DRAFT DO NOT QUOTE OR REPRODUCE

EU s foreign and development policy towards Brazil: Bilateralism or Interregionalism? IPSA 2016, Poznan, 27 de Julio, 15.30 EU s foreign and development policy towards Brazil: Bilateralism or Interregionalism? Author: Dr. Susanne Gratius Abstract: DRAFT DO NOT QUOTE OR REPRODUCE Brazil and the EU established diplomatic relations in 1960. Asymmetric relations between both partners developed at two separated levels: inter-regionalism and bilateralism. In 2007, stagnating EU-MERCOSUR negotiations on a free trade Association Agreement and the increasing role of Brasilia as the voice of the global South motivated the EU to define Brazil as a Strategic Partner. However, different to other Strategic Partners of the EU like Canada or South Africa, Brazil has neither signed a free trade agreement with Brussels nor did its international positions converge with those of the EU. Two reasons might explain the relatively low level of relations during the PT governments (2003-2016). One was Brazil s ideological foreign policy shift towards the emerging South and its integration in the BRICS group under the Lula government, and the other the ambivalent perception of the EU as a bilateral (strategic) and an inter-regional (MERCOSUR) partner. The paper argues that the simultaneous policy of bilateralism and inter-regionalism has been a major obstacle for the signature of a free trade agreement or a closer approach on developmental issues. Based on the traditional academic debate on interregionalism and more recent studies on Strategic Partnerships, the article seeks to identify how both levels of relations interact and if, in the case of Brazil, bilateralism will replace inter-regionalism as a new foreign policy and development strategy of the EU to address emerging powers. Session Type: CS04 International Relations Requested Panel: Governance in the Euro-Latin American Space Language: English Introduction Brazil s deep political and economic crisis undermines its credibility as an emerging power and a strategic partner of the EU. The instable and unpopular government of Vice-president Michel Temer who replaced Dilma Rousseff after her impeachment in May 2016 will probably not solve the critical situation of the country in the last two 1

years. Recession reached -3.5% in the first semester of 2016, inflation rate rose as well as unemployment. Consequently, south-south relationships lost their weight in foreign policy, while traditional partners and particularly the United States rank, again, high on Brazil s external agenda. The EU is also not in a good shape. The victory of nationalists in the popular referendum on the British membership in the EU, no government in Spain since Parliamentary elections in December 2015, and the refugee crisis combined with the rise of right-wing political parties and modest growth rates create new problems to an already paralyzed EU. Similar to Brazil, domestic priorities concentrate the political agenda of the European Union, and there is little room for an up-grading of foreign policy despite the debates of the EU s Global Strategy (Missiroli 2015) that might conclude in autumn 2016. Since 1999, Brazil participates in stagnating EU-MERCOSUR negotiations on an association agreement, and for nearly ten years, it is a Strategic Partnership of the EU. Vice-versa, Brazil established half of its 22 Strategic Partnerships with European counterparts (Costa Vaz, 2014): one with Brussels and another ten with individual countries (Finland, France, Germany, Italy, Norway, Portugal, Spain, UK, Sweden, and Switzerland). The multi-level relationship and the lack of a free trade agreement prove the dominance of bilateral patterns in EU-Brazil relations, a trend that has been reinforced by the EU s Global Strategy. In midst of political turmoil in Brazil and in the EU, there are three main arguments for a revitalization of relations First, the transitional government of Michel Temer and its close relationship with the private sector will push for trade liberalization and the end of state interventionism in the economy. Second, China s role as the most important export market of Brazilian primary products reduced the traditional conflict on EU agriculture subsidies. Third, an expected foreign policy change in Brazil away from the BRICS and in favor of a stronger partnership with the EU and the United States might create a new moment for a bilateral EU-Brazil free trade agreement or for interregional negotiations between MERCOSUR and the EU under the governments of Macri in Argentina and Temer in Brazil. Nonetheless, there are also arguments against the revitalization thesis. The lack of mutual strategic priorities and the concentration on domestic concerns in both Brazil and the EU diminish the prospects for visible progress in relations, as well as the severe economic crisis in Brazil, together with relative economic stagnation and protectionism in the Euro zone. The broad umbrella of Strategic Partnership with Brazil includes two competing foreign policy patterns of the EU: bilateralism and inter-regionalism. Rather than complementary policies, the simultaneous strategy of bilateralism and interregionalism seems to be major obstacle in relations between the two highly asymmetric partners. In the case of emerging regional powers of the South like Brazil, bilateralism looks like a better instrument than inter-regionalism to make visible 2

