisive role in creating greater cohesion between public diplomacy and
nation branding, converging long-term aims (Guitian, 2013: 17).
Along with Brazil-Chile bilateral relations, Argentina has always played
a key role in determining whether the two actors strengthen their ties or
259
distance themselves from each other. For instance, at the beginning of the
War of the Pacific, boundary disputes between Argentina, Chile and Brazil
played a decisive role in bilateral relations. The disputes between Chile and
Argentina over the region of Patagonia and the Tierra del Fuego archipelago
raised concerns in Chile (Canaveze, 2008: 3). Indeed, Brazil and Argentina’s
past rivalry encouraged Brazil-Chile long-term links. The need to contain
their common neighbour, Argentina, sustained an unwritten partnership
between Chile and Brazil the so-called ‘friendship without limits’,
‘traditional friendship’ or ‘friendship without examples’. All these terms
serve to create a favourable atmosphere for further developing diplomatic
relations between Brazil and Chile. Friendship was important for both
states. From Brazil’s perspective, Chile was an important ally against
Argentina. In Chile’s view, Brazil-Chile links helped maintain the balance
with Buenos Aires, while facilitating the relationship with Bolivia and Peru
(Soto, 2012: 17). For both partners, the alliance served as an important
element for maintaining geopolitical balance in the Southern Cone.
Another central actor in Brazil-Chile relations was the United States,
particularly during negotiations with Mercosur. In this respect, the United
States was considered one of the main obstacles to Chile joining the
regional integration initiative. United States foreign policy has had a
tremendous impact on Brazil-Chile links, especially considering the
consequences of the United States-Chile Free Trade Agreement (FTA) that
came into force on January 1st 2004 (Murphy, 2005: 160). For obvious
reasons, the FTA with the US reflected Chilean foreign policy’s priorities to
the detriment of Mercosur integration.
The Mercosur Summit on 14th-15th December 2000 in Florianópolis
(Brazil) illustrated this point, since Chile left the summit early to engage in
bilateral free trade negotiations with the United States. The fact that
President Cardoso was not officially informed of this by his Chilean
counterpart caused discomfort in Brazil-Chile relations. Like Argentina, the
United States is a fundamental actor that affects Brazil-Chile bilateral ties.1
Brazil and Chile have changed their bilateral links with the United States
over the years, since the increasing participation of new actors demanded a
multifaceted approach to reporting the impact of Argentina and the United
1
See United-States-Chile Free Trade Agreement Implementation Act. 29th July 2003, p.
36.
260
States on Brazil-Chile bilateral affairs.
Dynamic international relations demand a network approach like that
provided by the concept of public diplomacy. Insofar as investments and
trade play a relevant role in foreign affairs, public diplomacy supports
Brazil-Chile links with the United States and Argentina. For instance, the
United States-Chile FTAs involve important aspects such as reducing trade
barriers for services, protection of intellectual property and nondiscrimination in the trade of digital products.2 Brazil has also enjoyed
strong relations with the United States, consisting of the signing of ten
bilateral agreements in March 2011, five more in April 2012 and 11 in June
2015. For example, Brazil and the United States’ private sectors are
institutionalising their defence engagements in order to exchange
information and ideas.3
Although commerce is an important element for Brazil-Chile relations
with the United States, the relationship between them is not constrained to
trade flows and investments. The relationship between Brazil and the United
States is much broader, as explained by the public diplomacy concept. From
Brazil’s standpoint, the United States has become important in terms of
being an export market for Brazilian commodities. Losing its position as the
main market for China has not diminished the United States’ status as a
significant player in Brazil-Chile bilateral ties. The Free Trade Area of the
Americas (FTAA) is an important example of the United States maintaining
an ambitious platform for Latin America (Schott, 2005: 2). Despite 34
countries opting to abandon the project and the harmonisation of trade
policies in 2003, Chile’s interest in negotiating free trade agreements with
the United States guided its foreign policy and did not favour Brazil-Chile
links at that time. However, the fact that these countries share common
fundamental international values and a long-term historical friendship
demands a broader approach to help understand the two countries’ unique
relationship.
The economic crisis of 2008-2009 favoured the emergence of
protectionist policies and led to what some actors called a lack of agenda
2
See Office of the United States Trade Representative, “Chile Free Trade Agreement”.
https://ustr.gov/trade-agreements/free-trade-agreements/chile-fta.
3
See US Department of State, “U.S. relations with Brazil”. 29 July 2015.
http://www.state.gov/r/pa/ ei/bgn/35640.htm.
261
between Brazil and the United States .4 The decreasing importance of the
United States as an export market and imports supplier did not mean a lack
of cooperation between Brazil and the United States. In this sense, the
decrease in trade activities cannot be related to a lack of bilateral dialogue,
since foreign policy encompasses a multifaceted context for interaction.
New kinds of bilateral links emerged between the United States and Brazil,
given the increase in the export of primary products to and Brazilian
investments in the United States (Meyer, 2016: 12). Increasing horizontal
links within bilateral ties is aligned with strengthening the role of political
actors and the business sector to thus improve the dialogue between the two
states. Moreover, strengthening civil society’s participation of civil society
is fundamental to increasing the dimensions of international relations
beyond traditional diplomacy.
The emergence of a United States-Brazil global partnership dialogue to
the detriment of the previous perception of Brazil as restricted to regionallocal player has changed the nature of their bilateral relations. The United
States only recognised Brazil as a prominent global player in lesser politic
topics such as trade, finance and climate change, thus Washington did not
back Brazil’s aspirations for a permanent seat on the UN Security Council. 5
In 2008, the target for bilateral trade volume was US$ 53 billion. Until that
year, the United States had been the largest export market and largest import
supplier to Brazil since 1989. By 2009, China has become Brazil’s dominant
trading partner. Although the United States has been the largest provider of
foreign direct investment (FDI) in Brazil, particularly in financial services,
the chemical industry and oil and gas, a growing interest in agro-business
provided new opportunities for bilateral dialogue (Almeida, 2008: 7). As
Chapter 5 intends to show, energy and particularly ethanol encourages
bilateral dialogue between Brazil and the United States.6 Energy and ethanol
4
The absence of a formal economic agenda led to the forced addition of several specific
issues not directly related to the attempt to create a coherent agenda in the economic area.
The two countries’ foreign policy focused on facilitating trade and investment without
aperture to mutual markets or harmonising broader policies. Diego Zancan Bonomo (2011),
“As relações econômicas Brasil-EUA”, in Política Externa, vol. 19, n o 4. São Paulo: Paz e
Terra, p. 100.
5
See Mercopress, “Obama praises Brazil, but falls short of backing bid for UN Security
Council”. Sunday 20th March 2011. http://en.mercopress.com/2011/03/20/obama-praisesbrazil-but-falls-short-of-backing-bid-for-un-security-council.
6
Although Brazil-United States decreased the two countries maintained strategic
262
are not only significant to bilateral affairs, energy is also a central
component for Brazil nation branding strategy.
The countries differ considerably concerning the development of their
nation brands. Whilst Chile promotes itself as an efficient and transparent
country in which to do business, Brazil focuses on its sustainable and
renewable energy matrix. As has already been said in the first chapter, small
countries tend to devote more time and effort to projecting a positive nation
branding to distinguish themselves in the international arena. However, the
increasing importance of nation branding worldwide has also had a
significant impact on Brazil’s image projection, to the extent that its nation
branding is not restricted to stereotypical images such as soccer, ‘samba’,
‘mulatas’ and ‘carnival’ and the country has launched energy as its most
visible brand (Niesing, 2015: 12-13). Compared to branded countries, Brazil
has almost no commercial international brands although, ironically, it is one
of the most strongly branded countries in the world.
Curiously, the Brazil brand per se says a lot by itself, with people
immediately associating it with samba, carnival, sex, soccer and beaches. In
fact, these images are much more easily related to tourist attractions than the
destination that targets business. The definition says much more about how
stereotypes are understood, in other words the features – whether good or
bad - that differentiates one group from the other. Indeed, for the average
Brazilian, these may be even insulting clichés. However, it should be
recognised that these stereotypes do help sell many kinds of product. As
Anholt highlights, “After all, strong brand is a rich brand and richness
implies a complex and satisfying mix of many different elements” (Anholt,
2010: 30).
In contrast, America has been one of the most expensive market brands
in the past century compared to the rest of the world, which means it is
defined as the world’s leading nation branding. In this respect, America is
referred to as a megabrand, whose image is so powerful and positive that is
hardly necessary for it to be rebranded, with Hollywood as its exclusive
advertising agency and NASA as an agency to help promote and spread
America’s all-pervasive image (Anholt, 2010: 27-29). Even though brand
images of the United States also contain negative elements, they are not
partnership. See Matthew Schewel (2009), “Brazil’s Rousseff makes push for biofuels”,
Inter-american dialogues, 22 July 2009. Washington, D.C.
263
enough to diminish its attraction in practical terms.7
Argentina’s dramatic economic situation led the country to reformulate
its nation brand, with long-term national image strategy. For most people,
Argentina has long been linked to the Falklands dispute and the lessons
learned from its default in 2001. However, Argentina has a very strong
nation branding in terms of tourism and cultural attractions. 8 The bestknown and most emblematic Argentine symbols are the ‘tango’, the
legendary ‘gauchos’ and its passion for soccer. This multifaceted tourism
has been linked to slogans such as ‘Argentina beats for you’, ‘Argentina,
more than one reason’ and ‘Argentina, a serious country’ (Foster, 1998:
153). The country is particularly famous for its sporting potential, especially
in soccer, tennis and basketball as illustrated by the success of stars such as
Lionel Messi, Juan Martin del Potro and Emanuel Ginoboli, who have all
participated in major advertising campaigns.
How it is perceived politically has also improved somewhat. As
Macmillen points out, “international respect has been shown for its attempts
to try those responsible for the egregious human rights abuses of the last
military dictatorship and the legislation to legalise same-sex marriage in
2010 displays a burgeoning liberalisation that is positively viewed abroad
(Macmillen, 2011).”9 Its nation branding policy is a coordinated effort
between the government supported by the Strategic Country Brand and the
Inter-Ministerial Commision that seeks to export the ‘Argentina’ brand
abroad. Brand activities have converged to coordinated bilateral efforts
between Argentina and Brazil for the Iguazu Falls to become one of the new
Seven Natural Wonders of the World. This joint campaign has had positive
7
The Iraq War, entered into despite opposition from public opinion worldwide, could not
be justified by means of public diplomacy. Guantano Prison is another example of the lack
of legitimacy in sustaining public diplomacy targets, given the doubtful legality of
imprisoning people there. Peter van Ham (2005), “Power, public diplomacy, and the Pax
Americana” in Melissen, Jan, The new public diplomacy: soft power in international
relations. London: Palgrave Macmillan.
8
See Daniel de Castro Linhares and Isaak Newton Soares (2012), “Marca país: a logo
como um recurso mercadológico dos países latino americanos”, Percurso, vol. 12, n. 1.
Curitiba: UNICURITIBA.
9
Macmillen, Dmitri. “Nation Branding in Argentina: Twenty years on rebranding
Argentina”.http://www.culturaldiplomacy.org/culturaldiplomacynews/content/pdf/Cultural_
Diplomacy_Outlook_Report_2011_-_04-01.pdf
264
results since voting led to a provisional win for the Falls. 10
Whereas Argentina’s image has vastly improved in the past decade, a
better international insertion strategy to tackle domestic problems requires
further initiatives to improve the country’s image after the largest debt
default in its history in December 2001 (Anholt, 2010: 27-29). Furthermore,
the entire political class lacked popular support, the currency was
dramatically devalued and there was rampant inflation and doubts about
debt restructuring and bond repayments. All these elements led to an
uncertain economic and political scenario that did not attract foreign
investments. The difficult relationship between Argentina and the IMF due
to the country failing to provide adequate statistics led to a difficult
economic scenario in the following years.11 This instability made it
difficulty to conduct business internally and the economic interdependence
between Brazil, Chile and Argentina suffered the effects of the chaos in
Argentina. The current level of interdependence between the three actors is
on the increase, because the effects of the economic policies put into
practice in one country are transferred to the others, given that Brazil, Chile
and Argentina are macro-economic trading partners.
In contrast to Brazil, Chile has made consistent efforts towards a longterm nation branding strategy to attract foreign direct investment. In this
sense, Chile has focused on the macro-economic fundamentals of its
economy, its commitment to economic liberalisation and free market
policies as the best ways of communicating its message. The Chilean nation
branding strategy has clearly positioned itself in the market sector to boost
inward investment. International marketers have begun to understand the
added benefits of managing their brands and brand management has become
a critical aspect for attracting global capital (Anholt, 2010: 28). The
increasing importance of nation branding policies has led to the fact that
almost every country implements a nation building strategy in one way or
10
Official confirmation of Iguazu Falls as one of the New Seven Wonders of the World
was given at the Brazilian Embassy in Buenos Aires. The coordinated campaign between
Brazil and Argentina ended on 11th November 2012. “Iguazu Falls officially confirmed a
Wonder of Nature”, World of New 7 Wonders. http://world.new7wonders.com/2012/
02/23/iguazu-falls-officially-confirmed-a-wonder-of-nature/.
11
Jaime López (2014), “Argentina intenta hacer las paces con el FMI, necesita de un
préstamo de 10.000 millones para evitar la suspensión de pagos”, El Mundo, Economía,
26/02/2014.
265
another.
Chile has devoted significant efforts to building up a well-consolidated
nation branding as part of its international insertion strategy and the
importance of nation branding has also increased in Brazil. Therefore,
Brazil-Chile bilateral ties cannot be studied without taking into account the
nation branding concept. Chile’s nation image has key consequences for
Brazil-Chile relations given that, beyond traditional diplomacy, so-called
‘business dipplomacy’ also plays an important role in bilateral links. This
means that not only are government representatives important actors in
bilateral relations, but non-governmental stakeholders are also crucial to
explaining bilateral ties (London, 1999: 10). The study of the process of
branding a nation serves as a key element to understanding interstate
relations, particularly in the context of the Brazil-Chile relationship.
4.1 Chile’s Reformulated Nation Branding
Although nation branding is a new concept that dated from 1996, the idea of
rebranding a nation’s image is not completely new. From Chile’s view, the
concept of nation branding links a market perspective with business
diplomacy. It means that a nation branding strategy is an important way of
projecting Chile’s image as a new ‘tiger’ country. Pragmatic economic
policies, together with the demands of promoting exports, have become a
defining feature for success in the current economic context. As already
observed and discussed in Chapter 3, the nation brand allows a country to
attract greater foreign direct investment (FDI), insofar as it encourages
investor interest in the opportunities available in a country. Increasing
investments provides income streams and helps insert national products into
the world market.12
Nation branding is not restricted to the economy, with other dimensions
playing a relevant role, such as the tragedies that hit Chile in 2010. The
disastrous earthquake and the cave-in of a mine and subsequent rescue
operation of the 33 miners trapped in the Atacama region demonstrate that
12
See CEPAL, “La inversión extranjera directa en América Latina y el Caribe”.
http://repositorio.cepal.org/bitstream/handle/11362/38214/S1500535_es.pdf;jsessionid=174
B5168F56F2CEE4FBDD94403D0C2FA?sequence=4.
266
tragic incidents change the country’s international image.13 Although,
impossible to predict, both incidents provided the opportunity for leveraging
Chilean national support and brand recognition. Indeed, both episodes
brought Chile into the daily news worldwide. Coincidentally, in nearly all of
the media coverage shown, the Chilean flag was clearly present with
Chileans projecting their product to audiences across the world.14
One way or another, both the benefits of the targets of tourism
destination brandings and nation brands policy operate in a very volatile
external environment. For example, external factors such as war, political
turmoil or even negative media coverage can lead to disastrous
consequences in terms of brand image. For small countries with a limited
global voice like Chile, even regional instability can have devastating results
on the economy. As Morgan and Pritchard remind us, “Although tourists
may resume ‘normal’ travel habits after a single terrorist event, it is
becoming clear that investors may take longer to return to what they
perceive as unreliable business climates” (Morgan and Pritchard, 2010: 62).
Therefore, serious efforts are being made to promote Chile’s positive
business environment as a successful brand. In this context, Chilean brand
managers promote its political stability, the modernisation of the state, its
tradition of democracy, its independent judicial system, its social cohesion
and its economic freedom. Moreover, the idea of it being an exception,
which is a key element to Chile national identity, plays an important role in
differentiating the brand from competitors. This point is central to the
direction, purpose and meaning of the Chile as a stable, trustworthy and
peaceful country in the Latin American continent.
4.1.1 Brazil’s energy brand
Brazil has made little efforts to develop its brand, compared to other
13
Larraín, Maria Cristina Prieto. “Branding the Chilean nation, socio-cultural change,
national identity and international image”. Universiteit Leiden, 24th November 2011.
Accessed on 19 May 2013. https://openaccess.leidenuniv.nl/bitstream/handle/1887/18141/
front.pdf?sequence=16
14
Nicholet. “Chile: an emerging national brand built from the red, white and blue”. Global
Marketing: Georgetown University, 2nd July 2011. http://2011globalmarketing.wordpress.
com/2011/07/02/chile-an-emerging-brand-built-from-the-red-white-and-blue/
267
countries’ costly and constant investments in the policy of branding a
nation. However, the idea that Brazil could develop a global brand is not a
distant prospect. The fact that Brazil has hosted two international events of
great magnitude, the World Cup in 2014 and the 2016 Olympics (in Rio de
Janeiro) will probably accelerate its destination branding. Apart from what
is already known about Brazil, such as the visual image of Christ the
Redeemer at Mount Corcovado, events such as the carnival and music such
as samba, its brand can also propagate a much more complex and diverse
mix of new elements.15
Illustrating this point is the emerging brand of Brazilian ethanol, which
today is part of the business sector. As an important energy resource,
ethanol is an example of the relevance of public-private cooperation in
public diplomacy. The development of ethanol as a sustainable energy
source has laid the groundwork for a high value Brazilian brand based on
renewable energy. The relationship between the strategies of public
diplomacy and nation branding in the context of ethanol can be identified.16
Moreover, presidential diplomacy is a central element to promoting
ethanol as a renewable energy source. Presidential diplomacy contributes by
projecting ethanol’s positive image as a sustainable resource abroad.
Actions carried out by the head of the Executive branch have had an
important impact on foreign policy strategy. President Lula has been
overwhelmingly supportive of projecting ethanol as Brazil’s nation brand.
President Lula’s state visits to Finland, Sweden, Denmark and Norway in
September 2007 underline this point. Among the topics at official summits,
the emphasis on biofuel cooperation and energy efficiency in the field of
ethanol cannot be underestimated.17
Furthermore, given the global circumstances, developing countries also
benefit from a move towards ethanol exports. From the Brazilian standpoint,
potential biofuel development reduces developing countries’ dependence
15
See Sicco van Gelder (2005), Global brand strategy: Unlocking brand potential across
countries. London: Kongan Page Limited, pp. 20-21.
16
However, with Brazil’s political and economic crises in 2015 and 2016, ethanol has been
one of the hardest hit sectors. See Daniel Gallas (2015), “Brazil’s biofuel industry finds
new sweetspot”, BBC News. http://www.bbc.com/news/business-33114119.
17
“Visit of President Luiz Inácio Lula da Silva to the Nordic countries”. Ministério das
Relações Exteriores. http://www.itamaraty.gov.br/sala-de-imprensa/notas-a-imprensa/2007/
06/visit-of-president-luiz-inacio-lula-da-silva-to
268
abroad, besides generating income for their populations. Promoting biofuels
as a vector of sustainable development has led Brazil to cooperation
agreements with several countries in recent years. In this context, the
memorandum of understanding between Brazil and the US to advance
cooperation on biofuels, in which they agreed to cooperate on the research,
development and deployment of biofuels, deserves a special mention. 18
Brazil is a major player in the world ethanol market and can increase its
production of ethanol by expanding into sugar cane. Whereas Brazil has not
yet developed an outstanding ethanol branding strategy, its foreign policy
has made a significant effort to brand the positive attributes of ethanol and
biofuels. To contribute to the discussion, high-profile international activities
have been held by Brazil, such as the International Biofuels Conference that
took place in São Paulo in November 2008.19
Even if the promotion of renewable energy sources is, to some extent,
restricted by the context of foreign policy, the important role played by the
projection of ethanol as a leading renewable energy source should not be
diminished. Moreover, the official opening of the Panamerican Games in
2007 in Rio de Janeiro was accompanied by the slogan of ‘Viva essa
energia’ (Experience the energy), which sought to stress Petrobras’
commitment to developing clean and renewable energy sources. Petrobras’
marketing strategy attempted to use the word energy in both ways, referring
to energy as a fuel and, at the same time, to the athletes’ surpassing their
limits and achieving their goals. 20 Petrobras has also developed a
communication strategy for South America by launching television
commercials linking Petrobras, a renewable energy source with Brazil.
Brazil has begun to work on a believable global brand, focusing on new
sources of energy. To achieve this goal, the establishment of an inter-sector
partnership has occurred, associating the public and the private sector.
18
“Memorandum of understanding between the United States and Brazil to advance
cooperation on biofuels”.http://www.cfr.org/publication/13132/memorandum_of_under
standing_between_the_united_states_and_brazil_to_advance_cooperation_on_biofuels.htm
l
19
“Brasil prepara conferência internacional para debater biocombustíveis”. Biodieselbr.
com,http://www.biodieselbr.com/noticias/biodiesel/brasil-prepara-conferenciainternacionaldebater-biocombustiveis-10-04-08.htm
20
“5o Seminário de comunicação e marketing, Petrobras e PUC-Rio”, Pensamento criativo,
http://www.pensamentocriativo.com.br/seminarios/5_seminario_de_comunicacao_e_marke
ting_petrobras_e_puc_rio
269
Several sectors have embarked on the branding process, Petrobras
representing private law, presidential diplomacy carried out by President
Lula on his state visits and public diplomacy, in which the business sector
plays a major role, accompanied by the diplomatic corps.21 Despite the
absence of a consolidated agency that carries out Brazil’s branding strategy
(Chile has the Foreign Investment Committee), Brazil understands that
branding its image can profoundly shape its economic and political destiny.
Having understood the role played by new energy resources in sustainable
development, Petrobras ceased to operate exclusively with oil and became
an integrated energy company in the broader sense. Although not
megabrand like the United States with its powerful image, the Brazil brand
has gradually been recreated to the point that its well-known clichés are
rebranded into something more substantial, fair and true.
4.1.2 Chilean and Brazilian relations with the United States
As already discussed, the end of the Cold War redefined the scenario of
current foreign affairs in the continent. The new scenario embraced two
types of relations: the interstate relations between Latin American countries
themselves and the relations of Latin American countries with the United
States. It should be remembered that during the Cold War, relations with the
United States were fundamentally defined in terms of political and security
matters, as the main aim was to confront the threat of communism. With the
end of the Cold War, it is understandable that the 1990s were characterised
by the setting of a new continental agenda whereby foreign policy priorities
had to be redefined (Holden and Zolov, 2011: 16).
In this context, a more benign economic environment was developed,
attracting investment, implementing liberalised economic reforms and
building trade integration arrangements. Furthermore, academia has been
optimistic about the main circumstances that constitute the framework for
preventing conflict and fostering cooperation in Latin America. Ironically,
21
Petrobras is a joint capital company and a member of the indirect public administration
established by the Public Power with the mandatory participation of public and private
capital. Marcelo Alexandrino and Vicente Paulo, Direito administrativo descomplicado.
São Paulo: Método, 2010, p. 74.
270
these changes are expected to create a favourable architecture for
hemispheric relation, based on cooperation, solidarity and common identity.
On the other hand, sceptics believed that, as a super power, the United
States could restrict its relationship with the closest countries in Latin
America and the affairs that affect Washington most directly (Fonseca,
2007: 65-66).
Despite liberalised economic environment, certain aspects of the
international economic scenario should be taken into account to explain the
background of Brazil-Chile-United States affairs. The lost decade of the
1980s had significant influence on Latin American economies, given the
stagnation these countries suffered (Batista, 2016). In 1979, the United
States raised its interest rates, meaning the end of easy cheap money, which
led to the beginning of a financial crisis in Mexico (in August 1982) and in
Brazil three months later. This measure promoted capital attraction and the
revaluation of the dollar, while weakening the position of poor countries’ oil
net importers.22
Debt crises and defaults in Latin America occurred through transferring
resources to debtor countries to return money to creditor banks such as the
IMF of which Brazil was a regular customer at the time. The IMF was an
actor that controlled Brazil’s economic stability, as well as the World Bank.
IMF loan agreements with Brazil provided important short-term relief,
helping to finance the current account deficit and stabilise the real exchange
rate. Nevertheless, IMF support demands economic conditions, specify
policy goals and structural performance criteria. The country must submit a
detailed report on a quarterly basis as a precondition for access to loans. The
absence of formal links between the FTAA and the IMF, since the latter are
not the commited to fostering regional free trade agreements, does not mean
both institutions lack influence. As Batista Junior states, this connection can
have an informal background and affects Brazil-FTAA negotiations. The
defence of Brazilian interests vis-à-vis the FTAA can also have significant
consequences for the IMF agreement process.23
According to United States’ financial policy, Chile carried out a process
22
See David M. Cutler (2002), “Financial crisis, health outcomes and ageing: Mexico in the
1980s and 1990s”, Journal of Public Economics, vol. 84, Issue 2, May. London: Elsevier,
pp. 279-303.
23
Paulo Nogueira Batista Junior, O Brasil e a economia internacional: recuperação e
defesa da autonomia nacional. Rio de Janeiro: Elsevier, 2005, pp. 105-106.
271
of financial adjustments and economic reforms, economic and trade
liberalisation and the privatisation of state-owned countries, among other
measures. There was consensus in Chile’s foreign policy over the country’s
strategy as an international trading state.24 Brazil opted for partial adherence
to economically liberalised policies, since it conducted part of the economic
liberalisation programmes. According to Brazil’s economic perspective, low
levels of privatisation, a heavy taxation system and the absence of fiscal
reform remained part of the country’s domestic policy (Almeida, 2012: 1567).
The fact that Brazil opened up some sectors of its economy - such as the
finance, electric power and concessions for transport - without improving
bilateral relations caused certain discomfort, since the country expected to
receive better treatment.25 In spite of Brazil’s position managing economic
liberalised measures, insufficient open market policies led to the United
States’ diplomatic hopes being disappointed. Another dimension also
affected bilateral links, given the increasing importance of trade and the
creation of the World Trade Organisation (WTO). This new scenario led to
the discussion of Brazil-United States trade disputes within a multilateral
perspective.26
24
During the 1980s, Chile had a critical need for loans from the IMF, given the economic
difficulties the country was facing. The economic crisis began in 1981 as a result of
increasing imports to the detriment of the decrease in exports of the country’s principal
commodities, particularly copper. “Chile recibirá del FMI un crédito de 900 millones de
dólares”. El País, Archivo, Thursday 6th January 1983. http://elpais.com/diario/
1983/01/06/economia/410655612_850215.html. Accessed on 11th June 2013. This is in
contrast to the IMF’s current present assessment that highlights Chile’s important financial
system that is, diversified and highly integrated into the global financial system. Moreover,
the country’s financial system weathered the crisis well – the result of strong balance sheets
and profitability overall, a robust regulatory framework, and timely action by the authorities
to counter the pressures on liquidity and the supply of credit during the crisis. “Chile:
financial system stability assessment”. August 2011, IMF Report No 11/261, Washington,
D.C., approved by José Viñals and Nicolás Eyzaguirre. http://www.imf.org/external/
pubs/ft/scr/2011/cr11261.pdf. Accessed on 11th June 2013
25
The Brazilian Privatisation Programme - PND - was instituted under Law No 8.031/90,
when the concept of privatisation became an integral part of the economic reforms initiated
by the government. See Brazilian Development Bank (BNDES), “Privatization in Brazil”.
p. 15. http://www.bndes.gov.br/SiteBNDES/export/sites/default/bndes_en/Galerias/Down
load/studies/priv_brazil.pdf
26
Brazil’s disputes over United States’ subsidies for the production, use and export of
upland cotton. “United States – subsidies on upland cotton. Brazil’s first submission to the
panel regarding the peace clause and non-peace clause related claims”. Ministry of Foreign
272
Brazil’s foreign policy underwent significant changes to acquire more
visibility in the international arena. This reshaped foreign policy gained
importance due to three facts: its emphasis on regional integration
processes, trade liberalisation and multilateral negotiations. As Mariano and
Vigevani highlight, an important factor that has contributed to this change
since 1989 is the quest for autonomy in the international arena, with the
term of President Fernando Collor de Mello bringing a ‘bilateral realigment’
with the United States instead of a multilateral-global paradigm for
approach to foreign policy.27 The strategy was to reformulate domestic
policy in order to align it with the doctrine of the Washington Consensus.
Collor changed the focus of the international insertion strategy, moving
away from Third World values and highlighting the importance of fostering
relations with the United States (Sposito, 2013: 119-120).
President Collor’s term reveals an interesting dynamic of Brazil’s foreign
policy towards the United States, in which some connections to Chile can be
made. Even if Brazil adopted a bilateral alignment with the United States,
the former did not fully support the demands of the latter. In contrast to the
Argentina of President Carlos Menem and the Mexico of President Carlos
Affairs.http://www.itamaraty.gov.br/o-ministerio/conheca-o-ministerio/tecnologicos/cgc/
solucao-de-controversias/participacao-do-brasil-nos-contenciosos-documentos/brasil-comodemandante/ds-267-estados-unidos-subsidios-ao-algodao-brasil/1-painel/peticao-inicial-dobrasil. The United States’ anti-dumping measures against the import of Brazilian orange
juice were another trade dispute that ended with a favourable ruling for Brazil. “BrazilUSA WTO dispute on anti-dumping measures on imports of Brazilian orange-juice – final
report”. Ministry of Foreign Affairs. http://www.itamaraty.gov.br/sala-de-imprensa/notas-aimprensa/contencioso-na-omc-entre-brasil-e-estados-unidos-sobre-medidas-antidumpingaplicadas-sobre-a-importacao-de-suco-de-laranja-brasileiro-relatorio-final-do-painel-brazil2013-usa-wto-dispute-on-anti-dumping-measures-on-imports-of-brazilian-orangejuice/?searchterm=contencioso%20suco%20de%20laranja%20OMC. Accessed on 10 May
2013.
27
In the period of Independent Foreign Policy (1961-1964) and in some military
government, since 1967, particularly during the term of President Geisel (1974-1978), this
search for autonomy seems to have been related to maintaining distance from international
affairs during the period of the Cold War. However, since 1989 there has been a profound
debate on the part of the elite and policy makers as to the aim of Brazilian foreign policy.
This then profoundly modifies the foreign policy strategy which seeks ‘autonomy through
participation’. Therefore, during the Cold War period, Brazilian foreign policy had been
conducted through the influence of Araújo Castro whose position went against the
establishment of policies opposed to the existing hierarchy of power. Despite oscillating
foreign policy, this situation lasted from 1967 until 1989 and constituted the foundation of
an ‘autonomy through distance’ policy (Mariano and Vigevani. 2006: 336).
273
Salinas, the alignment of Collor’s administration did not apply to all
circumstances, as will be observed. For instance, issues such as the
environment, regional integration and the Persian Gulf War illustrate this
point, given that Argentina sent troops into the Persian Gulf War while
Brazil only provided political support. In this sense, Brazil’s alignment with
the United States should not be interpreted as absolute support (Pecequilo,
2011: 50-2).
As will be analysed, the factors explaining Brazil’s performance in the
FTAA match the performance of its foreign policy in this period. In this
sense, FTAA negotiations can explain the limits of autonomy through a
participation strategy. The main difficulties arise from dealing with a partner
like the United States and maintaining a reasonable margin for manoeuvres
in the international system. Furthermore, Brazil has had to overcome the
fact that negotiated contents undermine future aspirations concerning the
implementation of development national policy. As Hirst says, “it has
become clear that Brazil’s resistance to the FTAA goes beyond Mercosur”
(Hirst, 2005: 21). Since both countries are major actors in the FTAA
initiative, Mercosur serves as the scenario for the Brazil-United States
negotiation process. The leading role played by Brazil in the Southern Cone
demands a cautious negotiating strategy.
Chilean foreign policy since the 1990s has brought with it a strategy of
‘open regionalism’, as has Mexico’s, which has been the most aggressive
Latin American state when pursuing bilateral free trade agreements.28 When
referring to Chile’ strategy in hemispheric politics, membership of the North
American Free Trade Association (NAFTA) should be taken into account
and was a central issue in its foreign policy during the 1990s. Moreover,
Chile’s commercial diplomacy caused some tensions in this area: on one
hand with the attempt to achieve a closer relationship with the United States
and on the other the limited cooperation with Mercosur. In dealing with the
United States, Chile stressed the material benefits of cooperation since
copper remained an important source of export and the industrial content of
its exports remained low (Mullins, 2006: 115).
28
The concept of new regionalims means an aperture to international market combined
with encouraging the private sector and economic liberalisation. Indeed, it is distinguished
by trade liberalisation measures, like safeguarding rules and non-tariff barriers to reduce
import barriers and promote an increase in trade between nations. Devlin and
Estevadeordal, 2001: 22 apud thesis, p. 73.
274
To a great extent, this explains the different stances of Brazil and Chile’s
negotiations regarding the FTAA. Despite Chile’s long-standing interest in
the United States market, it has sought to establish contacts all over the
world. Nevertheless, it should be borne in mind that good relations with the
United States were a high priority of Chilean foreign policy during the
1990s. The considerations shown in the following sections endeavour to
demonstrate that Brazil and Chile’s diverging positions regarding their
policies towards the United States led to a lack of strong diplomatic links
between Brazil and Chile. On one hand, intense Chilean diplomatic activity
as a mechanism for entering into an agreement with the United States was
necessary to undertaken an ambitious strategic agenda as well as the
country’s trade priorities. On the other hand, Brazil-United States relations
were interspersed with more difficult periods in the relationship and a sense
of frustration from both actors without them actually entering into
confrontation. Indeed, a consequence of both states’ sub-regional leadership
role was the difficulty of accepting FTAA rules, especially in Brazil’s
industrial sector.
4.1.3 The United States’ strategy towards the continent
In practical terms, the United States’ new multilateral agenda was aimed at
political and trade initiatives in the continent and has fundamentally been
based on presidential and ministerial diplomacy. It is worth highlighting that
United States foreign policy is carried out by the State Department, the
National Security Council and the United States Trade Representative,
whilst Brazil’s foreign policy is conducted by the Ministry of Foreign
Affairs, the so-called Itamaraty.29 Indeed, Brazilian foreign policy has a
strictly Executive character, while in Chile the Executive predominates in
foreign affairs and the Legislative also has the capacity to influence the
trade policy decision-making process. The difference between the three
states explains the general guidelines on which each foreign policy process
is based. The role played by presidential diplomacy is also a key mechanism
for the study of both Brazil and Chile’s foreign affairs (Bernal-Meza, 1998).
