Explaining the Changes in Brazilian Foreign Policy towards South America under Michel Temer’s Administration (2016-2018): The Return to the Logic of Open Regionalism

Explicando as Mudanças na Política Externa Brasileira para a América do Sul sob a Administração de Michel Temer (2016-2018): O Retorno à Lógica do Regionalismo Aberto

Abstract

The administration of President Michel Temer (2016-2018) led to significant changes in Brazilian foreign policy towards South America as opposed to the country’s goals that had remained in place for over a decade. This article addresses the question of how and why these changes unfolded under Temer’s government. Anchored in an analytical framework of Public Policy Analysis, we develop two main arguments. Firstly, we claim that the changes in foreign policy towards South America represented a paradigmatic transition from a post-liberal strategy to the restoration of the logic of open regionalism. Secondly, we argue that this change resulted from the coupling of the three dimensions of the political process: problem recognition, policy alternatives, and politics. The primary cause of such change was the political dispute in the public arena between business groups and party leadership.

Keywords
foreign policy change; Brazilian foreign policy; Temer’s administration; South America; Public Policy Analysis (PPA).

Resumo

A administração do Presidente Michel Temer (2016-2018) levou a mudanças significativas na política externa brasileira em relação à América do Sul, em oposição às metas prevalecentes há mais de uma década. Este artigo aborda a questão de como e por que estas mudanças se desdobraram sob o governo de Temer. Ancorados em uma estrutura analítica de Análise de Políticas Públicas, desenvolvemos dois argumentos principais. Primeiro, afirmamos que as mudanças na política externa em relação à América do Sul representaram uma transição paradigmática de uma estratégia pós-liberal para a restauração da lógica do regionalismo aberto. Em segundo lugar, argumentamos que esta mudança resultou do acoplamento das três dimensões do processo político: reconhecimento do problema, alternativas políticas, e política. A principal causa de tal mudança foi a disputa política na arena pública entre grupos empresariais e lideranças partidárias.

Palavras-chave
mudança de política externa; política externa brasileira; administração Temer; América do Sul; Análise de Políticas Públicas.

Introduction

Brazilian foreign policy towards South America underwent significant changes after Michel Temer was sworn in as President in 2016, following a controversial impeachment process that removed Dilma Rousseff from office. During his brief and unpopular term (2016-2018), Temer changed the country’s regional foreign policy in directions that opposed the goals of the project which was formerly in place for over a decade. This project, originally envisioned in the administration of Luiz Inácio Lula da Silva (2003-2010) and continued, albeit less intensively, by Dilma Rousseff (2011-2016), had at its core a politicalstrategy of forging South America as a power pole. This strategy comprised strengthening the Southern Common Market (Mercosur) by enlarging its membership and shifting its trade emphasis to incorporate social and asymmetric issues progressively. During that decade, Brazilian leadership had also facilitated the establishment of the Union of South American Nations (Unasur) and its South American Defense Council (CDS, in Portuguese) to address political crises within the region. During his administration, Temer promoted emblematic changes that opposed those initiatives, such as announcing the suspension of Brazil’s participation in Unasur, proposing the flexibilisation of Mercosur, and bolstering contacts between Mercosur and extra-bloc partners, especially the Pacific Alliance.

This paper examines the question of how and why such profound changes in Brazilian foreign policy towards South America unfolded. We develop two main arguments anchored in an analytical framework of Public Policy Analysis (PPA). The first one is that even though the transition process had begun at the end of Rousseff’s second term, the changes in Brazilian foreign policy promoted by Temer represented a paradigmatic change from post-liberal regionalism to the restoration of the logic of open regionalism. Accordingly, Brazilian foreign policy instruments and the political objective of South America as a power pole were superseded by a restored commercial orientation.

Secondly, we argue that this paradigmatic change resulted from the coupling of the three dimensions of the political process: problem recognition, policy alternatives, and politics. This change was primarily motivated by the political dispute between party leadership and business groups. Mercosur’s commercial stagnation and the inability of Rousseff’s administration to effectively address the Venezuelan political crisis through Unasur stood out as critical signs of problems in Brazilian foreign policy towards South America. In such a turbulent context, the presidential impeachment process opened a policy window for political actors and the business community to advocate for changes in the current policy and to adopt their favoured policy alternatives.

This analysis relies on a thorough review of relevant academic literature, newspapers, official press releases, and speeches from representatives of governments and institutions. On empirical aspects, this article aims to address knowledge gaps concerning foreign policy changes and the regional dimension of Brazilian foreign policy during Temer’s administration. On theoretical grounds, we seek to strengthen the Foreign Policy Analysis (FPA) field in Brazil by promoting an interdisciplinary dialogue with PPA.

The paper is structured in three sections. Firstly, we set out an analytical framework to explain foreign policy change based on PPA literature. The second section develops the first argument, demonstrating the transitions observed in Brazilian foreign policy towards South America that shifted from the paradigm of open regionalism in the 1990s to that of post-liberal regionalism in the 2000s, and arguing that the foreign policy changes under Temer’s administration represented the restoration of the logic of open regionalism.¹ Finally, in the third section, we propose an explanation about the actors and processes that brought the paradigmatic shift of the Brazilian foreign policy in Temer’s government.

Foreign policy changes from the perspective of Public Policy Analysis

The area of foreign policy changes has been relatively underexplored in FPA and International Relations (IR) until the 1980s (Rosati, Sampson III and Hagan 1994). According to Gilpin (1981), this theoretical neglect can be explained by the rise of middle-range theorising within behaviourism, which is more limited in time and specific events in comparison to grand theories, and by a disbelief in the methodological possibility of generalisations about political changes given the uniqueness and complexity of historical events.