progress in cooperation. Strategic partnerships represent an important instrument for bilateral convergence. From the perspective of Brazil, bilateralism and a horizontal dialogue with the EU represent the recognition of its regional and global leadership role, while interregionalism suggests a non existing power balance between Brazil and the other four MERCOSUR member states Argentina, Paraguay, Uruguay and Venezuela. To single out Brazil by a special bilateral relationship is also an advantage for the EU, first, because of the country s leadership position in MERCOSUR and, second, because of its role in the powerful BRICS group of countries. 1. Two actors in crisis: an uncertain transformation 1.1. Domestic problems in the EU and in Brazil Brazil and the EU are two partners in crisis. The EU s survival as the world deepest integration process is endangered by three factors. First, the decision of 51.9% of British citizens to leave the European Union in the referendum held on 23 June 2016, that might inspire other member states to follow this path. Second, the rise of rightwing political parties as a reaction to a massive wave of 1.5 million refugees from fragile states and the poor management of the immigration flow on behalf of the EC and Germany. Third, the modest economic outlook in most EU member states before and after the British decision to leave the integration process threatens to further paralyze European integration. The lack of a strong political leadership in the EU provoked the come-back of nationalist policies and weakened the capacity and autonomy of supranational institutions like the European Commission to further advance integration and of the European Central Bank to stabilize the Euro zone. Nonetheless, paradoxically, in midst of turmoil, the European External Action Service (EEAS), now under the leadership of Federica Mogherini, gained in autonomy and capacity to manage international crisis and to define the external priorities of the EU by the Global Strategy s key external and security priorities. The political crisis in Brazil before and after the impeachment against Dilma Rousseff in May 2016 (Ayuso, 2016) ended with the interim government of former Vice-President Michel Temer that is still struggling for recognition, and a displaced President Rousseff denouncing a constitutional coup and fighting for her come-back. Charges of crime of crime of de responsibility against President Dilma Rousseff, approved by both Chambers of Congress, will be investigated in the next six months. In the meantime, interim government of Michel Temer introduced major changes in foreign policy that might affect the Strategic Partnership with the EU. This happens in a context of uncertainty. The return of Roussef, accused of irresponsibility by unilaterally approving debt services in midst of Brazil s most serious economic crisis, is as unlikely as the continuation of the Presidency of her unpopular successor Michel Temer from 3

the conservative PMDB party whose government will be transitional until the celebration of new elections. During the Presidency of Dilma Rousseff, the deep recession of -3.8 GDP in 2015, high inflation rates and rising unemployment began to reverse the positive trend towards poverty reduction and per capita income from 13.200 in 2011 to 8.600 dollar in 2015. The consequent social decline changes Brazil s positive performance as an emerging player in the international scene and one of the few successful developmental states in Latin America (Tepperman, 2016). Under Lula s and, less visible, during the Presidency of Dilma Rousseff, south-south cooperation with new global powers replaced the country s traditional identity as a Western ally and introduced a new paradigm of Brazil as a leading voice of the global South balancing US power (Hurrell 2006). The new narrative of Brazil as an emerging regional and global power was fostered by its active role in the BRICS group and a stronger political and economic alignment with China. This radical foreign policy shift generated an ideological debate in Brazil between autonomists and liberals (Saraiva Gomes, 2012) and might have contributed to the restoration of the ancient regime. 1.2. Brazil s return to the liberal Western alliance Interim Foreign Minister José Serra represents the come-back of the Brazil s foreign policy of Western alignment and liberal realism. In his inaugural speech (Serra, 2016), the former Minister of Health announced to reduce the strong PT s influence under the Presidencies of Lula and Dilma by a new, de-ideologized foreign policy based on ten liberal and realist principles 1. These translate into a value oriented, pro democracy and human rights policy; a leadership position in climate change negotiation and clean energies; a strong defense of economic interests; the attraction of investment to modernize infrastructure and reduce the custo Brasil ; a rapprochement to the Pacific Alliance (Chile, Colombia, Mexico and Peru); and trade negotiations with the United States, China, the EU and Japan. Following this liberal realist approach, at the end of May 2016, Minister Serra announced the possibility to sign a bilateral free trade deal with the United States and disqualified MERCOSUR as an obstacle for commercial agreements (El Diario, 22 May 2016). The powerful business association FIESP in Serra s hometown Sao Paulo strongly supports this option while the national confederation of industries (CNI) is rather protectionist. Serra paid his first official visit to Argentina at the end of May and agreed with the conservative government of President Macri on a new more liberal approach to MERCOSUR. 1 De-ideologisation and transparency, defense of democracy and human rights, leadership on climate change and clean energies, constructive engagement in regional and international organizations, bilateral trade deals, export promotion, recovery of liberal principles in relations with Argentina and Mercosur, reactivation of economic relations with the United States, Japan and the EU, economic interest based south-south cooperation and the participation of the private sector and foreign investment to modernize the Brazilian economy (Serra, 2016). 4