29
See The White House, President Barak Obama, “Regional Issues”. https://www.
whitehouse.gov/ issues/foreign-policy.
275
Moreover, the polarisation of political parties’ preferences in Chilean
foreign policy does not reflect the same traditional basis as that of Brazilian
diplomacy.
The increasing participation of unofficial actors such as the private
sector, NGOs and civil society in foreign policy decision-making processes
illustrates the importance of public diplomacy, nation branding and
presidential diplomacy. As Onuki highlights, the Chilean Executive branch
is the principal decision maker, although legislators do not completely
forget their preferences when determining foreign policy. In the case of
Chile, the preponderance of the Executive in formulating foreign policy
aims promotes the internationalisation of its economy and development.30
The way each country carries out its foreign policy should also be taken
into account. It is also important to bear in mind that FTAA negotiations go
beyond trade issues, since they encompass a wide range of topics in BrazilUnited States bilateral relations. The bilateral agenda includes moneylaundering cases, terrorist operations, human rights and adherence to
international non-proliferation agreements among others (Schott, 2005).
Beyond trade negotiations, other predominant topics were Mercosur’s
position regarding the FTAA process, demands for equal treatment in the
WTO field and the claim for a permanent seat on the UN Security Council.
Adopting the perspective that the FTAA consists of an economic-political
project seeking to reduce Asian and European influence in Latin America
provides a better understanding of the negotiation process.
In this scenario, the United States’ strategy caused heterogeneous
reactions among Latin American countries as will be seen. The proposal of a
hemispheric free trade zone was first presented during the Enterprise for the
Americas Initiative in 1991 by President Bush. In other words, the initiative
to create the Free Trade Areas of the Americas (FTAA) suggested the
creation of a hemispheric free trade area from Alaska to Tierra del Fuego,
excluding Cuba. The FTAA project was heavily influenced by the NAFTA
agreement considering that both initiatives were related. The impact of the
NAFTA on the FTAA project cannot be underestimated, since the former
30
The fact that the Executive has preponderance over the Legislative is relevant to all
foreign policy matters. More information in Onuki, Janaína et al., “Political parties, foreign
policy and ideology: Argentina and Chile in comparative perspective”. Brazilian Political
Science Review, 2009, pp. 127-154. Available at: http://www.fflch.usp.br/dcp/
assets/docs/Janina/Artigo_BPSR_-_Janina.PDF. Accessed on 10th July 2013.
276
imposes much stricter obligations on the members than the latter. The
NAFTA came into force in 1994, involved the United States, Canada and
Mexico and was focused on eliminating most tariff and non-tariff barriers,
promoting a reliable framework for investment and generating an
environment of confidence and stability for long-term investment.31
The formation of the NAFTA laid the groundwork for the creation of a
hemispheric free trade area, while Brazil and Argentina, on the other hand,
promoted the creation of Mercosur. Brazil has adopted different positions
since the beginning of hemispheric integration, influenced by different
FTAA factors. First, when the Bush Initiative was launched in 1990, Brazil
showed its contempt for a free trade area of the Americas. Four years later at
the Miami Summit, the country went on the defensive, fearing that
Mercosur and the FTAA were mutually exclusive. During preparations for
the summit in Santiago, in which official negotiations for the FTAA began,
a third attitude emerged. Thereafter, Brazil assumed a positive stance,
motivated by two different things: a) its presence in Mercosur and b) the
articulation of a national position on the FTAA, anchored in the converging
interests defined by the government, the business sector and union leaders.32
As has been explained, the main aim of the FTAA proposal was to
promote the United States’ business interests in the continent while attention
was focused on Eastern Europe and the disappearance of communism. The
FTAA strategy had clear economic goals, whose implementation relied on
political action. As well as liberalising goods and services, other relevant
issues were taken into account (Carranza, 2004: 319-320). Needless to say, a
project as ambitious as the FTAA, which altered how the economic system
worked, had significant legal consequences. Regional economic integration
has an important effect on the internal justice system of member countries,
just like world trade liberalisation. As Vizentini states:
31
NaftaNow.Org, “NAFTA background”. Accessed on 20 May 2013. http://www.
naftanow.org/about/default_en.asp
32
Veiga, Pedro da Motta. El Mercosur y el proceso de construcción del ALCA. Integración
y Comercio, Buenos Aires: Intal, 1998, p. 3-32; LIMA, Maria Regina Soares de. Brazil’s
response to the new regionalism. In: G. Mace and J.P. Thérien (Eds) (1996), Foreign policy
and regionalism in the Americas. Boulder, CO, Lynne Rienner Publishers, pp. 137-158
apud Hirst Monica, “Os cinco ‘As’ das relações Brasil-Estados Unidos: aliança,
alinhamento, autonomia, ajustamento e alinhação” in Relações Internacionais do Brasil:
temas e agendas. Henrique Altemani de Oliveira, Antônio Carlos Lessa (Ed). São Paulo:
Saraiva 2006, p. 105.
277
“The meaning of the FTAA and indeed its importance to the United States can
only be fully understood in the context of the reorientation of North America
world hegemony after the Cold War. Even though the FTAA’s reach is
continental, the initiative has a planetary scope in the construction of the new order
by American power in relation to other poles, such as the European Union and
East Asia (Japan and China)” (Vizentini, 2004: 11).
It should be highlighted that the FTAA emerged at the same time as the
Washington Consensus, meaning the redirection of United States foreign
policy towards Latin America. This forum sought to liberalise Latin
American markets by privatising state-owned enterprises, liberalising
financial flows, reducing economic interference by the government and
limitating public account deficits among others. The high social, political
and economic costs of this process for a country with internal social
disparities like Brazil were not taken into account. The creation of the
neoliberal environment by each country functioned as a prerequisite for
access to North American markets (Tautz, 2009). In fact, the United States’
strategy had already adopted in 1988, when cooperation agreements were
signed between the United States and Canada and discussions with Mexico
later initiated. Given the possibility of establishing a hemispheric free trade
area at that time, the United States prioritised the NAFTA.
From a Chilean-Brazilian perspective, there had already been
significantly different reactions to the United States’ new agenda in the
region. Brazil reacted cautiously to the NAFTA and FTAA initiatives, being
neither for nor against either proposal. In practical terms, Brazil wanted to
gain time by using diplomatic manoeuvres to obstruct any hasty action. 33 In
contrast, Chile did want to join NAFTA, this never actually happened
(Vizentini, 2004: 13-14). Therefore, it can be seen that Chile and Brazil
adopted totally different foreign policies regarding the FTAA. In the
Mercosur context, the FTAA negotiation process jeopardised Chile’s
membership. According to Diaz:
“Chile’s mercantilist foreign policy determines to some extent the connection of
33
It is part of Brazil’s foreign policy strategy to not refuse a proposal at first glance, even if
it is difficult to immediately recongnise the benefits.
278
the country’s elites with the north. On the other side of the coin, their failed
relationship with neighbours such as Peru and Bolivia and even Argentina explain their choice to look to strategic relations with the US. However, it is
interesting to note that strategic steps were taken in the 1990s with Argentina”
(Alvaro Díaz, interviewed on 7 February 2013 by e-mail).
The following discussion may, in theoretical terms, explain the environment
in which the foreign policy of both countries was born. It should be
remembered that Chile was the first country to react positively to the
Initiatives of the Americas, since a preferential relationship with the United
States was a long sought-after goal in Chilean trade policy. That said, on the
Chilean side, imports from the United States competed with domestic
products in a manner that did not boost bilateral exchange and, in fact,
jeopardised national industry. Given the absence of a significant industrial
area that needed to be protected a more appreciative and trustworthy
atmosphere was generated between Chile and the United States.
Furthermore, the ability to access the extensive United States’ market with
its commodities yielded appreciable sales in its trade balance (Chiarelli,
2004: 59). Chile shaped its international trade insertion with specialisation
in a narrow range of products focusing on comparative and competitive
advantages and as a result the FTAA meant increasing the size of its export
market.
As in the case of Chile, most Latin American countries export products
of lower value, whilst importing technologically sophisticated goods.
Therefore, both countries directed their efforts to joining the FTAA. This
means that each country’s reaction to the FTAA proposal also had its roots
in the domestic economic structure and therefore the differences in Chile
and Brazil’s industrial policy explain their opposing reactions to United
States foreign policy.34 Chilean trade strategy has prioritised exports to the
detriment of protecting the local economy. Thus, Chile continued an
34
Importantly, from 1964 to 1980, the Brazilian state’s development strategy was based on
the constitution of a highly integrated industrial economy. This occurred due to the collapse
of export-led growth based on primary products in the 1930s and a gradual consensus
emerged that economic development must be a top priority of national economic policy.
Ricardo Bielshowsky and Carlos Mussi. “El pensamiento desarrollista em Brasil: 19301964 y anotaciones sobre 1964-2005” in Rose Cave (ed) (2006). Brasil y Chile: una mirada
hacia América Latina y sus perspectivas. Santiago: RIL Editores, p. 29.
279
economic strategy based on growth in exports, while the Brazilian policy
prioritised domestic markets to generate growth (Mulins, 2006: 121).
While engaging in the analysis of asymmetric relations in the continent,
of which the FTAA is the most concrete evidence by far, it is important to
quantify and measure the presence of a larger partner in Southern Cone
geopolitics. On the one hand, it is possible to generalise by saying that, in
theory, the larger partner may seeks economic-political benefits from
neighbouring countries too and the reversal of trade discrimination. In brief,
it aims to create a standard area. As will be explained, in theory, the larger
partner also plays the role of 'paymaster', whereby it bears most of the
integration costs. As Mattli adds, “the presence of an undisputed leader state
among the group of countries seeking closer ties serves as a focal point for
the coordination of rules, regulations, and policies; it also helps to ease
distributional tensions by assuming the role of regional paymaster” (Mattli,
1999: 100). In this sense, the United States did not assume the role of the
driving force behind integration. An active position cannot be attributed to
the United States in terms of solving regional problems in order to provide
the conditions for sustained cooperation.
Despite the asymmetry among its partners, the United States did not
appear to be willing to contribute to the costs of the FTAA process. The
participation of smaller partners was centred on economic factors, such as
the possibility of broadening market access, access to investments and
increasing the credibility of and support for economic reform programmes.
In broader terms, integration processes tend to be asymmetrical. However,
what distinguishes the case of the FTAA is the huge asymmetry that
separated the United States from other participating countries. Such huge
asymmetry raised doubts about the United States’ real interest in the
hemisphere (Mariano and Tullo, 2006: 323).
Considering the broader scope of an economic agreement such as the
FTAA, this not only has deep-rooted structural and institutional effects, but
also long-term consequences.35 The FTAA would not commit to a restricted
free trade zone. In general terms, a free trade zone involves an international
35
The FTAA was the most ambitious free trade initiative of the post-war trading system.
However, negotiations have been complicated by financial crises and the political turmoil
facing the region. See Jeffrey J. Schott (2005), Does the FTAA have a future? Institute for
International Economics. http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=608
109.
280
agreement, which requires the signing countries’ commitment to eliminate
tariff and non-tariff barriers for the reciprocal trade of goods and services.
However, the FTAA initiative is much more ambitious than that United
States foreign policy, rather than seeking peace, cooperation and stability,
aimed to expanding its power by taking advantage of the geopolitical and
geo-economic transformations of the Latin American states.
4.1.4 Brazilian and Chilean diverging strategies towards the
FTAA
Brazil and Chile have diverging views on United States foreign policy
because of their different geopolitical contexts and internal development
strategies. The key issue is the importance of Brazil and Chile’s positions
vis-à-vis the FTAA project, insofar as the initiative measures both countries’
commitment to United States foreign policy targets. Brazilian and Chilean
national development policies as well as their international insertion
strategies, have paved the way for explaining their different perceptions of
the FTAA. Despite Brazil and Chile’s different approaches to the free trade
agreement, the period being analysed did not mean an absence of bilateral
dialogue. The lack of a strong commitment to official bilateral dialogue
needs some study not only in terms of the analysis of traditional diplomacy
analysis, but also to observe the multifaceted approach of public diplomacy
and presidential diplomacy, together with the specific concepts needed to
understand the dynamic of the Brazil-Chile-United States relationship.
Russel and Tokatlian (2008) focus on four different models to explain the
different types of relationship between Latin American countries and the
United States. It is worth pointing out that all of them involve a certain view
of the international system, a specific relationship with Washington and last but not least - the assignation of different places in the region’s foreign
policy. In general, these models reflect government policies, although there
are a few exceptions, which reflect either the existence of some kind of state
policy or a widespread policy strategy.
Regard this classification, Chilean foreign policy strategy towards the
United States consists of the ‘accommodation model’ with the gradual and
selective coupling that characterised its relationship with the United States.
281
Moreover, the accommodation model promotes an active role in shaping
international regimes preferably, in accordance with Washington. It means
that the country adopts a single position in the international arena by
focusing on foreign policy strategy regarding their own individual interests,
without a firm commitment to collective mechanisms. In this way,
economic diplomacy is essential both at global and hemispheric levels.
Thus, assigning prominence to diplomatic negotiations with one’s
neighbours rests on the opportunity of negotiating better terms with the
United States.36
However, the defence of their own basic principles in the international
field leads to a distancing from Washington in many foreign matters. The
countries belonging to this group, including Chile as an emblematic case,
require offsetting the effects of the domestic economic model with social
compensation measures. In essence, Chile promotes a balance between
market and state, while projecting its foreign policy towards Washington,
Latin America and the world. It should be highlighted that, like Chile, the
countries belonging to this group seek the introduction of partial adjustment
measures to the global order and in foreign affairs, stress the importance of
relations with the United States. This focus on Washington has led to a
position of relative indifference towards the region (Rahn, 2014). As already
stated above, adopting a favourable position regarding the FTAA with the
United States illustrates this point.
Nonetheless, an important factor that contributes to further understanding
Chilean foreign policy towards Washington, is its opposition to following
the United States in the war against Iraq in 2003. As a non-permanent
member, Chile stated this position at the UN Security Council (Russel and
Tokatlian, 2008: 14-15). In this way, Chilean diplomatic skills,
manoeuvring in difficult times to defend the country’s democratic values,
can be seen, as well as its commitment to international law. This stance has
enabled further steps to be taken to avoid issues on the security agenda
being affected by the economic one. In brief, Chile has tended to distance
non-economic issues from Washington. Chile’s independence regarding
36
Importantly, at the present time there is interest from Latin American countries in seizing
diplomatic opportunities with both neighbouring states and US. Folha de São Paulo,
Dinheiro, Rubens Ricupero, “Trapalhadas em série”, 16 August 2009. The reader will
notice a significant difference between Brazilian and Chilean foreign policy towards the
region and Washington.
282
issues on the international agenda demonstrates the possibility of
manoeuvring in foreign affairs. Chile’s independent approach favours the
defence of common positions with Brazil, regarding human rights and the
promotion of democratic values.
Chile is not totally connected to the United States’ aims, although
bilateral ties can be classified as highly linked, economically speaking.
Considering Chile-United States relations, it can be observed that the United
States is one of the most important destinations for Chilean exports. Chilean
commerce with the United States is not only reflected in the amounts
exported, but also in the variety of products that are shipped. 37 However,
Chile’s relations with the United States should not be restricted to
commerce, although these do foster feelings of admiration and respect.
President Lagos favoured strengthening relations with the United States
arguing that trade agreements would help the country becomes a more
competitive and dynamic economy. From Chile’s standpoint:
“There is a consensus that bilateral ties are permeated in turn by alternate feelings
of love and hate to the extent that their foreign policies did not experience constant
harmonic long-term ties. In this way, Chile is not totally connected to US goals. As
opposed to what Brazil perceived, Chile’s agreement with US foreign policy rests
on a number of complex issues. Chile’s approach towards the US cannot be
classified as a totally connection without considering the country’s internal
aspects” (Jaime Baeza, Professor at the University of Chile, interviewed on 30th
August 2011 in Santiago de Chile).
Furthermore, links with the United States do not only exist in trade and
cooperation was seen after the earthquake, when the United States offered
help. The United States Agriculture Undersecretary offered to cooperate
with Chile to mitigate the effects of the earthquake on Chilean agriculture.
This cooperation targeted scientific and commercial exchange programmes
and formed specialist teams to support agriculture and environmental
issues.38 The perception of Brazil-Chile bilateral links was twofold: the fact
37
See Office of the United States Trade Representative, Chile Free Trade Agreement.
https://ustr.gov/trade-agreements/free-trade-agreements/chile-fta.
38
Ministerío de Relaciones Exteriores/Dirección General de Relaciones Económicas
Internacionales/Departamento de Estudios. Alejandro Gutiérrez; Roberto Urmeneta.
December 2010, p. 6. Accessed on 1st June 2013. http://www.sice.oas. org/TPD/
283
that Chile’s foreign policy prioritized links with the United States did not
mean the end of Brazil-Chile relations from multi-sector approach; at the
same time, signing a FTA with the United States was a goal doggedly
pursued by Chilean foreign policy from 1990 onwards.
From the Brazilian perspective, there is what Russel and Tokatlian
address as ‘limited opposition’ whereby there is a joint policy concerning
the United States. This means that at the same time, there is a combination
of disagreement and collaboration, deference and resistance and conciliation
and misconceptions in Brazilian foreign policy with Washington. According
to the ‘limited opposition’ strategy, the priorities lay with maintaining
regional integration as a way to strengthening their negotiation power with
the United States. In this sense, political ties with close countries are
crucially important in order to achieve greater autonomy in negotiations
with the United States. In general, these countries have adopted a
development model that is more sensitive to social issues, whereby the state
plays a significant role in terms of economic and political transactions
(Russel and Tokatlian, 2008: 15).
Furthermore, these countries seek more profound changes in the
economic and financial structure of the international system and, at the same
time, immediate negotiations with the FTAA are discouraged. In essence,
their foreign policy strategies encourage the reform of global order wherein
the United States is considered a dual power. In other words, the United
States may represent both a threat and an opportunity at the same time.
Brazil is the best example of a Latin American country that conducts a
foreign policy strategy like this. In addition, Brazil’s position in the
continent has two aims: firstly, due to it aspiring to regional leadership and
secondly because of its extra-hemispheric projection. As a result, Brazil
seeks a middle ground between distancing itself from Washington and
expressing the desire to develop a closer relationship with the United States.
Said another way, on one hand it partially competes with Washington and
on the other, it needs its support to achieve its goal of playing a more active
role in the political and economic international order (Russel and Tokatlian,
2008: 15-16).
On the other hand, Chilean membership of the North American Free-
CHL_USA/Studies/EvaChUSDec_10.pdf
284
Trade Association during the 1990s was central into its foreign policy. 39 In
this regard, the Frei administration invested a good deal of political capital
in this strategy. Put into perspective, the strong interest in NAFTA is related
to the perceived economic and political benefits that Chile would acquire by
pursuing easier access to the United States market. NAFTA membership
would also be an important signal to the financial markets, stressing closer
relations with the most powerful economy in the world (Mulins, 2006: 121).
Therefore, Chile fully supported the United States initiative, given the fact
that the arrangement was an endorsement of the regional efforts of trade
liberalisation and institutional stability.
Moreover, for an outward economy like Chile’s one, the free trade
agreement has become a vital aspect of its foreign policy. The Chilean
position is applied to countries that have a less diverse productive structure.
This set of countries has insertion into international trade, with a narrow
range of products seeking central markets in order to seize comparative and
competitive advantages. (Mariano and Vigevani, 2006: 325). At this time,
the central foreign policy towards the United States influenced relations
with the Southern Cone because of Chilean expectations of having special
relations with the north. Nevertheless, the end of the twentieth century has
brought important alterations to the patterns of international trade, whereby
foreign trade is not restricted to the United States’ market, but is split
around the globe.
The emergence of a new multilateral order in which Brazil achieves
global visibility plays a fundamental role to understanding the importance of
Chile’s strategic approach to Brazil. 40 Changing the perception of the United
States as a unique economic-military great power to the detriment of China
39
Investment and trade is everything in North American foreign policy. Therefore, the
United States codifies its rules and agreements in initiatives such as the NAFTA. Further
reading in Walter Russell Mead (2001), Special providence: American foreign policy and
how it changed the world. New York: Routledge.
40
The new multilateral order embraces the multifaceted approach of public diplomacy.
Public diplomacy is a form of engagement, meaning intellectual and socio-political
engagement. See Alan K. Henrikson (2005), “Niche diplomacy in the world public arena:
the global corners of Canada and Norway” in Melissen, Jan, The new public diplomacy:
soft power in international relations. New York: Palgrave MacMillan. Further reading in
José Augusto Guilhon Albuquerque (2006), “Os desafios de uma ordem internacional em
transição” in Oliveira, Henrique Altemani and Lessa, Antônio Carlos, Relações
internacionais do Brasil: temas e agendas, vol. 1. São Paulo: Saraiva.
285
and other emerging powers, shifted the international perspective from one
singular power to a new multilateral arrangement.41 For obvious reasons, the
new international system brought significant changes to current Brazil-Chile
affairs, to the extent that these new international parameters, which
influenced the standards of their bilateral relationship could not be ignored.
Chile’s focus on strengthening its ties with the United States should not
serve to explain the lack of studies on Brazil-Chile bilateral relations.
4.1.5 The limited scope of the FTAA
The demands of the business sector together and labour unions explain
Brazil’s position during the FTAA negotiation process. Brazil’s nationalist
economic policy gained the support of key sectors such as labour unions,
political parties and the business and academic sectors. The country had
growing concerns, not only about the economic effects of trade
liberalisation, but also the lack of the guarantee of reciprocity on the part of
the United States (Nelson, 2015). The impact of bilateral trade disputes
contributed to Brazil’s careful approach to the United States. In this context,
negotiations were carried out according to three principles: the
indissolubility of Mercosur, the gradual nature of the integration process and
the balance between costs and benefits.
The wide scope of the cooperation initiatives between the two countries
means that Brazil and the United States do not share similar interests in the
region. Brazil aims to expand its influence in South America and supporting
democratic values has always been a feature of the country’s international
insertion, with a core issue being the expectations and frustrations related to
the recognition of Brazil’s international potential. There was an internal
consensus that the opening of new historical stages in Brazil would be
projected in its international insertion. However, frustration not only
occurred in the Brazilian field, since the United States also expected a much
more liberalised economy from its Brazilian counterpart. As will be
41
Today’s China is a booming economic power with a pragmatic foreign policy regarding
the international community. China’s projection of its nation brand sells its ancient culture
and economic success. More information in Ingrid d’Hooghe (2005), “Public diplomacy in
the People’s Republic of China”, in Jan Melissen, The new public diplomacy: soft power in
international relations. New York: Palgrave Macmillan.
286
observed, the understandings and misunderstandings that occurred between
the two in the FTAA negotiations would become the most prominent issue
on the bilateral agenda in the first year of Lula’s administration.42
Moreover, another important and changing feature refers to the new
world order. The importance of the United States as a market has declined
and foreign trade has been divided into four zones: Europe, North America,
Asia and Latin America (Mulins, 2006: 115). As Van Dijk states:
“Regarding the direction of trade flows prior to the establishment of the FTAA, it
can be noted that the trade of Mexico and the Central America and Caribbean
countries has traditionally been very much oriented towards North America, but
this holds true to a much lesser extent for members of Mercosur and the Andean
Group, which are more oriented towards the Latin American region and the United
States” (Van Dijk, 2004: 156).
For instance, in 2007, the European Union accounted for more than half of
the total value of all commercial services exported worldwide. China’s rise
as a global economic superpower changed the global perspespective of
American hegemony. Therefore, not only the United States, but also Europe
lost its politically and economically dominant position to the detriment of
China. However, the United States continued to be the second-largest
exporter of commercial services, even if its share of world exports went
down from 20% in 2000 to 15% in 2007. 43 This demonstrates that the
United States’ comparative advantage resides in the commercial services’
sector. Therefore, the FTAA implies that all services are to be liberalised,
even those provided by governments, such as education, social security and
health care (Wiesebron, 2004: 79). Furthermore, FTAA negotiations
42
Hirst, Mônica. “Os cinco ‘as’ das relações Brasil-Estados Unidos: aliança, alinhamento,
autonomia, ajustamento e afirmação” in Oliveira, Henrique Altemani and Lessa, Antonio
Carlos Relações Internacionais do Brasil: temas e agendas. São Paulo: Saraiva, 2006, pp.
118-121.
43
WTO. "Trade in commercial services by category. p. 118. http://www.wto.org/
english/res_e/statis_e/its2008_e/its08_trade_category_e.pdf). While studying the FTAA, it
should be considered that the United States has a deficit in its goods export rate compared
to its goods imports one. Moreover, tha gap between goods imports and export growth is
particularly large in developing regions such as Latin America (WTO. "World Trade
developments in 2003 and prospects for 2004". p. 8. http://www.wto.org/english/
res_e/statis_e/its2004_e/its04_general_overview_e.pdf
287
adopted the so-called negative list, this means that all sectors are liberalized
except those indicated by the countries, such as reservations or exceptions.44
As a result, the United States tends to stimulate the liberalisation of
international service transactions over the international economic system of
goods.
Instead of studying the FTAA as the result of a Latin American
consensus reached against the United States, it should be analysed as the
result of diverging policy interests from the past. This explains the
differences between Chilean and Brazilian foreign policy regarding the
FTAA. Accordingly, the absence of converging interests between Brazilian
foreign policy and that of the United States was not the only factor that led
to disagreements about the implementation of the FTAA. Other countries in
the region resisted to the United States’ version of neoliberalism and the
Washington Consensus served to overcome asymmetrical power relations in
the continent (Boekle, 2007: 92).
Moreover, Brazil wanted to play the role of a fundamental regional actor
in South America, while aspiring to an active role in global geopolitics.
Therefore, Brazilian foreign policy remained reticent about establishing
closer links with the United States. The FTAA denied Brazil’s influence in
the Southern Cone, as well as its foreign policy’s autonomy in other
international initiatives. In fact, Brazil needed more time to adapt its
domestic market to the more competitive North American market and last
but not least, the limited scope of the agreement, which did not include the
transfer of science and technology, was criticised by Brazilian diplomacy
(van Rompay, 2004: 30). Another way of stating the same point is by
indicating that Brazilian foreign policy was sceptical about US provision for
44
It is important to stress the difference between the GATT and the FTAA concerning the
principle of national treatment. In the GATT, national treatment applies only to service
sectors included in the schedules of specific commitments made by each member country
whereby these sectors apply the rules of liberalisation established by each state. This type
of services liberalisation is based on so-called positive lists. In contrast, the NAFTA and the
FTAA are based on negative lists. Costa, Ligia Maura. Comércio Exterior: negociações ee
aspectos legais. Rio de Janeiro: Elsevier/Campus, 2005, p. 60. The GATT 1947, negotiated
by Great Britain and the United States was rightly characterised as having created a “rich
man’s club”. It introduced a norm that was entirely normal at the time, namely trade nondiscrimination. Chin Leng Lim. “The conventional morality of trade”. In: Global Justice
and International Economic Law: opportunities and prospects. New York: Cambridge
University Press, p. 134.
288
opening its markets to Brazil’s sectors of interest.
Other issues also played an important role in Brazil-United States ties,
like the United States protectionist trade policies against Brazil’s exports.
The United States’ coerciveness was the result of export measures promoted
by Brazil and an emerging information technology policy. Another
significant point of divergence was the new General Agreement on Tariffs
and Trade, since Brazil opposed topics such as information technology rules
as well as restricted liberalisation procedures, given its domestic industry.
However, in 1996, the approval of an intellectual property law by the
Brazilian Congress facilitated dialogue on normalising relations between the
two states (Hirst, 2005: 9-11).
4.1.6 The diverging aspects of the FTAA and Mercosur
By the 1980s, many South American states were rebuilding their
democracies after several years of military dictatorship. The four states that
set up Mercosur (Brazil, Argentina, Uruguay and Paraguay) shared the
common struggle for democracy, as well as economic crises and chronic
inflation. 45 In this context, Brazil and Argentina suffered the impact of new
trends in the international economy associated with neoliberal values, trade
liberalisation and privatisation. Sustaining the macroeconomic balance
demanded new cooperation mechanisms within the region in order to
achieve greater insertion into the global economy.
In response to the FTAA initiative, Brazil launched the Common Market
of the South (Mercosur), in 1991, made up of Brazil, Argentina, Uruguay
and Paraguay, in an integration initiative guided by the trade agenda. This
period brought with it the idea of economic cooperation, closely linked with
the perception of economic growth and prosperity. After the Asunción
Treaty of 26th March 1991, member states sought to establish a common
market for the so-called four year ‘transition period’.46 The four years period
targeted measures of legislative harmonisation, the coordination of
45
See Javier Corrales (2013), “Constitutional Rewrites in Latin America 1987-2009” in
Jorge Domínguez and Michael Shifter (eds), Constructing democratic governance in Latin
America. Baltimore: The Johns Hopkins University Press, pp. 13-47.
46
More information in Ruy Pereira (2014), “O valor do Mercosul”, Política Externa, vol.
22, no 3. São Paulo: Editora Paz e Terra.
289
macroeconomic and sectorial strategies, cooperation on commercial policies
and the maintaining of similar foreign policies (Vigevani, 2004: 35).
Mercosur was the result of economic programmes carried out by Brazil
and Argentina.47 However the project had a broader impact, since it was
supported on a three-fold basis: legal, political and economic. The political
basis, as previously mentioned, was the redemocratisation process that the
member countries underwent. The economic aspect was the initiative’s main
aim, fostering macroeconomic growth and international insertion. The legal
order come from the fact that Mercosur had its roots in the ACE No 36 in
the field of the Latin America Integration Association (LAIA) and the
Protocol of Ouro Preto (POP), signed on 17th December 1994, leading to
the bloc’s institutional structure. It only became explicitly legal through the
POP and therefore could not be considered an international organisation
during the transition period. Prior to the POP, any legal actions were
performed by member states (Ventura, 2003: 63).
The aim behind Mercosur was that Brazil would consolidate sub-regional
integration over any United States-led hemispheric proposal. Brazilian
strategy towards the rest of the region rests on its full complement of
industry, modern infrastructure, a well-established national project and
competent diplomacy (Vizentini, 2004: 16). From a Brazilian foreign policy
standpoint, prioritising Mercosur would lead to strengthening its bargaining
position in future negotiations. Besides Brazil’s geopolitical strategy,
uncertainty regarding the possibility of moving forward with the FTAA,
with the United States Congress as its centre weakened the United States’
negotiating position.48 Curiously, the absence of a fast track has not only
delayed Brazil’s negotiations with the United States, but also virtually
frozen Chile’s negotiations. Ironically, Chile was one of the main supporters
of the arrangement and waited patiently, but not passively for this approval,
as highlighted by Rosales. As already addressed due to the difficulties in
continuing FTAA negotiations, in the first half of the 1990s, Washington
47
See “30 years of Argentine democracy”, The Economist, 22nd January 2014.
Regarding the difficulties which Presidents Clinton and George W. Bush faced with
obtaining fast tracking or trade promotion authority (TPA), Brazilian policymakers saw the
United States’ congressional resistance as a factor that could jeopardised the United States’
ability to negotiate. Estado de São Paulo, 10th December 2000, "Mercosul sobrevive sem o
Chile, diz Graça Lima"; interview with José A. G. Lima apud thesis by Jan van Rompay, p.
32.
48
290
established Economic Complementary Agreements (ECAs) with Mexico,
Mercosur and the Andean areas. The Chilean focus on trade led to an FTA
with Canada in 1996 and the ECA with Mexico was strengthened in 1998.
In a sense, an appreciative environment was generated which also led to
FTA negotiations with Central America along the lines of the NAFTA
model49 (Rosales, 2003: 3). Together with these, other FTAs were also
negotiated between Chile, the European Union and South Korea.
From a political standpoint, Mercosur has remained a priority of Brazil’s
foreign policy strategy since President Bush’s announcement of the
Enterprise for the Americas Initiative in 1991. Nonetheless, while FTAA
talks were being conducted, the foreign policy conducted by Brazil’s
Itamaraty was gradually changing from a defensive to a more offensive and
contributive approach. In this scenario, the economic reforms that Brazil
underwent in the 1990s were not reciprocated by the United States. This
means that the Brazilian economy opened up too much and too fast, with
negotiations with the United States having little impact on their own system
of subsidies and non-tariff barriers. Additionally, the Itamaraty stressed the
problem of the lack of definition of its role by the FTAA as well as its
unclear trade policy towards Brazilian goods in the United States market
(Van Rompay, 2004: 34).
During the summit in Mar del Plata, Argentina in November 2005,
negotiations seemed to have reached an impasse, hindering further
consensus over important issues. Among other things, the difficulties in the
negotiations cannot only be attributed to disagreements between the political
interests of the two main actors, the United States and Brazil, but also to
disagreements of an economic character. In other words, the incompatibility
between the foreign policy of Brazil and the United States cannot be
considered as the only obstacle to the negotiation process. Another
important factor was the growing discontent of Latin American countries
over the Washington Consensus.50 Furthermore, the United States was
49
Economic-diplomatic agreements of a bilateral nature led by Washington sought to
weaken or even derail the autonomous Latin American initiatives of integration, such as
Mercosur (Chiarelli, 2004: 126).
50
Bettina Boekle. “El Brasil y el Alca: análisis político enfocado em la política exterior
brasileña”, pp. 90-91 in Sérgio Costa, Hartmut Sangmeister, Sonja Steckbauer (eds) O
Brasil na América Latina: interações, percepções, interdependências.” São Paulo:
Annablume; Adlaf; Fundação Heinrich Böll, 2007.
291
always reluctant to include the crucial topics of its protectionist strategy,
like its anti-dumping legislation and policy to protect agriculture in the
debate. According to United States’ policy, these topics should preferably
be treated in the World Trade Organisation (WTO).51 However, the United
States wanted the FTAA to go beyond WTO standards on matters of
interest, such as services, investments, government purchases and patents
(Batista 2005: 79).
As mentioned above, the many obstacles during the FTAA negotiation
process led to bilateral agreements between certain Latin American
countries. From these countries’ perspective, as in the case of Chile, such
agreements ensured access to the United States’ market and more foreign
investment.52 For Brazil, this fact led to a struggle involving conflict and
cooperation among Mercosur members, since the Brazilian government
provided real short-term benefits as a way of maintaining some influence in
the region. As Mariano and Vigevani point out, from a political standpoint,
it is possible for countries to maintain complementary positions regarding
their goals, even having parallel goals in the short-term. In this context, the
prospect of the FTAA tends to generate limitations for the acquisition of
regional balance (Mariano and Vigevani, 2006: 327).
In fact, Brazil’s approach during the FTAA negotiations was backed by
the business sector, highlighting a more offensive policy due to the United
States’ continued protectionism.53 For example against, some of the goods
that caused controversy like Brazilian orange juice and sugar exports, which
had the highest import tax rate in the United States’ market.54 As a result,
countries demanded guarantees with regards to United States’ subsidised
51
It should be remembered that consensus among members of the WTO is the base of the
decisions. Further reading Roberto Azevêdo (2014), “A OMC e a Conferência de Bali”,
Política Externa, vol. 22, no 33. São Paulo: Editora Paz e Terra, pp. 9-20.