Despite the persistence of some of these obstacles, the end of the Cold War and the expansion of globalisation stimulated interest in the systematic study of changes in states’ foreign policies (Rosati, Sampson III and Hagan 1994). Several analytical models were developed to categorise different types of foreign policy change and their main constraints². Most of these models are characterized by an input-output type, in which foreign policy change, or its absence, is explained by the combination of sources of change and stability, whose effects are filtered by the decision-making process (Holsti 1982; Goldmann 1982; Hermann 1990; Hagan 1994).

In Brazil, Hermann’s (1990) model has become well known in FPA studies. It identifies four types (adjustment, program, objective/problem, and international reorientation) and sources (leaders, bureaucracies, domestic restructuring, and external shocks) of foreign policy change. Although it does not focus on the changes derived from the rise of new rulers, much of the Brazilian literature uses Hermann’s (1990) model for this purpose when comparing the foreign policy of different administrations, from Fernando Henrique Cardoso to Michel Temer (see Vigevani and Cepaluni 2007; Saraiva 2013; Cornetet 2014; Vigevani and Calandrin 2019). There is an intuitive association logic, meaning that the rise of a new government/leader (independent variable) can bring new beliefs and personalities on international issues, which can produce different types of foreign policy change (dependent variable) after being filtered by the decision-making process (intervening variable).

The problem with some of these studies arises when a cause-effect relationship is established between sources of change (e.g., alternations of government) and policy initiatives changes without tracing the causal mechanism (i.e., decision-making process) that connects the different variables. It is also common that the same set of sources of change is used to explain the simultaneous redirection of several foreign policy initiatives. However, not all the patterns of action and external relations in a country undergo changes at the same time; continuity might prevail in some areas. Furthermore, a common feature in FPA literature is the absence of propositions as to when changes are most likely to happen, as noted by Gustavsson (1999: 85): ‘While there are many conceptual discussions of the explanatory factors and political processes involved, there are few concrete suggestions as to when these might actually trigger a change in foreign policy’.

Following Lentner’s (2006) and Milani and Pinheiro’s (2013) interdisciplinary appeal, we hereby seek to expand the theoretical instruments used in the analysis of foreign policy change in Brazil beyond Hermann’s model by mobilising approaches from the PPA field that can help to fill the gap identified by Gustavsson (1999) and explain when policy change processes tend to actually occur. Among these models, we highlight the concept of political paradigms developed by Hall (1993) and the Multiple Streams Framework (MSF) developed by Kingdon (2014). While the former allows us to analyse the nature and intensity of the changes in Brazilian foreign policy, the last sheds light on the process and the conditions that contributed for them to take place.

According to Hall (1993), a policy paradigm consists of a structure of ideas and standards shared by policymakers that specifies (i) the nature of problems to be solved by the government, (ii) the policies’ objectives, and (iii) the instruments used to achieve those goals. From the analogy with the scientific paradigms of Thomas Kuhn, the author argues that public policies are characterised by the predominance of a dominant paradigm over a long period that occasionally collapses and is replaced by a new political paradigm. This paradigmatic transition represents the kind of political change that is rarer and more intense, termed by Hall (1993) as third order change, in which all policy components are modified (i.e. the instrument settings, the instruments themselves, and the policy’s hierarchy of goals). In contrast, first and second order changes occur within policy paradigms, in the policy settings and techniques, respectively, without modifying their objectives.

Therefore, the transition between policy paradigms is more a political and sociological phenomenon than a scientific one. It is the result of power struggles between social forces that support the competing policy paradigms and is influenced by the institutional positions, resources, as well as external factors that affect the balance of power between political actors. Thus, paradigm shifts are fundamentally engendered in civil society through the mobilisation of non-state actors, such as political parties, interest groups, and the media, and are usually associated with electoral disputes. In contrast, first and second order changes are incremental and conducted by bureaucrats and specialists through social learning (Hall 1993).

In addition to highlighting the importance of socio-political disputes in the public arena, Hall (1993) indicates two other fundamental factors for paradigmatic change: (i) change of the loci of authority over the policy, resulting from contestation within the policy community; and (ii) external events that produce anomalies in the dominant paradigm and render the adopted policy dysfunctional. The gradual accumulation of anomalies and the inability of ad hoc adjustments to overcome them would lead to the perception of policy failures in the social and governmental milieus, leaving the dominant paradigm discredited and vulnerable to attacks from proponents of a rival political paradigm. The deepening of the political dispute between different social forces would then open a period of inter-paradigm transition only to be concluded when the proponents of a new paradigm occupy positions of authority in the decision-making process and adopt necessary political and organisational standard procedures to institutionalise the new paradigm.

Similarly to Hall (1993), Kingdon (2014) seeks to explain the occurrence of significant changes in public policies, but with particular emphasis on the agenda-setting process. According to his MSF, also known as the “3 Ps”, political processes can be organised in three dimensions: (i) recognition of problems, (ii) formulation of policies, and (iii) politics. The dimension of problem recognition encompasses concerns from individuals within and outside the political system, such as public account deficits or environmental disasters. Crises and critical events, such as the terrorist attacks on 11 September 2011, are the most visible signs of a problem. However, mechanisms can be mobilised to attract public attention to a particular problem even in the absence of a critical event, such as statistical indicators, comparison with previous policies, or policies implemented by other countries (Zahariadis 2007; Kingdon 2014).

The policies dimension corresponds to the ideas and alternative solutions formulated, usually but not necessarily, by specialists, bureaucrats, academics, and researchers, who compete for acceptance within political communities. Selection criteria of the winning policy are defined by the degree of acceptability in the social environment, political support at the domestic level, compatibility with the dominant groups’ values, technical feasibility, and resource availability (Zahariadis 2007; Kingdon 2014). Although policies aim to solve public life problems, Kingdon (2014) notes that they can also advance the interests of specific groups such as those of bureaucrats and economic interest groups.