The radical shift in Brazil s foreign relations, from the Southern BRICS focus chosen by Lula in 2003, to the reestablishment of traditional partnerships with the United States, Japan and Europe reflects the predominance of Presidential preferences and ideology in foreign policy, where the influence of the executive branch is still much higher than in other policy fields. It is unclear how long the interim government will last and if the foreign policy reorientation will have any practical consequences until the political crisis in Brazil is solved. 1.3. New uncertainties in relations The EU s Global Strategy and the need for new export niches, combined with Brazil s new liberal government and the possible re-launch of MERCOSUR as a global economic opportunity, opens a new window of opportunity for a free trade deal. The announcement of individual or collective negotiations with the United States would connect Brazil, following the path of Chile, Mexico and other Latin American countries, to the Transatlantic Trade and Investment Partnership (TTIP) that Brussels and Washington negotiate since 2013. But mutual uncertainties rose serious doubts about the scenario of closer ties. First, aware of the crisis in Europe, Brazil s new foreign policy seems to focus on the United States and not on its main economic partner, the EU. Second, the EU s Global Strategy does not include any hint on the future of relations with Brazil, considered as a second tier power in the geopolitical and geo-economic puzzle of the EU, and not even mentioned in debates (Missiroli, 2016). Third, the economic crisis in Brazil and governance uncertainties, combined with the political polarization between PT members and the former opposition, conspire against a clearer commitment of the EU in Latin America s biggest economy. Finally, none of the two actors defines the other as a strategic priority. In case of the EU, the lack of strategic thinking has to do with internal power games between the different levels of foreign policy governance (Smith, 2004) and the problems of defining collective strategic priorities beyond the EU s immediate and near neighborhood. Given that the EU is still a regional and much less a global actor, its relationship with Brazil and Latin America represents an interesting test-case for its future as a global power. 2. Multi-level EU-Brazil relations: strengths and weaknesses Different to other public policies, multilevel governance In foreign policy means the coexistence and decision making between the EU s supranational dimension or Europeanization (European Commission, EC and the European External Action Service, EEAS), the bilateral level of Member States (and their Strategic partnerships with Brazil), the local or regional politics in some areas such as environment or development and the global playground of international organization in certain policy fields. Preferences in these levels are influenced by non-state actors and lobbies. 2.1. EU s multi-level governance versus Brazil s realist foreign policy 5