52
Stefan A Schirm. “Indicadores de liderança e modelos de análise para a nova política
internacional do Brasil” p. 53 in Costa, Sérgio, Or.; Sangmeister, Hartmut, Org.;
Steckbauer, Sonja, Org. “O Brasil na América Latina: interações, percepções,
interdependências.” São Paulo: Annablume; Adlaf; Fundação Heinrich Böll, 2007.
53
It must be stated that the business sector is not a homogeneous group, with some
favouring a more positive approach to the FTAA initiative. In the shadow of the generals,
p. 95.
54
Brazil had ongoing problems with other products, such as steel, textiles and footwear
which all faced a powerful US lobby in order to protect uncompetitive sectors of its
economy. Batista Junior, Paulo Nogueira (2005: 78).
292
goods in order to ensure similar competition with their non-subsidised
products.55 It can be observed that the active participation of the Brazilian
business community is congruent with the concept of public diplomacy,
which means that the new diplomacy collaborated with diverse sectors.56
Indeed, as analysed in the first chapter, the new international agenda
demanded the participation of other sectors in foreign policy strategy and
could not be restricted to the relationship between state representatives. That
said, the support of the business sector played an important role in FTAA
negotiations.
4.2 The Brazilian Business Sector vis-à-vis the FTAA
In addition to the different geopolitical strategies of Chile and Brazil, their
opposing reactions can be explained due to their extremely different
economic structures. On the Brazilian side, an estimation of initial trade
losses and their impacts on the domestic economy demonstrated the effects
they might had on exports. That said, the scarcity of expensive short-term
credit seriously prejudiced and medium-sized companies in particular,
which have little access to loans abroad. In this way, the FTAA with the
United States had a destructive effect on much of the Brazilian productive
system and also affected the most sophisticated sectors. As opposed to what
some defenders of the FTAA believed, even the most sophisticated
Brazilian companies were not prepared for the FTAA (Batista, 2005: 8283).
55
Neither sugar nor orange juice are considered crucial products to the United States
economy, whereas the orange crops located in the state of Florida were key element to the
elections of 2001. Regarding the sugar issue, even if Latin American countries needed the
United States’ market for export, the latter did not depend on these countries to meet its
internal demand. Bettina Boekle, “El Brasil y el Alca: análisis político enfocado em la
política exterior brasileña”, pp. 98-99 in Sério Costa, Hartmut Sangmeister, Sonja
Steckbauer (Eds) (2007). “O Brasil na América Latina: interações, percepções,
interdependências.” São Paulo: Annablume/ Adlaf/ Fundação Heinrich Böll.
56
However, the role played by Brazilian presidential diplomacy on its two main axes
cannot be underestimated, in United States’ and Southern Cone relations. Concerning either
relations with the United States’ or the neighbouring south, the president is an important
driver of foreign policy, even though this does not mean the retraction of the Itamaraty
from Brazilian foreign policy. Alessandra Falcão Preto. “O conceito de diplomacia
presidencial: o papel da presidência da república na formulação da política externa. São
Paulo: Universidade de São Paulo, 2006, p. 39.
293
It is important to remember that since the beginning of the 1950s, the
Brazilian economic development model has been based on import
substitution industrialisation (ISI). Continuing in this vein, the volume of
the production and diversification of economic activity has also been very
impressive in Brazil during the twentieth century. During the last century, a
complex infrastructure of transportation, energy and communications was
built up; huge steel, metallurgic and petrochemical industries were
constructed and an important capital goods sector and a huge consumer
goods industry emerged (Guimarães, 2004: 110).
As a result, some sectors of the Brazilian economy were able to compete
in the international market, for example steel, textiles, footwear and large
sectors of agriculture and agri-business. For this purpose, these sectors were
targets for the systematic protectionist practices of developed countries
(Batista, 2005: 84). Due to some domestic sectors’ lack of competitiveness,
together with excessive international protectionist barriers, the FTAA left a
disastrous legacy for the Brazilian business sector. In this case case, state
economic control was conducted through diverse institutions such as the
Central Bank, the financial system and the Trade and Development Bank,
even though they were interconnected.57
In Brazil’s opinion, rising doubts over competing without tariffs against
the United States from 2005 to 2015 had always caused concern among
businesses. At the same time, part of the business sector supported the
FTAA project, given the possibility of reducing domestic intervention in the
economy. For this group, the FTAA meant liberalising the domestic
economy by diminishing state instruments of economic control. Other
government departments stated that Brazil would face difficulties
counterbalancing the United States’ power, therefore dilatory manoeuvres
were an important strategic policy for dealing with the FTAA initiative
(Batista, 2005: 108).
Brazil was the only Latin American country that could resist the FTAA
project while proposing alternative integration mechanisms like Mercosur.
Mexico was already a member of the NAFTA and Chile targeted stronger
57
In fact, multifaceted state intervention in the economy had been the target of widespread
criticism due to the lack of coordination and communication among the different sectors.
Werner Baer. A economia brasileira; tradução de Edite Sciulli - 2. ed. - São Paulo: Nobel,
2002, p. 297.
294
links with the United States. Central America and the Caribbean consisted
of consolidated United States’ zones of influence in Latin America. 58
However, Brazil’s international insertion had changed, to the extent that the
country was now an emerging global power. Indeed, the strategy of
attracting Venezuela as a Mercosur member country was a way to prevent
Chávez getting lost in the Caribbean and also a way of demonstrating a
policy to strengthen regional influence. In this regard, Brazil’s foreign
policy adopted the position of an emerging power that should stand as
autonomous before the United States.
4.2.1 Brazilian economic strategy in the 1990s
Since the 1990s Brazil has adopted a new economic strategy whereby
privatisation, unilateral trade concessions, deregulation, the indiscriminate
attraction of foreign capital and political alignment with Western powers
transformed the domestic scenario.59 The new strategy sought to promote
monetary stability as well as fiscal equilibrium. Regarding trade and
regional integration, the strategy consisted of overvaluing the exchange rate
and fixing low tariffs in order to promote imports and control domestic
prices and inflation. Furthermore, it considers denationalisation and
structural trade and current account deficits as essential structural changes to
the economy (Pinheiro, 1999: 11-12). However, these measures were not as
rigidly adopted as in the case of Argentina.
On the one hand, a liberalising policy was adopted during the
administration of President Fernando Collor de Mello (1990-1992), given
anti-inflationary economic planning in which savings and other investments
were temporarily blocked. President Collor desisted from building more
advanced industrial structures in which the State actively intervened. On the
other, the United States exerted pressure on internal economic liberalization,
as well as on government barriers to national industries (like the computer
58
See The Economist, “Trade in Latin America: Unity is strength”, 10th March 2012.
http://www.economist.com/node/21549939.
59
However, Brazil’s delay in entering the global economy causes concerns among the
business sector. See Pedro Passos (2014), “Para uma nova política de comércio
internacional do Brasil”, Política Externa, vol. 22, no 3. São Paulo: Editora Paz e Terra, pp.
31-40.
295
industry) and markets. Liberalising procedures were carried out through
unilateral tariff reductions. The liberalisation policy did not offer
compensation for international competition. The resuming of subordinate
relations with the United States and an opening proposition for the IMF
represented priorities adhering to the Washington Consensus (Visentini,
2013: 96).
Looking ahead, Brazilian economic and social indicators should raise
concerns. To summarise, the liberalisation of the economy has brought even
great social problems to a Brazil already facing social inequalities. As for
the future, it can be speculated that the neoliberal strategy will face serious
economic and social problems. From an economic perspective, dependence
on the enormous inflow of capital, the multiplication of taxes, the
dollarisation of domestic public debt and an excessive privatisation
programme has had a great impact on unemployment, urbanisation,
international competitiveness and export expansion among others
(Visentini, 2004: 112).
President Collor did not take into account the fact that the Cold War
weakened the United States’ power and therefore the United States
maintained firm strategy regarding international economic affairs in the
framework of the FTAA initiative. Contrary to, President Collor’s
perception, military power was not linked to economic power, since the
United States did not sustain economic hegemony. Interestingly enough,
Southern Cone cooperation also targeted a reduction in tariff barriers in the
sense that the main aim of strengthening ties was to accelerate tariff
reductions. Fostering Brazil-Argentina relations with Uruguay and Paraguay
had the aim of encouraging reductions in tariff barriers, since these, the
smallest full members of Mercosur, maintained low trade barriers (Ibid).
4.2.2 Chile’s liberal economic backgrounds
From the Chilean perspective, the Chicago Boys reversed the entire stateinterventionist trend adopted since the 1920s. The Chicago Boys’
dogmatism would not allow backtracking on liberalisation policies.60
60
The Chicago Boys took their place in the Chilean economy during Pinochet’s
administration at a time of steep price increases and mounting unemployment. In that
296
Therefore, in the mid-1970s, in order to open up the economy, market
relations were imposed throughout society and a new entrepreneurial culture
substituted dependence on the state (Collier and Sater 2004: 366). Despite
the economic recession of the mid-1970s, the neoliberal programme was
preserved. In this way, the privatisation of state-owned companies began in
1974, import tariffs were brought down, very liberal foreign laws were
decreed and currency was reformed, among other measures.
The creation of a more benign neoliberal environment seemed to have
results for the Chilean economy. The economy began to rebound from the
recession, inflation fell and the GDP rose by an average of 7% per year. One
interesting factor is the growth of non-traditional exports in that period. As
in the example given by Collier and Sater, “Chilean apples appeared in
British supermarkets and good-quality Chilean wines in American liquor
stores. Whereas copper had accounted for nearly nine-tenths of all exports
(taking yearly averages) in the 1960s, it accounted for under half in the
1980s” (Collier and Sater, 2004: 369-370). Importantly, privatisations in
towns and the countryside alike provided excellent opportunities for
financial conglomerates to consolidate their business empires.
By the end of the 1970s, these conglomerates - called ‘grupos
económicos’ - had taken control of much of the banking system, the new
and unregulated finance houses named ‘financieras’ and an increasing share
of the manufacturing and agro-exporting sectors.61 This new pragmatism
was based on a careful manipulation of the exchange rate and money
supply, although it allowed for selective measures to stimulate domesticoriented agriculture, industry and the already much-favoured exporters as
well (Montecinos, 2009: 142-143). The combination of the limited strategies
of import substitution and export promotion contributed towards propelling
the country into a new phase of significant growth from the mid-1980s
onwards. In this respect, the neoliberal framework was encouraged and
scenario, their unrestrained capitalist vision seemed risky. However, during 1974, the
effects of the first oil shock, the result of which, was a rise in oil prices were felt and
indeed, copper prices began to fall alarmingly. In a context where inflation seemed to be
largely out of control, the Chicago Boys gained full control over economic policy. Simon
Collier and William Sater (2004). A History of Chile, 1808-2002. New York: Cambridge
University Press.
61
Further reading in Ricardo D. Paredes Molina et al. (1994), Organización industrial y
grupos economicos: el caso de Chile. Departamento de Economía, Universidad de Chile.
297
maintained (Collier and Sater, 2004: 371).
It should be emphasised that Chile was a laboratory for neoliberal
experiments and in this regard the country reaffirmed its exceptionalist
position in the continent. As observed, economic growth after the mid1980s was achieved at a heavy price, two deep recessions and badly
distributed income (Collier, and Sater, 2004: 372). One of the major and
most recognisable consequences of the neoliberal model was the increased
concentration of wealth in the hands of a few, which simultaneously created
a greater disparity between the rich and the poor. Oppenheim points out that
“there may be differences of opinion as to whether the liberal reforms of the
1976-1981 period were, overall, beneficial for Chile, but there is clear
evidence that economic concentration increased and income distribution
worsened” (Oppenheim, 2007: 129).
The approval of the free trade agreement between Chile and the United
States produced regional liberalisation efforts. As Rosales pointed out,
“American authorities always highlighted Chile's best rights to accessing a
FTA with the United States, insisting that Chile headed the ‘waiting list’
considering its good economic and trade performance” (Rosales, 2003: 2).
Nonetheless, the United States was much more important to Chile than
Latin America was generally to the United States. Since Chile was aware of
the region’s lesser strategic importance to United States foreign policy, there
was a persisting commitment on its part to establishing an FTA with that
country.
In 2001 Chile was invited to initiate trade negotiations with the United
States to open up the possibility of an FTA between the two countries. From
Chile’s perspective, an FTA with the United States would create clearer
rules about trade and investments, while reducing transaction costs and
giving incentives to new exporters.62 As a result, the agreement eliminated,
the escalation of tariffs, providing a greater impulse for diversifying exports.
In summary, the main aim of the FTA was the construction of a preferential
relationship with the United States.
62
See the United States Congress, 2002 Trade Policy Agenda and 2001 Annual Report,
“Message from the President of the United States”. Washington: U.S. Government Printing
Office, pp. 119-120.
298
4.3 United States Foreign Policy under George W. Bush vis-à-vis Latin
America
As far as Latin America was concerned, George W. Bush campaigned for a
platform that promised to reinforce and broaden relations with the region in
2000. Nonetheless, after attacks on September 11th things changed in terms
of the priorities of the United States foreign policy and security became a
key.63 In contrast, security was not considered a priority for Latin American
countries. However, in March 2007 President Bush decided to pay special
attention to the continent with a visit to five countries. Clearly, the purpose
of the visit was not trade negotiations, but rather to halt the growing
influence of Hugo Chávez in the region.
In this respect, security and terrorism are not considered the only factors
that explain the scant attention paid to Latin America. The United States’
strategy of negotiating separate bilateral agreements also contributed
towards paralysing FTAA negotiations (Fonseca, Carlos, 2007: 67). In fact,
separate negotiations put the United States in a better position to assert its
will. That said, the Enterprise for the Americas Initiative, launched in 1991
and which later resulted in the Free Trade Areas of the Americas (FTAA),
with aspirations to become a hemispheric free-trade area from Alaska to
Tierra del Fuego excluding Cuba, ended up producing nothing concrete in
terms of hemispheric cooperation.
The aperture of the markets is an inevitable trend and trade liberalisation,
leads to benefits for the world trade system as a whole. The elimination of
trade barriers are important for both north and south, contributing to
creating a more open and trusting environment in international trade.
However, as explained, the implementation of the FTAA was a goal that
generated uncertainty in both economic and political fields. Most
significantly, the FTAA was an economic project with strong political
ballast. Thus, its purpose was to bring a greater balance to relations in the
hemisphere so as to not worsen internal asymmetries. 64 In order to
understand the reasons that led to Brazil’s foreign policy strategy regarding
63
More information in Ricardo Seitenfus (2013), “O impacto do terrorismo sobre as
relações internacionais” in Relações Internacionais, 2. ed.. Barueri: Manole.
64
Costa, Ligia Maura. Comércio Exterior: negociação e aspectos legais. Rio de Janeiro:
Elsevier/Campus, 2005, p. 62.
299
the FTAA, it is important to remember that this was not simply the free
trade area it appeared to be. That said, a broad regional agreement like that
of the FTAA generated not only profound structural and institutional
changes but also significant long-lasting ones.
As is already known, no major steps to cementing the United States’
influence in Latin America through the FTAA occurred. In the aftermath of
September 11th, United States foreign policy focused its efforts on security
and consequently its policy making collaborated to undermine the
continent’s agenda of cooperation. On a political level, the main difficulties
arose because of the differences in the positions of the United States and
Latin America regarding foreign policy strategy. The United States’ focus
on security has overshadowed Latin America’s importance to Washington.
In this respect, some studies have been devoted to the United States’ neglect
of the continent in this period. Despite this attitude mainly existing during
the terms of George W. Bush, the scant attention paid to the continent had
its origins in the presidencies of Bill Clinton and George H. W. Bush
(Russel and Tokatlian, 2008: 20). With this in mind, the lack of a longstanding foreign policy strategy towards the region is understandable.
Regardless of the lack of President W. Bush’s political capital to achieve
a successful regional agenda, the importance of his official visit in early
March 2007 should not be underestimated. In fact, this official visit seems
to have achieved its goals to a certain extent. Firstly, it sought to establish
closer ties with Brazil based on the two countries’ interests in promoting
production and global trade of ethanol. Secondly, President W. Bush aimed
to get the tacit support of Brazil for a strategy to contain President Hugo
Chávez. Curiously, President Lula’s attitudes towards Chávez and the
President of Bolivia, Evo Morales, hardened after the visit of the President
of the United States (Soares, 2007).
The change in President Lula’s position became evident during the
Summit of Isla Margarita in April 2007. As Sotero highlights, there was a
willingness to foster cooperation with the United States during Lula’s
second term. In many respects, this was due to Lula’s interests in
establishing closer ties with the private sector. In this way, Brazil redirected
its hemispheric policy motivated by three fundamental factors: diverging
interests with Venezuela and Bolivia; the need to reassert regional
leadership and the fact that there were also some areas of agreement
300
between Brazil and the United States foreign policy. 65
At the present time, there are three major topics that shape the United
States foreign policy towards the continent: the potential increase in
transnational terrorism on a global scale; the sharp decline in the State’s
importance and the link between illicit drugs and organised crime (Russel
and Tokatlian, 2008: 20). The imbalance of power between the United
States and Latin America will continue in the coming years, meaning it
could still be predominant feature of international policy in the near future.
In this context, Brazil and Chile have seen an opportunity to develop
strategic policies towards Washington instead of the long-standing
traditional diplomacy of previous decades. Regardless of the difficulties in
the region’s greater political balance, there is room for manoeuvre in the
continent’s geopolitics. In some respects, the multilateralism endorsed by
the high-level of institutionalisation plays a major role in terms of restricting
the abuse of power and legitimising the state policies to be adopted.
Therefore, the United States cannot afford to ignore them without receiving
substantial penalties for a loss of support for their policies and aspirations.
Most significantly, at the present time Brazil is a ‘necessary interlocutor’
between the United States and Latin America. This means that Brazil is
crucial to the continent’s stability. The fact that the United States has
recognised Brazil as an articulator of consensus is exclusive to their foreign
relations, meaning that Brazil plays a key role in regional security. 66
Brazilian cooperation on regional matters and the country’s ability to deal
with every Latin American country has legitimised its position. Brazil is a
sub-regional leader and Chile supports the country’s geopolitical position in
the region.
65
See Paulo Sotero (2007), “Bush na América Latina: próximo do Brasil, longe de
Chávez”. Política Externa. São Paulo: Editora Paz e Terra, p. 67.
66
Diplomacy is a mode of tactful civilised conduct, gracefully smoothing the rough edges
of competitive, sensitive societies and men. Chiefly, however, it is an instrument and
procedure by which nation-states conduct their political affairs and other business among
themselves while at peace. It is thus the legislative process of world politics. Power and
force can establish or change equations of strength among nations, thus limiting
diplomacy’s influence. Paul Seabury (1964). Power, freedom and diplomacy: the foreign
policy of the United States of America. University of California. New York: A Division of
Random House, p. 332.
301
4.3.1 Brazil, the United States and Mercosur’s biofuel and ethanol
markets
A point made earlier in this chapter concerns the interests of both countries
in increasing the production and global trade of ethanol. In this context,
energy appears as the most promising area of bilateral cooperation between
the two countries in the foreseeable future. The opportunity to explore
cooperation in the research and development of ethanol has undeniable
implications for Brazil as a global player. To illustrate this point, the
Brazilian Sugarcane Industry Association (Unica) has sought to create a
global ethanol market, transforming the product that today meets less than
3% of world fuels demands into an internationally important commodity. 67
It is worth observing that Proalcool was the world’s most consolidated
biofuel programme, as well as the main mechanism used by the government
to encourage sugar-cane production and foster the industrial capacity needed
to transform the alcohol programme into a credit subsidy. Subsidies are also
currently given for the development of the ethanol industry in the financial
system, with compensation for regions according to their level of production
and biofuel use requirements. Proalcool was implemented through financing
contracts with unions and with National Treasury Secretariat and Brazilian
Bank funding (Banco do Brasil S/A) allocating resources for the programme
(Andrade, 2009: 131-132).
The National Treasury provided financing to the Brazilian Bank
according to the Selic rate and refinanced sugar mills, distilleries and
cooperatives producing alcohol at a fixed rate for the programme (11,5% in
2004). The amount financed corresponded to the volume of alcohol
estimated to guarantee the loan. Law No 10,453/02 established the
Sugarcane Production Cost Programme for the north-east region, with direct
compensation for major north-eastern production costs compared to the
centre-south. Moreover, the Green Fleets Law determined that acquisition or
67
The Brazilian sugar-energy industry particularly that associated with the National
Alcohol Programme (Proalcool) was launched in the 1970s as an alternative to imported
fossil fuels. After a successful period that lasted into the 1980’s followed by a difficult
stretch in the 1990s, ethanol made a strong comeback as an alternative fuel source in 2003,
with the car industry’s introduction of Flex-Fuel technology. Unica News, “White House
staffers learn about Brazilian ethanol”, 17/08/2009. http://english.unica.com.br/noticias/
show.asp?nwsCode={CBD9A90F-23DB-4A96-81F5-401D3E170024
302
replacement of the official fleet only be made up of vehicles that used
renewable fuels.
90% of biofuel production is concentrated in the United States, Brazil
and Europe, which represents a great potential for Mercosur members.68
Mercosur’s main partner is the world’s second largest producer. It is
estimated that Brazil’s production will reach 44 million tonnes by 2016, an
increase of 145% compared to 2006.69 Industrial scale production of ethanol
goes back several decades, so it is not surprising that the ethanol sector
outweighs the biodiesel one. The increasing demand for renewable energy
sources has had an important impact on ethanol production, to the extent
that production volume almost tripled between 1995 and 2006. World
ethanol production has reached approximately 50 million tonnes, with
Brazil and the United States contributing more than a third of the total
(López and Starobinsky, 2009: 24-5).
It should be remembered that the bilateral agreement between Brazil and
the United States in 2007 changed the energy scenario in such a way that it
created an important international ethanol market. Strengthening ties in
other sectors such as energy goes hand-in-hand with the concept of public
diplomacy and demonstrates the importance of diverse actors in foreign
affairs. Energy issues play a fundamental role in foreign policy strategies in
Brazil, the United States and Chile and therefore help build bridges in the
sector to strengthen bilateral links. On the other hand, global efforts to
reduce dependence on oil have led to initiatives being encouraged
worldwide that use renewable energy sources. An increase in environmental
concerns demands an alternative energy matrix to serve as a potential
solution for cleaner energy use. Achieving greater energy security through
increasing biofuels and ethanol production demands a competitive
performance from the country’s producers.
However, there is still some reticence about the United States and
68
Among experts, biodiesel is the best candidate for diesel fuel. Biofuel has a number of
benefits, such as adding value to feedstock and increasing rural manufacturing jobs and
income taxes and investments. More information in Ayhan Demirbas (2007), “Importance
of biodiesel and transportation fuel”, Energy Policy, vol. 35, issue 9. Elsevier, pp. 46614670.
69
Despite the general arguments against renewable energy sources, Brazil’s ethanol
programme demonstrates that scale economies can profit by using renewable energy. See
José Goldemberg et al. (2004), “Ethanol learning curve: the Brazilian experience”, Biomass
and Bioenergy, vol. 26, Issue 3. Elsevier, pp. 301-304.
303
Brazil’s production of ethanol and its impact on food prices. Whereas the
impact of ethanol produced from corn in food production is recognised,
Brazilian ethanol derived from sugar-cane does have a similar impact
(Zhang, 2010: 145-146). Unlike the United States, Brazilian ethanol is
already a reality in its energy matrix. To illustrate this situation, it can be
pointed out that Brazil today meets more than 40% of its needs for fuel for
cars with ethanol.
At the same time, Brazil has become one of the three largest producers
and exporters of food in the world, together with the United States and the
European Union. In addition, sugar-cane is only grown in 5% of the
country’s land used for agriculture. This fact demonstrates how ethanol can
be used as a political tool to reshape the Brazil-United States relationship. In
practical terms, the United States-Brazil agreement to promote the
consumption of biofuels such as ethanol has still not achieved great results.
Ironically, this has occurred due to the trade barriers that the United States
has imposed on ethanol imported from Brazil. 70
The growing international demand for biofuel and ethanol means that
renewable energy source have become an important issue in foreign affairs,
encouraging multi-sector cooperation such as public-private partnerships.
Environmental concerns have increased in the last few decades, determining
the comparative advantages of ethanol producers like Brazil. The
combination of adequate weather conditions and an adequate renewal of
sugar-cane stocks have led to an increase in production. The United States is
the main destination of Brazilian ethanol exports, leading to continuous
energy links. In Mercosur, biofuel cooperation, especially ethanol in which
Brazil is a world leader would help launch the aforementioned energy
sources as a real alternative to fossil fuels.
4.3.2 Mercosur vis-à-vis Brazilan and Chilean foreign policy
Given the even more unfavourable and worsening conditions for
70
There has been an attempt by representatives of the Brazilian ethanol industry to create a
more open and trustwothy market for ethanol as a global commodity. Moreover, the
Brazilian biofuels sector has directed its efforts towards the greater carbon credit market
advantages that President Obama wants to create to combat climate change. Eletrosul,
Gestor digital de informações, “EUA buscam cooperação na área de energia”, 13th March
2009. http://www.eletrosul.gov.br/gdi/gdi/index.php?pg=cl_abre&cd=hniceZ4:%5BTehe
304
international insertion in the 1980s, Brazilian foreign policy was unable to
seize diplomatic opportunities with strategic world regions like before. In
practical terms, relations with the European Union and Japan became more
difficult due to increased protectionism. Likewise, the country’s privileged
relations with the developing world were impractical and hard to maintain.
It became clear that the regional order established in the Middle East after
Gulf War of 1991 restricted any possibility of relations in that area. As the
international scenario worsened, the creation of a new regional reality came
into effect. In this sense, the process of integration with neighbouring
countries became a reality, bringing immediate economic benefits. Another
important point that should be mentioned is the reinforcement of the
regional base with a view to broadening Brazil’s participation as well as that
of its neighbours in the global system. The creation of Mercosur should not
be considered a goal in itself but goes hand-in-hand with a far-reaching
geopolitical project (Visentini, 2004: 16-17).
As was explained in the first chapter, contemporary integration initiatives
cannot be exclusively defined as state activity and the role of the State
should not be underestimated. It has been recognised that the adoption of
major reforms in Chilean public policy led to a decrease in external tariffs,
together with the liberalisation of foreign investment. In this sense, Chile
decided not to take part in projects involving negotiated economic
integration and instead chose to support a system with a freer exchange rate.
At this time, the country withdrew from the Andean Group due to the fact
that it did not share a common external tariff. Indeed, it opposed the
common treatment of foreign investments as well as of industrialisation
through import substitution. The transition from a military regime to a
democratic one brought with it a multitude of risks because of the economic
reforms carried out during the military government.
The developed strategy preserved the macroeconomic balance and
therefore in President Aylwin’s term import tariffs were also reduced as an
incentive for non-traditional export products. Continuing along these lines,
foreign policy was built up through trade negotiations with central markets.
Meanwhile, more public and private resources were designated to Prochile
and to a more active development of the Direcon.71 As a small country,
71
Dirección de Relaciones Económicas Internacionales. Prochile is an agency that belongs
to Direcon and the Ministry of Foreign Affairs and is aimed at developing the country's
305
Chile’s foreign policy strategy was to take advantage of global trade, even if
it could not influence it.
Chile sought to sign complementary economic agreements within the
framework of the ALADI with Mexico and other Latin American countries.
Furthermore, it signed free trade agreements (FTA) and cooperation
initiatives with certain developed and emerging Asian countries. The
important strategic understanding that emerged between Chile and Mexico
should be stressed, enabling the possibility of Chile becoming part of the
APEC, in the same way as it also favoured its negotiations with developed
countries. 72 On the whole, this foreign policy strategy continued in the
subsequent governments of Presidents Frei (1994-2000) and Lagos (20002006). During the Frei administration, complementary economic agreements
were signed with Mercosur, other Latin American countries and Canada and
the European Union. Trade agreements were part of Chile’s long-term
foreign policy, with the government encouraging the expansion and
diversification of commerce.
4.3.3 The fundamental matters concerning the FTAA
As has been explained, the FTAA was designed by the United States’
government and the business sector and led to a tremendous loss of
autonomy for Latin American countries. Brazil was threatened by
international agreements to keep its domestic market open to United States’
exports and exports from other countries in the continent. Certainly,
Brazilian companies could not compete with corporations from the United
States, given their technological, financial and commercial power. However,
Brazil would have to give up a number of government policy instruments in
order to join to the FTAA.73 As a result, its trade policy would cease to exist
trade policy. http://www.prochile.cl/quienes_somos/que_es_prochile.php. The activities
carried out by Direcon depend on the Ministry of Foreign Affairs. http://www.
direcon.cl/index.php?accion=quienes_somos
72
Augusto Animat (2008). “La política comercial chilena: una experiencia satisfactoria
pero con nuevos desafíos”, pp. 136-137.
73
Brazil’s organised resistance to the FTAA was shaped by the Rose Garden Agreement
signed in the White House Garden on 19th June 1991. This was the first such multilateral
agreement since the EAI. The agreement establish a Council of Trade and Investments,
which would be shared and chaired on a rotating basis by the foreign ministers from
306
in other FTAA countries. This means that neither tariff barriers nor nontariff barriers would apply to protect certain sectors of the economy.
In practical terms, the country would be unable to use trade policy to
protect its industries and the emergence or consolidation of new sectors.
Most significantly, the situation worsened during the government of George
W. Bush, with the United States’ interests becoming more explicit.74 On the
one hand, the FTAA played an important role in creating a more open
environment for the more competitive sectors of the United States’
economy. On the other, it adopted protectionist measures for the most
vulnerable and least competitive sectors of its economy. As previously
analysed, the FTAA also had trade and economic implications for Brazil,
since the liberalised policies of the United States required the country to
open up its industrial sectors. Maintaining industrial development was the
basis of the national industrialisation initiative.
Historically protected from foreign competition, Brazil service sector
reacted cautiously to the FTAA project. The negative listing approach
adopted by the FTAA, which demanded the exclusion of certain sectors
from the agreement, reflected the dissonance in the way the country was
being industrialised.75 The FTAA’s target to include almost every sector in
the liberalisation programme had undesirable effects on the economy.
Therefore, the FTAA model was formally rejected, due to its strong
liberalising nature. As already noted, the FTAA had a much broader scope
than better market access to goods and services.
4.4 The Present Course of Brazilian Foreign Policy
Under President Lula, Brazilian foreign policy did not undergo any dramatic
Mercosur member countries and the Office of the United States Trade Representative.
Signficantly, the agreement established a framework in which to relax trade barriers
between the United States and Mercosur countries. “Mecanismos de diálogo e processos
negociadores”. Ministério das Relações Exteriores. Available at: http://www.itamaraty.
gov.br/o-ministerio/conheca-o-ministerio/america-do-sul/dnc-ii-divisao-de-negociacoesextra-regionais-do-mercosul-ii/?searchterm=acordo%20do%20Jardim%20das%20Rosas.
Accessed on 11th July 2013.
74
See Luiz A. P. Souto Maior (2001), “Brasil-Estados Unidos: desafios de um
relacionamento assimétrico”, Revista Brasileira de Política Internacional, vol. 44, n o 1.
Brasília: Instituto Brasileiro de Relações Internacionais.
75
See Inter-American development Bank, “The trade policy making process: Level one of
the two level game”. Buenos Aires: INTAL_ITD_STA.
307
changes or adopt a more militant position as some would have expected
from a leftist government. The appointment of a career diplomat,
Ambassador Celso Amorim, as head of Brazilian foreign policy illustrates
this point, strengthening the foreign policy of fomer President Cardoso in
the last two years of his administration, which coincided with the
international financial crisis. This means that, in the last two years of
Cardoso’s term, diplomacy prioritised an agenda of cooperation in South
America as a way of circumventing the crisis in Mercosur, maintaining the
integration process in adverse circumstances (Vigevani and Cepaluni, 2012:
50-51). Brazil also attempted to recover a degree of autonomy from the
Bush administration, as already highlighted.
Brazil’s new foreign policy strategy sought to increase its negotiating
power on the international agenda vis-à-vis major world powers. At the
same time, talks were conducted with its neighbours regarding the
establishment of a broader partnership in order to help economic growth.
That said, Brazil encouraged the possibility of a coordinated action plan at
an international level, aiming to avoid the marginalisation the region was
suffering. 76 The logic behind this strategy was that regional integration
could contribute to South American development. Furthermore, an
integrated Latin America was an indispensable tool for negotiating the
FTAA (Visentini, 2006: 166).
The new international coalition strategy adopted by Brazil’s foreign
policy-makers was a continuous and flexible search for international
activities in order to extend national power. The Brazilian multilateral
foreign policy strategy of the twenty-first century, in which the G-20 and
BRICs (Brazil, Russia, India and China), are important bodies in the
country’s foreign policy strategy has been considered by many analysts as
more rhetoric than substance. 77 However, the coalitions strategy is part of a
new global order, creating a new architecture for international relations. In
76
It should be highlighted that Mercosur was created for strategic and political reasons
beyond the field of trade. Further reading in Féliz Peña (2011), “Uma perspectiva sobre o
future do Mercosul”, Política Externa, vol. 20, n o 1. São Paulo: Editora Paz e Terra, pp. 99106.
77
The weakening of the United States’ power in the international arena is associated with
India and China’s emerging position as global powers and has been attracting greater
interests among the international community. Roberto Teixeira da Costa (2011), “Chile e
Índia: protagonistas de um mundo em transformação”, Política Externa, vol. 20, no 1. São
Paulo: Editora Paz e Terra, pp. 181-188.
308
this global scenario of restructuring, the so-called emerging countries of
Brazil, India and South Africa, for example, aim to exert more political and
economic influence on the international arena. The end of the Cold War
brought the return of these large, peripheral countries to the diplomatic
context, with them playing the role of intermediaries between developed and
developing countries in international talks.
Despite major differences between the larger peripheral states, they all
share similarities such as large populations and huge territories, providing
opportunities for economic exploitation. As Visentini points out, the
potential of these countries for promoting greater economic, scientific and
technological developments, military capability and broad and diverse
competitiveness on an international level was soon realised (Visentini,
2006: 161). Furthermore, in the current context of economic crisis, the size
of these peripheral countries matters when world trade is falling, since large
economies have millions of domestic consumers to turn to when foreign
markets fail. Another important fact is that large economies tend to be
diversified. On the one hand, diversification means little when markets all
fail at once. On the other hand, it can be considered a significant advantage
when recovery begins, since these countries are most likely to be involved
in businesses in which demand is rising.78
Due to the previously mentioned factors, these states can increase their
bargaining power in the international arena through coordinated action. The
reason behind this policy of coordination is the attempt to develop a more
symmetrical world order. In response to the inability to reform existing
structures within the United Nations, new attempts to shift the global
balance of power were made by emerging countries. In this way, initiatives
like the BRIC, striking for a bigger say in global policy-making, contribute
to this trend. That said, when the BRIC meet, they discuss topics such as
reforming the IMF and, in the case of China, Brazil and Russia plans to
switch some of their foreign-currency reserves out of dollars and into IMF
bonds.79
Continuing along these lines, the G-20 the group of the world’s 20 largest
economies, constitutes a forum for debating topics that affect the global
order, such as international crises, climate change and global warming and
78
79
The Economist, 20th-26th June 2009, p. 65.
