Global tensions over Iran’s nuclear program coincided with Brazil’s rotating two-year seat on the UN Security Council, where securing the votes for a sanctions resolution on Iran topped Obama’s agenda. Lula and Amorim saw sanctions as a slippery slope to war and wanted to protect Brazil’s own right to a peaceful nuclear program consistent with the Nuclear Non-Proliferation Treaty. Brazil, moreover, long has seen itself as mediator and bridge between the old powers and the new. Brasilia calculated that success in bringing Tehran to the negotiating table might pave the way to a permanent Security Council seat and prevent or at least slow the momentum toward a direct conflict between Iran and the West.

Moreover, Lula believed he had a tacit green light from the White House when, with Turkey’s help, he revived an earlier U.S.-supported proposal to have Tehran send its uranium outside of Iran’s borders to be enriched for civilian purposes. Washington did not expect these efforts to succeed. Thus, when Lula, Turkish prime minister Recep Tayyip Erdogan and Iranian president Mahmoud Ahmadinejad proposed a nuclear-fuel-exchange deal in May 2010—without giving Washington advance notice—the response at Foggy Bottom was surprise and anger. Irritated by Brazil’s lack of deference to U.S. leadership and convinced Lula’s team had fallen for an Iranian stalling tactic, Washington moved forward with its UN sanctions resolution and publicly upbraided Brazil. To avoid appearing an opportunist to the developing and non-Western world, Lula instructed his diplomats, long accustomed to the more polite abstention, to vote no on the resolution. Combined with the flap over Honduras, this incident left considerable bad blood between the White House and Lula’s government.

IT TOOK the inauguration of a new president, Dilma Rousseff, in January 2011 for Washington and Brasilia to begin recovering from the conflict over Iran. Rousseff rapidly changed the tone and substance of Brazil’s foreign policy in ways that encouraged Foggy Bottom. A victim of torture, she publicly condemned the stoning of women in Iran and voted to appoint a special rapporteur for Iran in the UN Human Rights Commission. She appointed Antonio Patriota, Brazil’s ambassador in Washington under Bush and Obama, as her foreign minister. And she moved quickly to restore diplomatic relations with the new government in Honduras. Within a year, the United States and Brazil would negotiate a deal to avert close to $1 billion in Brazilian duties on American exports to compensate for Washington’s cotton subsidies. Distancing herself, moreover, from some of the high-wire foreign-policy initiatives of the previous administration (in which she had served as Lula’s chief of staff and energy minister), Rousseff made clear that her top priorities lay on the home front: growth with social inclusion, progress in eliminating poverty, reducing inequality and—to move Brazil up the value-added chain—investments in infrastructure and education to foster innovation in science and technology.

Foreign policy thus became a more direct extension of her domestic agenda. Her priority list featured global finance, climate change, energy, Security Council reform, and managing relations with China and the United States. China has become the largest source of foreign investment in Brazil and a top consumer of Brazilian commodities such as soy, iron ore and oil. But Chinese currency manipulation had weakened the Brazilian real and reduced the competitiveness of Brazilian exports. The United States, meanwhile, offered a natural market for Brazilian capital and commerce but protected its farm and ethanol industries, just as Brazil did. From China, Rousseff needed currency reform; from the United States, she needed market access, financial stability, and entrée for Brazilian students to American educational and scientific institutions. Her “Science without Borders” program allocated $1.2 billion to send one hundred thousand undergraduate and graduate students abroad, mainly to the United States.

The ubiquitous nature of Lula’s foreign policy and the prior clash over Iran also prepared the Obama and Rousseff administrations to deal smoothly with disagreements over new international-security crises. Indeed, Rousseff’s initial attempts to bury the hatchet over Iran in the first months of her administration coincided with the outbreak of civil war in Libya and the controversy over American military involvement. During Obama’s March 2011 visit to Brazil, he announced somewhat awkwardly the beginning of limited American military operations to support the insurgency against Muammar el-Qaddafi. Rousseff chose not to pick a direct fight. Instead, she used the remainder of Brazil’s stint on the Security Council to advance the goal of Council reform by engaging emerging democratic nations, established powers and developing countries. As civilian casualties mounted in Libya, moreover, Patriota and Rousseff circulated a proposal to amend the “responsibility to protect” doctrine with an iteration they dubbed “responsibility while protecting.” The proposal called for a greater focus on mitigating humanitarian casualties such interventions were intended to avert. Brazil received a serious hearing for its ideas, and Washington began to accept that Brazil and other major democratic powers such as India and South Africa would insist on reform and resist automatically conforming to the received wisdom of the established powers.