The complexity of multilevel governance in EU-Brazil relations increases by a misperception between both actors: Brazil follows a realist tradition of diplomacy (Gomes Saraiva, 2012: 46) focused on bilateralism with individual countries (mainly France, Germany, Portugal, Spain and the UK), while in most sectors the EU represents de jure a collective actor beyond national interests. An additional obstacle to fluent relations at all levels of relations poses Brazil s polarized foreign policy (Gomes Saraiva 2012: 48) between the search for developmental autonomy under the PT Presidencies (2003-2016) and liberal realism that prevailed in all former governments. Liberal realism is, again, the preferred option of President Michel Temer and his foreign minister José Serra. This foreign policy shift from developmental to liberal realism (Merke, 2008) might introduce major changes in Brazil s relations with the United States, but not necessarily in its partnership with the EU. Nonetheless, the likely re-alignment with the West and the shift from balancing to band-wagoning (Hurrell 2006) open new opportunities for cooperation on global governance. In EU-Brazil relations, the most important layers are, first, the supranational dimension, second, the bilateral level of relations between countries, third, the regional cooperation between EU and MERCOSUR and fourth, the global governance level of relations in international organizations and forums. The article will apply these four levels to the following policy fields: trade (exclusive supranational, inter-regional and global), investment (supranational and national), development (supranational, local and national), environment (all levels), security (national), and global governance (supranational, national, international). These issues are the most relevant and promising of the 30 sectorial dialogues including environment and climate change, the UN, human rights, finances, drugs, disarmament, peace and security, social policies, trade and energy. 2.2. Trade and investment: asymmetric inter-regionalism Inter-regionalism is rather a brand of the EU than an efficient formula for trade negotiations. There are very few exceptions to that rule. One of them is the EU s collective free trade agreement with Central America, although even the United States decided to choose the same formula to avoid six bilateral negotiations with dwarf states. EU negotiations with the Andean Community failed as well as similar deals with the Gulf States, ASEAN, MERCOSUR and other Southern trade blocs. Together with investment, trade is the core element in EU-Brazil relations. The EU has a share of 20% of Brazil s imports and exports and is its first commercial partner, slightly before China and the US. Until 2014, Brazil ranked nine in the EU s hierarchy of trade partners, and declined to the 11tn position as a consequence of the economic crisis. In trade affairs, the EU acts as a unique actor. Because of Its hardliner negotiation position on the two core issues agriculture and services, Brazil perceives the EU as a rather negative partner (Gomes Saraiva 2012: 46). 6

During the 1990s, MERCOSUR was the EU s first partner in Latin America that started an inter-regional negotiation process on a association agreement including free trade. In 1999, when the process was officially launched at the EU-LAC-Caribbean Summit in Rio de Janeiro, MERCOSUR was an attractive platform for EU investment and trade. At that time, the EU privileged inter-regional relations with similar trade blocs and had little interest in fostering bilateral ties with countries in the far South. The bloc s first period was a full success and integration advanced faster than expected. In 1995, MERCOSUR at that time integrated by Argentina, Brazil, Paraguay and Uruguay established itself as a customs union with external tariffs. But EU s logistical support and initial enthusiasm vanished soon, when Brazil suffered, three years later, a severe devaluation of the real and, in 2002, followed the dramatic financial collapse in Argentina that paralyzed MERCOSUR for several years. Simultaneous trade negotiations with the EU had also been affected by the negative impact of national economic crisis in Brazil and later on in Argentina. In 2004, both partners reached an important step forward, when they presented their trade offers to the EU. The same year, both partners agreed to condition an inter-regional deal to the outcome of WTO negotiations and a successful conclusion of the Doha round. This attempt to shift from an inter-regional to the global level failed in 2008, among other reasons because of the disagreement between Brazil (under Lula) and the EU on agriculture subsidies and lower tariffs for industrial products. The obstacles are well known and could be summarized by the zero-sum-game logic: the main gains of the EU in services and industrial goods are the main losses of MERCOSUR and, vice-versa, the most important benefits of MERCOSUR in agriculture pose the main risk to the still strong European-French agriculture lobby in the EU. The extremely critical Resolution of the European Parliament in March 2013 proves the powerful opposition to a free trade deal with MERCOSUR that could negatively affect a weakened European economy. Apart from mutual fears and threats, a free trade deal stagnated for other important reasons. The EU s formula of bloc-to-bloc negotiations is highly asymmetric. Its counterpart MERCOSUR is a much less advanced integration process, that does not foresee any kind of pooling sovereignty neither supranational institutions like the European Commission exclusively responsible for the trade part of an agreement with MERCOSUR. 16 years of unsuccessful negotiations allow the conclusion that the dialogue formula 1 + 4 (Venezuela is not fully integrated) does not work. Additionally, the European Commission as an institution that subsume the interests of 28 States and the world s first commercial bloc is too powerful compared to the rather weak national governments and individual trading partners Argentina, Brazil, Paraguay, and Uruguay. On the other hand, the lack of a common trade policy in each sector and a large number of exceptions in others rest credibility to MERCOSUR as a bloc or, as inter- 7