Finally, the politics dimension refers to the public arena where policies are disputed. This dimension comprises three key elements: (i) national mood, commonly measured by public opinion polls; (ii) pressure and interest groups; and (iii) electoral and political turnover in the Executive or Legislative (i.e. changes in the dominant political actors or government ideology). Among these elements, changes in the national mood and in the political turnover in government have a higher capacity to influence the formation of political agendas (Zahariadis 2007; Kingdon 2014).

In the MSF, the most profound public policies changes occur when the three dimensions of the political process are aligned and combined to favourable policy forces. According to Kingdon (2014), policy windows stand for critical moments that facilitate this process. Policy windows are often short-lived and triggered by external events, such as an environmental disaster or change of government, whereby political entrepreneurs are more likely to galvanise public attention, propose new policies, and articulate the political support necessary for implementation according to their interests. Hence, policy windows do not automatically determine political changes but rather depend on the action and capacity of political entrepreneurs to formulate new alternatives.

In this paper, we use the concept of policy paradigm and the MSF to explain the changes in Brazilian foreign policy towards South America under Temer’s administration. We develop two arguments: (i) the changes were of third order in Hall’s model and represented a paradigm change from post-liberal regionalism to the restoration of the logic of open regionalism; and (ii) this paradigmatic shift resulted from the coupling of the three dimensions of the political process in Kingdon’s MSF. As foreseen in Hall’s model, its primary cause was the political dispute in the public arena between party leadership and business groups that culminated in Rousseff’s impeachment in 2016 and the rise of a new political coalition.

Changes in Brazilian foreign policy towards South America

Brazilian foreign policy: from open to post-liberal regionalism

The open regionalism paradigm characterised Brazilian foreign policy towards South America in the 1990s. Formulated by the Economic Commission for Latin America (ECLA), open regionalism represented a revision of national development models based on import substitution and regional economic complementation initiatives (Veiga and Ríos 2007). As a response to demands of economic regionalisation and globalisation, it associated regional economic integration with the liberal policies of the so-called Washington Consensus (Sanahuja 2012: 25).

In consonance with the open regionalism paradigm, Brazilian regional policy prioritised economic interests. Despite the diversity of initiatives, Brazilian South American policy unfolded in the 1990s mainly through the trade dimension axis (CINDES 2007: 6). Cardoso (1995-2003), for instance, contemplated Mercosur as instrumental to strengthening the Brazilian bargaining position in the WTO, the EU-Mercosur treaty negotiations, and the discussions about a US-sponsored Free Trade Area of the Americas. Nevertheless, the first South American Summit, held in 2000 by the Brazilian government initiative, marked an antecedent for a political strategy based on a perspective of South America as a political region (Vigevani and Cepaluni 2007).

After taking office, Lula engaged more actively in and heightened the political component of the foreign policy towards South America. His administration’s approach was simultaneously part and product of a new regionalism phase active in the 2000s, called post-liberal by some scholars. The essence of this new phase was a critical revaluation of open regionalism when globalisation was challenged, the WTO negotiations were deadlocked, unemployment led to contestation in developed countries, and developing nations were hit by a succession of crises (Veiga and Ríos 2007). Financial and political crises, slowdown in economic growth, and unsustainable social conditions as a ‘legacy of the neoliberal model’ (Riggirozzi 2012: 138) led to the election of popular left-oriented governments in Latin America by the mid-2000s.

Those new governments in Latin America shared features characteristic of post-liberal regionalism, such as the strengthening of the state, the politicisation of regional relations, and the adoption of a developmental agenda (Serbin, Martinéz and Ramanzini Júnior 2012: 11). This post-liberal strategy actively seeks more autonomy in South America to conceive it as ‘an area capable of challenging the traditional hegemony and the importance that the USA has had as a “regionalising” power’ (Riggirozzi 2012: 134).

Brazilian foreign policy towards South America under the Workers’ Party (PT) during Lula’s and Rousseff’s administrations can be seen through the perspective of a post-liberal regionalist project that culminated in Unasur and which sought to strengthen South America in geopolitical terms and turn it into a power pole (Nery 2017). Brazil was the chief proponent of the establishment of Unasur in 2008 as an organisation seeking to avoid polarisations from outside the region, particularly from the USA, by providing an institutional space to address regional crises (Vigevani and Ramanzini Júnior 2014). The CDS was created in 2008 to assist Unasur in the mediation of political crises, such as the Bolivian crisis in 2008, tensions between Colombia and Ecuador in 2010, and the deposition of Paraguay’s president in 2012. It developed into an alternative to the Organization of American States (OAS) (Sanahuja 2012). Within Mercosur, the agenda was expanded beyond trade and embraced social issues and regional structural asymmetries; the Constitutive Protocol of the Mercosur’s Parliament and the Structural Convergence Fund exemplify this emphasis.

On the one hand, Rousseff’s government preserved Lula’s objective of forging South America as a power pole to foster the Brazilian universalist impulse in international relations (Cervo and Lessa 2014: 139). Her administration maintained the support to Unasur as the reference for Brazilian action in regional crises and advocated for the preservation of the customs union project within Mercosur, which continued to be deemed necessary to manage the relations with neighbouring countries (Saraiva and Gomes 2016: 93). Besides that, Rousseff supported the expansion of Mercosur with the conclusion of Venezuela’s accession in 2012 and Bolivia’s signing of an accession protocol in 2015. Within Unasur, the South American Defence School was created, and the Centre for Strategic Defence Studies had its charter approved by the Council of Heads of State and Government of Unasur in 2012.