Ibid, p. 63.
309
trade liberalisation among others. According to President Lula, decisions
about measures to contain the international crisis cannot only be contained
to the G-8 (the United States, Japan, Germany, the United Kingdom, France,
Italy, Canada and Russia). The G-20, which represents about 80% of global
wealth, should also discuss issues such as the recovery of the global
economy. 80
In the long-run, Brazil’s foreign policy expresses values of tolerance and
respect for other countries. In accordance with the country’s diplomatic
tradition, Brazil’s leadership builds on its capacity to articulate conflicting
interests, while operating as a consensus-building country. Regardless of
Chile’s divergent approach to the FTAA initiative vis-à-vis Brazil’s
diplomatic strategy, the two countries share common values associated with
their similar international insertion. As van Klaveren states:
“From Chile’s standpoint, Brazil embodies the so-called ‘para-neighbour policy’, as
does Ecuador, which has also been a traditional friend of Chile. This kind of
relationship reflects ties that are not so strong, since neither state shares a common
border or long-term stable relations that encourage mutual respect. Chile’s position
supporting the NAFTA and FTAA projects, while distancing itself from Mercosur
and UNASUR initiatives, cannot be linked to Brazil-Chile ties. The perception
within Chile’s foreign policy plan was that strengthening participation in the field of
UNASUR could demonstrate undesirable support of the country for the Bolivarian
Alliance for the People of Our America (ALBA). Establishing closer links with
President Hugo Chávez was not the goal of Chilean diplomacy (Alberto van
Klaveren, Vice-Chancellor for Foreign Affairs (2006-2009), agent of the State of
Chile in the case of Peru versus Chile in the International Court of Justice regarding
a maritime border dispute on 16th January 2008. Interviewed on 29th August 2013
in Santiago de Chile).
Brazil and Chile’s similar international insertion, based on the defence of
human rights, should not be underestimated, given the importance of
protecting human rights and the favourable environment developed from the
1990s onwards in both countries. 81 The consolidation of human rights
80
“Lula diz que cabe ao G-20 agir contra a crise”. O Globo, Economia, Tuesday, 14 July
2009.
81
Further reading in Mónica Serrano and Vesselin Popovski (2010), Human rights regimes
310
reforms laid the groundwork for both states’ active position. From Brazil’s
standpoint, the return to civilian rule in 1985 brought a minimum number of
political rights: universal suffrage, free and fair elections and an adequate
separation of power. With regards to civil rights, the country signed every
regional and international human rights protocol and convention, taking an
active position in the United Nations’ human rights protection system.
Indeed, reapprochement to the Inter-American system also occurred in this
period. The 1988 Constitution expressly recognised rights and guarantees in
accordance with the country being a pioneer as one of the first to institute
the National Plan of Action on Human Rights (Macaulay, 2010: 133-137).
In Chile, the increasing importance of protecting human rights has been
twofold. The gross violations that occurred during the military dictatorship
and the legal changes that had to be carried out to sustain democratic values
as a due process of law to guarantee freedom of expression and to give
rights to vulnerable groups led to important changes in the country’s
political system. The first step was the creation of the National Commission
for Truth and Reconciliation (the Rettig Commission) during the
administration of President Aylwin (1990-1994).82 From the 1990s onwards,
civil tribunals played an active role in prosecuting the abuses committed by
the dictatorship. Alongside Brazil, Chile remains extremely active in
international forums on human rights, as illustrated by the country’s position
signing of the Universal Declaration of Human Rights and of the American
Convention on Human Rights.
At a constitutional level, important changes took place in 2005, due to
the interpretation of information of a public nature. Therefore, the so-called
desacato laws were removed from the penal code and restrictions on
freedom of expression in a state of emergency were modified to adhere to
international standards. Vulnerable groups like women and their rights also
underwent significant reforms, with the creation of the Ministry for Women
(SERNAM). The transition policy included membership of
intergovernmental human rights organisation notably the UN Human Rights
Commission, the Inter-American Court and Commission, the UN Human
in the Americas. New York: United Nations University Press.
82
More information in the “Report of the Chilean National Commission on Truth and
Reconciliation”, United States Institute of Peace, 4th October 2002. Notre Dame:
University of Notre Dame Press. http://www.usip.org/sites/default/files/resources/
collections/truth_commissions/Chile90-Report/Chile90-Report.pdf
311
Rights Committee and the UN Sub-Commission on Human Rights
(González, 2010: 156-164).
It is worth highlighting Brazil and Chile’s similar approach, through their
mutual support to the Universal Declaration of Human Rights and their
policies on democratising and promoting human rights policies. Brazil’s
hope of gaining a permanent seat on the UN Security Council had Chile’s
support. The reform of the Security Council needed would lead to more
permanent members and Brazil, as an emerging global power would comply
with the council’s need to better represent the new international context. The
fact that Chile was the first country in the region to express such support has
an important diplomatic interpretation. 83 It shows that Brazil and Chile think
about global matters in a similar way, as well as demonstrating the values of
peace, democracy and human rights.
4.4.1 Brazil-United States bilateral relations during the Obama
administration
There is a general consensus that the well-functioning bilateral relationship
between Brazil and the United States has not undergone significant changes
during Obama’s term. On the whole, the partnership has continued in the
areas of cooperation, although the emergence of new subjects has warranted
closer attention. The unexpectedly easy dialogue between President Bush
and President Lula provided, to some extent, a new scenario for the
development of bilateral ties from 2005 onwards (Amaral, 2002). Despite
some scepticism about the ability of the two states to maintain a favourable
relationship others saw an opportunity to cultivate good relations and
continue the development of new areas of cooperation in the subsequent
years, taking into account Obama and Lula’s similarities in their personal
trajectories and values.
Moreover, both presidents share the same opinion on multilateralism as
an inclusive universal mechanism, as opposed to the idea of it as a mere
83
Chile has carried out its foreign policy based on respect for international law, the
inviolability of treaties, non-interference in other countries’ international affairs and the
juridical and peaceful resolution of controversies. “Chile’s foreign policy”, Chile Embassy
of Chile, Washington D.C., 2014. http://www.chile-usa.org/forpolicy.htm
312
grouping of the like-minded. When announcing his foreign policy, President
Obama named three main Department of State priorities: strengthening
international institutions, promoting nuclear non-proliferation and managing
peace in the Middle East. Indeed, he ranked the UN as an indispensable
organisation for fostering global cooperation. The previous 15 years had
been filled with the United States’ attempts to promote ‘anchor projects’ in
Latin America: the Enterprise for the Americas (EAI) announced by
President George Bush in June 1990 and the redefinition of the Latin
American system through periodic summits with the creation of the FTAA
as the main target, as previously studied (Sharma and Gielen, 2014: 219).
As outlined in the chapter about energy and also in the section about
nation branding, Brazil and the United States developed a partnership to
search for and develop biofuels. This bilateral understanding had
implications for the harmonisation of global technical standards.
Furthermore, it contributed to the dissemination of information seeking the
production and use of biofuel in developing countries through the viability
of financing studies and technical assistance.84 Bilateral cooperation is a big
step towards an international biofuel market with the largest possible
number of producer and consumer countries, all of which is a prerequisite
for the security of this energy source. The appointment of a Nobel Prize
winning physicist committed to clean and renewable energy sources to the
Department of Energy illustrates the United States energy policy.
Regarding trade, Brazilian exports increased from US$13.2 billion to
US$27.4 billion between 2000 and 2008 and imports rose from US$12.9
billion to US$25.6 billion. The United States enjoyed a strong commercial
relationship with Brazil, representing nearly US$63 billion of bilateral trade
in 2008. Ironically, bilateral trade led to a better trade performance, with
some countries maintaining a free trade agreement with the United States. In
2008, the United States was Brazil’s top foreign direct investor (US$7
84
However, Brazil’s protest over United States’ ethanol tariffs demonstrated the trade
dispute between the two countries over ethanol. According to Brazil, the US tariff of US$
54 cents per gallon was designed to protect American corn farmers who could not produce
ethanol as cheaply as sugarcane growers. The United States considers ethanol the only
United States product outside the scope of WTO rules, but Brazil challenges this, saying
any tariff cuts would have to be a part of future global trade pact. “Brazil is poised to begin
WTO protest over ethanol tariffs”. New York Times. Available at: http://www.
nytimes.com/2008/07/30/business/worldbusiness/30iht-30ethan.14880834.html?_r=0.
Accessed on 11 July 2013.
313
billion) and, at the same time, the largest recipient of Brazilian foreign direct
investment (US$4.8 billion). Both President Obama and Secretary of State
Clinton demonstrated signs of an interest in strengthening relations with
Brazil in the economic and commercial fields through their support, for
example of the United States-Brazil CEO Forum that takes place twice a
year. 85
In the UN Security Council, cooperation between the two countries
acquired greater relevance, given Brazil’s two-year term (2010-2011) as a
non-permanent member.86 Under the United Nations’ Charter, the Security
Council has primary responsibility for maintaining international peace and
security and the authority to determine “the existence of any threat to peace,
breach of the peace or act of aggression” (Article 39). The Council decides
which measures are to be adopted to fight these threats, including the
establishment of peacekeeping operations.87 Brazil’s participation in
international decision-making sets the stage for further bilateral
partnerships. The United States recognised Brazil as an emerging power and
a key actor when dealing with issues of lesser politics, like trade, finance
and the climate, given its ranking as the Latin American leader in dealing
with radical regional trends (Bonomo, 2011: 101).
Minister Celso Amorim and Secretary of State Hillary Clinton had phone
conversation shortly after the confirmation of the appointment of Clinton by
the United States Senate. On 24th February, Clinton and Amorim held a
summit to decide common areas for more intense cooperation and dialogue
85
Brazilian-American Chamber of Commerce, Inc., “United States -Brazil CEO Forum to
hold fourth meeting in Washington later this month”. 16th July 2009.
http://www.brazilcham.com/ default.asp?id=248&c002_ui=sa&c002_id=730
86
United Nations Security Council. http://www.un.org/sc/list_eng5.asp
87
Brazil held an elective seat on the Council for the tenth time, a number matched only by
Japan. As an elected member of the Security Council, Brazilian priorities were among
others, stability in Haiti, the situation in Guinea Bissau, peace in the Middle East, efforts
towards disarmament, the promotion of respect for International Humanitarian Law, the
strengthening of peacekeeping operations and an approach that relates the defence of
security to the promotion of socio-economic development. Nowadays, Brazil contributes
more than 1,300 soldiers, military observers and police on three different continents. The
greatest contingent is in Haiti, where a Brazilian General also holds the military command
of the United Nations Stabilisation Mission in Haiti (Minustah), made up of 17 countries.
Ministério das Relações Exteriores, “Brazil elected to the United Nations Security
Council”, 15 October 2009. http://www.itamaraty.gov.br/sala-de-imprensa/notas-a-impren
sa/2009/10/15/brazil-elected-to-the-united-nations-security
314
in the future: energy, climate change and global warming; the first against
poverty; Haiti, Cuba and the Middle East and the strengthening and reform
of the UN among others. Triangular cooperation for promoting the
development of third world countries was also an important topic during the
talks. As pointed out earlier, the complementary capabilities of Brazil and
the United States already existed in the areas of ethanol and health, yet
further progress could also be made in other fields allowing for a joint
performance (Patriota, 2009: 91).
Most notably, the development of closer dialogue does not imply
absolute alignment or agreement between the two states. However, their
partnership has faced difficulties due to the international financial crisis and
the resurgence of protectionist tendencies. Furthermore, the latest
negotiations of the Doha Round, agricultural subsidies, a consensus on the
ethanol tariff, the relationship between intellectual property and access to
health among others, all demand constant dialogue.88 Fixing these issues
requires an extra effort on the part of Brazilian diplomacy. 89
It should be remembered that this is the first time in history that an
international financial crisis has not significantly affect Brazil’s growth.
Despite unequal social distribution remaining improvements did not occur
to social inequality rates. Obviously, more needs to be done to improve the
education system, health care, infrastructure, transportation and the political
and tributary system among others (Oliveira, 2010). However, Brazil did
take advantage of the environment of mutual respect between the two
countries, the undeniable new political affinities and the more powerful
international role it had acquired in recent years. The addition of several
specific topics not directly linked to the need to create a common economic
agenda or to the harmonisation of trade policies sustains the progressive
institutionalisation of bilateral dialogue.
The Brazil-United States relationship during President Dilma and
88
The complexity of agricultural issues demanded global solution for liberalising these
markets. John C. Beghin and Ataman Aksoy (2003), Agricultural trade and the Doha
Round: lessons from commodity studies. Iowa City: Iowa State University Press.
89
Negotiation is the principal mechanism for resolving major conflicts in international
commerce. Advances in transport and communication systems coincided with a period of
political, trade and economic instability. Therefore, negotiation was the best way to solve
conflicts in international trade. See Ligia Maura Costa (2005), Comércio exterior:
negociação e aspectos legais. Rio de Janeiro: Elsevier.
315
Obama’s administration was not marked by strong political links. The
United States spying on Brazil significantly influenced the bilateral
relationship. Evidence that the United States’ National Security Agency
(NSA) appeared to be spying on Petrobras, Brazil’s national oil company
caused certain discomfort between the two countries. President Dilma
Rousseff demanded explanations from the United States, threatening to
postpone or cease paying official visits to Washington. The lack of formal
explanations led to the cancellation of the planned state visit.
Chile joined Brazil in demanding answers from Washington over
allegations of spying. 90 Chile’s Minister of Foreign Affairs Alfredo Moreno,
categorically condemned the practice of espionage. As Moreno said, “Chile
reaffirms its adherence to international law and conventions, which are
appropriate instruments to ensure harmonious coexistence among
nations.”91 Regional cooperation mechanisms, such as the Community of
Latin American and Caribbean States (CELAC) set up in 2011, included
Cuba and excluded the United States and Canada and create a new regional
body. The CELAC provides hope of a regional cooperation initiative
beyond the United States’ influence.92
In line with the interpretation of public diplomacy, the growing
participation of different actors, such as the business sector in foreign affairs
is significant, especially from a regional point-of-view. The focus on the
centrality public diplomacy is now occupying in foreign policy, with the rise
of multiple actors, offers a new paradigm for exploring international
relations. The CELAC and the European Union (EU) summit of heads of
90
“Brazil and the United States: more in sorrow than anger”. Volume, 408, 21st-27th
September 2013. The Economist, p. 37.
91
Karen Riquelme. “Chile condemns USA spying”. News. 11th July 2013.
92
The combined gross domestic products of the countries in CELAC make it the third
largest economic powerhouse in the world. It is also the group with the world’s largest oil
reserves and the third largest world producer of energy and food. In Havana, on 30th
January 2014, the bloc’s leaders signed a declaration that stated that regional integration
should respect the sovereign right of each of the region’s population to choose their own
form of political and economic organisation. “Time to hug a Cuban: a rush to embrace a
fading outpost of communism”, The Economist, 15th-21st October, vol. 410, 2014. p. 32.
Founded in 1986, the well-known Rio Group - ‘Grupo de Rio’ - was a political forum to
facilitate discussions of common interest. The Rio Group’s dialogue with the EU was
institutionalised in 1990. The Rio Group merged with CALC (Cumbres América Latina y
Caribe – internal LAC Summits in 2010 under the CELAC framework. “The EU and the
Rio Group”, European Union External Action, http://eeas.europa.eu/la/riogroup_en.htm
316
state and governments in Santiago de Chile from 26th-27th January 2013,
was the first of the official meetings between the European Union and
CELAC and contributed to the regional approach towards Europe. Brazil,
Chile and the other Latin American states came together to address an
alliance on sustainable development.93 The CELAC sought to promote
regional cooperation within a framework of solidarity, economic
cooperation and political coordination.
4.4.2 Chile’s expectation with regards to the United States
In 2000, Chile undertook an ambitious agenda with the United States, made
up of emerging topics such as electronic commerce, business visas, labour
requirements, environmental topics and civil society participation in the
trade negotiation process, all beyond the traditional topics of trade
negotiation. Not surprisingly, a free trade agreement with the United States
had been the goal of Chile’s foreign policy with the EAI since June 1990.
Symbolic negotiations occurred in the early 2000s during the administration
of President Clinton and actual negotiations were carried out during the term
of President George W. Bush, but were not fast-tracked. Afterwards, the
United States Congress – by a minimum number of votes – passed the Trade
Promotion Authority (TPA) on 6th December 2002. As Pizarro stated:
“President Lagos’ approach is totally in accordance with the United States’
liberalising values. More than sharing similar economic principles, Lagos
appreciates the significance of strengthening and intensifying links with the United
States. Therefore, his administration was connected to the United States’ trade
liberalisation measures. The first free trade agreement ratified by Chile was the
Canada-Chile Free Trade Agreement (CCFTA) that came into force in 1997 during
Lagos’ government” (Interviewed on 24 August 2011 in Santiago de Chile).
The CCFTA promoted increasing bilateral links between the two countries,
with Canada becoming the largest source of new direct investment in Chile
since the agreement. In this way, the aim of stregthening ties with the United
93
“EU-CELAC Action Plan 2013-2015”, Santiago 27th January 2013, 5748/2013, Press 32.
http://www.consilium.europa.eu
317
States consisted of opening up the Chilean economy, becoming more
competitive, fostering the export-oriented model, increasing value-added
exports and raising the share of manufactured goods and skilled services.94
Achieving a balanced parnership played a key role in promoting
understanding beyond the WTO, as well as including all aspects of a
bilateral economic relationship, such as trade, investments and strict trade
barriers.
When negotiations took place, 19 topics were selected from topics
involving trade goods, trade protectionism, technical rules, investments,
trade services, institutionalisation issues, labour requirements and
environment sustainability. Official talks started in December 2000, with 14
rounds of negotiations concluding in agreements on 11th December 2002.
President Lagos officially announced the new agreement, emphasising the
opportunities for job creation and the dynamic growing economy. On 31st
January 2003, the United States notified Congress of its intention to sign the
free trade agreement, with the legal procedure to be carried out in an
estimated minimum of 90 days.95 However, in the international context, the
result was that the agreement’s ratification was postponed.
The press argued about the pressure on President George W. Bush to sign
the FTA in exchange for Chile’s support for United States’ military
intervention in Iraq in the UN Security Council. In this respect, President
Lagos’ decision to remove FTA negotiations from the UN Security Council
debate was unanimously backed in Chile. Maintaining an independent
approach while strengthening bilateral trade and economic connections
demonstrates the lack of correlation between the country’s economic and
political-diplomatic position (Sater, 1990: 135-136). Therefore Chile - as a
non-permanent member of the UN Security Council - maintained its
opposition to the military invasion of Iraq. The United States-Chile FTA
entered into force on 1st January 2004.
Chile’s neoliberal approach, in accordance with the United States’
advanced economic liberalisation values, demonstrated the pragmatism of
Chilean diplomacy, whereas their absence of support for issues related to
94
See Government of Canada (2012), “Canada-Chile Free Trade Agreement”. http://www.
agr.gc.ca/eng/industry-markets-and-trade/agri-food-trade-policy/trade-agreements-inforce/canada-chile-free-trade-agreement-ccfta/?id=1383936689069.
95
“Chile: 20 años de negociaciones comerciales”. Direcon. Santiago: B&B impresores.
November 2009, pp. 135-136.
318
‘hard politics’ as illustrated by the invasion of Iraq, should not be
underestimated. Economic ties do not have a direct relation on international
political insertion, which explains the adoption of Chile’s independent
position on specific topics (Pennaforte, 2001: 68-69). Another important
point that help understand Chile’s foreign policy approach consists of the
greater priority given to the Pacific Alliance by President Sebastián Piñera.
Chile’s business diplomacy was consolidated by the Pacific Alliance,
with the private sector playing a significant role in carrying out market
integration initiatives. The pragmatic nature of the alliance goes hand-inhand with the country’s foreign policy strategy. Therefore, on 23rd May
2013, Chile, Colombia, Mexico and Peru signed the alliance removing
tariffs on 90% of their trade of merchandise. Although the alliance currently
involves four Latin American countries, nine showed up at the meeting as
observers, including Canada, Spain, Australia, New Zealand, Uruguay,
Japan, Guatemala, Costa Rica and Panama. These countries and investors
from outside of Latin America were attracted by the positive business
climate among the alliance’s members.
The countries of the new alliance already occupied four of the top five
spots in the World Bank’s list of countries for doing business in Latin
America, encouraged by the fact that the bloc was serious. According to
international perceptions, the bloc was focused on trade, investment and
immigration rather than politics and ideology.96 Not surprisingly, Chile
signed the Pacific Alliance because of its economic foreign policy priorities,
which had gained a preponderant position in the country’s diplomatic
targets. Since trade and investment liberalisation were fundamental aims of
Chile’s economic policy, the alliance created a deeper regional market in
which to reap scale economies.
4.5 The Pacific Alliance vis-à-vis Mercosur
The excitement among the international press over the Pacific Alliance
should be cautiously observed. Different organisations’ perceptions of the
economies of the Atlantic and Pacific countries led to the erroneous
96
Keppel, Stephen. “Meet Latin America’s serious side: the Pacific Alliance”. ABC News,
28th May 2013. Available at: http://abcnews.go.com/ABC_Univision/News/meet-latinamericas-side-pacific-alliance/story?id= 19262599#.UeM4S1OhA0Q.
319
interpretation of Mercosur as a political front without original principles and
which opposed the pragmatism aspect of the Pacific Alliance.97 The
superficial analysis of Mercosur as a lost cause without considering Brazil’s
role as a leader in the region does not serve to help understand Brazil-Chile
cooperation. It is worth remembering that Brazil-Chile ties demand public
diplomacy, nation branding and a presidential diplomatic approach, in which
the traditional diplomacy perspective lags far behind when explaining
current bilateral links.
On 30th April 2013 Chile’s Chamber of Deputies approved the law
proposed by the administration of President Piñera, a first step that targeted
parliamentary sanctions for the Pacific Alliance agreement, signed in
Paranal, Antofagasta on 6th June 2012. The pact was signed by the host
country’s president plus Mexico, Peru and Colombia which gave way to the
Pacific Alliance upon the signature of the Lima Declaration on 28th April
2011. This was the political context in which President Alan García
officially invited the presidents of the three countries to join closer
collaboration between them. As Monge says:
“The idea had its roots in the economic perception, given that the nations that
made up the alliance - the so-called ‘Arc’ at the beginning – had exports
valued at $445 billion in 2010, almost more than 60% of Mercosur exports in
the same year, according to the World Trade Organisation. Simultaneously,
the traditional allies of Chile - like Brazil and Ecuador - in terms of
ideological activism should not be ignored. Traditional historical friendships
should not be transformed into economy as the main aim of foreign policy
aims” (Monge, 2013: 2).
Brazil’s international insertion as a global emerging superpower encouraged
Chile’s interest in developing closer links. Moreover, their share and similar
values on various topics in the international agenda could not be ignored.
Díaz provides a fundamental explanation:
97
See The Economist (2015), How deep is their love? The Pacific Alliance is a great brand
in search of a shared product, 14 March 2015. http://www.economist.com/news/
americas/21646273-pacific-alliance-great-brand-search-shared-product-how-deep-theirlove.
320
“The Pacific Alliance is the natural integrated economic bloc for Latin American
countries with coasts in the Pacific. The perception of the alliance as an antiMercosur bloc is not aligned with Chile’s foreign policy targets. The subsequent
administration considered Brazil and Mercosur as essential actors in the country’s
diplomatic strategy. However, Brazil needs to redefine its foreign policy with
regards to Chile” (Álvaro Díaz. Interviewed on 6th June 2013 via e-mail).
In this way, pragmatism and continuity appeared in Lagos’ economic
policies. As seen in the first chapter, the long-term focus of Chilean foreign
policy encourages the state’s relations of cooperation with conglomerates
and business sectors. The public diplomacy perspective demonstrates the
importance of diverse sectors to understanding Chile’s strategy, insofar as
the country has maintained neoliberalism as a development model,
strengthening the role played by transnational capital.98 Furthermore, the
country has created fundamental institutions to guarantee coherence during
negotiations and parliamentary approval for trade agreements. In theory, the
Arc of the Pacific goes hand-in-hand with the country’s liberal foreign
policy aims.
Another core element to understanding Chile’s growth is the emergence
of China as an international power, increasing its imports of Chilean copper.
According to OECD rates, Chile has grown by 4.8% a year and has seen
productivity increase by 1.1% a year. However, its educational system’s
performance, labour force participation and youth unemployment rate are
relatively high compared to other OECD countries. At the same time, the
country is described as investing enough in education and training, since
Chile spent 6.8% of its annual income on education in 2010 more than the
OECD average in 2009.99 According to the 2012 Human Development
Index Ranking, Chile ranked fortieth with a ‘Very High Human
Development’, while Brazil was eighty-fifth with ‘High Human
Development’.100
98
Public diplomacy requires state and private actors to communicate with the people.
Geoffrey Cowan and Amelia Arsenault, “Moving from monologue to dialogue to
collaboration: the three layers of public diplomacy”, The Annals of the American Academy
of Political and Social Science. http://ann.sagepub.com/content/616/1/10.short
99
“How Chile compares”. OECD. http://skills.oecd.org/informationbycountry/chile.html.
Accessed on 10th July 2013.
100
Human Development Reports. 2012 Human Development Index (HDI) Ranking.
321
Despite the importance of China’s insertion into the global scenario, the
internal differences between Chile and Brazil’s social organisation should be
observed. Brazil’s gigantic dimensions and social inequalities contradict the
country’s international insertion as an emerging global power. Nevertheless,
the boom in the past years has caused significant changes to the rate of
poverty, especially in the north-west region, falling markedly from 21% in
2003 to 11% in 2009. Extreme poverty (people living on $1.25 per day) has
also dropped dramatically from 10% in 2004 to 2.2% in 2009. Despite their
totally different dimensions – to some extent explaining Chile’s better
human development levels – Brazil’s social inequalities remain high even
for a middle-income country.101 Brazil’s human development levels contrast
sharply with its position as the world’s seventh wealthiest economy. Hosting
important international events such as the Pope’s trip to Brazil in July 2013,
the World Cup in 2014 and the Olympic Games in 2016 has demanded
logistical organisation as well as social development.
The Pacific Alliance and Mercosur should not be seen as South America
separating into two blocs, since the former is the natural way for countries
on the Pacific coast. The coexistence of two blocs does not mean a
continental division, since Mercosur serves to consolidate the efforts of
Argentina-Brazil integration after a history of wars and differences.
Moreover, the Pacific Alliance does not reflect the homogeneous cohesion
of Chilean national interests, since the agreement in practice summarises the
conducting of business diplomacy. The historical friendship and mutual
support in multilateral forums of the Brazil-Chile bilateral relationship
should not be underestimated. When analysing Brazil-Chile bilateral
relations, Asia is an overwhelmingly important actor with Chile representing
a bridge to the Pacific. As long as China is its main trade partner, Brazil
urgently needs access to the Pacific. Chile is the natural choice in this case,
since the country’s stable socio-economic circumstances favours building
infrastructure partnerships.
Available at: http://hdr.undp.org/en/statistics/. Accessed on 1 August 2013.
101
“Brazil overview”. The World Bank. Available at: http://www.worldbank.org/
en/country/brazil/overview. Accessed on 1st August 2013.
322
4.5.1 Brazil-Chile-Asia
The increasing importance of China as a global power - to the detriment of
the United States’ world influence - targets a new approach to the role
played by the Asian actor in Brazil-Chile foreign affairs. The remarkable
growth of China in the past few years demands special attention, given the
transformation it has produced in the global economy’s contemporary
history. China’s growth has had a direct effect on Brazil and Chile’s
economies, taking into account the flux of commerce between China and the
two countries. China’s rapid growth in the world economy has enhanced
Brazil-Chile direct growth and both the United States and this Asian power
have emerged as relevant actors in the Brazil-Chile bilateral context.
In the global order, Brazil and China are similar in the sense that they
both face difficulties when projecting an accurate contemporary image
abroad.102 We support the idea that Brazil’s image is completely tied to past
perceptions, which may occasionally correspond more to stereotypes than
serious branding initiatives. Like China, Brazil finds its identity shifting as
never before since both states have become increasingly influential global
players. From the Brazilian perspective, the emerging force of ethanol as a
renewable energy source is also a tool of political influence and therefore
careful marketing is necessary to maintain its value. In addition Brazil’s
exports have diversified over the years, to the extent that the country has
become one of the world’s most successful and fastest growing
manufacturers of jet aircrafts with its company Embraer (Morgan, 2002:
43). Today, China and Brazil face similar dilemmas and need to find ways
to select a set of ideas and values – among the ones that are most obvious
and important - in order to rebrand their contemporary image. It should be
highlighted that it takes patience to establish brand reputations and that a
successful nation brand requires a long-term effort.
From the Chinese perspective, it successful nation brand is not only
important in the context of domestic public diplomacy, but also, given the
102
However, China comprises the same public diplomacy instruments as other countries,
like internet, the media, events, publications, notwithstanding the fact that in the case of
China, many of these mechanisms are state-controlled. Ingrid d’ Hooghe (2005), “Public
diplomacy in the People’s republic of China”, in Melissen, Jan, The new public diplomacy:
soft power and international relations. London: Palgrave Macmillan, p. 96.
323
potentially vital role China can play in maintaining a peaceful international
order, its misbranding may result in dangerous consequences worldwide
(Bergsten, 2009: 9). Therefore, China needs to reassure the international
community of the overall positive, peaceful and constructive implications of
its growth.103 Given the challenge to the global economy posed by China, it
can be assumed that its growth is also reflected in Latin America and as a
result in Brazil-Chile affairs. The emergence of a new global agenda in the
twenty-first century has been suggested in which a broader coalition of
government officials and non-governmental agents provide the necessary
elements to deal with a wide array of critical issues in the international
system.104
4.5.2 The background and potential of a Brazil-Chile-Asia
partnership
Once Asian states have diversified their socio-economic realities, they
provide different opportunities for Brazil and Chile in terms of sustainable
103
China recognises the importance of projecting its culture through soft power. Nicholas
Dynon (2014), “China and nation branding: Beijing’s ‘all culture’ focus is delivering a poor
return on its soft power investment”, The Diplomat, 11th January 2014.
http://thediplomat.com/2014/01/china-and-nation-branding/
104
Nowadays, non-traditional issues play an increasingly important role in the international
security agenda and therefore multilateral bodies have assumed a substantial role in global
coordination. The new reality demands cooperation between diverse actors and emerging
economies, like China and Brazil play a central role in the process. See Giovanni Maggi
(1999), “The role of multilateral institutions in international trade cooperation”, The
American Economic Review, vol. 89, no 1. American Economic Association. There will be
no cooperation on global affairs unless emerging powers embrace them. With the advent of
the financial crisis this approach became clear. More information in “The origins of the
financial crisis”, The Economist, 7th September 2013. London. We have the Group of
Twenty, which has assumed an important role in the context of financial crisis in many
ways reducing the importance of the Group of Seven. See Leonardo Ramos et al (2012), “A
governança econômica global e os desafios do G20 pós-crise financeira: análise das
posições de Estados Unidos, Alemanha e Brasil”, Revista Brasileira de Política
Internacional, vol. 55, n o 2, July/December 2012. Brasília. Within a multilateral scenario,
nation branding is part of a collective domestic effort to promote a better image abroad.
Public diplomacy embraces the concept of nation branding, so both strategies should be
aligned, otherwise countries’ misconceptions may cause either international friction or have
opposite effects internally. For the importance of systematic multidisciplinary effort to
analyse contemporary international relations, see Eytan Gilboa (2008), “Searching for a
theory of public diplomacy”, The Annals of the American Academy of Political and Social
Science, vol. 616, pp. 55-77.
324
relations. The emerging importance of Asia is not only due to the Pacific
Alliance, but also to other areas, as will be observed. Despite China’s
position at the forefront of economic influence, it is worth observing the
Asian presence in Brazil-Chile ties. When referring to Asia, two points must
be discussed: first, the relevance of Asia in the field of Brazil-Chile
relations, given that Chile is a bridge to accessing Asia. Secondly, Asia is a
significant international partner, so Brazil-Chile-Asia relations should be
observed from a long-term perspective. The emergence of Asian provides a
new architecture for Asia-Latin America relations in that new forms of
approach, not previously available, have been developed, as will be argued
in this section.
Ironically, the Asian crisis combined with the Brazilian crisis at the
beginning of 1999, created an opportunity to establish closer links, but also
created downturn in the trade and investment between both states. The postcrisis circumstances laid the groundwork for strengthening political ties
seeking mutual support to deal with issues on the international scene.
However, what is seen in Asian intercontinental relations - particularly in
the case of Brazil - is the difficulty in prioritising an Asian partnership to the
expense of either regional or Western commitments. As will be discussed,
there is a huge interest in expanding political ties and business partnerships,
even though there is no clearly defined way of pursuing these goals.
As a result, an institutionalised approach to Asia and Latin America was
developed in 1999, called the Forum for East Asian-Latin American
Cooperation105 (FEALAC). The FEALAC played a strategic role in
fostering and strengthening relations between the two regions without the
presence of the United States. It demonstrated the increasing interests from
both sides in promoting cooperation and strengthening political economic
dialogue. Technology has helped mitigate the effects of the geographical
distance between East Asia and Latin America and has created a benign
environment in which to foster interaction between the two regions. Along
with the concept of public diplomacy explained earlier, the FEALAC forum
sought both a private and public approach to promoting better understanding
and political and economic dialogue. The possibility of preferential Latin
105
The FEALAC is an association of 34 countries from East Asia and Latin America tha
came together for the first time to form an official and regular channel of dialogue between
the two regions. FEALAC, http://www.fealac.org/FEALAC/01_about/sub01_01.asp
325
American-United States trade due to the emergence of the FTAA provided
the context for the development of Asian cooperation initiatives. To avoid
the negative effects that the FTAA might have brought to Asian insertion
into the Latin American market, Asia launched the FEALAC.
All in all, the evidence suggests that the revival of Brazil’s attractiveness,
the aperture of the market, financial stability and market expansion (as a
result of Mercosur) have all played a significant role in Asia-Brazil relations
(Oliveira, 2006: 179-181). Therefore, in the study of the Latin AmericanAsian partnership, the FEALAC can be considered a big step towards
establishing ties between the two regions. Since one of the key aims of the
FEALAC was multidisciplinary cooperation, the partnership was not
constrained to the economic field and an increasing interest in political links
should be taken into account.