regionalism suggests, an equivalent partner of the EU. Third, in the EU s main areas of interests, services and industries, MERCOSUR does not work as a collective entity but divide into four national policies. Fourth, spill-over and spill-backs in MERCOSUR depend on unforeseeable presidential shifts and decisions, particularly between the two biggest states Argentina and Brazil. Even if both countries agree on a free trade deal with the EU, they have to convince the two smaller states and cannot guarantee continuity in a highly uncertain political context of possible ideological chances in presidency and the strong influence of national protectionist lobbies in Argentina and Brazil. All these factors and risks make a collective, inter-regional agreement not very likely and, as for the EU, a very risky business. From a MERCOSUR perspective, the credibility of the European Commission as a unique, exclusive and liable negotiation partner is undermined by the multi-layer process of decision-making and strong influence of France, Poland and other member states strong agriculture lobbies whose interests are represented by rather protectionist Agriculture Commissioner and the European Parliament. In this sense, not even the EU is able to act as a unique player. The negative result of this complicated multilevel game of trade negotiations is a non-agreement. It is doubtful that bilateral negotiations can break with this negative dynamics, but it is for sure that EU and MERCOSUR will never reach a deal under the current conditions of imbalances of power and competences. Although China as Brazil s main export market might be an incentive for an agreement with the EU, this scenario is more likely as a reaction to Brazil-US negotiations than as a conscious decision for an EU trapped into its own inefficient formula of inter-regionalism that is more a model of wishful thinking than an instrument for a successful foreign trade and development policy. 2.3. Investment: bilateralism prevail The Lisbon Treaty increased the EC s competences in investment in order to facilitate economic agreements with third countries and further harmonize national investment policies. Even though, core competences on investment are still assumed by EU member states regulatory functions of large and multinational companies. Given that the EU is Brazil s main supplier of capital flows and stock, Investment is the most important incentive for signing an agreement, but it is also one of its major obstacles. The fact that the EU s investment in Brazil is higher than flows in India and Russia combined contrasts with the relative neglect of the country compared to other BRICS countries. MERCOSUR has no common investment regime and capital flows are still national competences. If investment is the main area of interest for both partners, it offers a further argument for a bilateral negotiation process. In this case, the EC hasn t the exclusive competence but needs a positive feed-back by member states and takes into account national investment regimes when dealing with Brazil or MERCOSUR. According to the UNCTAD, Brazil signed eleven of its Bilateral Investment Treaties with European partners (Belgium, Denmark, Finland, France, Germany, Italy Luxemburg, the Netherlands, Portugal, Switzerland, and the UK). 8