On the other hand, Rousseff maintained the strategies from Lula’s administration in a ‘slow and obstructed way’ (Cervo and Lessa 2014: 149). The domestic political crisis, deteriorating economic conditions, and differences between the two presidents in style, personality, and interest in the external agenda compromised the implementation of the previous ambitious strategy (Lessa, Becard, and Galvão 2020). Consequently, the presidential diplomacy and political will espoused earlier by Lula in articulating regional leadership were not sustained (Saraiva and Gomes 2016: 84). The national economic downturn also curtailed the material resources necessary to support actions in the regional and international arenas. In 2015, for instance, Brazil accumulated R$ 3.5bn of debts with international organisations, such as the UN, the Inter-American Development Bank (IADB), Mercosur’s Structural Convergence Fund (FOCEM), and the Development Bank of Latin America (CAF) (Waack and Teles 2015).

Confronted with mounting political and economic pressures, Rousseff attempted to promote foreign policy adjustments as a response. While domestically Rousseff departed from the developmentalist policies during her first term by appointing Joaquim Levy as Finance Minister with a mandate for fiscal adjustments, her foreign policy changed its emphasis to a ‘diplomacy of results’, as designated by Mauro Vieira, who took office as Foreign Minister in 2015 (Casarões 2020: 92–93). According to Casarões (2020), this new emphasis meant that Brazil abandoned its former regional power status as a paymaster and would not devote further efforts to fix Mercosur or advance initiatives like Unasur and the Community of Latin American and Caribbean States (CELAC), and immediate economic gains on trade and investment received much more attention on the foreign policy agenda.

Rousseff’s government worked to bring Mercosur and the Pacific Alliance closer. In 2014, Brazil sent a clear signal in favour of Mercosur by concluding a free trade agreement with Chile, Peru, and Colombia. Strengthening ties with the Pacific Alliance was instrumental in pressuring the EU to unlock negotiations for an agreement with Mercosur and react to domestic criticism on the paralysis of the government’s trade policy (Paraguassu 2014). On subsequent occasions, when meetings were held in Colombia in 2015 and Chile in 2016, Rousseff reiterated her enthusiasm for bringing the two blocs closer (Braga and Campos 2015; Olmos 2016).

Nonetheless, despite the depth of these adjustments, they are still better understood as changes within the policy paradigm trying to cope with external anomalies, according to Hall’s (1993) framework. The intensity and political will of Brazil’s foreign policy towards South America were indeed impaired during Rousseff’s government, but the overarching long-term political objectives were not relinquished altogether. It would not be conceivable by Rousseff, for example, to suspend Brazil’s membership in Unasur, as was later decided by Temer.

Michel Temer’s foreign policy towards South America: restoration of the logic of open regionalism

In May 2016, Rousseff faced an impeachment process that culminated in her removal from office as president. Then Vice President Michel Temer assumed power and made significant changes to the command structure of the Ministry of Foreign Affairs (MRE), also known as Itamaraty. The largest opposition party to the PT, the Brazilian Social Democracy Party (PSDB), gained ground in the new government. José Serra, a PSDB senator, was appointed foreign minister in May and remained in office until February 2017, when Aloysio Nunes, a senator from the same party, was chosen as the succeeding minister.

The rise of Temer caused a paradigm change in Brazilian foreign policy towards South America: post-liberal regionalism was replaced by a renewed approach of open regionalism. Notwithstanding this paradigmatic transition had been initiated during Rousseff’s government, it was in Temer’s administration that the paradigm change actually took place. The two following aspects of the restoration of the open regionalism approach and of the abandonment of post-liberal regionalism can be identified: (i) concrete initiatives to re-insert Mercosur into an economic and commercial dimension and to strengthen ties with the Pacific Alliance and extra-regional partners; and (ii) the suspension of Brazil’s participation in Unasur in favour of greater engagement in the Lima Group and the strengthening of the role of the OAS as the primary instance of conflict resolution in South America.

Intending to provide greater dynamism to the commercial dimension of Mercosur, Temer and other Mercosur leaders began a process of reviewing the bloc’s internal rules, especially the rule that prevents the establishment of individual agreements with other nations. As a result of this process, free trade negotiations between Mercosur and the EU were resumed, and new extra-regional ones were launched with Canada, Singapore, South Korea, the European Free Trade Association (EFTA), and the Pacific Alliance.

The Brazilian commitment to advancing the negotiations and deepening the relations between Mercosur and the Pacific Alliance culminated in the process of institutionalising the partnership. In Serra’s inaugural speech, he stated that one of his main goals was to transform Mercosur:

Together with the other partners, we need to renew Mercosur to correct what needs to be corrected, so it can be strengthened, above all with regard to the free trade among its members, which is still insufficient, to promote shared prosperity and to continue to build bridges instead of widening the differences with the Pacific Alliance (Serra 2016).

When Nunes took office, he maintained Serra’s wishes to reinvigorate Mercosur – to a free trade area – and bring it closer to the Pacific Alliance (Nunes 2017a). The first step to connect Mercosur and the Pacific Alliance was taken in April 2017, when representatives of both organisations held a ministerial meeting. With Brazil’s support, a second step was taken to institutionalise the partnership. In July 2018, their first presidential meeting took place in Mexico, and a joint declaration with seven commitments was released. The second of them explicitly emphasised the importance of the open regionalism model as a driving force for South American integration: ‘the firm commitment to continue to promote free trade and open regionalism, without unnecessary trade barriers, avoiding protectionism, in order to efficiently insert ourselves into the globalised world’ (Brazil 2018).

As opposed to Mercosur, Unasur was relegated to a secondary position. In their inaugural speeches, both Serra and Nunes did not even mention “Unasur”. Nunes had already expressed that it was not in Brazil’s interest to exercise regional leadership shortly before assuming the position of minister in early 2017: ‘Brazil is on the road to recovery, but not leadership because it is not our ambition. We do not want to lead anyone, we want to be friends, but in full recovery of the economy’ (Nunes 2017c: 211).