To understand East Asian-South American relations, it should be
considered that Asian countries share important features with the region,
like the fact that cultural differences exert a strong influence on the
economy and politics. Furthermore, APEC106 and ASEAN107 are the leading
regional institutions, even though none of these initiatives have played a
central role in achieving economic leadership in the Pacific region. The
absence of a regional political framework and the direct influence of
economic forces in integration processes - either among their members or
abroad – has led to the separate study of Asian countries. Nonetheless, our
study focuses on the relevance of Asia in the context of Brazil-Chile
relationship and therefore an emphasis on Asia as a core component to
strengthening bilateral links.
Creating a benign geopolitical scenario, China’s economic progress has
influenced the way north-east Asia has inserted itself into the world today.
Furthermore, China’s attractiveness as an alternative development model is
a source of normative power for the country. Its emergence and impact on
the global economy provides a new context for international relations at the
beginning of this century. China is welcomed as an engine of economic
growth worldwide, not only in terms of trade but also China’s in foreign
106
Asia-Pacific Economic Cooperation, which included Chile among its members and
operated as a cooperative, multilateral economic trade forum. APEC http://publications.
apec.org/index.php
107
Association of South-East Asian Nations. http://www.aseansec.org/index2008.html
326
policy. Geopolitics have been growing rapidly, to the extent that they have
become a key element for the study of other emerging powers like Brazil. 108
State relations with Asia have grown, motivated by President Lula’s
administration but also by Brazil’s relations with East Asian countries as the
result of over a century of friendship and cooperation. For instance, relations
with Japan commenced in 1895 and relations with China officially began in
1909 after signing of an arbitration convention. Indeed, under the military
rule of the 1970s and early 1980s, Brazil developed extensive ties with the
developing world. In other words, the Itamaraty’s desire to seek a closer
relationship with developing countries has been present for some time.
Moreover, in the 1990s, Brazil redirected its foreign policy in terms of
international affairs. As part of this strategy, Asia played an increasingly
important role in Brazil’s world insertion policy. From an economic
perspective, its growing interest in expanding cooperation ties led to the
emergence of Asia as an important actor after the Cold War. In this respect,
in 1993, during the term of President Itamar Franco, Asia was recognised as
being key to shaping bilateral arrangements. The strength of Asian links
enjoyed strong diplomatic support, considering on one hand, the demand for
investments and the easy access to technology and, on the other, a huge
capacity for market consumption.
From a political standpoint, Brazil’s foreign policy strategy was to
strengthen Southern Cone integration, whilst expanding relations with
different regional poles. Indeed, Brazil and Asia shared similar views in
multilateral forums, ensuring more autonomy and a diversified partnership
for Brazilian diplomacy. In accordance with the new scope of Brazilian
foreign policy, President Cardoso maintained the focus on a long-term
relationship with Asia and in his first term in January 1995, paid an official
visit to Malaysia and Japan. During his second term, at the beginning of
twenty-first century, Cardoso was the first Brazilian president to visit Seoul,
Dili and Jakarta.109
108
Moreover, the Yellow Sea Basin was portrayed as a new model for dynamic
transnational cooperation between the Chinese, Japanese and South Korean economies. In
terms of economic value, Japan, China and South Korea provide a useful insight into the
increasing importance of Asian trade. Amaury Porto de Oliveira. “Coréia do Sul e China
em tempos de globalização administrada”. Política externa, vol. 16, no 1, June-July-August
2007, p. 83.
109
Henrique Altemani de Oliveira, “O Brasil e a Ásia” in Henrique Altemani Oliveira and
327
Continuing along these lines, President Lula shared the vision of his
predecessors for creating a benign environment for an Asia-Brazil
partnership in his inaugural speech on 1st January 2003.110 However, after
Lula’s election, the focus on relations with other developing countries
increased. To illustrate this point, Brazil has developed closer links with
China, India and South Africa in recent years. In other words, after decades
of talks about the importance of south-south ties, significant progress has
been made regarding those links.
After prioritising relations with central states, Brazilian foreign policy
saw an opportunity to learn from Asian countries about how to combine
tradition, culture, business, its own interests and international insertion.
Importantly, this focus was not only connected to ideological terms and
trade also played a crucial role in the process. In this way, the foreign policy
goals were to open markets up to Brazilian goods and services. Brazil’s
relationship with developing countries offered potential leverage in wider
negotiations on trade. As a result, Brazil and similar countries were less
vulnerable to the regular intense pressure from the United States (Mullins,
2006: 96-97).
In fact, a more appreciative atmosphere was created that favoured
Brazil’s relationship with the developing world and is partly the result of
two sets of circumstances. First came the relative decline of the United
States’s economic and political pre-eminence after a period of dominance at
the end of the Cold War. As has been explained, Latin America was
specifically neglected because of the - “war on terror” – under George W
Bush. The second factor is that not only Brazil, but also other Latin
American countries had become more self-confident in terms of asserting
their diplomatic independence. This is due to economic stability and the
more robust democracies acquired by the regions’ states. From the Brazilian
perspective, in the elected left-wing government of President Lula, the
Antônio Carlos Lessa, Relações Internacionais do Brasil: temas e agendas, vol. 1. São
Paulo: Saraiva, 2006, pp. 170-178.
110
Since the 1990s, Brazil and Asia have re-established ties, despite their remarkable
differences in previous periods. Firstly, Japan remained the most important trade and
investment partner only losing ground afterwards to other competitors. The relationship
with China, South Korea and the Association of South-East Asian Nations (Asean) was
highly supported. Henrique Altemani de Oliveira, “O Brasil e a Ásia” in Henrique Altemani
Oliveira and Antônio Carlos Lessa, Relações Internacionais do Brasil: temas e agendas,
vol. 1. São Paulo: Saraiva, 2006, p. 178.
328
search for new allies occupies a prominent position on the Itamaraty’s
agenda. This was part of its strategy to seek a more powerful role as a
regional power of global significance. Therefore, Brazil saw expanding ties
with China as an opportunity to strength south-south alliances not only with
China, but also with India, Russia and South Africa as will be seen later
on.111
There are parallels between Brazil and Chile’s background relationship
with East Asia, since both nations began to develop diplomatic ties with
their Asian counterparts in the late nineteenth century. Brazil entered into
relations with Japan in 1895 and with China officially in 1909, while Chile’s
diplomatic ties started in 1845 and ran until the end of the century, when it
opened a consulate in Canton and Hong Kong and a commercial bureau in
China. Like Brazil, Chile’s international affairs throughout the twentieth
century have been defined by their relationship with the United States,
Europe and Latin America. Whether East Asia will strengthen its ties
remains to be seen.112 The widespread prejudice and misconception were
based on the idea of the ‘yellow peril’ prevalent in the West. Furthermore,
the enormous geographical barrier posed by the Pacific Ocean, combined
with the lack of appropriate technology to foster cooperation set the stage
for the absence of viable methods for improving dialogue.
However, Chile was the first South American country to establish ties
with Beijing in December 1970 under the socialist President Allende.
Furthermore, the eighties included a move towards enhancing ties with the
nations that avoided condemning Chilean policy-makers for human rights
abuses. Throughout the 1980s Chilean authorities, including high-ranked
officials, businessmen and journalists, advanced China’s position as an
emerging power. In the 1990s, two successive Chilean presidents regularly
held talks with Chinese heads of state as part of their multilateral and
bilateral discussions. The president’s official visits were accompanied by
large delegations of businessmen who contributed to conveying Chile’s
nation brand as a serious country (Benedikter, 2015: 128-129). According to
how it was promoted brand, a sound business environment helped project
the country’s image in East Asia. As well as, Chile’s aim of playing a
111
The Economist, 15th August 2009. “Briefing Latin American geopolitics”, p. 19.
For a regional economic outlook, see Asia and Pacific: Consolidating recovery and
building sustainable growth. Washington D.C: International Monetary Found, 2010.
112
329
leading role in South America as a bridge with Asia, Brazil’s recognition of
Chile as an export platform also illustrated this point.
Despite diplomatic stagnation during Pinochet’s regime, which should
have led to the Asia-Chile relationship getting worse, trade rose
dramatically especially with Japan, South Korea and China. Furthermore,
the first joint venture between Beijing and a Latin American state was
signed with a Chilean copper company in 1987. 113 In the coming decade,
President Frei recognised the economic importance of Asia and that Chile
would be the natural bridge between Asia and Latin American countries.
From a traditional foreign policy perspective, the admission of Chile as a
member of APEC in 1993 – with China’s support - represented a further
step towards Pacific cooperation. In November 1995, President Frei paid an
official visit to China, reinforcing bilateral ties.114
113
More information about Asian joint ventures in M. Patricia Marchak (1995), Logging
the globe. Quebec: MacGill-Queen’s University Press.
114
Frei’s administration exerted a political and economic influence on bilateral trade, which
resulted in the decision to establish a consulate in Shanghai in 1996. The Chinese market
was the third most important destination of Chilean exports, after America and Japan.
Copper, cellulose and fish accounted for almost 75% of Chile’s total outputs in China, with
copper representing 25% of this. Insofar as the Chinese market grew rapidly and increased
its need for copper talks were conducted in the area of Chinese investments, seeking to start
joint ventures with the Chilean copper industry. For instance, the Chilean Quadra Mining
company QUA agreed to form a joint venture with China’s largest utility company to
develop its huge Sierra Gorda project in Chile, expected to cost over US$ 2 billion.
“Quadra, Chinese utility in Chilean join venture”, Reuters, 8th March 2010.
http://www.reuters.com/article/2010/03/08/er-quadra-china-idUSN0816535220100308. In
this respect, plans were discussed for Chile to sell its copper know-how to China. Since
then, discussions have taken place between the Chinese National Corporation of NonFerrous Metals and the corresponding Chilean companies as part of a project to invest in
copper exploitation in Chile. Talks have also focused on fostering partnerships in other
areas, such as the non-violent use of atomic energy and the possibility of developing
common projects in the space industry. In 1995, during President Frei’s visit, a maritime
agreement was signed, in which mutual maritime and port rights were given. The two
countries also signed a forestry agreement including the processing and commercialisation
of forestry production .Augusto Soto Alvarez. “Chile faces China. Relations in a new era.
Expectations and realities”, p. 3. http://www.casaasia.es/ pdf/1409041520081095168
008479.pdf. The APEC Summit in 1995 was a meeting in which China announced
significant tariff reductions, including on fruits and vegetables. The products that benefitted
were salmon, wine and grape. Chile also directed its wine production towards the Chinese
market through its aggressive trade strategy that opened a permanent Chilean company in
Beijing. ProChile, “Expertos internacionales expusieron oportunidades para vinos chilenos
em los mercados asiáticos emergentes”, 12th July 2010. http://rc.prochile.cl/
330
Over the last few years, Chile’s improving economy, political stability
and status as the only South American country that is a member of APEC
(since November 1994) has provided it with opportunities to take advantage
of its position and make advances in Asia. The opinion in Chile was that,
since other countries in the region had undergone sustainable growth, the
country should hurry up and strengthen its ties with Asia in order to improve
its position as leader. Membership of APEC had already been extended to
Peru (November 1998), while Colombia and Ecuador’s interest in joining it
suggest that they will be next.115 However, for countries that dot not face the
Pacific Ocean like Brazil and Argentina that also have significant trade with
Asia, Chile would help bridge the gap between the two regions. It must be
considered that Brazil was the first Latin American partner of China.
4.5.3 Chile as a bridge to Asia
Once Asia had provided technology and a huge market, Chile’s aim was to
strengthen its export strategy in the region. By entering into a second stage
of export-oriented manufacturing with the generation of value-added
production, the Japanese industry and Chinese market became core elements
of Chile’s trade policy. As highlighted earlier, the tariff liberalisation
announced by Beijing in conjunction with the rising amount of participation
in joint ventures in China bolstered Chile’s trade policy efforts. From the
Chilean perspective, there was mutual desire to advance its position in Asia
and a willingness to become the natural bridge between Mercosur and the
Pacific Ocean.
However, as was pointed out earlier, Peru-Brazil bilateral initiatives have
progressed in terms of business partnerships, illustrated by $20 billion in
Brazilian company investments in the country in 2010. Indeed, projects with
Peru-Brazil cooperation have assumed a leading position in the area of
regional infrastructure. Peruvian ports appear to be viable vehicles for Asia,
especially China and therefore, public-private integration methods have
noticia/26339/1.
115
Alvarez, Augusto Soto. “Chile faces China. Relations in a new era. Expectations and
realities”. p. 3. http://www.casaasia.es/pdf/1409041520081095168008479.pdf
331
been developed between Brazil and Peru.116 In fact, Chile offered better
access to the Pacific through a series of improvements to railroads,
highways and ports, although the Andes remain a tremendous natural
barrier. In this way, investments, transportation and communications - in
short, financial support mechanisms - must be developed in order to create a
more realistic approach.
Continuous trade growth spurred on by an emerging Asia brought with it
the urgent need to find a - “valid bridge” - between Asia and Latin America.
From a Brazilian standpoint, the Chile-Brazil partnership widened its trade
flow taking advantage of the FTAs that Chile had signed with several
countries worldwide. Furthermore, goods production in Chilean territory
seeking subsequente export is another interesting point, since Brazil enjoys
a wide range of tariff reduction benefits because of the FTAs signed by
Chile (Resende-Santos, 2007: 282-283). Today, the country has FTAs with
Australia, Canada, South Korea, China, Costa Rica, El Salvador, Japan,
Mexico, the United States, Panama and the European Union. However, from
Brazil’s perspective, the key issue when gaining access to these markets is
paying close attention to the rules of origin, because these cannot be
violated whether or not access concerns are a priority. The pursuit of
developing trade exchange in countries with which Chile has FTAs requires
obeying the rules of origin. 117
Apart from technical discussions, there are already signs of the expansion
of Brazilian-Chilean export markets. Together, public-private sectors from
the two countries have made mutual efforts to perform better trade-wise and
to redirect their strategic partnerships. Since progress in WTO negotiations
remains slow, the search for new markets has been part of Brazilian
government strategy. Thus, as outlined in the first chapter, neither Brazilian
or Chilean foreign policies can be restricted to the fields of diplomatic
activities, since diverse issues such as the economy, business, trade, energy
sources, sustainable development, the environment and nation branding
among others occupy centre stage in international affairs.
116
O Globo, “Aposta brasileira no Peru”. Economia, 2 August 2010, p. 17.
“Parceria Brasil-Chile requer análise das regras de origem”. International Centre for
Trade and Sustainable Development (ICTSD). http://ictsd.org/i/news/pontesquinzenal/
44935/
117
332
4.5.4 Brazil-China
China has become a global economic superpower. It has the second largest
national economy in the world and is the second largest exporter. China is
far more deeply integrated into the world’s economy than any of the other
economic superpowers. Since China’s rapid expansion has had a powerful
effect on the rest of the world, China’s emergence in the study of BrazilChile bilateral relations should be taken into account.118 Today, China is an
increasingly important market for Brazilian and Chilean exports, since
Brazil having to export through the Atlantic increases transport costs,
shipping times and causes product prices to rise.
Maintaining a Sino-Brazilian relationship can be attributed to the
cooperation efforts made by representatives of the two countries. The
reestablishment of diplomatic relations with China occurred in 1974, as a
result of Brazil’s economic development and in conjunction with a
favourable international context. As Brazil’s foreign policy sought to
diversify its partnership and focus on a more competitive international
insertion, rebuilding ties with China played an important role in the pursuit
of these goals. Despite the initial increase in trade flows, Sino-Brazilian
relations at that time were restricted to the political-diplomatic field. 119 Only
in the 1990s, in the context of the aperture of the Brazilian economy and the
increasing insertion of Chinese trade did Brazil-China trade ties get
stronger. A big change occurred during the government of Presidents
Cardoso and Lula who, aiming to maintain so-called ‘universal’ foreign
policy, strongly supported relations with developing countries. On one hand,
developing countries were becoming emerging markets, safer places to
invest and not as dependent on aid from the West as they used to be. On the
other, emerging countries meant areas with a strong political expression and
the prospect of joint action in multilateral institutions.
When carrying out foreign policy, the business sector was at the forefront
of the Brazil-China negotiation process. This initiative was aligned with the
118
See The World Bank, “China Overview”. 6th April 2016. http://www.worldbank.org/
en/country/china/overview.
119
It is symptomatic that the development of closer relations occurred due to the initiative
of the Brazilian entrepreneur Horácio Coimbra, who in 1970 visited the Canton Fairs for
personal reasons. As a result, the government opened negotiations to establish political ties.
333
concept of public diplomacy, whereby other actors also played an important
role in international affairs, as seen in the first chapter. Brazilian
businessmen in search of new markets for their products took the first steps
towards establishing Brazil-China political ties at the height of the Cold
War. In response to this changing situation, China became Brazil’s top trade
partner in 2009, displacing the United States. Since then, both states have
built a balanced partnership based on key points on the international agenda.
The fact that both countries are important emerging powers that want
developing nations to have a larger say in world affairs explains their
cooperation efforts.120
In practical terms, Brazil and China’s national development models
converged in the 1980s in such a way that both states supported the statebased development model. Therefore, talks were conducted after China’s
reform and opening-up policy and after Brazil’s military regime was
replaced by democracy.121 In this way, a more open and trusting
environment was created, favouring bilateral relations. Brazil and China
share common values such as the defence of sovereignty and national
independence, territorial integrity and the defence of international stability
and security. The strategic importance of dialogue between Brazil and China
has increased in international organisations and through actions of bilateral
cooperation and exchange. Indeed, in a context of recession in the wealthy
120
In 1993, Zhu Rongji representing the President of the People’s Bank of China, visited
São Paulo to promote a strategic partnership between the former and the Federation of
Industries of the State of São Paulo (Fiesp) seeking cooperation in the economic,
commercial and financial fields. Cabral, Severino. “1974-2004: trinta anos de relações
Brasil-China” in Relações Sul-Sul : países da Ásia e o Brasil. Alberto do Amaral Júnior e
Michelle Ratton Sanchez (Eds.). São Paulo: Aduaneira, 2004, p. 167.
121
Policymakers broke with agro-export diplomacy and in turn committed themselves to
the new role played by the state. This paradigm shift occurred not only in Brazil nut also in
many Latin American countries, which led to a new strategy of international insertion. The
context could be typified as follows: introducing of economic diplomacy to external
negotiations; promoting industry to meet societal demands and implementing national
development projects to overcome inequalities between nations. The development
paradigm contains ideological and political aspects that exerted more influence over the
Brazilian scene from the 1950s until the 1980s. Amado Luiz Cervo. “Política exterior e
relações internacionais do Brasil: enfoque paradigmático”. Revista brasileira de política
internacional, July-December, vol. 46, 2003. Instituto Brasileiro de Relações
Internacionais. Brasília, Brasil, p. 9.
http://redalyc.uaemex.mx/redalyc/pdf/358/35846201.pdf
334
world, China and Brazil are contributing more than ever to world output.122
Since the Brazil-China trade relationship has grown sharply, this
improving partnership suggests that progress is possible, leading to a more
benign environment for bilateral relations, which go well beyond mere
commercial issues.123 During the summit, Brazilian and Chinese authorities
supported the creation of a new international reserve currency to eventually
replace the dollar as the world’s standard124. The increasing importance of
Asia claimed to facilitate access to Asia through the Pacific; therefore
Brazil-Chile links go beyond bilateral ties, given the relevance of Chile to
targeting Asian market.125
The partnership with China has been normalised since 1974, though it
only achieved consistency from the 1990s onwards, when important
122
While Brazilian diplomacy refers to relations with China as a ‘strategic partnership’,
which means special relations with a certain country, Amado Cervo recognises the term
‘ascending partnership’ as the best way to define their relationship. An ascending
partnership indicates a move towards closer ties in the future by comparing them to the
present Brazil-US relationship. Cervo, Amado Luiz. Inserção internacional: formação dos
conceitos brasileiros. São Paulo: Saraiva, 2008, p. 279.
123
Together, both states demanded the reform of and a greater say for developing countries
in global financial institutions like the World Bank and the International Monetary Fund,
especially after the global financial crisis. The BRICS Summit held on 16th June 2009 in
Yekaterinburg was the first full-format meeting of BRIC nations, which today are the main
centres for economic growth in the world. BRIC consists of the world’s fastest emerging
economies – Brazil, Russia, India and China. The term BRIC (later BRICS) was first
coined in 2001 by Jim O’Neill, chief economist for Goldman Sachs. However, despite
those unlikely beginnings, in the past decade, BRICS has become a near ubiquitous
financial term, shaping how a generation of investors, financiers and policymakers view the
emerging markets. Now Public, “BRICS Yekaterinburg summit”. World,
http://www.nowpublic.com/world/brics-yaketenaburg-summit
124
O Globo, “Brasil e China afinam discurso para reunião do G-20, 4th June 2010,
Economia, p. 23.
125
However, there is a certain reticence on the issue in the United Nations Security
Council, since China does not support Brazil’s demand for a permanent seat. Brazil would
obviously like the Chinese to support its bid to get a permanent seat on the UN Security
Council. It should be remembered that, in 2005, China opposed the proposal of the Group
of 4 – Brazil, Germany, India and Japan – all of whom aspired to become permanent
members of the UN Security Council. One way to explain the Chinese lack of support for
the Group of 4 consists of its opposition to Japan and India’s aspirations for permanent
seats, meaning that Chinese opposition was not directly related to Brazil. United Nations,
Press Release GA/10371. ‘Uniting for consensus’ group of states introduces text on
Security Council reform to General Assembly, 26 July 2005. http://www.un.org/
News/Press/docs/2005/ga10371.doc.htm
335
initiatives in the economic, commercial, scientific and technological fields
were developed. 126 This is due, to some extent, to the context of the
financial slump, which increased the role played by Asian countries in the
international scenario.127 China has grown at an average of 10% for the past
30 years, the most impressive record in history. Real GDP in 2006 was
about 13 times the level of 1978, when Deng Xiaoping began economic
reforms.128
When Chinese President Hu Jintao officially visited Brazil in 2004, some
issues came to the fore again: Chinese investment in infrastructure, the
strengthening of business links, the growth of Brazilian manufactured goods
in bilateral trade and the signing of bilateral agreements concerning trade.
Furthermore, potential trade conflicts of interests were discussed in the field
of the WTO. In 2006, Vice-President José de Alencar paid an official visit
to China, aiming to establish the Sino-Brazilian Commission to increase
bilateral partnerships, with regulatory agreements and strengthen
cooperation in multilateral organisations especially the UN and the WTO, as
well as bilateral links in agriculture, energy, mining, information
technology, infrastructure and advanced technology. 129
126
One of these initiatives was the China-Brazil Earth Resources Satellites Programme
(CBERS), considered the paradigm of south-south cooperation. In other words, the CBERS
is a pioneer in terms of satellites cooperation agreements between developing nations.
Along these lines, further steps have been taken to develop cooperation programmes in
other fields, such as information technology, biotechnology and joint initiatives in the
production and selling of drugs against AIDS. See Paulo Vizentini (2006), “O G3 e o G20:
o Brasil e as novas coalizões internacionais” in Henrique Altemani Oliveira and Antônio
Carlos Lessa(Eds) (2006), Relações Internacionais do Brasil: temas e agendas, vol. 2. São
Paulo: Saraiva. Moreover, bilateral trade has increased dramatically, transforming China
into the most important trading partner for Brazil today. After almost 80 years of the US
being Brazil’s top trading partner, the importance of China as a foreign trade leader has
been growing rapidly. “China passa Estados Unidos como principal parceiro comercial do
Brasil”. O Globo, caderno Economia, 5th May 2009.
127
Important initiatives have been developed in the area of investments and joint ventures,
such as the association between Baogang Steel and the Vale do Rio Doce company and
between Embraer and AVIC-II. Edmundo Fujita. “O novo quadro estratégico da Ásia pósguerra fria”. Amaral Júnior, Alberto and Rattom Sanchez, Michele. Relações Sul-Sul países
da Ásia e o Brasil. São Paulo, 2004, p. 30.
128
Bergsten et al. (2009) “China`s challenge to the global economic order”, p. 9 in China’s
rise, challenges and opportunities. Washington DC, October 2009, p. 9.
129
Rapid economic growth, together with urbanisation and industrialisation, have turned
China into the second largest consumer of energy in the world. In this regard, China faces a
series of challenges such as expanding its energy supply by increasing the efficiency of
336
Brazil and China share a coherent foreign policy concerning national
development, the stage of development achieved in recent decades,
geopolitical standpoints and the autonomy of state-led world insertion.
According to the Brazilian Central Bank, there is a growing tendency
towards Chinese investment in Brazil and Chinese direct investment is still
increasing, growing by $359 million in the first quarter of 2010 compared to
$83 million in 2009.130 At the moment, China is the fifth largest foreign
investor in Brazil, behind the United States, Bermudas, the Netherlands and
France. Another sign of growing Chinese interest is the opening of a
subsidiary of the Bank of China in São Paulo, which finances Brazilian
companies’ purchases of Chinese supplies. 131
Since Brazil’s main export commodity to China is soya beans - and
considering that it has a lot of competition in the international market,
especially from the United States - shipping costs must be reduced in order
to have a more competitive product. In this scenario, Chile can serve as a
bridge, facilitating Brazil-China trade. Since public diplomacy involves a
broader coalition of decentralised actors, the Brazil-Chile pragmatic
approach is congruent with a dynamic idea of the concept, since BrazilChina ties also demand a multifaceted approach.132 In this context, the
creation of the China-Brazil Business Council contributes to promoting
dialogue in a coordinated way, enhancing bilateral trade and the investment
environment.133
how it is used. Since the geopolitical context cannot be separated from the field of energy,
as argued in a previous chapter, the problem of China’s energy matrix, which is highly
dependent on coal, should be addressed. Therefore, in the coming years, China’s demand
for new energy sources will increase rapidly and will certainly include a close association
with other countries to exploit new oil deposits, develop nucleus-electricity and include
renewable energy sources like ethanol. Luiz Augusto de Castro Alves. “Os desafios da
China na crise do mundo globalizado”. Política externa, vol. 18, no 1, June/July/August
2009. Universidade de São Paulo, p. 99.
130
Investment performance does not consider the operation of Itaminas, the partnership
between MMX the Chinese group Wisco and the Metallurgical Complex of Açu, launched
on 18th May 2010. The partnership of the two companies represented the largest Chinese
investment ever made in Brazil. O Globo, Economia, 19 May 2010, p. 27.
131
O Globo, Economia, 22nd May 2010, p. 25.
132
China is under pressure from the US to increase its soya bean purchases in order to drop
its strong bilateral surplus in its favour. Henrique Altemani de Oliveira, “O Brasil e a Ásia”
in Relações Internacionais do Brasil: temas e agendas. São Paulo: Saraiva, 2006, pp. 192193.
133
The CBBC is a non-profit organisation dedicated to promoting dialogue among
337
Moreover, China and Brazil share common values regarding their
participation in world politics: peaceful coexistence among nations, respect
for the sovereignty of all members of the international community and
cooperation between countries to achieve greater equity in international
economic development. In recent years China has been one of the most
active countries using multilateralism as an instrument in international
policy (Wei, 2008: 10). For Brazil, the issues of pluralism and selfdetermination are long-standing concerns in its foreign policy. Regarding
the Brazil-China partnership, there are basically two areas in which progress
can be made: scientific-technological cooperation to break the monopoly of
developed countries and a political-strategic alliance in multilateral forums.
As has been explained, there are many points of agreement between the two
states, since both countries seek to achieve economic development, while
improving the living conditions of their populations. Brazil-China long-term
relations demand better access to the Pacific in order to facilitate business
diplomacy. In this regard, Chile is the natural bridge to the Pacific, meaning
that Brazil-Chile share a long-term trustworthy relationship.
4.5.5 The Brazilian-Chilean coordinated policies towards Asia
The relationship between Latin American states and Asia has been further
stimulated by the initiatives of Chile and Singapore, for example, the
cooperation forum between East Asia and Latin America (FEALAC)
established in 1999 and outlined earlier. This forum involves 15 Asian
countries and 15 Latin American countries, all seeking to strengthen their
mutual knowledge and socio-economic cooperation. The first summit was
held in Santiago de Chile in 2001. Together with South Korea, Brazil began
to coordinate group activities, shortly after the summit in Manila in 2004.
FEALAC’s goal is to search for bi-regional areas of cooperation (Fujita,
2004: 31).
In this context, Brazil and Chile begin to establish coordinated policies
based around the vision of the latter as an export platform for the United
Brazilian and Chinese companies. The CBBS focuses its efforts on addressing the structural
issues underlying bilateral relations. China-Brazil Business Council, http://www.cebc.
org.br/005/00502005.asp?ttCD_CHAVE=12211
338
States, EU and Asia, taking into account its bilateral agreements worldwide.
Despite the fact that Chile has developed a long-term strategy as an exportplatform, this concept only became important to Brazil in 2008. In practical
terms, attention has been paid to policies concerning an increase in trade and
investment between both states. In pursuit of these goals, Brazil sent a trade
mission to Chile from 1st-3rd April 2009. Apart from using Chile as an
export platform for products destined for Asia, the mission sought to
strengthen trade ties and foster partnerships between entrepreneurs.134 The
opportunity for integrating the two countries’ supply chains contributed to
diversifying the market, especially during economic crises. Brazil took
advantage of the trade agreement network, which Chile had signed
worldwide as a way of expanding markets.
With copper as its main export commodity, Chile has a great opportunity
in the Asian market. The country has also succeeded in reducing its
dependence on mining: 89% of total exports in 1973, the mining sector’s
participation has gone down to 41% in 2001. Copper is still an important
export commodity through and in 2005 accounted for 15.5% of the
government’s budget. Together with this, Chile has diversified its exports to
include wine, fresh fruit and salmon. Furthermore, it has been possible to
direct efforts towards higher value-added sectors than the copper industry,
such as mining consulting and machinery. 135
However, for Brazil a major concern is excessive specialisation in
commodities, which could lead to the ‘Dutch disease’ in the economy. This
is when either the focus on a single product or a low diversification when it
comes to products causes an undesirable architecture for trade relations.
That said, the increasing economic force that is China and its insatiable
demand for raw materials may widen trade concerns. At the same time,
134
Ministerio do Desenvolvimento, Indústria e Comércio Exterior. “MDIC recebe
inscrições para missão empresarial ao Chile”, 04/03/2009. http://www.mdic.gov.br
135
The introduction of new varieties of grape, quality control of wine and the certification
of fruits for export are among Fundación Chile’s innovations. In 2005, the Chilean
government introduced a mining tax to increase public funds for research and development.
However, one of the challenges has been to incorporate the private sector into financial
innovations. A lack of human resources is another of the difficulties with the relationship
between industry and science, although important measures are being put into practice.
Rolando Avendaño, Goril Bjerkhol Havro, Javier Santiso. “Oportunidades na Ásia?
Perspectivas para o comércio internacional da América Latina”. Política Externa, vol.18, no
3, December/January/February, 2009-2010, pp. 158-159.
339
Brazilian manufactured products could lose ground in the export sector.
Brazilian manufactured exports, however, have gained ground as shown by
the deal involving Embraer – the Brazilian aircraft maker – with a unit of
the state-owned China Development Bank (CDB) to fund the sale of
regional jets in Asia and since December 2009, Embraer has had a factory in
the north-eastern Chinese city of Harbin. 136
From 2002 to 2003, Brazilian exports to China increased by 80%.
Together, they accounted for 6.2% of Brazilian exports, in contrast to 1999
when they accounted for 1.4%. The five Brazilian products that have
benefitted most from Chinese demand are soybeans, soybean oil, iron ore,
steel and wood, all of which correspond to 75% of the total of Brazil’s
exports to China in 2008. However, the low-tech sector has been couched in
terms of being the most vulnerable to Chinese competition.137 In addition, in
the long-run this threat can be extended to the automobile industry. There
are also some market policies that should be taken into account when
strengthening bilateral relations between China and Brazil. For instance, the
two countries’ agricultural sectors complement each other, since they foster
trade and investments. For Brazil, the main challenge concerning China is to
maintain the same kind of exports as to other regions, while avoiding an
excessive specialisation in commodities.
4.6 Latin American Infrastructure
Before undertaking an analysis of the potential implications of an AsianLatin American partnership, it should be noted that the region’s countries
have become less dependent on traditional trade partners. For the first time,
in history, the region has sought to establish relations simultaneously with
the three main world centres of trade – the United States, the European
Union and Asia. China has overtaken the United States and the European
Union to become Brazil’s biggest trading partner and formal diplomatic ties
have been strengthened, as stated earlier. Despite the fact that the United
States still accounts for more than 50% of Latin American exports, trade
136
Reuters. FACTBOX-Brazil-China ties surge with trade and investment. 13th April.
http://www.reuters.com/article/idUSN1321425620100413
137
More information in Vera Thorstensen (2010-2011), “China e EUA – de guerras
cambiais a guerras comerciais”, Política Externa, vol. 19, no 3. São Paulo: Editora Paz e
Terra, pp. 11-35.
340
with Asia has grown considerably in the last few years, although the lack of
a suitable infrastructure has caused considerable concerns in terms of Latin
America’s competitive advantage.138
In this way, building an effective infrastructure would strengthen the
region’s trade relations as a whole. This means that the cause of high
transport costs can not only be attributed to the long distances involved, but
also to the quality of its infrastructure (Gayá and Campos, 2009). Therefore,
foreign affairs are included in a much broader discussion, given that
traditional diplomacy restricts the understanding of contemporary
international relations. In contrast, public diplomacy is a flexible approach,
according to which not only state-centric actors are considered in foreign
affairs and decentralised actors also play a relevant role.
However, the relevance of investment in infrastructure differs depending
on each economic sector. For instance, economies focused on the export of
commodities like Chile tend to emphasise the need for ensuring
transportation infrastructure. Chile has developed successful public-private
partnerships in the second half of the 1990s, with large investments in
infrastructure (Grimsey and Lewis: 2004: 127). Unfortunately, infrastructure
problems remain in several of the region’s areas. When compared to other
Latin American states, Chile is considered a successful example of the
transformation of high rates of growth into large investments in
infrastructure.
With the exception of Chile, there are twice the number of roads per
capita in Asia than in Latin America. In Brazil, for example, only 5% of
roads are paved and both the river system and railways are underdeveloped.
The performance and efficiency of ports is a critical factor that differentiates
Asia from Latin American ports. It be should highlighted that, since ports
are a vital link in the overall chain of trade, to a large extent their level of
efficiency determines a nation’s international competitiveness.139
Framework topics need to be dealt with in order for Latin American
138
See Inter-American Developmen Bank, “14% drop in exports underlines importance of
trade diversification in Latin America and the Caribbean”. 14th December 2015.
http://www.iadb.org/en/news/news-releases/2015-12-14/latin-american-exports-drop14,11365.html.
139
Hsuan-Shih Lee and Ming Tao Chou (2005). Journal of the Eastern Asia Society for
Transportation Studies, vol. 6, pp. 544-559. http://www.easts.info/on-line/journal_
06/544.pdf
341
integration to succeed and provide a competitive advantage in export costs.