These agreements constitute the bases for a collective legislative regime in a future agreement. From a pragmatic foreign policy perspective discarding Brazil s political loyalty with Argentina and Brazil - It does make little sense to wait for an inter-regional decision, if bilateral negotiations could advance further. Moreover, in this field, the national level still prevails over the limited supranational competences of the EC and the initial stage of regionalization in the case of MERCOSUR. 2.4. Development: mixed competences and little in common Paradoxically, since 2015, in midst of a severe economic and social crisis, Brazil is not any more a recipient of multilateral EU funds. The main argument is its relatively high level of development (according to the UN Human Development Indexes), and the concentration of EU aid flows to least developed countries like Bolivia, Haiti, Honduras or Paraguay in Latin America. The same rule is applied to Argentina and Venezuela, also considered as high developed countries despite existing and increasing levels of inequality. This means that the EU officially divides relations with MERCOSUR into a bloc of four high developed countries (Argentina, Brazil, Uruguay and Venezuela) and one or two partners (Bolivia and Paraguay) that are still receiving aid flows. The policy of EU member states is similar, even though Spain still maintains development assistance with middle-income countries such as Argentina and Colombia. During the economic boom under President Lula da Silva, Brazil itself became a donor country under the broad umbrella of south-south cooperation. Brazilian development cooperation is less financial aid than capacity-building and concentrates half on African and half on Latin American partner countries. According to José Serra, his government will maintain these Southern partnerships, but from an economic perspective of concrete results and benefits for Brazil (Serra, 2016). This announcement, the minority position of autonomists in Itamaraty (the Brazilian foreign ministry) and economic constraints undermine the prospects for south-south and triangle cooperation. Although the economic crisis will limit Brazil s new role as a donor, its return into the group of beneficiaries of aid doesn t look very likely. At the same time, Brazil is the main contributor to MERCOSUR s social cohesion fund FOCEM. This makes Brazil (and Argentina) different from the rest of MERCOSUR countries. Instead of asymmetric North-South development cooperation, despite the negative economic performance since 2014, Brazil is in transition towards knowledge-based triangle cooperation with the EU and its member states 2. The mixed competences of the EC and EU member states in development cooperation and the division of MERCOSUR countries between donors and recipients limit a common developmental regime in a hypothetic agreement to very general 2 Brazil signed agreements on triangle cooperation with the EU, Germany, Spain and the UK. 9

commitments that, again, could better be specified in a more sophisticated bilateral deal. 2.5. Security as a national and bilateral concern Security cooperation is a clear added value of the strategic partnership between the EU and Brazil that is not included in EU-MERCOSUR negotiations. Security can be defined by the double edge of classical defense against external threats (terrorism and conflicts) and domestic problems (drugs and public insecurity). One of the 31 dialogue forums created between the EU and Brazil focuses on security. A concrete result of security focused relationship was the signature of an agreement between Brazil and the European Atom Agency Euratom, as well as the exchange of information and action on international terrorism. EU-Brazil cooperation in this field goes back to the 1990s, when both sides established a regular security dialogue in Rio de Janeiro on military affairs, regional and global conflict resolution. Since 2007, the fight against international terrorism and drugstrafficking dominate the agenda on security. The reluctance of Brazil to accept international interference in domestic affairs has been an obstacle for further cooperation on the country s internal public security challenges. Security is still a primary national concern and bilateral patterns of cooperation prevail. France performed into an important supplier of military equipment and a real strategic partner of Brazil on drug cooperation and national defense (Costa Vaz, 2014, 16). The UK and its development agency DFID participated in police reform and training in Rio de Janeiro to combat drugs trafficking and insecurity in the city s widespread Favelas. 2.6. Environment and climate change: a success story Compared to the trade knot, environment and climate change are the real success stories in EU-Brazil relations. This area best illustrates that a multilevel foreign policy can have a positive outcome if both partners agree on the basics. In this case, the shared commitment to multilateralism and the common task to protect the environment and to stop climate change prevailed over interest conflicts and ideological differences that have been less important in this field than the strong multilateral commitment for global governance. The Climate Agreement signed in Paris in December 2015 compensated temporal discordance between Brazil and the EU at the COP 21 conference in 2009 in Copenhagen, when the EU was isolated by its maximum demands to reduce Green House Gas (GHG) emissions and when Brazil decided to join a rather reluctant group of countries including China and the United States. In Paris, Brazil and the EU shared the same camp pushing for a successful conference and a binding commitment on climate change policies until 2030. The global reach was complemented by national commitments to reduce deforestation in the case of Brazil 10