Despite differences over Libya and Syria, both Obama’s visit to Brazil and Rousseff’s later visit to the United States in April 2012 took ideology largely off the table. And in December 2011, Congress finally ended—with White House backing—its subsidies for corn-based ethanol, long a major issue for Brazilians seeking access to the American market for their own sugar-based ethanol products. But precisely because Brazil lives in a peaceful, nonnuclear and democratic neighborhood, the Obama administration stopped short of a Brazil strategy worthy of its potential. Both countries now participate in a host of joint dialogues, clearly viewing the convergence of interests, where possible, as a plus. They cooperate on matters that include biofuels, tropical-medicine initiatives in the Caribbean and Africa, and drug interdiction in Bolivia; they disagree on Cuba, where Rousseff has made clear that she considers Washington’s approach toward Havana counterproductive. But the United States pointedly avoided endorsing Brazil’s case for a seat on a reformed UN Security Council, in contrast to backing nuclear India’s identical claim. Meanwhile, a skeletal defense-cooperation agreement negotiated under George W. Bush lost some muscle when the Pentagon, after an aggressive anti-Brazil lobbying campaign by Hawker Beechcraft, canceled a pending contract to purchase aircraft from the Brazilian aviation company Embraer.

The perennial second-class status afforded to Latin American affairs—even when it comes to such an important power as Brazil—came into full relief during Rousseff’s 2012 visit to Washington. Notwithstanding the Obama administration’s commitment to working in a world of emerging powers, Brazil’s foreign-policy independence and implicit geographic and thus bureaucratic determinism within the interagency process appear to disqualify it from full diplomatic treatment. Still, while Brazilian diplomats and presidents may bristle at such slights, they recognize that this distance from the United States affords Brazil the space to autonomously pick and choose its foreign-policy objectives in order to propel its domestic priorities.

COLOMBIA, WHERE Washington has invested over $7 billion in counternarcotics and counterinsurgency programs since 1999, has traditionally been much more dependent on the United States than Brazil. Yet under the leadership of its president, Juan Manuel Santos, Colombia has sought a degree of independence from Washington after years of ideological intimacy. With the strategic upper hand on the battlefield against the Revolutionary Armed Forces of Colombia (FARC), Colombia’s primary Marxist-Leninist insurgency force, and with bona fides from his time as defense minister to the hard-line president Álvaro Uribe, Santos broke with Uribe—and to some extent with Washington—in order to end his country’s internal conflict and Colombia’s isolation from its neighbors. He worked out a modus vivendi with Venezuela’s Chávez after years of tension. The result was restored bilateral trade, joint extraditions, tighter security on the country’s porous two-thousand-mile border and an effort, facilitated at Santos’s request by Cuba, to press the FARC into talks with the Colombian government.

At first thrown off by Santos’s autonomy, the Obama administration adjusted quickly and successfully sought from Congress approval for the languishing free trade agreement negotiated by George W. Bush. Likewise, Obama continued a steady reduction of security resources devoted to Colombia—while pushing a willing Bogotá to export its U.S.-funded antidrug expertise to Central America and the Caribbean.

Santos also added his name to the growing list of current and former Latin American heads of state that question America’s largely ineffectual three-decade-long approach to interdicting narcotics flows. President Obama listened to their critique and boosted funds for treating American drug habits as a public-health challenge, not just a matter of law and order. Yet he rejected their call for legalization or “harm reduction” strategies, arguing that legalization would not address the underlying economic and institutional weaknesses that help power the illicit, transnational drug trade.

Going forward, the passage of marijuana-legalization laws in Colorado and Washington might afford the United States greater leeway to reconsider the basic precepts of the drug war. Thus far, however, a belief within the bureaucracy in the lessons of Plan Colombia’s counterdrug strategy coupled with understandable anxiety over levels of violence near the Mexican border and in Central America, led Obama to extend, in slightly amended form, the Mérida Initiative assistance programs for Mexico he inherited from Bush. The effectiveness of these efforts has been widely questioned by human-rights activists concerned by the collateral damage accompanying a militarization of the drug war.

Image: Pullquote: Latin America and the Caribbean, with a population of roughly six hundred million and a GDP of more than $5.6 trillion, continue to represent a missed U.S. opportunity, economically, politically and diplomatically.Essay Types: Essay