However, several aspects play an important role in the region’s potential
integration. First, the potential for economic gains from developing an
infrastructure programme has to be significant in order to justify its high
costs. Secondly, the willingness to do so relies on presidential diplomacy,
involving the president’s incorporation of new topics into the foreign policy
agenda, as pointed out in the first chapter. This means that the willingness to
develop projects involving infrastructure is expected to be conducted by
political leaders, although policymakers may implement regional
transportation projects if these are expected to improve their chances of
retaining power. Third, a lack of coordination must be mentioned as one of
the collective problems that can have a major impact on how regional
infrastructure networks functions. Mattli highlights:
“… the presence of a benevolent leading country within the region seeking
integration. Such a country serves as a focal point for the coordination of rules,
regulations, and policies; it may also help to ease the tensions that arise from the
inequitable distribution of gains from integration. Contested institutional
leadership or the absence of leadership makes coordination games very difficult to
resolve” (Mattli, 1999: 42).
Increasing Asian-Latin America trade has led to important partnership
initiatives between countries in the region, like the “Brazil-Chile platform
for integration”, which has set the stage for strengthening the integration
between the two states, with a focus on the Asian market. The potential for
economic gains between both countries has helped increase their interest in
developing a mutual transportation network. However, regarding the
integration of regional infrastructure, Peru-Brazil cooperation took the lead
in the process. Brazil-Peru integration has shown signs of significant
improvement, as illustrated by several Brazilian companies that, in 2010
invested over $20 billions in their neighbouring state. Private integration has
been driven by the rapid increase of Brazilian investments, mainly carried
out by Vale, Votorantim and Eletrobras. One of the stated aims of this
initiative is the gaining access to the Asian market, especially China. 140
With the target of implementing infrastructure projects, policymakers
140
O Globo, “Aposta brasileira no Peru”, Economia, 2nd August 2010, p. 17.
342
should be able to accommodate the demands for transportation at each level
of the integration process. Latin American topography per se is among the
most restrictive in the world and tends to keep people and resources apart
rather than joining them together. Since the territory is filled with natural
barriers, improving the infrastructure of a transportation network is a core
element for regional integration. The structure of Latin American countries
has changed in many ways, with industrialisation, the increase in the export
of commodities to the Asian market and intra-regional trade having a major
impact on each nation’s policy. Growing exchange at a regional level has
given rise to the demands to develop the commitment to infrastructure
needed to carry out cooperation aims.
4.6.1 China’s power and its impact on Brazilian and Chilean
foreign policy
China’s rapidly growing economic and political influence around the world
today is as undeniable as it is remarkable. Furthermore, China has become
an active player in critical global security issues. Along with China, other
emerging powers like Brazil, Russia and India have an ever-growing
importance internationally. This means that no major international challenge
can effectively be met without the assistance of an emerging power. China’s
embrace of globalisation in all its forms has meant that it has become a
coequal player in international affairs (Derolle, 2015). Therefore, it is not
possible to analyse international studies without taking into account China’s
role in the global arena.
As a permanent, veto-wielding member of the UN Security Council,
China has the authority to act or block action on critical international affairs
facing the world, be it weapons proliferation or energy security, among
other issues. However, Brazil is interested in gaining Chinese support for its
aims of getting a permanent seat on the UN Security Council, China’s
increasing power is forcing Western nations to look again at how they deal
with emerging actors.141
141
See Post-Western World, “Brazil and UN Security Council reform: Is it time for another
big push?”, 30th June 2013. http://www.postwesternworld.com/2013/06/30/brazil-and-unsecurity-council-reform-is-it-time-for-another-big-push/.
343
As scenario of growing world interdependence means that Chile is not
only an important actor in the Latin American context, but also an important
partner for Brazil’s intercontinental relations. The contemporary
international scenario requires a more collaborative approach, in which the
infrastructure sector is seen as a relevant area in foreign affairs. The
promotion of links between the public and private sectors, provides BrazilChile relations with the conditions to develop pragmatic ties in accordance
with the concept of public diplomacy. Chile has become a significant
partner in the sense that the country helps reduce export costs to Brazil. The
possibility of becoming a bridge to the Pacific has turned Chile into an
important player in Brazil’s foreign policy strategy, as well as in Latin
American integration. 142 As argued in the first chapter, the Brazil-Chile
long-term stable relationship dating back to the ABC Pact forms a
trustworthy context for a bilateral partnership.
The importance of the Brazil-Chile pragmatic approach has grown to the
extent that China overtook the United States as Brazil’s most important
trade partner, although it would be wrong to conclude that Brazil-China ties
are constrained to commerce. In many ways, the prospects for strengthening
the partnership have progressed in terms of scientific-technological
cooperation and politic-strategic alliances. Sharing a coherent foreign policy
on national development, as well as geopolitical views and state’ autonomy
suggests that both countries share common positions. Both nations promote
the idea that there no single model of national development applies to all
countries and therefore each state must decide the best path of development
without outside interferences. Moreover, the capacity to enforce future links
has led to the definition of Brazil-China relations as an “ascending
partnership” and China’s brand remains well-regarded in most developing
region - whether Africa or Latin America - mainly because of the perceived
economic benefits of engagement with this country.
Furthermore, from a Chinese viewpoint, America remains at the top of
the countries’ explicit hierarchy of important topics in international
relations, followed by fostering ties with neighbouring countries and then
142
See “Chile ready to act as a ‘bridge’ between Mercosur and the Pacific Alliance”,
MercoPress.South Atlantic News Agency, Wednesday, 27th August 2014. http://en.
mercopress.com/2014/08/27/chile-ready-to-act-as-a-bridge-between-mercosur-and-the-paci
fic-alliance
344
developing states elsewhere. This means that in practical terms, recognising
a ‘strategic partner’ cannot be taken literally. However, interaction with the
developing world has increased in importance in recent years, previously
outlined, with the growth of the Brazil-China relationship, the Chile-China
FTA and the signing of a Memorandum of Understanding on Labour
Cooperation and Social Security. This approach towards the developing
world emerged in the latter years of Jiang Zemin’s administration and was
accelerated under Hu Jintao (Olopade, 2014). In this regard, China has
established multilateralism as a priority in foreign affairs and has developed
certain patterns of cooperation with developing nations.
In Brazil steps were already being taken in the 1960s towards an
independent foreign policy involving autonomy and partnership
diversification, as a way of compensating for problems with traditional
partners and to avoid reliance on a single country or region. Foreign policy
in the 1990s provided a context whereby the macroeconomic stability
promoted by the Real Plan in 1994, privatisation, trade openness and a
consolidated democracy all laid the groundwork for a policy that involved
diversifying its partners. 143 In brief, the concept of Brazil as an articulator of
consensus, able to maintain a sustained and coherent dialogue with different
actors worldwide emerged in the 1990s and East Asia-Brazil affairs have
gained substantial support since then.
Despite concrete steps toward an Asia-Brazil partnership, the relationship
suffered the effects of the Asian Crisis between 1997 and 1998. As a result,
Asian imports dropped dramatically and rather than an adverse context for
Brazilian output what was seen was an optimistic scenario for exports
between 1997 and 2001, with the exception of the crisis period.144 Another
cause for concern is the lack of a consolidated effort on physical Latin
American integration. The absence of a well-integrated transportation
infrastructure has, to some extent, made an alliance on issues relating to
China and other countries more complicated. Despite the lack of efficient
infrastructure in the region, the establishment of constructive relations
143
See Folha de São Paulo, “Entenda os mecanismos usados em 1994 na criação do Plano
Real”, 28th June 2014. http://www1.folha.uol.com.br/mercado/2014/06/1477907-entendaquais-os-mecanismos-usados-em-1994-na-criacao-do-plano-real.shtml.
144
More information in Prema-chandra Athukorala and Nobuaki Yamashita (2006),
“Product fragmentation and trade integration: East Asia in a global context”, The North
American Journal of Economics and Finance, vol. 17, issue 3, pp. 233-256.
345
recognising Chile as an export platform towards Asia is noted. The initiative
of a Brazil-Chile platform for integration is offered as an example of this
attempt.
As well as initiatives such as the development of the Brazil-Chile
partnership, East Asian and Latin American countries came together for the
formation of the FEALAC. However, one of the major obstacles facing
FEALAC is that both regions preferred a traditional partnership, either in
South America or in East Asia. However, this means that within the
developing world, traditional partners - called Western powers – benefited
from such alliances, to the detriment of their potential Asian counterparts.
Secondly, as pointed out earlier, when referring to East Asia, there are
changing trade and economic circumstances regarding China’s major impact
on total trade, increasing Korean participation and the re-establishment of
ties with Japan. High expectations about the increase in Chinese investments
have played a significant role, while South Korea seeks investments
possibilities in Brazil aimed at third-party markets. Thirdly, China considers
Brazil a “strategic partner” sharing a commitment to topics on the
international agenda and supporting a new world order. In short,
technological and political ties have been core elements to bilateral relations
in recent years.
346
Chapter 5
Brazilian-Chilean Energy Scenarios and their Impact
on Bilateral Relations
Energy topics are increasingly being incorporated into the context of Latin
American relations, since the energy situation both in the southern
hemisphere and worldwide is changing rapidly. In recent years, issues
concerning energy have leapt to the top of every country’s agenda, leading
to the possibility of either cooperation or conflict in the area. Energy has a
lot to do with public diplomacy, since energy resources involve publicprivate cooperation. Energy has also become an important tool for
projecting the nation’s brand, given that a renewable energy matrix
demonstrates energy sources in accordance with environmental concerns
(Fräss-Erhfeld, 2009: 84). The nations’ geopolitical relationships in the
region must not be disassociated from the energy market, in which natural
gas, hydroelectricity, biomass (among other renewable energy sources),
sugar-cane ethanol, nuclear energy, oil or other energy resources have
substantially contributed to influencing either interstate or multilateral
relations.
In the current international scenario, energy simply cannot be separated
from other important events regarding foreign affairs. Energy policy makes
an integral part of domestic foreign policy strategy. In this sense, energy
policy is perfectly aligned with the idea of public diplomacy, presidential
diplomacy and nation branding in our multi-field approach. As observed in
the first chapter, Lula’s presidential diplomacy plays an active role in
promoting the country’s ‘nation brand of sugar-cane ethanol’, exerting a
great influence over strategic foreign policy targets and the perfect scenario
is presented for understanding how nation branding and presidential
diplomacy are interrelated when projecting the nation’s image.
Brazil’s rapidly changing international status and insertion into world
energy markets led to a change in state-oriented policy regarding the
importance of energy in foreign affairs. The emerging Brazilian energy
sector was a positive factor for conducting foreign policy in the Southern
347
Cone. In this way, Brazil’s diversified energy matrix encouraged more
scientific bilateral dialogue to increase the use of renewable energy sources
to ensure energy security. Within the Brazil-Chile bilateral context, energy
dialogue serves to promote scientific cooperation, through which both states
can strengthen their economic, political and defence ties using a more
dynamic energy approach.1
Today, energy has emerged as one of the most important variables in the
global geopolitical context. Given the global and regional nature of energy
issues, it is difficult - if not impossible - to separate the national focus of
analysis from the overall energy context. Moreover, environmental issues
and global warming have increased interest in the biofuels industry and
other alternative energy sources. Brazil’s favourable macroeconomic
context, together with increasing international demand for renewable energy
sources, has paved the way for changes to the country’s international
insertion in the last two decades (Hanson, 2012).
Moreover, the combination of a global commodity boom with the
increasing projection of Brazilian firms has led to further the country
international insertion for the country. As observed in Chapter 3 with
regards to foreign direct investment (FDI), Brazilian companies such as
Vale, Gerdau, Petrobras and Odebrecht have contributed to diplomatic
leverage to the extent that they lead to even stronger links between Brazil
and Chile.2 Like energy in the Brazil-Chile bilateral approach, the two core
sectors promote strengthening business dialogue as a broad platform on
which to improve bilateral cooperation. Energy shows that Brazil-Chile
bilateral ties go beyond traditional diplomacy and that public diplomacy and
nation branding are core concepts when analysing the bilateral approach.
Although many experts argue that pipelines should not be built, mainly
for political and financial viability reasons, the region’s reality has been
somewhat different in the sense that energy sources are necessary tools for
1
Energy is an important topic in European integration for obvious reasons. The
consolidation of energy cooperation would reduce energy costs for member states. The
energy union aims to make Europe greener, safer, cheaper and more modern. “European
energy policy: only connect”, The Economist, 17-23 January 2015, vol. 414, p. 52.
2
Energy is also interrelated with foreign direct investment. See Otavio Mielnik and José
Goldemberg (2002), “Foreign direct investment and decoupling between energy and the
gross domestic product in developing countries”, Energy Policy, vol. 30, issue 2. São
Paulo: Elsevier, pp. 87-89.
348
guaranteeing adequate regional security. Since the economic benefits of
energy integration tend to be high, multilateral and bilateral opportunities
for dialogue should occur more frequently. The emerging focus on
sustainable development in international policy recommendations fosters
cooperation for providing renewable and non-renewable energy supplies. In
the long run, South America’s vast energy sources have laid the perfect
groundwork for strengthening cooperation.
Therefore, Chilean-Brazilian foreign affairs cannot be discussed without
analysing the role of energy in the bilateral and regional economic
integration process.3 At the current time, energy is a key factor to
understanding foreign policy and the discrepancies that exist between both
countries’ energy policies. Obviously, this issue cannot only be restricted to
the Chilean-Brazilian energy sector analysis and attention must be drawn to
the Latin American energy matrix to fully understand its complexity. It
should be remembered that sometimes energy decisions are taken on a subregional basis, which means that each country cannot be analysed each
country separately. Another reason is that the energy sectors from different
countries are interrelated, either directly - through the interconnected
electricity market and natural gas pipelines - or indirectly.
The aim of this chapter is not to reconstruct the details of ChileanBrazilian historical bilateral relations - since this was the done in Chapter 2 or to compare the energy matrixes of both countries. This chapter’s aim is to
recognise the possibility of cooperation between both countries, either
through bilateral dialogue or in the multilateral field. In the current context,
there is a kind of parallel between both countries’ status as natural gas
importers, with certain similarities and differences in each nation’s energy
supply.
So far, there is a greater possibility of Brazil-Chile reaching an
3
Natural gas resources occupy an important position in Brazil and Chile’s energy and
foreign policy agendas. The creation of Brazil’s Natural Gas Act No 11.909/09 created a
regulatory framework. The Natural Gas Act establishes standards for the operation of
economic activities for the transport of natural gas. Lei no 11.909, 4th March 2009,
Presidência da República, Casa Civil. http://www.planalto.gov.br/ccivil_03/_ato20072010/2009/lei/l11909.htm. In the 1990s, Chile’s increasing demand for electricity and the
state of electricity markets’ development generated the need to import natural gas. See
Constanza Fosco and Eduardo Saavedra (2003), Estructura de la industria y relaciones
patrimoniales del gas natural en Chile. http://fen.uahurtado.cl/wp-content/uploads/
2010/07/inv147.pdf
349
agreement in the multilateral scope than in the field of exclusive bilateral
relations. 4 In this sense, regional multilateral forums serves to promote
closer interaction between Southern Cone actors, targeting cooperation
connections within the multilateral mechanism. Another important factor in
the energy scenario is that energy policy strategy is not a recent
phenomenon and is deeply rooted in defence policies from the 1970s and
1980s. A more pragmatic concern is that the Brazil-Chile energy approach
from the 1990s onwards cannot be studied, since energy is part of the longterm political and defence strategies of both states.
Another fundamental aspect of Brazil and Chile’s politicised energy
context is the different nature of their energy matrixes. The disparities in
both countries’ energy matrix are significant and the Chilean energy scene
faces several limitations with regards the diversification of resources.
Although the energy approach cannot be constrained by an analysis of both
states, such discussion naturally implies the examination of Argentina,
Bolivia, Peru and Venezuela. In brief, other Latin American realities must
be considered in energy analysis. The energy approach is a mechanism of
extending the horizons of the analysis of Brazil-Chile bilateral relations.
Energy’s scope is a legitimate presence in the Brazil-Chile bilateral
approach, to the degree that even cultural exchanges embrace energy issues.
As noted in Chapter 3, the new Brazil-Chile bilateral agreement in the
cultural field also encompasses collaboration in other areas, in which
bioceanic corridors, scientific cooperation and clean, renewable and bio
energy promote the future relationship of dialogue between the two actors.5
Two-way communication between official and non-official actors - as in
public diplomacy - embraces the energy field insofar as the sector demands
public-private partnerships. Public diplomacy’s emphasis on a decentralised
approach goes hand-in-hand with the importance of public-private
coordination in the energy field.
4
See Global Data, “Brazil and Chile leading strong South American renewable energy
growth to 2017”, May 2015. http://energy.globaldata.com/media-center/press-releases/
power-and-resources/brazil-and-chile-leading-strong-south-american-renewable-energygrowth-to-2017-says-globaldata.
5
This is Chile. Chile’s oficial website. Bi-national cooperation. “Chile and Brazil agree to
forge new academic and cultural ties”. Thursday 28th February 2013. http://www.
thisischile.cl/8511/2/chile-and-brazil-agree-to-forge-new-academic-and-culturalties/News.aspx
350
Interestingly enough, strengthening cultural, educational and scientific
initiatives helps to boost cooperation in different sectors. This kind of
agreement also demonstrates that both states seek a closer approach, given
that they share important features and that they therefore see a long-term
partnership as a possibility. Although Chile is not considered a top priority
among Brazil’s state partners, the absence of conflicts in the course of their
history, together with their support of similar democratic values, has had
positive effect on strengthening bilateral links in the energy dialogue.
As per Russell’s definition, foreign policy can exclusively be considered
the area of governments’ policy action and comprises three analytical
dimensions: diplomatic policy, military strategy and the economy. These
three dimensions project themselves in the international scenario through
diverse actors such as governmental and non-governmental organisations
(NGOs), either in bilateral or multilateral circumstances (Russel, 1990: 5).
Despite the increased involvement of NGOs, enterprises and social groups
in the process of state interaction, foreign policy still means the performance
of each state in the defence of the interests of these institutions (hard
power). However within the energy scenario, the important role played by
the private sector in driving foreign policy energy targets must be taken into
account, instead of the exclusive traditional diplomatic approach.6
Although energy may become nation branding in order to carry out
official foreign policy strategy, the importance of emerging new actors in
the international arena went down in traditional diplomatic analysis. 7 For
instance, Venezuela’s foreign policy towards Latin America and the
Caribbean rests upon the use of oil to promote its integration into the region
and is highly connected to maximising its geopolitical influence by using its
oil exports as political weapons. Oil politics depend on public-private
interaction, to the point where it is difficult to differentiate the exclusive role
of traditional diplomacy in conducting domestic foreign policy.
6
Energy infrastructure encompasses socio-economic institutions, social norms and actors.
Further reading in Andreas Goldthau (2014), “Rethinking the governance of energy
infrastructure: scale, decentralisation and polycentrism”, Energy Research & Social
Science, 1. Cambridge: Elsevier, pp. 134-140.
7
Denmark is an interesting example of a country that has gone from being 99% dependent
on foreign fossil fuels to being completely energy self-sufficient. Denmark is officially
recognised as the ‘Green Brand State’. See “International Frontrunner”, Danish Responsibility. http://danishresponsibility.dk/danish-responsibility/international-frontrunner
351
Despite the region’s historical lack of cooperation, there is a tendency
towards increasing transnational cooperation in the energy sector that could
easily be translated into benefits. Therefore, strengthening interdependent
energy links constitutes an international tendency endorsed by the
increasing participation of energy in diplomatic affairs. Real innovation
comes from integrating energy policy into Brazil-Chile cooperation ties.
Energy is not only associated with business, but also establishes the basis of
national foreign policy targets. In this scenario, energy has assumed a
fundamental role to help understand the focus of Brazil-Chile ties.
Clearly, the energy question in Latin America cannot be compared with
the highly developed cooperation between the United States and Canada as
illustrated in certain NAFTA clauses on energy security. Indeed, it should
be remembered that Canada and the United States had already been
integrated trade-wise since the 1950s and two-way trade increased due to
the significant lowering of tariffs through GATT rounds.8 In summary,
before the NAFTA, Canada and the United States were already highly
integrated economies (Weintraub, Sidney, 2008: 10-11). However, South
American infrastructure integration has made progress in the last few years,
to the extent that concrete initiatives have been carried out in this area.
The importance of the energy issue in foreign policy cannot be discussed
in the abstract; the origins of the European Union should be highlighted to
illustrate this point, as well as the impact of the European Coal and Steel
Community, which led to the European cooperation process (an
administrative agency established by a treaty ratified in 1952, designed to
integrate the coal and steel industries in Western Europe). Energy remains a
political issue - as shown by the cooperation between German and French
war industries’ (coal and steel) in an attempt to avoid another conflict.
Therefore political strategy was centred on war industries, with the same
authority undermining state power in this field (Barbosa, 1991: 37-38). The
creation and recent evolution of the European Union have influenced other
regional cooperation projects worldwide. Furthermore, political unification
based on the functionalist theory has had an impact on theories of regional
8
The United States and Canada are the largest integrated energy markets in the world. The
two countries have established a huge market for energy, focused on fuels and products
such as natural gas, electricity, coal and hydropower among others. “Energy”, Embassy of
the United States, Ottawa Canada. http://canada.usembassy.gov/canada-us-relations/
energy.html
352
integration in Asia, Africa and Latin America (Axline, 1994: 10).
In Latin America, there is already an example of bilateral energy
cooperation, the Brazilian-Argentine Agency for Accounting for and
Controlling Nuclear Materials, created by the governments of Brazil and
Argentina (the ABACC) in 1991.9 An interesting example of a bi-national
agency that has the goal of expanding its membership in the future, the
ABACC demonstrates how coordination efforts may go beyond ABACC
officials and their countries of origin. That said, technical cooperation
activities have also been extended to specialists working for laboratories in
Argentina and Brazil. Furthermore, technical cooperation activities are
shared with other countries, such as the United States, France and South
Korea.
The main purpose of the ABACC is to verifying that the nuclear
materials existing in both countries are being used exclusively for peaceful
purposes. The ABACC is another important example of how presidential
diplomacy played a significant role in its creation, to the extent that the
political aspect cannot be underestimated in comparison with technical
issues.10 It should be taken into account that the creation of the ABACC
demanded a long political dialogue that involved generating trust and
building up a strategic alliance, rather than exclusively technical support.
There are parallels between the ABACC initiative and similar ArgentinaChile cooperation within the security sector, illustrated by the Permanent
Security Committee (COMPERSEG). Both the ABACC and the
COMPERSEG involve the participation of Brazil and Chile’s common
neighbour Argentina, showing a high level mutual trust between Southern
Cone actors. COMPERSEG and ABACC constitute core elements to help
understand Brazil-Chile-Argentina geopolitics. As mentioned in Chapter 1,
Argentina complements the understanding of the Brazil-Chile approach and
therefore becomes an important actor in the analysis.
Moreover, the ABACC and the COMPERSEG are unprecedented, not
9
Its well-known abbreviation is ABACC (Agencia Brasileiro-Argentina de Contabilidade e
Controle de Materiais Nucleares in Portuguese or Agencia Brasileño-Argentina de
Contabilidad y Control de Materiales Nucleares in Spanish). http://www.
abacc.org.br/home.htm
10
The ABACC comprises the Commission (made up of four members, two from each
country) and the Secretariat (a Secretary and a Deputy Secretary). http://cns.
miis.edu/inventory/pdfs/abacc.pdf
353
only in terms of Brazil-Argentina and Chile-Argentina links, but also
concerning the three main Southern Cone states. Their two initiatives in the
defence have two different features: strong cooperation ties and a high level
of diplomatic confidence. The involvement of the three states in integration
mechanisms relates to Chapter 2 about the Brazil-Chile historical
backgrounds and the importance of Argentina when analysing the BrazilChile bilateral approach.
By analysing the Brazilian-Chilean energy sectors, it should be
considered that they have a totally different energy matrix. Chile, on the one
hand, is a consumer and net importer of energy and has not yet developed a
sustainable energy plan for the coming years. Chile still used a high
percentage of energy derived from fossil fuels (73%), while fuel from
renewable energy sources only accounts for 37% (Nasirov and Silva, 2016).
On the other hand, Brazil is the region’s main player in terms of a wellbalanced energy mix. Indeed, Brazil’s size and leadership have led the
country to exert an influence on the region’s geopolitical context.
However, Chile’s energy supply is not secure, given that its own energy
sources are very limited. For this reason, Chile would benefit from
widespread hemispheric energy cooperation in order to safeguard its energy
supply for the foreseeable future. As highlighted by Wittelsbürger,
“whichever way Chile intends to solve its energy problem in the long-run, it
will need to act quickly and make decisions efficiently”, especially because
it depends on fossil fuel imports, account for between 70% and 90% of
energy consumption (Wittelsbürger, Helmut, 2007: 3). Chile’s vulnerability
became clear when Argentina started cutting off natural gas deliveries to
Chile in 2004. According to the report by the Embassy of Switzerland in
Chile, with energy consumption growing at an average rate of 6% per year
an extra 15MW is considered necessary by 2020, reflecting the high level of
economic activity in Chile at the moment.11
In this context, further dialogue between Brazil and Chile has been
encouraged, with significant gains for both sides and the entire region,
contributing to the creation of possible cooperation in the field pertaining to
11
The Chilean Energy Market. Embassy of Switzerland in Chile. Santiago de Chile,
January 2011.
http://www.osec.ch/sites/default/files/The%20Chilean%20Energy%20Market_Embassy%2
0of%20Switzerland%20in%20Chile.pdf. Consulted on 16th March 2013.
354
hard politics. This means that, beyond soft power cooperation, bilateral
dialogue provides benefits for strategic cooperation between the two states.
Chile’s lack of a nuclear energy programme and of a self-sufficient energy
matrix has led to bilateral dialogue with respect on the energy issue.
Furthermore, energy dialogue has provided the opportunity to bring together
different groups from Brazil and Chile, such as politicians and technical
teams, to discuss a single key issue.
5.1 Brazil and Chile’s Energy Matrix
The Brazilian energy sector has been associated with the concept of national
security since the so-called “Era Vargas” (1937-1945 and 1950-1954), in
other words, the term of President Getúlio Vargas. The creation of
Petrobras, which reflected a new stage in oil exploration in Brazil, occurred
during this period. In the Brazilian energy matrix, hydroelectricity
represents 80% of the amount of energy used. Despite the important
advantages of generating cleaner energy and its lowerer generation costs,
hydroelectric power cannot guarantee a constant supply of energy in the
long run, taking given its meteorological uncertainty.
It should be considered that the Brazilian energy matrix is the result of
strategies pursued during the military period (1964-84) combined with the
regulatory reforms and privatisations of the 1990s. The country’s energy
policy is deeply rooted in the strategies developed during this period, to the
degree that changes during the 1990s did not affect the well-consolidated
tendencies in Brazil’s energy policy. However, the use of gas has been
introduced into the domestic energy matrix. The reforms of the 1990s were
much more market-oriented and economically efficient with respect to the
structure of national energy policies (Sennes and Narciso, 2009: 20).
Moreover, regarding the constant supply of energy, the use of
thermoelectric energy generated by diesel and natural gas has been relied
upon, with both sources mostly being imported, even though Brazil is
practically self-sufficient in petroleum products. The use of
thermoelectricity raised many concerns about the Brazilian government’s
decision to use this type of energy to replace hydroelectricity in specific
situations. In other words, the government’s plan to replace hydroelectricity
for thermoelectricity - in periods of drought - provoked severe criticism
355
from diverse sectors of society. Moreover, a large part of this
thermoelectricity was generated by natural gas (Landau, 2008: 245).
The impact of the petroleum crises in 1973 and 1979 on the Brazilian
energy matrix led to the emergence of Proalcool – the creative ethanol
programme based on sugarcane that was created in 1975. 12 This crisis,
combined with periods of low demand in sugar markets, resulted in the
development of an important programme to produce ethanol for use as an
automobile fuel. In this way, domestic production and the use of ethanol
decreased dependence on foreign oil, reduced trade deficits, created jobs in
rural areas and reduced air pollution. 13
Ethanol production has reached such volumes and technological
sophistication that Brazil aspires to world leadership in the export of this
commodity, although there is still a long way to go before reaches this
objective. 14 Other alternative sources of energy with obvious environmental
benefits are solar and wind power, which have also been subsidised by
Lulas’s administration, although to a lesser extent. In this respect, solar and
wind power are not as relevant in terms of the Brazilian energy matrix
(Landau, 2007: 246).
The fact is that important changes have occurred in the international
aspects of Brazil’s energy projection. As Sennes and Narciso state, “the
strategies’ content was altered both in multilateral spheres – the UN, the
International Atomic Energy Agency and the like – and in terms of the
country’s international role, as it went from being an oil importer to being
an oil, capital, technology and ethanol exporter”. External participation in
the energy cycle involves a variety of energy sources, such as oil, gas and
12
Further reading in Eduardo Giacomazzi (2012), “A brief history of the Brazilian
Proalcool Programme and the development of biofuel and biobased products in Brazil”,
Industry Federation of São Paulo State, Bioindustry Committee. http://www.oecd.
org/sti/biotech/Giacomazzi.pdf. See Carlos R. Soccol et al (2005), “Brazilian biofuel
programme: an overview”, Journal of Scientific & Industrial Research, vol. 64, November.
New Delhi, pp. 897-904.
13
Brazil continues to invest highly in its sugar cane programme. The State of São Paulo’s
Research Foundation has supported a large number of research projects based on different
topics related to sugar-cane cultivation. “Brazil world leader in sugarcane and ethanol
knowledged technology”, São Paulo Research Foundation (FAPESP). http://www.
fapesp.br/en/4686
14
See Isaias C. Macedo et al. (2008), “Green house gas emissions in the production and use
of ethanol from sugarcane in Brazil: the 2005/2006 averages and predictions for 2010”,
Biomass and Bioenergy, vol. 32, issue 7. Elsevier, pp. 582-595.
356
the electricity sector (Sennes and Narciso, 2009: 20). As previously
mentioned, developing biofuels technology demanded public-private
partnerships, in which public diplomacy, presidential diplomacy and nation
branding played an active role.
Another key issue regarding Brazil is the structure of the country’s
energy supplies. The plus is that the Brazilian energy matrix is different
from that of most developed and developing countries in several respects.15
The high use of renewable energy sources is primarily the result of the use
of biomass and hydroelectricity. At the same time, the use of natural gas,
coal and uranium help lower rates below the world average, although the
percentage of natural gas in Brazil’s energy matrix has increased
considerably in recent years. As opposed to international tendencies, Brazil
has invested heavily in hydroelectricity, while the use of biomass is
comparatively high (Sennes and Narciso, 2009: 21-2).
Nuclear energy is another potential source, not only for Brazil but also
for the Chilean energy matrix in the foreseeable future, which is why this
chapter addresses the nuclear approach.16 There is one key fact that is
relevant in the field of nuclear power for both countries, with Chile a
potential user of this source of energy and nuclear energy already part of the
Brazilian energy matrix.17 It is important to note that the city of Rio de
Janeiro is supplied with electricity that is partly derived from thermonuclear
generators. However, factors such as the possibility of accidents involving
nuclear power still have a profound effect on the public’s perception of its
use.
Chile does not currently produce nuclear energy and President Piñera’s
15
The positive impact of ethanol is particularly noticeable in the air quality of metropolitan
areas, as well as in rural areas. More information in José Goldember et al. (2008), Energy
Policy, vol. 36, issue 6. Elsevier, pp. 2086-2097.
16
Brazil’s relations with long-time rival Argentina even improved insofar as Brazil and
Argentina cooperate in nuclear and other security areas. Travis C. Stalcup and Barbara
Bush (2012), “What is Brazil up to with its nuclear policy?” Georgetown Journal of
International Affairs, 10th October. Edmund A. Walsh School of Foreign Service.
Washington, DC: Georgetown University.
17
Chile is once again thinking of meeting its energy demand with nuclear power. The
government decided to build a new nuclear power plant in 2013, despite the fact it would
not be ready until after the end of President Sebastián Piñera’s term in 2014. “Chile
thinking again of nuclear power use”, UPI, 30th October 2012. http://www.
upi.com/Business_News/Energy-Resources/2012/10/30/Chile-thinking-again-of-nuclearpower-use/UPI-77881351632087/
357
administration indicated that a decision on nuclear power would not occur
during his term, altough this did not mean that studies were not being made
on possible projects. In order for future governments to make a valid
decision, the juridical requirements for the establishment of nuclear energy
in the country are already being worked on. Possible future nuclear power
applications are being researched by the Chilean Nuclear Commission.18 In
2010, the Chilean government met with their French counterpart to discuss
the possibility of nuclear power use.19 Nuclear power was also one the
topics of President Obama’s official visit to Chile in 2011.
After two years of problems (2003-2004) in oil production, due to delays
in the delivery of offshore platforms, Brazil has been a modest exporter of
petroleum since 2005. Petrobras’ plan emphasises the consolidation of
petroleum self-sufficiency to carry this out, the company needs to continue
its research and put new blocks out to tender (Landau, 2007: 264-7).
Beyond Brazil’s evolution from a net importer to a potential net exporter of
petroleum, Petrobras has become one of the world’s most successful oil
companies, increasing its reserves, production and technical capacity and
developing international projects (Isabell, 2008: 11). Indeed, Petrobras has
become an important symbol of Brazil’s energy supremacy, to the extent
that it airs television commercials in other countries, such as Chile, where
the country’s image is linked to its brand projection.
In Chile, the energy policy is carried out by the National Energy
Commission (Comisión Nacional de Energía- or CNE), the Ministry of
Finance (Ministerio de Economía) and the Ministry of Mining (Ministerío
de Minería) (Martner, 2007: 110). However, the CNE executes the majority
of the technical work, aimed at elaborating and coordinating national energy
security programmes and, in this respect, the commission has centred on the
production and development of efficient energy use (CNE).20
18
The Chilean Energy Market. Embassy of Switzerland in Chile. Santiago de Chile,
January 2011. http://www.eda.admin.ch/eda/fr/home/doc/publi.html.html. Consultation,
19th March 2013.
19
Chile thinking again of nuclear power use: Chile is thinking of meeting future energy
needs with nuclear power after more than a year of delays caused by the atomic reactor
disaster in Japan”. Energy Resources. October, 2012. http://www.upi.com/
Business_News/Energy-Resources/2012/10/30/Chile-thinking-again-of-nuclear-poweruse/UPI-77881351632087/. Consulted on 20th March 2013.