and by the EU s agreement to reduce greenhouse gas emissions (GHG) by another 40% from today s level of emissions until 2030 (http://ec.europa.eu/clima/policies/strategies/2030/index_en.htm). Foreign Minister Serra defined the reduction of climate change and the promotion of clean energy as the third priority in his foreign policy principles. This announcement promises continuity of the close partnership between Brazil and the EU on binding international climate change agreements and a deeper bilateral cooperation in the next future. Particularly Germany has a great interest to reduce reforestation in Brazil, among others, by its financial contribution to the Amazon fund. 2.7. Gobal governance: a mixed record Climate change is a clear example for the complexity of a multilateral and multilayer foreign policy, where different national policies (environment, economic, foreign) are strongly influenced by non-governmental actors, regional regimes and international agreements. Climate change and other transnational challenges as a consequence of globalization force governments to pool national sovereignty and to multilateralize their foreign policies. This means that decision-making processes take more and more place in international organizations. Even though international organizations still depend on the decisions of national governments, the formulation of national and global preferences depend on domestic lobbies and international alliances. Climate change and sustainable development as a primary global concern of both Brazil and the EU is also a key issue for a bilateral coordination at the global stage and particularly at the UN. In this field of global governance and others, Inter-regionalism is no option, given that there is no foreign policy coordination between MERCOSUR member states, not even between Argentina and Brazil as permanent members of the G-20. In other areas of global governance, like security or the solution of international conflicts including Iran or Syria, there has been much less coordination between Brazil and the EU (Gratius 2013) and Brazil tended to align with the BRICS bloc. In the near future, under the Presidency of Temer, Brazil might change its south-south focus on international conflicts and return to a closer stance with the EU and/or the United States. 3. Bilateralism as a preferred option in EU-Brazil relations Eleven Strategic partnerships, one with Brussels and the other ten with EU member states, confirm a close relationship between Brazil and Europe driven by a balance between common values and interests. The complex and dense pattern of horizontal relations helped to increase mutual understanding and confidence, but did not create a strategic relationship beyond the diplomacy of summits. 11

The brief analysis of sector policies in EU-Brazil relations generates a clear picture: the preference of pragmatic bilateralism over idealist inter-regionalism. From a realist and rationalist point of view, to advance bilateral relations between Brazil and the EU, neglecting the MERCOSUR dimension, seems to be a more viable option than pushing for inter-regionalism that has not proven to be successful in any of the four analyzed areas (trade, investment, development, security and global governance). The EU-Brazil Strategic Partnership also lacks substantial results, but it opened the door to bilateralism. The latter seems to be a more efficient strategy than idealist interregionalism between two highly unbalanced trade blocs that deny national asymmetries, in this case the dominant position of Germany in the EU and of Brazil in MERCOSUR. From a (Brazilian) liberal realist point of view, a bilateral trade deal with a leading voice of these two countries seems to be more realistic than a come-back of inter-regionalism that has been replaced by the third generation (Gratius, 2011) of Strategic Partnership with individual emerging power. This analysis coincides with Costa Vaz statement that as to the objective of fostering inter-regionalism, strategic partnerships have been rather inefficient and there has been little progress at the inter-regional level, compared to bilateral strategic partnerships and particularly between Brazil and France as an outstanding example of effective bilateralism (Costa Vaz 2014: 15/16). Another argument for bilateralism is the correction of Brazil s foreign policy shift under Lula towards a multi-vector approach (Edler/Lanzarou, 2014) and south-south cooperation by the return to the traditional Western partnership. The ideological realignment around liberal realism in EU-Brazil relations makes a bilateral trade deal more likely than under the PT governments. Moreover, the search for economic opportunities and export promotion offers another strong argument for mutual concessions in trade negotiations. Against that trend, the strong developmental partnership including triangle cooperation in Africa might suffer a set-back, as well as the Brazilian initiatives to reduce poverty and inequity at the regional and global level where both partners reached a great level of convergence (Gratius, 2011). According to the ten principles of interim Foreign Minister Serra, Africa will not be any more a priority neither in Brazil s foreign policy nor in its relations with the EU. It is also doubtful if Brazil s new strategic relationship with the United States will automatically bring it closer to the EU s positions at the global stage, given that the transatlantic partners do not always coincide. The EU represents a unique multi-level foreign policy model (Smith 2004) by combining classic national instruments with supranational trade negotiations of the European Commission and diplomatic means by the EEAS. But in practical terms, the combination of bilateralism (security, sustainable development, culture) and interregionalism (trade and investment) lacks a coherent strategic approach and concrete results. The absence of visible progress in EU-Brazil relations in the last decade might be partly attributed to multi-level governance of relations that rather than help posed 12

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