Wednesday, January 25, 2012

Obama: harming America at every turn

U.S. 'Reset' Backfires As Brazil Turns To China

Diplomacy: President Obama earlier this year hailed a new era of energy cooperation with Brazil, vowing to make America Brazil's best customer. Brazil's response? To sell its oil to China. So much for the "reset" in relations.

Hailing Brazil as "a global leader" in a visit so important to him he refused to postpone it even though it happened on the same March day he was sending U.S. troops into harm's way in Libya, Obama put Brazil on a pedestal.

"It's time for the United States to treat our engagement with Brazil on economic issues as seriously as we do with nations like China and India," he declared on arrival in Brasilia. "The United States doesn't simply recognize Brazil's rise; we support it enthusiastically."

Around the same time, his U.S. Export-Import Bank announced $2 billion in U.S. trade credits to develop Brazil's oil, and an additional $1 billion for its infrastructure, declaring Brazil "a top priority." And an Ex-Im Bank source volunteered to IBD that that amount could go way higher — in the neighborhood of $20 billion.

"We want to help you with the technology and support to develop these oil reserves safely, and when you're ready to start selling, we want to be one of your best customers," Obama told Brazil.

Ten months later, what does Obama have to show for this? A Brazil that has dismissed the U.S. as a lightweight and opted to sell its oil to China instead.

That's right, China has bought up a 40% stake in Repsol-YPF's Brazil unit, which has dibs on drilling the Santos Basin offshore, where the biggest deepwater discoveries are being made, as well as a 30% stake in Galp Energia, a Portuguese company also with rights to the same basin, according to the Washington Times.

It's signed two big energy cooperation agreements with China's state oil companies, while China has pledged $10 billion in development credits.

It's a stunning repudiation of President Obama that shows the U.S. has lost influence and desirability as a partner, something that until now had been an absolute given in foreign affairs. Naivete and domestic priorities have lots to do with this historic snub.

First, Brazil, unlike Canada, is not an ally, and as a matter of fact owes us nothing. One showy visit by a U.S. president does not an alliance make.

Obama has naively considered Brazil a natural ally out of solidarity for its democratic-left government. That doesn't translate into the same policies.

Brazil's president, Dilma Rousseff, fiercely favors Brazilian energy projects. Obama, by contrast, halts U.S. drilling. As leftists, both seek to cut America down.

Brazil does that by making itself bigger. Obama slavishly follows the green prescriptions of cutting energy development in the U.S., from the Gulf to the Keystone XL pipeline from Canada.

Obama offered a "green energy partnership" and to help Brazil develop "in an environmentally responsible manner." Brazil decided China was a better bet.

Second, Brazil sees its energy development as a logical course for a booming nation of 200 million people. As it doesn't have dibs on Saudi, Mexican or Canadian oil, it knows it's on its own for energy. Brazil saw how Obama snubbed our neighbor and ally to the north on the Keystone Pipeline. If Obama would snub a close and friendly energy supplier like Canada, why would he treat Brazil any better as a customer?

Third, Brazil sees that the U.S. has vast energy resources and technical expertise to develop it and may be betting America will get a new president who will open the U.S. gates to energy production — in which case, the U.S. may not need to be Brazil's "best customer."

China, by contrast, doesn't have such options. It's desperately snapping up whatever supplies it can lock in, across Africa, Asia and the Americas. A desperate customer may be a better one.

All of this underlines how Obama has failed in his aims to push the reset button on Brazil relations, which have always been friendly but distant.

Now that he's been taught a lesson by them, isn't it time for him to start thinking about energy security in serious terms — with local and Canadian sources?

Brazil might just respect him for it.

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