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Summary

On January 1, 2007, Luis Inácio Lula da Silva, of the leftist Workers' Party (PT), was inaugurated to a second four-year term as President of Brazil. Lula was re-elected in the second round of voting with fairly broad popular support. His immediate tasks were to boost Brazil's lagging economic growth and address the issues of crime, violence, and poverty. Despite President Lula's significant personal popularity, occasional corruption scandals and inter-party rivalries within his governing coalition have made it difficult to advance his agenda through Brazil's fractured legislature. President Lula has benefitted from a strong economy throughout most of his second term. The global financial crisis, however, has slowed Brazil's economic growth and is threatening to erase some of the social gains made in recent years. President Lula has implemented countercyclical policies to boost the economy and protect those most exposed to the effects of the economic downturn. These actions appear to have been reasonably successful, as a number of analysts believe the Brazilian economy has already begun to recover. During the first Lula term, Brazil's relations with the United States were generally positive, although President Lula prioritized strengthening relations with neighboring countries and expanding ties with nontraditional partners, including India and China. Brazil-U.S. cooperation has increased during President Lula's second term, particularly on energy issues. Two presidential visits in March 2007 culminated in the signing of the Memorandum of Understanding (MOU) Between the United States and Brazil to Advance Cooperation on Biofuels; the agreement was expanded in November 2008. President Obama has made strengthening U.S.-Brazilian relations a major part of his policy toward Latin America, meeting with President Lula a number of times since his inauguration. While several differences between the countries have emerged in recent months, Brazil-U.S. relations remain friendly. The 111th Congress has maintained considerable interest in Brazil. On March 12, 2009, a resolution was introduced in the Senate (S.Res. 74, Lugar) that would recognize the importance of the U.S.-Brazil partnership and call on the U.S. Treasury Secretary to pursue negotiations concerning a bilateral tax treaty. The Western Hemisphere Energy Compact (S. 587, Lugar)-- which would provide $6 million to expand U.S.-Brazil biofuels cooperation in FY2010--was also introduced on March 12, 2009. An international custody case involving Brazil has been another concern of Congress. Both the House and the Senate passed resolutions (H.Res. 125 and S.Res. 37) in March 2009 calling on Brazil to comply with the requirements of the Convention on the Civil Aspects of International Child Abduction and to assist in the safe return of Sean Goldman to his father in the United States. On June 4, 2009, H.R. 2702 (C. Smith) was introduced in the House. The bill would suspend the Generalized System of Preferences for Brazil until the country meets its obligations under the Convention on the Civil Aspects of International Child Abduction. This report analyzes Brazil's political, economic, and social conditions, and how those conditions affect its role in the region and its relationship with the United States.

Related Legislation:
• S.R.74
• S.587
• H.RES.125
• H.R.2702

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