The most significant evidence of the abandonment of the post-liberal regionalism approach in Brazilian foreign policy was the decision taken by the government in April 2018 to suspend Brazil’s participation in Unasur indefinitely. Nunes – together with his counterparts from Argentina, Chile, Colombia, Paraguay, and Peru – wrote a letter to Bolivia’s foreign minister, then in charge of Unasur’s presidency, to address their decision to suspend their participation in the organisation for an indefinite period (Giraldi 2018). Officially, this decision was motivated by the fact that Unasur became paralysed, mainly because it did not have a Secretary-General. Hence, Nunes claimed that Brazil should step away from the institution so that it could be restructured. In any case, Brazil had already failed to meet its financial commitments made to the institution since 2016, by accumulating debts until the end of Temer’s government in 2018 (Gonçalves 2019).

The decision to suspend Brazil’s participation in Unasur represented the discontinuation of PT’s efforts to construct a South American power pole. It also gave room for the exercise of US leadership in the region (Nery 2017). Nunes criticised Unasur’s oppositional character to the USA, stating that it was attached to an anti-American “childish” articulation (Otta 2018). In fact, Brazil was not interested in reinforcing the organisation and did not lead a process of restoring Unasur’s role as a mechanism for dialogue and conflict resolution. For instance, Unasur was never considered under Temer as a viable alternative to mediate the Venezuelan crisis, as shown by official press releases issued by Itamaraty.

Temer’s administration also gave up the leadership role that Brazil could have had in the mediation of the Venezuelan crisis. According to Nunes, the reason for this position was that Brazil ‘had a very defined side’ (Fleck 2017). In other words, the Brazilian government had manifested itself contrary to the government of Nicolás Maduro, as Serra had already advocated for suspending Venezuela from Mercosur. The suspension occurred for the first time in December 2016, under allegations that the country did not abide by the bloc’s protocol of accession. In August 2017, Brazil participated in the meeting that created the Lima Group. On that occasion, Nunes said that Maduro’s decision to call a National Constituent Assembly had confirmed the establishment of a dictatorship in Venezuela (Brazil 2017). He also urged the other countries at the meeting to redouble efforts to ensure that the OAS applied the Inter-American Democratic Charter to restore the democratic rule of law in that country (Brazil 2017). Therefore, Nunes’ strategy was to support the Lima Group, the OAS, and Mercosur as instruments to isolate Maduro’s government in the region. In August 2017, Venezuela was suspended from Mercosur for the second time, for its members considered that the country had failed to comply with the democratic clause of the Ushuaia Protocol.

The causal process of the paradigmatic shift in Temer’s foreign policy towards South America

Problems

The first dimension of Kingdon’s MSF can be identified in Brazilian foreign policy since 2008 as arising from the crisis of the multilateral trade negotiations via the WTO and the interruption of the trade intensification process between Brazil and its Mercosur partners. Many countries redefined their negotiating strategies since then, particularly in South America. Negotiations with the USA were intensified; Chile, Colombia, Peru, and Mexico created the Pacific Alliance in 2012; and the USA launched the Trans-Pacific Partnership (TPP). All these negotiations encouraged Brazilian decision-makers to seek new opportunities for bilateral or plurilateral trade agreements. Indeed, one of the first promises made by Serra when he took office was the following:

Brazil will no longer restrict its freedom and latitude of initiative through an exclusive and paralysing adherence to multilateral efforts within the scope of the World Trade Organization [...] these [WTO] negotiations, unfortunately, have not been prospering with the necessary speed and relevance, and Brazil, clinging exclusively to them, has remained on the margins of the multiplication of bilateral free trade agreements. The multilateralism that did not happen harmed the bilateralism that happened around the world. Almost everyone invested in this multiplication, except us. We need and will overcome this delay and recover missed opportunities (Serra 2016).

This situation challenged the preservation of a preferential market in South America and is related to three main aspects. Firstly, Brazil’s trade with Mercosur was stagnated. As shown in Figure 1 below, since the financial crisis in 2008, there has been a trend towards stagnation in Brazil’s trade with the bloc, despite a recovery between 2009 and 2011. Secondly, Mercosur’s rules impede individual agreements with other nations that would compromise the TEC. Finally, the TEC’s imperfections continued to be a stalemate for the bloc’s advancement towards a common market. Over time, there was a perception that the National Exception List was insufficient, which led countries not to commit to the TEC. Therefore, the project to extinguish the List was being extended; initially, the deadline was 2008, then it was postponed to 2015 and currently extended to 2023.

Figure 1
Evolution of Brazil-Mercosur Trade (1997-2018), in billions of US$ (approximate values)

Another event within the problem recognition dimension of Kingdon’s (2014) MSF was the failure of South American governments and institutions, particularly Unasur, to defuse the crisis in Venezuela. This ongoing crisis is related to political and economic developments after the death of then-President Hugo Chávez in 2013 and Nicolás Maduro’s election as his successor, who took office amid a deteriorating economic environment. This condition generated nation-wide protests since 2014 and increasing polarisation episodes between the government and opposition, such as the summoning of a National Constituent Assembly in 2017 and the re-election of Maduro in May 2018 in a contested low-turnout process which was not recognised by parts of the international community, such as the Lima Group, the OAS, the EU, USA, and Canada (Maisonnave 2018).