20
As Chile grows, it needs more energy and therefore energy is directly related to the
economy and foreign policy strategy. Energy is a central element for achieving economic
358
During the last five years, Chile’s energy supply has not been secure,
since the country’s energy matrix is very limited to gas, coal and oil. To
make matters worse, it is estimated that 90% of each of these sources come
from abroad.21 Furthermore, as will be addressed in the following section,
even imports of Argentine natural gas are no longer reliable. Due to its
narrow and restricted territory, the only realistic way to deal with energy
shortages and demand is to import, which has constant dependence as a
consequence (Wittelsbürger, 2007: 1). Since the Chilean energy matrix is
too dependent on natural gas, the following section focuses on ChileanBrazilian gas supplies. Moreover, the Chilean energy shortage may have
profound short and long-term consequences for its foreign policy.
5.1.1 Natural gas
At present, natural gas is the second most important fossil fuel after oil in
the United States. Natural gas is growing in use, since it is seen as an
increasingly good alternative to oil. Therefore, the potential or real
possibility for natural gas to replace the role of oil in the economy deserves
special attention from an academic standpoint. For some countries, natural
gas provides an opportunity to use another energy source that will be able to
replace some of the power that is currently obtained from oil. However, it
should be borne in mind that oil still plays an overwhelmingly significant
role in the international energy scenario.
Overall, since the 1980s, natural gas has been the fuel that has
experienced growth to the expense of coal and oil22 (Clegg, 2001: 10).
growth and sustained social progress. “National energy strategy 2012-2030: energy for the
future”, Gobierno de Chile, February 2012. http://kallman.com/shows/iftenergy_2012/
pdfs/Energy-for-the-Future-Chile%27s-National-Energy-Strategy-2012-2030-English.pdf
21
Today 62.9% of the total amount of energy produced in Chile comes from generators that
use oil, coal or natural gas, whilst 31.2% comes from hydropower, according to the Chilean
National Energy Commission (CNE). José Luis Alarcón (2013), “Chile seeks to diversify
energy sources”, Diálogo/Digital Military Magazine, 07/08/2013, Forum of the Americas.
http://dialogo-americas.com/ en_GB/articles/saii/ features/economy/2013/08/07/feature-02
22
Moreover, “natural gas consumption is concentrated in three major areas: North
America, Europe and the Former Soviet Union, and the Far East”. See Marian Radetzki,
“World Demand for Natural Gas: History and Prospects”, The Energy Journal Special Issue
(1994), pp. 219-236.
359
According to some predictions, it will soon be the second most important
energy source in the rest of the world as well. Increasingly, natural gas is
becoming more important for the production of electrical power.
Furthermore, it is highly important in the production of industrial fertilizer
(Darley, 2004: 8). Darley reminds us that:
“…after natural gas, there are no more easy energy bonanzas left in our planet’s
crust, and now the first indisputable warnings about the limits to global natural
reserves have appeared. In both 2001 and 2002, for the first time ever, more natural
gas was used than was found. This isn’t a blip; it’s a permanent trend” (Darley,
2004: 5).
Although Latin America’s existing infrastructure can provide enough energy
for the moment and for the near future, the lack of investment in the sector
may bring problems for the energy supply. As a result, current investment
policy cannot be considered sufficient for future demand. A key fact to
understanding the complexity of the natural gas policy is that gas is not as
easily transported as oil, since it requires long-distance pipeline systems or
the provision of LNG (Horsnell, 2001: 28).
Indeed, the capacity to process and transport oil and gas to the markets
remains deficient, while the demand of these resources has risen markedly.
The current gas framework strategy is being carried out according to the
regional balance of supply and demand, storage capacity and gas pipeline
location. Nonetheless, as Darley highlights, “natural gas cannot be imported
on demand; it requires planning long in advance, especially if it comes over
the ocean as liquefied natural gas or LNG” (Darley, 2004: 3).
When referring to the gas markets, it should be noted that there is no
unified market. Instead the market consists of tenuously linked regional submarkets. As Horsnell argues, “the gas market is primarily a series of
regional markets in which separate development depends on the nature of
the infrastructure and the regulatory regimes in place. In addition,
transmission costs for gas represent a far higher proportion of end-user
prices than is the case with oil” (Horsnell, 2001: 36).
The Latin American region boasts natural gas reserves together with
high-growth energy markets. The need to diversify beyond the high
investments in hydroelectric power and expensive oil sources directs
360
countries to the search for natural gas, especially for generating power. The
region has benefitted from the abundant gas reserves in several countries,
particularly Venezuela, Argentina and Bolivia and their interconnection
with other markets. Furthermore, additional changes play a significant role
in the process, such as: competition between hydro and thermal generation
in a highly hydro balanced region; the need to build it up which could lead
to breaking cross-country natural gas agreements later; increasing
competition between gas and other power resources and the development of
the natural gas industry in a volatile international market (Hammons, 2011:
1).
As already observed, Brazil’s energy matrix does not rely heavily on
international resources with the exception of coal and natural gas, with onethird of the latter’s supply being imported as opposed to oil, the majority of
which comes from local production for the internal supply and whose
import volume (light oil) is similar to its export volume (heavy oil). In
recent years, shifting the country’s energy matrix laid the groundwork for
other energy sources such as natural gas, ethanol and biofuel production.23
In the case of gas, policies have been adopted by Brazil to restrict
dependence on Bolivian gas and project an increase in exports (Sennes and
Narciso, 2009: 24).
In the Brazil-Chile approach, it should be considered that liquefied
natural gas (LNG) started to be considered as an option to ensure an
adequate natural gas supply, targeting the generation of power in particular.
Interestingly enough, Brazil and Chile are leading the implementation
process of regasification system facilities. As Hammons argues, “the region
also has the potential to become an exporter of LNG in the mid-term, once
the potential gas reserves that require deep drilling become commercially
available” (Hammons, 2011: 2).
Despite being formed from regional markets, the gas market is connected
23
The significance of natural gas is on the rise due to the Gas Law, passed on 2nd
December 2009, which regulated natural gas activities in Brazil. The decree, which was
passed a day after the approval of the new regime for the exploration of pre-salt reserves,
provides rules for the transportation, handling, processing, storage, liquefaction,
regasification and trading of natural gas. However, the decree did not end Petrobras’s
control, since the government-owned company enjoyed a transportation monopoly. As a
result, the National Agency of Oil, Natural Gas and Biofuel adopted new rules to restrict
Petrobras’ participation in the natural gas market. Ramalho, André (2014), “Abertura pra
valer?”, Brasil Energia Patróleo & Gás, ano 33, no 400. São Paulo: Editora Brasil Energia.
361
to the general energy market. As already mentioned in this chapter, energy
is firstly a political issue and even countries that have attempted to
depoliticise the energy market in the past have made the decision in recent
years that there is no possible way of isolating the energy field from
policy.24 Secondly, energy prices are generally political, both in the
domestic and the international market.25 Thirdly, energy security issues still
need to be settled by governments. Last but not least, environmental issues
play an increasingly important role in international debates, mostly
contradicting governments’ energy policies26 (Horsnell, 2001: 39).
There is no other region in the world where the issues of energy and
policy are so interconnected as in Latin America. The ownership of an oil or
gas state enterprise is considered a symbol of national sovereignty. As
opposed to the United States, where energy resources are not associated
with national identities, state-owned enterprises have a far higher impact on
the creation of national symbols in Latin America27. This has to do with the
fact that the nationalisation of resources allows their use to benefit the
country. Moreover, state-owned enterprises avoid transnational corporations
and get involved in politics of a domestic nature also functioning as a
security policy against foreign powers.
24
The conflicts of the 1990s led to the disintegration of the European unified energy
system, which stretched from the Adriatic to the Black and Aegean Seas. What was once a
single system was suddenly was a patchwork of several systems. In this context, the Energy
Community, established in October 2005, brought together the European Union and
countries from South Eastern Europe and the Black Sea region. The key aim of this
organisation was to extend the European Union’s internal energy market to South East
Europe and beyond, on the basis of a legally binding framework. Energy Community,
https://www.energy-community.org/portal/page/portal/ENC_HOME.
25
The example of German energy policy will be used to illustrate this point. It must be
emphasised that German coal mining is still a powerful political tool for lobbying, since
without that subsidy, coal would not maintain a dominant position in the energy sector. The
German coal lobby prevents the liberalisation of the European gas market (Horsnell, Paul,
2001: 39).
26
A good overview on environmental issues can be found in Estenssoro Savedra, J.
Fernando. “Antecedentes para una historia del debate político en torno al medio ambiente:
la primera socialización de la idea de crisis ambiental (1945-1972)”. Universum, no 22, vol.
2, 2007, Universidad de Talca, Chile.
27
The issue of national symbols and identity has been studied in the chapter about
national identity and nation branding. In general, Latin Americans have a strong sense of
national identity. According to Linkohr, this occurs frequently in heterogeneous societies
where the huge differences between the wealthy and the poor lead to the neede for national
symbols in order to maintain social cohesion – Linkohr, Rolf, 2007: 92).
362
Nonetheless, the potential of South American internal gas market has not
yet developed the necessary infrastructure to withdraw the potential
energy’s resources. On the one hand, Argentina, Peru, Venezuela, Colombia
and Bolivia are being transformed into significant gas producers, inasmuch
as some of these countries can already be considered gas exporters. On the
other hand, Brazil, Chile, Uruguay and Paraguay have a growing demand
for gas imports. These circumstances have led to the proposal of building
regional gas pipelines in order to connect producers with consumers.
Despite considerable problems, the trading of Latin American energy,
which basically consists of oil and natural gas, is on the increase due to the
creation of gas pipelines, oil pipelines and electricity connections. Mercosur
has developed an integrated internal electricity market with interconnected
electricity transmission among its four members (Argentina, Brazil,
Uruguay and Paraguay). The natural gas produced in Bolivia is transported
to Brazil and Argentina through transnational pipelines. Indeed, the problem
stated should take into account the uncertainty of the South American
market, due to the Argentine economic collapse in 2002 as well as the
continuous political instability of Bolivia.28 It should be taken into account
that there is no short-term market for either gas or electricity or for the
energy market that encompasses both (Horsnell, 2001: 34). Therefore, longterm energy policies should be established in the regional energy context.
Despite the difficulties and complexities involved in the Latin American
energy market, the region believed infrastructure mechanisms should be
rethought and therefore efforts to connect the gas market increased.
Connections in the gas sector are a considerable step forward towards a
common Latin American energy market. There is a tendency towards
electrical connection projects in South America, for example the existing
projects between Peru and the north of Chile, Colombia and Ecuador and
the south of Bolivia and the north of Argentina.29
The Great Gas Pipeline of the South will have a profound impact on the
28
In the case of Bolivia, the nationalisation of its gas and oil resources could have a
profound impact on access to technology. Furthermore, there is disagreement about how the
PDVSA (the Petroleum of Venezuela company) will cover the production of international
enterprises, without jeopardising long-term investments.
29
Research by the OLADE (Organización Latinoamericana de Energía) calculated that
energy integration will allow for savings of around US$ 4,500 million per yearhttp://www.olade.org.ec/siee.html. Consulted on 8 November 2009.
363
Latin American energy market. The huge project will begin in Southern
Venezuela, cross Brazil and finally reach Argentina. Bolivia, Chile and
Paraguay will be integrated afterwards. In this way, the Great Gas Pipeline
of the South will become a symbol of the region’s energy integration.
Nevertheless, as Wittelsbüerger says, “until now, however, no laws have
been adopted to furnish the legal certainty required for progress in energypolicy integration. Similarly, hopes were raised by the 2007 Mercosur
summit in Rio de Janeiro, when members professed their intention to
enhance cooperation in the energy as well as in other sectors of the
economy. Still, it is not clear how this intention is to be implemented”
(Wittelsbürger, 2007: 1).
Additionally, it should be mentioned that both gas pipelines and LNG are
very expensive methods of acquiring natural gas. The scale of investments
required to expand the gas pipeline network presupposes a single main
investor (Landau, 2007: 272). Furthermore, according to Linkohr, it is not
profitable to transport natural gas any distance over 4,000 km, because the
loss of pressure is very high. It is therefore better to transport natural gas as
a liquid (LNG) over the ocean (Linkohr, 2006: 94-5). It should also be
mentioned that there is disagreement on the advantages of a gas pipeline at
the cost of LNG. Darley highlights that the continuous pipeline method of
gas transportation is clearly preferable, not only because it is cheaper but
also because it is continuous. Like electricity, gas supply is needed in a
continuous stream (Darley, 2004: 48).
Another controversial point concerns accidents involving pipelines. In
general, pipelines have a fairly good safety record, although there have also
been disastrous accidents for different reasons, such as weakened
constructions or impoverished local people who live in the area and try to
collect the leaking fuel for themselves and sell it on the black market. The
increased use of gas may contribute to more natural gas leaks in the near
future, unless they are serious improvements made to the pipelines’ quality,
security and safety. Moreover, when a native tribe or village gets in the way
of a pipeline or a hydroelectric plant, they are usually forced to leave, with
little or no compensation. 30
30
Temis Gomes Parente (2008). Impactos da construção da Usina Hidrelétrica Luis
Edurdado Magalhães - TO: narrativas e memórias de mulheres. In: Linguagens Plurais:
cultura e meio ambiente. Temis Gomes Parente e Hilda Gomes Dutra Magalhães (eds),
364
5.1.2 Chile’s natural gas issue
The Chilean natural gas supply highlights how complex the Latin American
gas issue is. Natural gas represents one-third of Chile’s energy supply and is
imported exclusively from Argentina. The fact that Argentina was
consolidated as Chile’s exclusive gas exporter contributed to what some
authors called an international link between both countries that was far too
premature (Mares, 2004: 11). In 2004, the partial interruption of Argentine
natural gas exports to its neighbouring Chile worsened the relationship
between both states.31 The politicisation of energy affairs lead President
Lagos to stress that the relationship between them should not take into
account the natural gas supply (Calle, 2008: 1).
However, the lack of investment in exploiting new natural gas deposits is
one of the reasons for supply shortages in Argentina. As a result, natural gas
supplies from Argentina were cut off, threatening Chilean production of
electricity. In accordance with research about Chile’s energy supply
published by the ‘Centro de Estudios Públicos de Chile (2007)’, between
2006 and 2010, the Chilean economy was expected to experience an energy
deficit, with 2009 to early 2010 the most critical period. One proposal to
avert the gas crisis was converting gas plants into diesel ones. This measure
would reduce Chile’s vulnerability to interruptions in Argentine gas exports.
On a theoretical level, even though Argentina’s gas exports have not been
interrupted, Chile’s energy scenario demands constant attention. The
Chilean consul Horacio del Valle stress:
“Chile is urgently seeking to solve its energy problem and this has become the
main aim of Chilean foreign policy. In this context, we cannot separate the existing
energy shortage from the country’s diplomatic aims” (interviewed on 19th April
2010 at the Consulate of Chile in Rio de Janeiro).
President Michele Bachelet confirmed that the country’s top priority was to
achieve energy autonomy. This means that energy was considered a national
Bauru, SP - EDUSC, 2008).
31
See H. Rudnick (2005), “South American reform lessons – twenty years of restructuring
and reform in Argentina, Brazil, Chile”, Power and Energy Magazine, vol. 3, issue 4. IEE,
pp. 49-59.
365
security issue. In February 2006, Bachelet created the Ministry of Mineral
Resources and Energy, combining both areas as opposed to the Ministry of
Mineral Resources of Lagos’ government. This change was definitely a
result of the endeavours of the Minister of Economy and Energy to deal
with the Argentine natural gas supply crisis in 2003. The energy problem
was circumscribed by some proposals, such as the installation of LNG
regasification plants from Australia and Indonesia and the hydroelectric
project in Aysen. These other sorts of energy will be analysed in the
following subtopics (Martner, 2007: 125).
Nonetheless the LNG proposal requires a lot of investment, plus time to
deal with suppliers and to build terminals, which means that Chile could
suffer a shortage of energy at least during the installation of the
regasification plants. On a theoretical level, LNG sounds like a simple
concept, but in reality it is not. Despite the fact that it must be cooled
repeatedly in order to be carried in considerable volume, for example by
ship, it is not easy to maintain these low temperatures (-260oF or –160oC),
since it requires special vessels and a great deal of energy. In the case of
Chile, shipping natural gas seems a good idea, whereas LNG requires a
complex and extremely expensive infrastructure (Darley, 2004: 59).
Although, Chile’s shortage of natural gas is considered a matter of great
urgency, it must be taken into account that dependency on LNG can also
turn into an economic problem. Furthermore, it will be seen that the huge
demand for gas is not a centralised South American problem. There is a
parallel between the gas production decline worldwide and the increasing
demand for natural gas. Therefore, it would be imprudent to consider natural
gas as the main fuel for the Chilean energy sector in the coming years.
On the other hand, environmental leaders have demanded the dramatic
diversification of energy sources in response to the cutting of natural gas
supplies from Argentina, which threatens local electricity production. The
president of the Institute of Political Ecology, Manuel Baquedano, said that
“Chile must change its energy matrix immediately”. Given the shortage of
gas, “suppliers announced that they would use diesel to alleviate the natural
gas deficit. The national copper corporation, Codelco, Chile’s leading
source of revenue, plans to follow suit” (González, 2007: 1).
The energy shortage has had a major impact on the north of Chile where
the mining regions are situated. Indeed, for geographical reasons, the
366
country’s north, south and the centre are not connected in terms of the
energy web and thus cannot depend on a mutual supply in periods when
there are energy shortages. This means that Argentina restrictions on
exporting Bolivian gas to supply the Chilean markets produced real
concerns in the mining sector (especially in the region of Chuquicamata one
of the world’s largest copper mines). The following graph shows the impact
of a gas crisis on mining production:
Source: http://www.kitcometals.com/charts/copper_historical_large.html#5years
As the graph illustrates, the gas crisis had an impact on the copper
extraction mining cycle and, as a result, this process became more
expensive.32 In the last two years, copper prices have remained extremely
high, thanks to its use in the houses worldwide, the construction boom and
32
On 14th May 2014, President Michelle Bachelet inaugurated an onshore storage tank at
the Mejillones Liquefied Natural Gas (GNLM) regasification terminal, the biggest in Latin
America. Marianela Jarroud (2014), “Natural gas: both crisis and solution in Chile”,
Terramérica/Environment and Development, 16 November 2014. Inter Press Service.
http://www.ipsnews.net/2014/06/natural-gas-crisis-solution-chile/
367
its use in electrical and electronic products. However, in the current scenario
and due to the uncertain future of the market, enterprises are not encouraged
to invest in energy, given the drop in copper prices by more than 50%
(Kitco Metals). It is clear at this point that the meteoric growth and
continuous demand for gas poses severe problems not just for Latin
America - and specifically the Chilean-Brazilian scenarios - but also for the
United States and Canada. Since the United States and Canada have
declining supplies, while others in the world still have gas to spare, this
should serve as a warning to the other world regions of the world and to
Latin America as well.
Since natural gas is a fossil fuel and a finite commodity, a nation like the
United States becomes considerably more dependent on imported energy
resources as worldwide gas production declines. Another problem that
should be mentioned is that, when production begins to slow in the gas field,
it does so very quickly and without the timely warning signals as the same
problem in oil fields. Darley reminds us that “the past century has seen
numerous oil wars. World War II, the most destructive conflict in history,
was largely fought over access to petroleum reserve. With increasing
international trade in the diminishing supplies of natural gas, we may begin
to see gas wars as well” (Darley, 2004: 8).
Latin America has in recent years, been one of the most dependent
countries on the natural gas power that electricity development demands.
Heavy hydropower dependency does not only occur in Brazil and therefore
there is a need to diversify because of the high investments in hydropower
and oil, which has led many countries to redirect their domestic policies
towards alternative energy sources.33 Energy issues have encouraged a
profound multilateral debate, since the region is extremely diverse in size,
installed electrical capacity and electrical power demand, which depends on
the natural gas network. The Latin America energy scenario has had a
positive effect on Brazil and Chile dialogue, given the fact that energy
strategy policies demand long-term targets.
33
Climate change directly affects hydropower production. Hydroelectric dependency refers
to the percent of total installed capacity dedicated to hydropower. See Ben Blackshear
(2011), Hydropower vulnerability and climate change. Middlebury College. http://www.
middlebury.edu/media/view/352071/original/
368
5.1.3 Brazil-Chile natural gas demand in the foreseeable future
The future Brazilian supply of natural gas has gone from a situation with
hardly any availability in the past two years to promising availability in the
coming months. The Petrobras plan called ‘Plangás’ intends to increase the
offer of natural gas from 15.8 million cm/d to 24.2 million cm/d, with this
additional volume to gas imported from Bolivia.34 Bolivian President Evo
Morales’ announcement on 1st May 2006 about the decree nationalising his
country’s oil and gas industry provoked specific reactions from Petrobras
and the Brazilian public. The fact that the nationalisation decree was
expected should be taken into account: what raised concerns was the way it
was done through the military occupation of Petrobras’ gas fields (Landau,
2007: 273). The instability of the Bolivian gas supply has led to a decrease
of Brazilian dependence on Bolivian gas.
In the current context, it should be considered that, contrary to the
shortage of gas from Bolivia in the past two years, the offer has now
increased significantly. Although it is an understatement to say that
Bolivia’s future as a supplier of natural gas to its neighbours is uncertain,
further steps have been taken in order to decrease dependency on Bolivian
gas. In the present circumstances, with a more abundant offer of Bolivian
gas, the creation of a secondary market may be a relevant strategy for
maximizing the benefits of the growing offer. The director of Petrobras’ Gas
and Energy sector, Graça Foster, points out that, in the coming years, southeast Brazil will be able to export natural gas through the creation of
onshores LNG export terminals. 35
Currently, Bolivian gas accounts for roughly half of Brazil’s natural gas
consumption (about 48 million cm/d). Because of political uncertainty in the
neighbouring country, the Brazilian government has prioritised developing
domestic gas reserves. In this respect, Petrobras is looking for alternative
sources of energy to reduce its dependence on Bolivian gas (Landau, 2007:
272-3). It is relevant that policy makers realise that managing the variations
of the energy market plays an important role in energy provision.
However, Brazil’s gas supply situation changed dramatically, similar to
the difficult period Chile underwent when Argentina began restricting gas
34
35
O Globo, 10 July 2006, caderno Economia, p. 13.
O Globo, 18 January 2009, Economia, entrevista com Graça Foster, p. 21.
369
exports. The worst drought in decades caused significant damage to
hydroelectricity supplies in the country’s north-east. As a result, Petrobras
was forced to pay premium prices to secure spot cargoes of LNG, due to
strong demand for the fuel from Asian countries hit hard by cold winter
weather and ahead of the planned purchase by Argentina. Given drought in
the north-east, Petrobras had to purchase LNG, which is used in Brazil as a
subsidiary energy power that substitutes hydroelectricity in the dry
months.36
As has been seen, Chile will face serious problems in the coming years if
it continues to formulate its energy policy based on one major fossil fuel,
without diversifying its energy matrix. At the present time, Chile’s main
problem in foreign affairs is its energy supply security dilemma, which
means that it has become extremely dependent on a fuel now in sharp
decline. Indeed, the whole industrial world is now looking to natural gas for
its electrical power. For this purpose, Chile’s current energy policy must
seek to generate an uninterrupted, environmentally sustainable and available
energy supply. Chile’s energy problems encourage dialogue in the field of
foreign affairs to solve its energy shortage. The public-private partnership
needed in the energy sector demonstrates the relevance of public diplomacy
in the energy issue. As far as public diplomacy’s focus on the interaction
between decentralised actors is concerned, the Brazil-Chile energy dialogue
has fostered dialogue between non-official actors, which has led to a better
understanding between the two, based on the public diplomacy concept.37
The mainstream media and newspapers with a large circulation continue
to treat natural gas as a local subject that exclusively concern historical or
present rivalries between neighbouring countries. For instance, Brazilian
reports about the Bolivian nationalisation of the production and distribution
of natural gas and oil in May 2006 treated the situation as sovereignty issue
between both countries. The majority of the reports even considered the
36
McAllister, “Brazil seen paying high price for emergency natural gas imports”. Reuters.
Tuesday, 8th January 2013. http://www.reuters.com/article/2013/01/08/brazil-energy-lngidUSL1E9C88NV20130108
37
The deep fear surrounding the safety of the energy supply led to an emerging debate on
energy topics in international relations. The importance of energy cannot be exclusively
understood from a state-centric perspective, since one country’s energy security does not
mean another’s lack thereof. Andreas Goldthau and Jan Martin (2010), Global energy
governance: the new rules of the game. Berlin and Washington, DC: Global Public Policy
Institute /Brookings Institutions Press.
370
complexity of the energy supply for the continent as a whole in the short
and long-term. These fragmentary reports are no help at all to understanding
that the focus on gas or other energy sources cannot exclusively be on a
certain country, but rather the overall context, including the international
energy scenario and its future demands, must be studied. The current
situation requires serious rethinking, in the sense that it is not only a
problem about substituting one energy source for another and the use of
alternative energy sources should also be learnt about. In the following
sections, we will analyse the issue of nuclear energy, alternative energy
sources, the importance of oil and ethanol within Brazil’s foreign policy and
energy efficiency as strategic alternatives for energy security.
5.2 Nuclear Energy
A point made earlier in this text concerns the constant increase in energy
supply and demand, as well as the notion of supply security, which has
received special attention from international policy in recent years. Another
way of stating the same point is to say that countries want to increase their
energy supplies in order to have a better bargaining position in the
international arena. Combining current energy demand with concerns over
the impact of carbon and other emissions on the global climate, global
warming and climate change leads to the emergence of one of the most
appropriate scenarios to discuss the use of nuclear power. Moreover, the
current debate should mention that state ownership of nuclear technology
can be translated into energy independence, which is considered a top
priority in terms of national development.
The influence of all these factors questions the role nuclear energy will
play in this context. There is certain optimism concerning the use of nuclear
power for peaceful purposes, if it is taken into account that, at present,
nuclear energy and hydropower are the only options for generating noncarbon gases and being commercially deployed on a large scale. All of these
factors help create the perfect scenario for expanding both types of energy.
Hydropower is still considered a natural and renewable energy source,
despite the lack of studies about the emissions of greenhouse gas through
the hydroelectric reservoir.38
38
The anaerobic degradation of organic material, mainly the material that rests on the
371
Furthermore, the economic and environmental limitations of hydropower
in certain countries and regions are recognised. In this regard, nuclear
energy tends to be developed on a wider scale, considering its viable
environmental potential. The preceding discussion has focused on the
advantages and disadvantages of the use of nuclear energy (Goldemberg,
2002: 231-2). Since the nuclear issue often leads to an irrational evaluation
of its impact on human lives and the environment without considering the
technology and safety methods available in recent years, the following
discussion will attempt to analyse both sides of the argument.39
This section will examine whether nuclear power will need to be used as
a sustainable energy source in the future, the problem of the radioactive
waste associated with nuclear power electricity generation and the safety
standards are only effective when applied in practice. Last but not least,
since regulating nuclear and radiation safety is a national responsibility, it
will study the fact that radiation risks may transcend national borders,
demonstrating that this is not an issue that concerns a specific country’s
policy. The complexity of the issues at stake is such that they are not
problematic domain of one country’s decisions and that there must be
international cooperation and standardisation to enhance global safety
instead.
Another fact is that open debates on the opportunities and risks of nuclear
energy have not taken place in either Chile or Brazil. 40 On the one hand,
decision-makers have not shown an interest in promoting open discussions.
bottom of the river where there is little oxygen, results in the emission of greenhouse gases.
This is a common phenomenon that occurs naturally in swamp areas worldwide. However,
in the current circumstances, no universal concept exists to establish a relationship among
the percentage of production and liberalisation of methane, the percentage of renewable
water, the reservoir geometry and the vegetation of the flooded area in order to measure
greenhouse emissions. Jerson Kelman, Carlos Tucci, Benedito Braga e Luiz Pinguelli
Rosa. “As hidrelétricas e o efeito estufa”. Brasil Energia, no 334, September 2008, p. 193.
39
Nuclear power encourages important debate in domestic politics and diplomatic affairs.
In the European Union, which has different opinions on the energy issue, its members use
different energy matrix. Germany, for instance, is giving up nuclear power while France
has an energy matrix committed to nuclear energy. “The storm over new European Union
climate-change targets”. The Economist, 26 January 2014, vol. 410, p. 46.
40
Latin American states have different stances on nuclear energy. For instance, according
to President Evo Morales, “Bolivia is ready to pursue nuclear energy”. Patricia Rey Mallén
(2014), “Bolivia wants nuclear energy, but Brazil and other Latin America countries are
abandoning it”, International Business Times, 3rd January 2014.
372
On the other, there is a lack of interest in the issue among the citizens from
both countries. This situation could be described by saying that when large
quantities of electricity are produced cheaply and safely, people tend to
ignore the energy issue. Nonetheless, when things start going wrong at an
operational level, such as when there is the threat of lights going out or
energy only being available at high prices, people become interested.
From Chile’s perspective, the lack of consistent debate over the use of
nuclear energy is even worse than in Brazil, since the absence of a
diversified energy matrix could lead to a severe shortage of energy in the
coming years. The accident at a nuclear plant in Japan in May 2011 has
diminished - if not totally paralysed - Chile’s attempts to create a rational
domestic discussion on the advantages and disadvantages of a nuclear
project for peaceful purposes. Neither the energy crisis nor the droughts that
affect the main sources of the country’s energy production have been
considered solid arguments to open up the energy debate after the nuclear
accident in Japan.
Indeed, social inequalities may play a role in the general ignorance about
nuclear power. Concerning Latin America’s social complexities, Wesson
suggests “inequality, the separation of the rich from the poor or top from
bottom, of educated from ignorant or illiterate, or the refined and proud elite
from the despised masses” (Wesson, 2001: 205). The difficulties that this
inequality creates for an open and well-informed debate may lead to a lack
of discussion. Since there have not been many discussions about energy
matters, it also suggests that opinion can be easily influenced one way or
another.41
Not only in Chile and Brazil but also in Latin America in general there is
little public debate on nuclear energy. This may have to do with the fact that
41
According to the IAEA (the International Atomic Energy Agency is the world’s centre
for cooperation in the nuclear field. It was set up as the worldwide ‘Atoms for Peace’
organisation in 1957 within the family of the United Nations. The agency works with its
member states and multiple partners worldwide to promote safe, secure and peaceful
nuclear technologies-http://www.iaea.org/About/index.html). “If we look at the United
States, it is clear that the vastly improved public perception of nuclear power has its roots in
the superb operating performance of its 104 plants in recent years. Producing large
quantities of energy cheaply, safely and with due regard for the environment is far more
effective than any fancy communication strategy. It is only when things start to go wrong at
the operational level that the public becomes interested” (http://www.iaea.org/
Publications/Magazines/Bulletin/Bull501/50107293233.pdf).
373
nuclear plant projects are associated with military governments and, given
that there is a feeling of distrust concerning the military, this also implies to
this source of energy. However, a considerable number of the continent’s
countries have been developing nuclear energy technology for peaceful
purposes under democratic governments. To give one example, President
Chavez’s administration in Venezuela has demonstrated great interest in the
use of nuclear power, leading to a nuclear cooperation agreement between
Venezuela and Brazil (Linkohr, 2006: 102). In fact, nuclear cooperation
between both countries also occurred in 1983 during the government of Luis
Herrera Campins. Since then, there has been a nuclear energy agreement
between both countries that has been applied to developing this source of
energy for peaceful purposes.42
5.2.1 The historical background of Brazil’s nuclear programme
As mentioned at the beginning of this chapter, hydroelectricity corresponds
to 80% of Brazil’s energy matrix. However, according to the Brazilian
Association of Nuclear Energy, hydroelectric power will cease to be the
main energy source in 2030, when it will start to lose capacity. The future
discrepancy between demand and supply will play a significant role in
ensuring a diversified energy supply in the following years. In this respect,
nuclear power becomes a strategic source of energy because of its low
operational costs and its almost complete absence of gas emissions into the
atmosphere.
From a historical viewpoint, the first research on nuclear energy in Brazil
began in the decade of the 1930s and was determined by European
scientists, whose arrival in the country occurred because of their political
persecution in Europe.43 As a result of the political context after the Second
World War, the first type of nuclear agreement between Brazil and the
42
An article from Julio García Montoya, Ambassador of Venezuela in Brazil.
http://www.midiaindependente.org/pt/blue/2005/06/318402.shtml
43
Brazil, a party to the Non-Proliferation Treaty, is reportedly planning on developing a
nuclear propulsion system and the country’s first nuclear submarine is expected to be
operational by 2017. Debalina Ghoshal (2013), “South America goes nuclear: now Brazil”,
Gatestone Institute, International Policy Council, 20th August. http://www.
gatestoneinstitute.org/3941/nuclear-brazil
374
United States was signed in 1945. 44 This agreement concerned the
possibility of exporting of Brazilian nuclear materials to the United States as
well as to other countries with United States’ consent as a prerequisite.
Despite the difficulties that emerged in the field of nuclear cooperation
between both countries during the government of the Brazilian Café Filho
(1954-1955) regulations were set in place for the nuclear programme,
executed by the CNPq (the National Council of Scientific and
Technological Development), on mineral prospection, the construction and
functioning of nuclear plants and the formal participation of other countries.
Since 1955, the Ministry of Foreign Affairs has been the body that deals
with nuclear issues and controls the export of nuclear materials. Moreover,
during the government of Juscelino Kubitschek (1955-1960), there was an
institutional development with the creation of the National Nuclear Energy
Commission (Comissão Nacional de Energia Nuclear – or CNEN) and the
Institute of Atomic Energy (Instituto de Energia Atômica – or IEA), to focus
on the training of experts and research. Thereafter, during the presidency of
João Goulart (1961-1964), the state monopoly of radioactive ore was
recognised and the government decided to construct a nuclear plant using
natural uranium, a project that was later abandoned. During that period, the
first Brazilian nuclear reactor for research was built by the Institute of
Nuclear Engineering (Instituto de Engenharia Nuclear – or IEN), mainly
using its own resources (Almeida and Marzo, 2006: 192-193).
The development of the nuclear programme to generate electrical energy
was launched by the military government in the 1970s, as a result of the
increase in demand, which rose to 14% in that period (Ibid, 193). The
implementation of a large-scale nuclear programme was underpinned by the
idea of foreign cooperation. Furthermore, the availability of uranium
reserves, combined with the German and American technology available,
substantially contributed to the construction of two nuclear plants - Angra I
and II - in the city of Angra dos Reis in the state of Rio de Janeiro. At that
time, another project for a nuclear plant was also developed - Angra III 44
There is a continuing military influence in Brazil’s nuclear programme. Brazil is the only
non-nuclear weapon state in which the military leases uranium enrichment technology to
the civilian nuclear programme and the navy drives technological advances in the nuclear
sector. Brazil is also the only non-nuclear weapon state developing a nuclear-powered
submarine. “Nuclear power in Brazil”, World Nuclear Association, October 2014.
http://www.world-nuclear.org/info/Country-Profiles/Countries-A-F/Brazil/
375
although it was not eventually built 45 (Landau, 2008: 249).
