Brazil’s Active Non-Alignment Strategy: Prize or Peril?
How will Brazil's 'active non-alignment' strategy shape its global relationships amid rising global tensions?
Over the next two years, Brazilian foreign policy will very likely continue to follow a path of multilateral engagement. President Luiz Inácio Lula da Silva’s (Lula) foreign policy approach of "active non-alignment" is being driven by a strategy to engage with a wide spectrum of global actors while avoiding entanglement in the rivalries of major powers.
This approach aims at fostering economic diversification and independence while reducing the vulnerability of Brazil being beholden to a single global power. While Brazil’s relationship with regional economies are important, this report will focus primarily on its foreign policy vis-a-vis the US and China.
Recent actions by Brasília exemplify its dedication to maintaining strategic neutrality across various issues that often necessitate a clear position. For instance, Brazil has:
Refused to join Western efforts to arm Ukraine, but was also the only BRICS nation to support the UN resolution demanding a withdrawal of Russian troops.
Authorized the docking of Iranian naval ships, while maintaining its commitment to non-proliferation and supporting peace in the Middle East.
Joined OPEC+ but has stressed it does not contradict the country’s commitment to being a green power and the host of COP30 next year.
Supports the idea of developing nations creating alternative frameworks for global governance but harbors concerns regarding the expansion of BRICS.
This is a stark divergence from Lula’s predecessor, Jair Bolsonaro, who took a more isolationist approach to foreign policy. The current administration has also worked to repair the antagonism generated by the previous government created by its rhetoric towards China.
As Brazil's - and South America’s - largest trading partner, policymakers have no interest in isolating their primary patron. Fundamentally, Brazil’s relationship with China is primarily economic. China purchases approximately one-third of all Brazilian exports.
However, this trade dynamic has created a strong dependence on Brazilian commodities and simultaneously led to the growth of a powerful pro-China lobby in Brazil. The agribusiness sector’s interests in maintaining good relations with China manifested in their pushback against Bolsonaro’s aggressive posture.
Local Brazilian politics are being influenced by the trade dynamics with China: the strong economic connection constrains the policy options leaders can explore if it goes against the interests of the players in the current trading paradigm.
This dynamic may be reinforced if US-China relations deteriorate under another Trump presidency and a resumption of the trade war. In that scenario, China would deepen agricultural trade ties to Brazil and increase Beijing’s economic coercive capacity.
Despite the existence of a strong pro-China faction, skepticism about China's global conduct persists among many Brazilians, who often view the United States as a more reliable partner in matters of security and peace.
Therefore, just as Brazil’s domestic politics make it difficult for its leaders to distance themselves from Beijing, so too do they make it unlikely Brazil will get too close to China. In addition to trade, both China and the United States play crucial roles as major sources of investment in Brazil.
Since 2007, Chinese firms have channeled approximately $71 billion into the region’s largest economy. The United States leads as Brazil's primary source of foreign investment, with cross border capital flows totaling $191 billion in 2021.
Brazil is financially and economically motivated to avoid aligning exclusively with a single superpower and to resist allowing one state to dictate its interactions with another.
And despite calls for dedollarization and democratizing global governance to reduce Washington’s unilateralism, they are keen to continue engaging with the US. Brazil's quest for self-reliance has sharpened against the backdrop of the intensifying standoff between the U.S. and China, and the driving force behind that autonomy has been its growing political and economic stature.
Brazil’s ability to implement active non-alignment strategies is therefore predicated on its diversified economic relationships as a geoeconomic hedging strategy to allow room for geopolitical maneuvering. Domestic fiscal and monetary policy will therefore be crucial to understand not just the macroeconomic dynamics themselves, but how they influence Brazil’s foreign policy.
For a deeper understanding of how Brazil's domestic policy complements its foreign statecraft, stay tuned for next week's article on the internal strategies shaping Brazil's path on the global stage.