South American governments initially responded to the Venezuelan crisis mainly through regional institutions, but the responses have been interpreted as tacit support for Maduro’s government. In the 2013 presidential elections, when the opposition candidate Henrique Capriles did not recognise Maduro’s victory, Unasur held an emergency summit with almost all South American leaders to demonstrate support for the Venezuelan institutional decisions that granted victory for Maduro (Maisonnave 2013). During another wave of protests in 2014, Brazil joined forces with countries such as Bolivia, Ecuador, and Nicaragua to prevent the OAS from convening its foreign ministers and sending a mission to Venezuela, understanding OAS’ involvement could escalate tensions (Cantanhêde 2014). Instead, Unasur’s foreign ministers decided to create a ministerial committee with the stated goal of supporting Maduro’s government dialogue with the opposition to reach an agreement and end violence (Bergamo 2014). In essence, governments’ responses were described by analysts as inaction resulting from ‘a combination of partisanship, indifference, and impotence’ (Feldmann, Merke and Stuenkel 2015).

Unasur was fractured and rendered paralysed to deal with the crisis after political developments in several South American countries. Until 2015, most of its members had centre-left governments. Since then, some centre-right presidents came to power in Argentina, Peru, Chile, and Colombia. Mauricio Macri, for instance, had campaigned for changes in the Argentinian foreign policy and wanted Venezuela to be ousted from Mercosur (Feldmann, Merke and Stuenkel 2015). Unasur was politically divided into at least two groups, one led by Bolivia and the other by Argentina; the latter called conservatives and reportedly the dominant one (Diniz 2018).

Policies

By acknowledging these problems, it is possible to observe the second dimension of Kingdon’s (2014) MSF: the formulation of alternative policies. Lula and Rousseff’s foreign policies consisted of an essential tool for strengthening the business community, whose interests in opening new export markets were supported by Brazil’s emphasis on prioritising South America and the Doha Round negotiations at the WTO. However, the pact between business and government began to collapse due to changes in the international scenario and the inflexion of the industrial bourgeoisie’s view. Therefore, different business associations have started to propose alternative trade policies (Boito Jr. and Berringer 2013; Nery 2017).

The Confederation of Agriculture and Livestock of Brazil (CNA), for instance, expressed its frustration with the obstacles of the Doha Round since 2006. In the annual balance sheet, the CNA showed dissatisfaction with the insistence of Brazilian trade diplomacy on the multilateral sphere as the main strategy for the sector to increase its world market share. The document recommended bilateral agreements with major trading partners as a more effective foreign trade policy (CNA 2006).

Key industrial associations like the National Confederation of Industries (CNI) and the Federation of Industries of the State of São Paulo (FIESP) also began to distance themselves from the PT government’s foreign policy and reviewed their position as of 2008. In an interview, Rubens Barbosa³, President of FIESP’s Superior Council for Foreign Trade, stated the institution’s vision as the following:

It is necessary to review all of Brazil’s trade negotiation strategy in the last 14 years, which was totally mistaken in playing all the cards in the multilateral negotiation of the Doha Round. While the world was producing trade agreements, Brazil was hanging on to multilateral agreements that did not go off the drawing board (Turrer 2016).

In the wake of the 2013 political crisis, the vision of industrial leaders – expressed by the CNI’s President Robson Andrade – began to favour closing a free trade agreement with the USA, relegating Mercosur to a secondary role (Singer 2018). FIESP had a similar position. In the earlier mentioned interview, Rubens Barbosa explained his views on the reasons for Mercosur to shift directions:

In the economic and trade area, Mercosur was totally paralysed, with the agreements frozen, without progress. Now, with the new forms of trade and trade negotiation, such as the TPP, Mercosur is completely out. Argentina, Brazil, Paraguay and Uruguay must discuss how to get Mercosur back to its origins to reduce protectionism and advance trade liberalisation (Turrer 2016).

In general, FIESP’s vision was convergent with Temer’s foreign policy, since its representatives understood that the key for enhancing Mercosur was to foster trade inside and outside the bloc, seeking its integration into the international market and global value chains (FIESP 2014).

At the parties’ level, since 2006, PSDB’s leaders criticised the failure of PT’s foreign policy to unblock the regional integration process, which was perceived to be in crisis. Mercosur’s ineptitude to sign free trade agreements and Brazil’s supposed isolation from global trade were pointed out as components of the same problem (PSDB 2010: 165, 168). Since then, as well as part of the business community, PSDB has been proposing to recompose Brazil’s relations with South America by emphasising physical, energy, and commercial integration, as well as ‘promoting a broad reflection on Mercosur’ (PSDB 2006: 142). However, it was mainly after the presidential elections of 2010 that PSDB’s leaders began to defend with greater determination the revision of the Brazilian trade negotiations strategy and regional integration policies to restore the primacy of trade liberalisation and the promotion of democracy. At the same time, it proposed loosening the bloc’s rules so that member countries could individually negotiate trade agreements with other markets (PSDB 2010).

In the 2010 and 2014 presidential elections, PSDB leaders condemned the alleged politicisation and ideologisation of Brazilian foreign policy during the PT’s administrations, which would have resulted in an automatic alignment of Brazil with Bolivarian countries, especially Venezuela. The objective of leading the construction of a South American power bloc based in Unasur was seen as an excess of diplomatic voluntarism and evidence of ideologisation. It was, therefore, necessary to re-establish the traditional character of Brazilian foreign policy as state policy, in which the relationship with South American countries would be based on ‘the values defended by Brazil and the strict national interest’ (PSDB 2010: 116; PSDB 2014).

The alternative commercial policies proposed by business groups and political parties were supported by part of the epistemic community. Mainly after 2013, academics from think tanks, such as CINDES, FGV, and CEBRI, highlighted potential risks of Brazilian non-participation in the plurilateral trade agreements being negotiated in the world. According to Thorstensen and Ferraz (2014: 7), for example, the international isolation resulting from the difficulties of Mercosur could damage Brazil’s ‘present role as a relevant global rule-maker, accepting a secondary role of passive rule taker’. In order to avoid this situation, the country should integrate itself with the leading world economies. In the same direction, the economist linked to PSDB Edmar Bacha proposed reversing the economic growth strategy implemented in Rousseff’s government with the removal of protectionist practices and the urgent integration to global value chains (Castelan 2018).

