Foreign Policy / Politics

Historic Brazilian Loss Bodes Well for US

The United States’ 1-0 blunder against Germany on June 26th appears to be an achievement following the 7-1 drubbing suffered by Brazil at the hands of the Germans yesterday. Tears and disbelief filled the minds of onlooking fans as native Brazilians watched their country suffer the worst semi-final loss in World Cup history. Brazilian defender Marcelo Vieira da Silva emphasized the embarrassment faced by the Brazilian nation, describing the defeat as “the worst day of our lives”. The Brazilian defeat will certainly cause many negative emotional and political repercussions amongst Brazilians, however, the loss may prove to have a positive political influence on the United States.

Brazil is one of the fastest-growing nations in the world, currently listed as the “world’s seventh largest economy and the United States’ eighth-largest merchandise trading partner” according to the US Department of State . Two-way trade between the US and Brazil amassed $76 billion in 2012 en route to the United States’ recordation of an astounding $11.6 billion in trade surplus during the same year.

Brazil represented the sixth highest market surplus for the United States in 2012, however, US surplus with the Portuguese-speaking nation fell substantially following American whistle-blower, Edward Snowden’s, release of classified NSA files on June 12, 2013. Snowden’s leaks found the United States guilty of tapping phone calls from Brazilian President, Dilma Rousseff, popular Brazilian oil company, Petrobras, and millions of Brazilian citizens.

Outraged, Rousseff, the nation’s first female President, promptly cancelled a planned visit to the United States and accepted a $4.5 billion contract with Swedish manufacturer, Saab, rather than American manufacturer, Boeing, for Brazilian jet engine production.

Relations between the US and Brazil appear to be slowly mending, however, upon his recent visit to Brazil, Vice President Joe Biden’s attempts to mend relations with Rousseff appeared to have minimal effects. Rouseff, much to Biden’s dismay, “did not appear anxious to return to relations with Americans in any way, nor did she seem ambitious to return to previous trade agreements.”

Fortunately for Americans, Rousseff is up for re-election this fall, and her approval rankings are quickly plummeting. According to a March opinion poll Rousseff’s current approval rating is 36%, a sharp 7% decline from 2013’s 43% approval rating.

Many have equated the sharp decline in Rouseff’s approval rating with the vast Brazilian spending in anticipation of hosting the World Cup. To date, Brazil has spent over $11 billion on the World Cup, $3.6 billion of which was spent on 12 soccer stadiums that will have no long-term future value to the nation.

Drastic World Cup spending has been the source of multiple Brazilian riots over the past year. Thousands of Brazilians filled the streets of Rio de Janeiro in early 2013 to voice their disapproval towards government spending on stadiums that will have no long-term economic impact for the state. Additionally, Brazil will receive none of the profit margins from ticket and merchandise sales within the stadiums which they constructed. The Fédération Internationale de Football Association (FIFA), the organization responsible for the World Cup, keeps all benefits tied explicitly to the World Cup. The supposed non-profit organization deemed that host nations should benefit through increased tourism and publicity, however, hundreds of thousands of Brazilians disagreed, resulting in riots and Rouseff’s plummeting approval rating.

Brazil’s embarrassing loss yesterday to Germany may have been enough to sink Rouseff’s political career. Turmoil has already ensued in Brazil, as seen through recent riots, including one which saw the burning of a public bus transit. Brazil’s recent downfall is one which no nation would wish upon another, however, if opposition Eduardo Campos or Aecio Neves were somehow able to leverage public opinion and overtake Rouseff in the fall, increased trade, tourism, and positive externalities may arise within the American economy.

To many Brazilians, soccer is a form of religion, however, given Brazil’s investment to the 2014 World Cup, soccer has become politics, and the political repercussions of Brazil’s defeat may fare well for US foreign policy.