In 1979 the government created an autonomous programme for the
development of nuclear technology, seeking to acquire the specialised
knowledge needed to prevent Brazil from being vulnerable in areas as
sensitive as nuclear materials. Brazil has made important progress since
1987 in the nuclear arena, as demonstrated by the development of the
necessary technology for enriched uranium, induced by an ultra-centrifugal
force. At that time, both the Brazilian and the Argentine nuclear
programmes were regarded with suspicion by the international community,
since both countries’ interest in developing this type of energy could have
been for military purposes. Therefore, the Brazilian National Constituent
Assembly approved Article 21 of the Federal Constitution of 1988,
indicating that nuclear power be used exclusively for peaceful purposes.46
The second initiative adopted by the Brazilian government was an attempt
to cooperate with Argentina in nuclear matters, through the creation of a
Permanent Committee on Nuclear Policy.47
The implementation of technical-scientific cooperation between both
countries in the sector contributed to enhancing the transparency of
Brazilian-Argentine nuclear programmes, despite the fact that an agreement
45
Despite the Brazilian-German nuclear agreement’s emphasis on the increasing demand
for energy, this demand did not increase like it was supposed to. Therefore, changes in the
international context played a major role in the lack of financing for investments and
Brazilian foreign debt. The combination of all these factors meant that the construction of
nuclear plants may not occur, given the socio-economic circumstances. Regardless of the
economic problems, this agreement did not guarantee Brazilian autonomy in the nuclear
fuel cycle. Regarding the technological, commercial and strategic importance of this sector,
there was a huge effort on the part of industrialized countries to maintain their markets (Silvio Gonçalves de Almeida and Marco Antonio Saraiva Marzo, 2006: 194).
46
It should be noted that after New Zealand, Brazil was the second country in the world to
explicitly recognise this issue in its Constitution. Moreover, all of Brazil’s nuclear activities
must be submitted for the approval of the National Congress (Gonçalves de Almeida, Silvio
and Saraiva Marzo, Marco Antonio, 2006: 195).
47
Despite the focus on Brazilian-Argentine cooperation in this research, it is important to
note that there is a strong parallel between this attempt and the European Coal and Steel
Community (ECSC) created in 1951. The ECSC was a major step towards developing an
organisation based on the principles of supranationalism aiming at security and the creation
of a common political system. The European Economic Community (ECC) and the
European Atomic Energy Community (EAEC or EURATOM) emerged afterwards as a
result of the ECSC. In order to compare Brazilian-Argentine and European initiatives of
cooperation, see Barbosa, Rubens Antônio. América Latina em perspectiva: a integração
regional da retórica à realidade. Edições Aduaneiras: São Paulo, 1991.
376
for the peaceful use of nuclear energy only occurred in 1991 as a result of a
system of mutual inspections. Thereafter, both countries signed an
agreement with the Brazilian-Argentine Agency for Accounting for and
Controlling Nuclear Materials (ABACC) and the International Atomic
Energy Agency (IAEA) seeking safeguards. The ABACC is an important
example of the consolidated cooperation between two Latin American
countries – Brazil and Argentina - in a strategic field such as the nuclear
sector, as mentioned at the beginning of this chapter. Moreover, it
demonstrates the high level of mutual trust that countries must have in order
to develop a common policy for accounting for and controlling nuclear
materials. 48 The ABACC demonstrates that, in the future, there is no
speculation that there will be pragmatic energy cooperation among Latin
American countries.
In the long run, Chile will have to attempt to solve its energy shortage by
adopting nuclear energy, contributing to the development of a diversified
energy matrix. In the coming years, there may be a possibility of
cooperation between Chile and Brazil, since on one hand, Brazilian knowhow of the nuclear programme exists and, on the other, Chile has an energy
supply deficit associated with its interest in developing nuclear power. In
the integrative energy context of both countries, there has been one
Brazilian-Chilean attempt in the nuclear sector, summarised by the
Memorandum of Understanding about Cooperation in the Scientific,
Technological, Development and Practical Application of Nuclear Energy
for Peaceful Purposes Between Brazil and Chile, signed on July 19th 1974.
The memorandum’s aims are self-explanatory. However, after the signing of
the memorandum between both countries no further progress was made
towards cooperation in the nuclear sector.
5.2.2 Brazil-Chile nuclear power dialogue
On 13th March 2007, Chilean President Michelle Bachelet officially
announced the constitution of the Nucleoelectric Working Group through
Decree No 49 of the Ministry of Mining. The mission of this group of ten
professionals from different fields of specialisation was to advise the
48
Details of the ABACC in http://www.abacc.org/home.htm
377
government on studies focusing on identifying the opportunities, benefits
and risks involved in the use of nuclear energy, with the aim of producing
electricity in the country in accordance with the framework of international
treaties that deal with the issue (Zanelli, 2009).
Despite institutional support from the Ministry of Mining and the
National Energy Commission, the Chilean group worked autonomously and
independently from the government and other political influences. The study
also involved interaction between different state bodies, since it promoted
dialogue with different sectors such as the environment, international
relations and defence, nuclear energy and health and radioprotection in
order to achieve a better basis for the study. Thus, meetings were held with
national and foreign specialists in nuclear energy, electric energy planning
and regulation, as well as with operators of nucleoelectric generation plants.
The study also considered the vision of civil society, the business sector and
the academic field and of representatives from environmental movements.
This complex study was not carried out all at once and several
observations on it were made by the International Atomic Energy Agency. In
the meantime, the Nucleoelectric Working Group was dissolved and the
National Energy Commission, under the direction of minister Marcelo
Tokman was given the task of carrying out studies for the report. These
studies functioned to assess the feasibility, costs and challenges that Chilean
society would face if it opted to embark on a nuclearpower programme. The
study sought to form a basis so that the next administration could make a
knowledgeable commitment to carrying out a nuclear programme in Chile
(Zanelli, 2008: 5-6).
Energy is a commodity that has a direct bearing on development and
foreign policy strategy. As previously discussed, a lack of energy affects
national foreign policy aims, given that energy matters need urgent
solutions. Therefore, other issues are relegated to second place to the
detriment of the energy shortage. The energy topic establishes a direct link
between countries, to the extent that it maintains a constant dialogue
between the technical field, the business sector and official and non-official
state actors. The vulnerability a country faces because of energy shortages,
increases the importance of the energy topic in the analysis of international
relations. The energy issue brings three core elements to the Brazil-Chile
bilateral analysis: the ideas of interdependency, cooperation and
378
harmonisation.
In practical terms, confidential dialogue between the military fields in
both states occurred, even though civil society did not know how good the
source of the information obtained was. Indeed, dialogue at an academic
level with Brazil’s Nuclear Engineering Institute (IEN) has taken place,
especially because of Chile’s increasing interest in the study of nuclear
technology. Brazil’s has the most developed position in the region regarding
the use of nuclear power and also has one of the largest thorium deposits in
the world, although it has not yet established a thorium-based fuel cycle. At
the same time, Chile is highlighted as the country with the best resources to
implement a nuclear programme in the coming years (Berry, 2009: 1).
As seen in the previous paragraph, Chile and Brazil are at totally
different stages of their nuclear power policies. While Brazil developed its
autonomous nuclear technology programme at the end of the 1970s, seeking
to apply technology in accordance with its energy needs, Chile preferred to
purchase its nuclear reactor from abroad rather than take the time to develop
its own nuclear programme. 49 In fact, Chile’s neoliberal policy does not sit
easily with the developmente of an autonomous nuclear plan, since it relies
to a great degree on state involvement. In this sense, Chile has had modest
development in this area, summarised in only two experimental nuclear
reactors.50 Moreover, the current international financial crisis may also
contribute to restricting the expansion of such programmes for some time.
Brazil is nowadays part of the India-Brazil-South Africa Dialogue Forum
(IBSA), a recent alliance (from 2003) of countries who have or have had
nuclear ambitions of their own in the past and present. One of IBSA’s main
targets is to galvanise south-south cooperation and greater understanding
between three key continents in the developing world. The forum provides
the three countries with a platform to engage in discussions for cooperation
in various fields, including defence. Nevertheless, the forum has not openly
made any pronouncements on the nuclear issue. In addition, as previously
mentioned, Brazil’s nuclear activities come under the full scope of AIEA
safeguards, in conjunction with the ABACC (Berry, 2009: 9-10).
49
An interview with a nuclear chemist from the ABACC, Silvio Gonçalves de Almeida,
took place on 17th December 2008 at ABACC headquarters.
50
Biblioteca del Congreso Nacional de Chile – BCN. http://www.bcn.cl/carpeta_temas_p
rofundidad/energia-nuclear.
379
It should be remembered that an absence of the use of nuclear energy
does not mean that Chile is not an important country in nuclear power
discussions. On the contrary, Chile occupies the position of an active
nuclear player in the international debate. Among the group of countries
interested in acquiring the capacity to develop nuclear energy, Chile has the
greatest potential and technical and financial knowledge to develop this
energy source. As noted in the second chapter, the country has the financial
mechanisms to deal with power shortages, since it is the world’s largest
producer of copper.
Recent studies demonstrate that planners have had some initial concerns
over Chile’s lack of human resources to run a nuclear power programme.
However, nuclear power companies from Canada, France and the United
States are already lining up to offer assistance. Relying on international
financing, Chile could have a nuclear programme in the next decade or so.
Chile’s nuclear programme does not aim to be large, since it would not
exceed 1 GM in output taking into account the small size of the territory.
However, the fact that it is located along a significant tectonic fault line in a
very active country seismically has caused discomfort within civil society
and among some politicians.
However, both countries have taken the opportunity to cooperate in
radiation protection and the application of safety procedures. In this way,
bilateral cooperation measures involve procedures for the use of technology
with regards to worker protection, the use of nuclear energy in medicine and
industry and its effects on the population.51 The possibility of affecting the
public and workers’ health has fostered increasing interaction between the
technical fields of both states.
In brief, Brazilian-Chilean bilateral cooperation on nuclear energy at the
current time has been restricted to applying radioprotection measures,
although it should be recognised that there is some form of interaction
between the two countries in the nuclear field. Chile’s need to diversify its
energy matrix encourages a closer energy approach between the two
countries. Moreover, global warming is a relevant element, encouraging the
use of nucleotechnology, given its less significant impact on the
environment compared to other energy sources. The international
51
Interview with nuclear chemistry of ABACC Silvio Gonçalves de Almeida, took place in
17 December 2008 in the seat of ABACC.
380
community together with the market has increased its pressure to reduce the
emission of greenhouse gases (GHG) and therefore the energy approach is
an important component of the Brazil-Chile foreign policy agendas.
5.3 Renewable Energy Sources
Although conventional energy sources such as oil, natural gas and coal still
occupy the largest part of most countries’ energy matrixes, a transition to
renewable energy-based systems is gaining support from several countries
worldwide. Furthermore, traditional fossil fuel-based energy forces are
facing increasing pressure on environmental fronts, illustrated by the
episode when the use of coal in the future was challenged by the Kyoto
Protocol’s greenhouse gas (GHG) reduction targets. The potential to
develop the use of renewable energy sources is enormous, with biomass,
wind and solar energy increasing their participation in the energy matrix.
From a sustainable development perspective, it is important to ensure that
the decline of the petroleum supply and the security of the energy supply are
combined with the impact of climate changes and global warming,
generating a new scenario for energy demands. In this way, dependence on
non-renewable fossil fuels faces a new reality, which entails environmental
concerns and the option of renewable energy sources as a trend (Bush, 2007:
6-7). In these circumstances, Brazil emerges as the only country in the world
that can play a major role in the production of biofuels without jeopardising
the security of its food supply.
Since the beginning of the current boom of corn ethanol production in the
United States, Brazil’s success with ethanol from sugarcane has been cited
as an example of how the United States could avoid importing oil (mainly
from Middle East), substituting ethanol for gasoline. 52 The issue with corn
ethanol is that the progressive use of corn as a biomass contributes to a rise
in feed prices. There is one vital difference between Brazilian and the
United States’ ethanol, Brazil does not require fossil energy to produce
52
Ethanol can be made synthetically from petroleum or by the microbial conversion of
biomass materials through fermentation. In 1995, about 93% of the ethanol in the world
was produced using the fermentation method and about 7% using the synthetic method –
Badge, P.C., “Ethanol from cellulose: a general review”, http://newcrop.hort.purdue.
edu/newcrop/ncnu02/pdf/badger.pdf, p. 17.
381
ethanol but the North Americans do.53 For this reason, producing ethanol
from sugarcane and molasses without the additional costs of raw materials
for industry makes Brazilian ethanol more economically competitive
(Andreoli, 2008: 7).
In the current situation, according to Petrobras, ethanol from sugarcane
and molasses can be generated sustainably given that sugarcane farming
occupies 1% of Brazilian territory. Moreover, Paulo Roberto Costa, the
company’s supply director argues that the 25% of ethanol added to gasoline
for the use of flexi-fuel vehicles has caused significant changes to the
Brazilian fuel market. To give one example, in the state of São Paulo, more
ethanol is sold nowadays than gasoline. Ethanol production grew strongly
by 404% from 2007 to 2008 and for the first time in January 2009, Brazil
exported ethanol to Costa Rica.54
Nevertheless, it must be emphasised that the large-scale production of
biofuels requires other raw materials for production, apart from the corn and
sugarcane available. In this context, cellulose is designed to fill the gap
between market needs and the commodities on offer. In summary, cellulose
conversion of biomass into ethanol could reduce the cost of converting
sugarcane into ethanol in the future. Nevertheless, the enormous quantity of
biomass that the conversion process demands currently is not available. In
this sense, there is an optimistic analysis of the production process in the
foreseeable future, with biomass for the production of biofuel in the coming
years becoming available (Perlack, 2005: 5).
In the meantime, however, it is recognised that the improvement of
genetic studies and agriculture practices is an indispensable step towards
creating sustainable agricultural system. In other words, the agricultural
system is able to produce food, rations and fuel at the same time, without
the inefficiency associated with the current production of raw materials and
its market logistics system (Andreoli and Souza: 2008: 5).
On one hand, Chile’s stance on renewable energy sources, specifically
ethanol production is not particularly defined for many reasons. First of all,
diversifying its energy sources needs a well-planned, high-quality
53
O Globo Newspaper, 9th December 2008, Suplemento Projetos de Marketing, p. 32.
In order to understand the variety of raw materials needed to create biofuel, see Macedo,
Isaias de Carvalho and Nogueira, Luiz Augusto Horta (2004). “Biocombustíveis”.
Parcerias Estratégicas, no 19, December. Brasília: CGEE.
54
382
government investment; secondly legal procedures must be instated to allow
for the use of renewable energy sources; thirdly, there is not specific raw
material that can be used in large scale ethanol production and fourthly,
promoting a renewable biomass energy source raises concerns over the risk
of mono-cultivation.
To sum up, Chile’s current liberalised energy market with no government
intervention raises many concerns about the development of a well-balanced
energy mix. Government investment in a serious energy plan is a
prerequisite for any progress in this sensitive area (Wittelsbürger, 2007: 910). Moreover, the mechanisms that must be created to promote renewable
energy are still complex at the moment and the costs are high. In this sense,
it seems that the generation of biomass requires knowledge and skills that
are not yet available in Chile.
On the other hand, if no action is taken on energy by policy-makers to
redress the energy policy in the coming years, a shortfall between supply
and demand will once again occur. In the current Chilean circumstances, the
implementation of renewable energy sources is a tangible alternative,
inasmuch as the government seeks a well-balanced energy matrix. There are
initiatives to increase Chile’s capacity for producing renewable power,
mostly through hydroelectric dams. Hydroelectric power currently covers
more than one fifth of its primary energy needs and is expected to give the
country an ample power supply by 2012.55 However, as highlighted in this
chapter, environmentalists and people living in the regions where
hydroelectric dams are being built are opposed to their construction.
There are other alternative sources such as wind, solar, wave, tidal and
geothermal power, which should be examined in the future, although it is
seen that they are not government priorities. Generating power from wave
and tidal forces is still in its infancy. Photovoltaic plants in the north of
Chile are being discussed as a possible source of energy, even though the
technology available to generate this type of energy source is still very
costly and is inadequate in terms of energy efficiency.
However, the country’s capacity for producing solar energy is more
developed in areas of lower consumption and in the process of heating
industrial water. Indeed, the mining sector in the north has made use of solar
55
Bloomsbury Minerals Economics Ltd, www.bloomsburyminerals.com. Consulted on 11
March 2009.
383
and wind power to supply. In this context, there are favourable conditions
for the use of solar energy. One of the advantages of the use of wind energy
is that it its generation process is totally clean and neither the supply of wind
nor solar energy is threatened by periods of drought.56 Finally, geothermal
energy is something of a remote possibility, since no serious national policy
has yet been developed (Wittelsbürger, 2007: 3-10).
As far as Chile is concerned, the only way the country will be able to
cover its demand is through the creation of a well-balanced energy matrix.
Among other things, the development of new technologies and the costly
demand for fossil fuel indicate that it is only a matter of time before a move
is made towards the use of renewable sources. In any case, it is clear that a
profound transformation of world energy and the replacement of fossil fuels
by alternative sources of energy are taking place. There are undeniable
implications for the current Chilean circumstances, with the generation of a
short and mid-term energy deficit. Due to the Chilean energy deficit, its
supply cannot be based on renewable sources in the short-term, given that
the process of conversion can take years to be developed.
Although the energy sector may be an obstacle to Brazil’s fast rates of
growth, it is also a window of opportunity for the ethanol sector - as well as
for the country itself - to assume a leading position in the international
energy market. According to the current scenario, ethanol producers are
making investments to connect mills to the grid, although they claim the
price paid by the government in energy auctions is not enough to convert
these investments into profits. Another important challenge for the ethanol
sector is reducing transportation costs by investing in pipelines. From a
market perspective, there are three projects being planned for ethanol
pipelines in Brazil. The main issue is not building the pipelines themselves
but making them economic viable, with the variables of international
markets for ethanol playing a key role in the process. Pipelines have been
planned to transport ethanol from the producing regions to ports for exports
(Nassar, 2009: 78).
Several conclusions emerge regarding this topic. Firstly, the issue is not
56
More information about diversified energy sources in Fres, Cristian. “Energías
alternatives: el hidrógeno, las mareas y las olas”. Revista Futuros, no 15, 2006, vol. IV.
http://www.revistafuturos.info/and at Star Media - http://html.rincondelvago.com/ energiasalternativas_4.html
384
only about markets, but also about the infrastructure necessary to transform
the export of ethanol into a profitable business. Brazil could become the
world leader in ethanol production, which means it is also about exporting
the know-how with which to manufacture the product in other countries.
One of the major bottlenecks that Brazil faces is transforming ethanol into a
prosperous international commodity in the foreseeable future. In terms of
renewable energy resources, it is difficult to make a parallel analysis
between Brazil and Chile and what has been seen in this chapter is that
Chile has not developed a clear energy policy to reduce its dependence on
external sources of energy.
Whether or not Chile will be interested in importing either Brazilian
ethanol or the know-how to produce it is hard to predict. The Brazilian
ethanol market would have to be well-consolidated for Chile to show some
kind of interest. At the same time, due to the central importance energy has
acquired in foreign affairs, this subject cannot be excluded from our
analysis. Brazil continues to play the role of mediator and cautious ally in
the regional energy context, while Chile attempts to solve its energy
shortage in its own way without much regional involvement.
Moreover, energy is a new force in understanding Brazil-Chile bilateral
relations, since a shortage of energy exerts an influence over the foreign
policy aims of both states.57 Therefore, energy is equally important in our
study, to the extent that it affects foreign affairs and how countries establish
their relationships in accordance with domestic needs. Energy requires
multi-sector partnership and to foster transnational cooperation, which helps
intensify political dialogue. Energy cooperation is in accordance with the
core element of our study, which means building up links with diverse
sectors should also be taken into account in Brazil-Chile bilateral ties. That
said, Brazil-Chile relations go beyond traditional diplomacy and their
bilateral links can be approached in a much broader way, rather than being
restricted to diplomatic circles.
57
Energy promotes bilateral dialogue between state-centric actors and the business sector.
For instance, the energy topic has strengthened Brazil-US dialogue, with government-togovernment and business-to-business dialogue evolving. “US-Brazil bilateral dialogues”,
Brazil-US Business Council. http://www.brazilcouncil.org/ BilateralDialogues
385
5.3.1 Brazil as an emerging energy leader vis-à-vis Chile
The impact of pre-salt reservoirs should not be forgotten, given that Brazil is
beginning to develop its largest ever hydrocarbons discovery. While oil
prices remain as high as they are and the proposed new legal framework
unlicensing pre-salt reservoirs is adjusted and implemented in some areas,
Brazil has a chance to embark on a long-term path towards an innovationdriven economy. The increasing importance of the energy context means
that the country will become an oil and gas supplier as well as an exporter of
energy services. Obviously, Brazil must undergo significant structural
changes, involving institutional maturity and economic development, in
order to deal with pre-salt’s impact on domestic and foreign policy. Faced
with this potential wealth, Brazil’s government has already implemented
policies to decrease social inequality and promote sustainable economic
growth.
Brazil faces significant changes, given that it is the position of moving
from being a net-importer of oil to a net-exporter in the near future. This
shifting scenario will make core changes to Brazil’s international insertion,
given that this is only going to be possible because of the development of
new technology. These new technical mechanisms made it viable to extract
oil from deep water, as far as 200 miles from the coast and thousands of feet
down (Graefe, 2009: 10). This oil can only be produced using cutting-edge
techniques and is classified as unconventional oil.58 The pre-salt reservoirs
contribute a significant dimension to Brazil’s international ambitions, while
changing external perceptions of Brazil’s new position in the world order.
There is no doubt that pre-salt discoveries have already changed Brazil’s
emerging role on the international scene. Brazil’s position as a net
hydrocarbon products exporter and sugar-cane ethanol producer has been
caused an enormous impact on how the country’s nation brand is projected.
As in Chapter 1, Brazil’s brand help sell any youth-oriented product on the
market from food to music, meaning that old clichés and stereotypes, as
analysed in the survey, turn into something different and original to project
58
Experts use the phrase ‘unconventional source of oil’ as a term for a variety of methods
that produce liquid fuels. It has a higher production cost compared to conventional oilfields, demands a much more complex extraction and may require additional processing in
order to be refined (Graefe, 2009: 7).
386
the country’s main features. In other words, the old-fashioned stereotypical
vision of Brazil has been manipulated in order to transform the negative
components into something that coincides with the country’s new emerging
power.
An association with energy sources has rich elements to help export a
sustainable economic-political image, paving the way for the new
international image Brazil aims to project. The new Brazil brand exerts an
influence on Brazil-Chile links, given the fact it is impossible to ignore the
country as an emerging energy superpower. Increasing economic indicators,
decreasing social inequalities and the development of a diversified energy
matrix are some of the arguments that maintain the strong Brazil-Chile
bilateral approach. Instead of the economic difficulties os past decades, the
current optimism encourages new approach mechanisms between the two
states. Although the possibility of strengthening political bilateral dialogue
is not something that has tended to be consolidated over the years, the two
countries demand new instruments of cooperation and harmonisation in the
business sector, transport infrastructure, tax agreements and cultural
exchanges among others. The perception of public diplomacy, presidential
diplomacy, nation branding and paradiplomacy help turn the traditional
perspective into a dynamic approach.
387
Conclusion
Since they became independent in the early nineteenth century, the
relationship between Brazil and Chile has been significant for both
countries’ foreign policy. From 1808, Brazil’s centralised monarchical
system brought relevant gains in the establishment of a very strong
institutional presence. The conservation of the monarchy in Brazil was a key
element to understanding the stable scenario in which the country
established its bilateral links with Chile. The fact that Brazil took a different
path to other Latin American republics made the other nations skeptical
about the region’s only monarchy. This was a determining factor in the
difficulties faced when shaping relations with other Latin American
countries. The difficulty in cementing relations with other Latin American
nations did not, however, occur with Chile, with whom Brazil achieved
important bilateral ties in the post-independence period.
From Chile’s perspective, boundary disputes in the nineteenth century, such
as the War of the Pacific (1879-1884), led to a difficult relationship with
Bolivia and Peru, since both countries were defeated by and lost territory to
Chile. The aforementioned circumstances brought Brazil and Chile’s
traditional diplomatic links closer even though Brazil did not express its
official support of Chile during the War of the Pacific. Chile was the first
Latin America country to establish traditional diplomatic links with Brazil.
This symbolic representation of traditional diplomacy highlights the
importance of the relationship between Chile and Brazil. According to
Melissen (2005), traditional diplomacy goes hand in hand with mid-term
objectives and long-term aims, demonstrating the strategic character of the
Brazil-Chile partnership.
Therefore, Chile became a key nation for building a bridge between
monarchical Brazil and other Latin American republics. Ever since, the
absence of a conflict of interests, of territorial disputes and of mutual
affinities between Brazil and Chile has demonstrated that bilateral relations
should be observed from a public diplomatic approach. Brazil and Chile
developed multi-level cooperation to complement traditional diplomacy and
the two countries consolidated their informal geopolitical relations after the
post-independence period. As Cann (2012) emphasises, non-institutional
388
actors also play a key role, given the growing participation of the media,
political parties, organised interest groups and the Legislative and Executive
bodies in international affairs. In this way, the multi-level nature of BrazilChile relations and the importance of public-private partnerships in bilateral
affairs illustrate the importance of public diplomacy.
Since the post-independence period, Brazil and Chile have enjoyed
significant traditional diplomatic links. An informal bilateral alliance was
important for building proactive public diplomatic relations. Maintaining
this informal bilateral alliance demonstrated the ongoing long-term
orientation of Brazil-Chile relations by contrast to other Latin American
nations. Their mutual trust and perceived friendship was a core component
of the regional geopolitical context. The ABC Pact of 1915 between
Argentina, Chile and Brazil illustrates the commitment to creating stronger
levels of cooperation between the three states. Coordination between Brazil
and Chile in the pre-ABC Pact years endorsed talks and helped strengthen
common positions. The ABC Pact had important results for traditional
diplomacy, counterbalancing Argentina’s geopolitical influence and the
power of the United States in the region. However, the treaty was only
ratified in Brazil and the programme lacked a clear focus; in fact, the
declaration of mutual friendship was more related to public diplomacy,
given the importance of the informal bilateral ties created by the pact. The
period before the ABC Pact provides an opportunity to analyse Brazil-Chile
cooperation from a public diplomacy perception, since the initiative also
demonstrated their informal bilateral links, given the fact that the pact was
never ratified by Chile and Argentina.
In fact, public diplomacy shaped the boundaries of the Brazil-Chile
relationship, even though the post-independence period considered bilateral
links from a traditional diplomacy perspective. From 1870 to the end of the
nineteenth century, the perception of a partnership between Rio de Janeiro
and Santiago, encouraged by rivalry from their common neighbour
Argentina, was in Chilean-Brazilian interests. Therefore, the idea of public
diplomacy explains bilateral relations in a broader perspective. Since this
period, the Brazil-Chile long-term perception of easy communication
directly influenced political relations and the participation of non-official
actors in the long-standing partnership.
While diplomacy is exclusively responsible for managing state-state
389
relations, contemporary diplomacy is shaped by the participation of nonstate actors. Therefore, traditional diplomacy has, to a certain point, seen its
role in the world order lose importance, given the interdependence between
the government and the private sector and between civil society and
institutions. By contrast to what Von Bülow (2010) states, traditional
diplomacy’s role in foreign affairs has not diminished and state
representatives still play an important role, with contemporary international
relations demanding, in fact, a multifaceted approach. Therefore, traditional
diplomacy’s secrecy and exclusivity goes against the current demand that
negotiations and international agreements need to be public. At the same
time, diplomacy cannot be totally open and proper measures should be taken
regarding discretion and publicity. In general, there is consensus, since
Szondi (2008) argues that diplomacy has achieved a much more public
aspect. Foreign policy strategy has had a significant impact on the private
sector and, therefore, public diplomacy also explores the interaction
between the public and private sectors in international affairs.
Public diplomacy has a lot to do with Schneider (2005) perception of the
exchange of ideas, information and aspects of culture. However, new forms
of media communication, such as the internet and intervention in public
opinion make it difficult to maintain a coherent foreign policy. In extremely
large countries like Brazil, domestic political crises, like those during
President Dilma Rousseff’s second term have led to difficulties in
maintaining collaborative diplomatic relations with multiple actors.
Openness and transnational cooperation are key elements to understanding
current international relations as Copper (2003) indicates, whereas the
participation of diverse actors in foreign policy can cause political turmoil,
given the increasing number of multiple voices in international relations.
Whilst the increase of non-traditional issues on the international agenda
favoured closer interaction between official and non-official actors as
Riordan (2005) points out, transnational problems demand the adoption of
collective and coherent approaches. From this perspective, domestic
political instability has generated a difficult scenario for carrying out public
diplomacy, since civil society tends to participate in internal politics. As
Serra (2009) indicates, in the context of a central domestic crisis,
paradiplomatic relations and decentralisation play an important role in
international relations. Despite the political instability of central
390
governments, local governments maintain high levels of cooperation with
decentralised actors. Brazil-Chile decentralised relations illustrate the
capacity of local governments to participate in international affairs despite
domestic political turmoil. The Brazilian 475/2005 Constitutional Amendment Project provides legal support for establishing decentralised
international links, while in Chile, the participaiton of the so-called
‘Intendencias’ and municipalities in international affairs has increased in
recent years.
As Saraiva (2006) states, federal entities have shown more spirit in recent
years, which has facilitated interaction between local governments. The
respective significance of subnational entities in Brazil-Chile bilateral
relations allows for dynamic interaction, like that between the Brazilian
state of Ceará and Santiago de Chile. Subnational ties have emerged to
become an integrated part of Brazil-Chile relations. Apart from diplomats,
subnational authorities have also adopted an active role in bilateral relations.
In this context, public diplomacy and the communications approach are not
the only adequate approaches for analysing Brazil-Chile relations, given the
important interaction between local authorities.
Today, diplomacy operates in a network environment, whereby not only
state-centric but also non-official actors play a relevant role in foreign
affairs as White (2011) and Figueira (2009) highlight. This does not mean
that diplomats and official actors have no direct role in conducting foreign
policy and they continue to engage in the formulation of foreign policy
strategy. However, non-traditional actors from civil society, such as NGOs,
the private sector and individuals, have come to participate more in foreign
affairs, to the extent that diplomacy involves a two-way message. This
means that people have also a ‘voice’ in international relations and exert
influence on how the country’s foreign policy is carried out. People should
have confidence in their country’s foreign policy objectives so as to support
their implementation. Public diplomacy also encompasses what people have
to say in terms of foreign policy creation and implementation. The
international agenda requires collaboration between governments and
decentralised actors in order to deal with emerging issues, such as the
Brazilian Access to Information Law, which shows that diplomacy is open
to participation from society. Indeed, bilateral technical cooperation has
become an important decentralised cooperation initiative, as seen in the
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Basic Agreement on Scientific, Technical and Technological Cooperation in
1998 and the Cooperation Agreement in the Field for the Peaceful Use of
Nuclear Energy in 2002.
Public diplomacy deeply embraces the idea of the need to strengthen the
communication between different actors for a dynamic approach of foreign
affairs. The increasing participation of decentralised actors in the
international community shows that interstate relations cannot be restricted
to a state-centric perspective as long as non-official actors exert an
increasing influence in foreign policy. However, the study of international
relations has still not sufficiently stressed the fact that public diplomacy has
increased in Brazil-Chile relations. In addition, paradiplomacy and nation
branding also play an important role in Brazil-Chile relations, since foreign
investments, tourism, trade and bilateral agreements are core elements in
both countries’ relationship.
In fact, public diplomacy was only taken into consideration in the Brazilian
Ministry of Foreign Affairs (Itamaraty) after it became evident that there
was an increasing interest in sectors of civil society in the way foreign
policy was conducted. In the last few years, the Itamaraty’s efforts to make
its activities more transparent and improve its channels for interaction with
civil society have been seen. The Ministry initiative to promote events, such
as the ‘Dialogue on foreign policy’, on 26th February 2014, encouraging
debate and the like demonstrates a commitment to foster a more open debate
of the country’s foreign policy implementation. The growing participation
of non-official actors has contributed to the adoption of a dynamic approach
of international relations. Nonetheless, official groups still play a significant
role, given the increase in open debates initiatives carried out by
government actors.
Chile focus on an intense trade flux, foreign direct investment activity, free
trade agreements and a network of alliances led to its well-kown pragmatic
approach to foreign affairs. Chilean foreign policy favours so-called
business diplomacy, insofar as public-private interaction is an important tool
in carrying out the country’s foreign policy. The involvement of the local
business community is relevant to the country’s foreign affairs, hence the
lack of significant Brazil-Chile political ties does not mean an absence of
important bilateral relations. As Hurrell (2006) states, international
organisations, NGOs and multinational companies are also important actors
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in international affairs when look at the Brazil-Chile relationship.
The increasing importance of trade, infrastructure and investments in
international relations means that the relationship between states should not
exclusively take into account the state-centric approach, since public-private
partnership has became a relevant component. As Cabral and Weinstock
(2004) argue, bilateral technical cooperation has become a significant
mechanism for strengthening ties. Public diplomacy is becoming an
important part of Chile’s foreign policy, despite the fact that the concept of
public diplomacy has not yet been adopted by the Chilean diplomatic
academy. Chile’s dynamic foreign policy approach allows for links to be
established with the private sector to develop policy strategy without the
official participation of public diplomacy in foreign policy, as occurred in
Brazil.
The collaboration of decentralised actors means that Brazil-Chile
relationship goes beyond traditional diplomatic links, given that the
coordination of projects in the area of trade, investment and infrastructure
are core elements to understanding bilateral relations. However, not
everything is dominated by economic or commercial interests. Both
countries have the same democratic and human rights values, a policy of
non-interference in the international affairs of other states and favour
international security and the peaceful resolution of controversies. Whilst
Brazil-Chile relations remain strongly influenced by the traditional
diplomacy approach, bilateral links cannot only be observed from a classic
diplomacy standpoint, since public diplomacy, paradiplomacy and
presidential diplomacy should be the prevailing concepts when trying to
understand current bilateral relations.
The over-competitive international scenario has led to the growing
importance of the projection of the country’s image as a brand on the world
stage. Although the projection of a nation’s image is not something new, the
field of nation branding has grown insofar as countries have launched
sophisticated brand campaigns to attract foreign investments, trade and
tourism, to improve their private sector’s competitiveness and to secure
geopolitical influence, as stated by Anholt (2005). As long as nation
branding is a relevant marketing concept in the study of foreign affairs,
Brazil-Chile relations cannot be studied without incorporating this
phenomenon into the analysis. Chile’s well-organised economic
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management, respects for institutions and rule of law is widely recognised
by the international market and its foreign policy that focuses on projecting
a nation brand with public-private partnerships should be taken into account
when studying Brazil-Chile ties. Brazil and Chile have not historically
developed strong political ties; however, multifaceted cooperation between
both countries goes hand in hand with the contemporary concepts of public
diplomacy and nation branding.
The famous statement of Baron