Politics

Rousseff’s impeachment represented the policy window by which the political processes that had already been developing in the dimensions of problems and policies were combined and fostered the paradigmatic change in Brazilian foreign policy towards South America. Although the annulment of the presidential mandate was officially justified on legal aspects, its root causes can be traced beyond legal intricacies. After a narrow victory in the second round of the 2014 presidential elections, the fairness of which had been contested by the PSDB’s candidate Neves, Rousseff began to suffer an intense decline in popular support. Since 2013, popular discontent with the lack of political representation, the reversal of economic growth, ineffectiveness of public policies, and a perception of the spread of corruption among authorities began to manifest through large popular demonstrations in several states in the country. The launch in 2014 of a massive corruption investigation linked to the state-owned oil company Petrobras – “Operation Car Wash⁴” – added to this scenario and was continuously highlighted in the national media. Early in 2016, opposition political leaders and conservative groups in society began to channel against Rousseff’s administration the desire for urgent changes by the Brazilian population.

Among the political actors (i.e., policy entrepreneurs) who sought to galvanise popular repudiation against Rousseff and act in favour of particular interests were Temer himself, the then Vice President, and the PSDB leaders, particularly Serra. Even before his party, the Brazilian Democratic Movement Party (PMDB), broke the alliance with the PT at the beginning of 2016, Temer began to articulate a new government project with opposition actors, especially the PSDB (Singer, 2018). In fact, in 2015, the PMDB released a document entitled “A Bridge to the Future”, which was considered a new government program for Temer’s presidency. Launched months before Rousseff’s impeachment, the document’s main concern was to provide ‘greater trade openness and the search for regional trade agreements in all the relevant economic areas - United States, European Union and Asia - with or without the Mercosur company, though preferably with them’ (PMDB 2015: 18). Although the program recognised Mercosur as an important project, the possibility of negotiating agreements with other regions without its participation demonstrates alignment with the business community’s interests.

Still in 2015, with the deepening of the Venezuelan crisis, PSDB leaders, such as Serra, Nunes, Aécio Neves, and Tasso Jeirassati, exercised intense parliamentary activism to discredit Rousseff’s foreign policy, especially in relation to South America. During this period, the Federal Senate’s Committee on Foreign Affairs and National Defense (CREDN), chaired by Nunes, held public hearings that even included Venezuelan oppositional political leaders and their families (CREDN 2015a, 2015b, 2016)⁵. During these hearings, Rousseff’s opponents frequently criticised the omission of Brazilian foreign policy towards Venezuela’s situation. Nunes even suggested that Brazil act on the crisis on its own, and no longer necessarily through Unasur. Mercosur, likewise, was criticised for the exceptions of the TEC and Brazilian absence in plurilateral trade negotiations involving the USA and the EU.

When he was sworn in as president, Temer set up a new cabinet of ministers with the main political forces that supported him. The PSDB was awarded three ministries, including the MRE, which is historically considered the main subsidiary body to the Presidency for formulation and implementation of Brazilian foreign policy. The change of government and the transfer of Itamaraty’s command to Serra contributed to raising South America to the centre of the country’s external agenda for three main reasons. Firstly, Serra and his party criticised the PT’s foreign policy for years, as aforementioned. In March 2016, the PSDB established as one of the fifteen conditions to seal its support for Temer the reorientation of Brazilian foreign policy with the objective of reintegrating Brazil into the global economy and guiding its diplomacy once again ‘by the national interest and not by ideologies’ (PSDB 2016: 3). Therefore, when Serra took office as Brazilian Foreign Minister, he announced as one of the priorities of his administration the elaboration of a ‘New Brazilian Foreign Policy’ (Serra 2016: 62). This reorientation would involve the renewal of the regional integration project, granting it ‘more focus and pragmatism’ (Serra 2017: 24).

Secondly, according to Casarões (2016), Serra wanted to galvanise popular support for his possible candidacy in the 2018 presidential elections, using Itamaraty as a political platform for this ambition. Therefore, to ensure media exposure and attract a portion of the electorate critical to the PT, Serra chose as his main targets of criticism the PT’s foreign policy towards South America and the Venezuelan crisis. He hoped that this would also win a portion of the national business community’s sympathy, which was at risk due to Venezuela’s external debt (Casarões 2016).

Finally, Rousseff’s impeachment process suffered harsh criticism by countries in the region chaired by left-wing leaders, such as Venezuela, Bolivia, and Ecuador, as well as Unasur’s Secretary-General Ernesto Samper, who even raised the possibility of activating the organisation’s democratic clause against Brazil. Such criticisms were fervently countered by Serra and followed by a diplomatic crisis with neighbouring countries that contributed to placing Brazilian policy towards South America, particularly to Unasur, at the centre of the Temer government’s external agenda.

Besides raising the region to the country’s external agenda, the government’s change also implied a fundamental shift in the loci of authority of Brazilian diplomacy. Even before that, at the beginning of Rousseff’s second term, Itamaraty had been losing influence to other government agencies in the decision-making process of Brazilian foreign policy (Saraiva and Gomes 2016). In 2015, in an attempt at political survival, Rousseff appointed ministers with a liberal economic view, especially Joaquim Levy and Armando Monteiro, selected to head the Ministry of Industry, Foreign Trade and Services (MDIC). Both had strong connections with the business community – Monteiro had been CNI’s president for eight years (2002-2010). They advocated for bringing Brazil closer to the USA in order to facilitate trade (Folha Vitória 2015), and Monteiro was enthusiastic about possible integration between Mercosur and the Pacific Alliance (Otta 2014).

With Serra’s appointment to head Itamaraty in Temer’s government, the resistance that the nationalist wing in Itamaraty could eventually impose to the reorientation of Brazilian diplomacy became unlikely. Serra’s appointment not only represented a breach of the tradition adopted by the PT’s governments of nominating career diplomats to the position of foreign minister, but also contradicted the diplomatic thinking that guided the entire strategy of Brazil’s international insertion during Lula and Rousseff’s administrations.

Considering that trade issues could grant him more political projection than diplomatic acts in general, as a condition to assume the MRE, Serra demanded from Temer an institutional reform that transferred the executive secretariat of the Chamber of Foreign Trade (Camex) and the Brazilian Trade and Investment Promotion Agency (Apex-Brasil) to the Itamaraty⁶. Besides, Serra made changes to Apex-Brasil’s constitutive law to proclaim himself President of the Deliberative Council of this body, a position that was previously defined by majority election among the board members (Casarões 2016). With these instruments, the new minister sought to exert more influence on foreign trade policy, emphasising the economic content of the Brazilian relationship with South America.

Another significant change in the loci of authority occurred within the institutional structure of the presidency, with the removal of Marco Aurélio Garcia from the Special Advisory Office of the Presidency of the Republic for International Affairs. After being the PT’s vice president and director of the party’s international relations secretariat, Garcia remained as Special Advisor to the Presidency from the beginning of Lula’s administration until Rousseff’s impeachment in 2016. According to Almeida (2003) and Villa and Viana (2008), in the last years before PT governments, this position had been held by career diplomats appointed by Itamaraty. These diplomatic advisors maintained a low political profile and a restricted role in the formulation of Brazil’s foreign policy. However, by becoming an advisor to the president, Garcia had been projected to the centre of the foreign policy decision-making process, particularly to South America. Indeed, Garcia shared the objective of building a power bloc in the subcontinent and played a prominent mediation role in regional political crises (Villa and Viana 2008). During Temer’s administration, the president’s international advisory position, as before Lula, was held by a career diplomat, Ambassador Claudio Frederico de Matos Arruda, and returned to playing a consultative role so that foreign policy formulation was centralised in the Itamaraty (Mello 2016).

Indeed, by composing a coalition government, Temer delegated much of foreign policy formulation to Ministers Serra and Nunes. However, other bureaucracies, such as the Ministry of Finance and the presidency’s strategic advisory bodies, were aligned with the dominant thinking at Itamaraty. An emblematic example was the Secretariat for Strategic Affairs (SAE), which was commanded by Hussein Kalout under Temer’s administration. In a co-authored document released when he had already taken office, Kalout criticised several foreign policy initiatives by Lula and Dilma towards South America, which would have failed because they: (i) generated adverse reactions in neighbouring countries against the Brazilian ambition for regional leadership; (ii) abandoned trade as the locomotive of the integration project; (iii) kept Brazil tied to Mercosur’s structure and its partners’ options, rendering the country unable to sign more free trade agreements; (iv) did not adopt alternative policies such as the flexibilisation of Mercosur; (v) isolated Brazil from the main plurilateral trade negotiations (Kalout and Degaut 2017).

The new government project envisioned by Temer and Serra was supported by key sectors of the Brazilian business community from its onset. Three days before the impeachment vote, CNI president Robson Andrade openly defended Rousseff’s deposition in a letter sent to all the 513 deputies expressing optimism about the change of government: ‘We are convinced that discussions about impeachment and its vote in Congress will result in a new phase of national politics’ (Ramos and Viegas 2016). FIESP’s representative, Rubens Barbosa, also publicly expressed his wishes for changes. He condemned the decision of the interim president of the Chamber of Deputies, Waldir Maranhão, to annul the impeachment process – reversed by the then-Senate president, Renan Calheiros – stating that: ‘I think it was a decision taken individually and that cannot revoke the decision of 367 deputies who voted in plenary. The decision of the president of the Senate was correct, to take it forward’ (Istoé 2016).

Conclusions

We argued in this paper that Temer’s foreign policy towards South America is part of a paradigm shift process. In Hall’s terms, a paradigm shift is a rarer and more intense process that involves the main policy components, especially the hierarchy of goals behind it. The objective of Brazil leading the construction of a regional power bloc through Unasur was replaced by an economic-commercial orientation based on trade liberalisation and institutional flexibilisation. We argued that this change represented the abandonment of a post-liberal regionalism agenda to the restoration of the logic which was typical of the open regionalism paradigm that prevailed in the 1990s.

Mobilising Kingdon’s (2014) MSF, we argued that this paradigm shift only effectively occurred when the three dimensions of the political process were coupled: problems, policies and politics. The recognition of problems involved the identification of two external events: Mercosur’s stagnation alongside the crisis of the Doha Round in 2008 and Rousseff’s government incapacity of dealing with the Venezuelan political crisis through Unasur. Influential representatives from the Brazilian business community, accompanied by PSDB leaders, claimed that Brazilian diplomacy’s insistence on multilateral negotiations and the deadlock in the WTO would not result in new agreements advantageous to the national economy. This view was decisive for a change of position in favour of greater trade liberalisation. Mercosur’s trade stagnation also contributed to this change, paving the way for Temer’s foreign policy to consolidate the efforts of strengthening the bloc’s ties with the Pacific Alliance. At the same time, the Venezuelan crisis opened space for Temer’s government to support the dismantling of Unasur as the preferred political forum for resolving South American tensions.

After recognising these problems, in the field of alternative policies formulation, the business community began to support a reorientation of foreign policy towards South America. For instance, FIESP advocated more openly for greater flexibility in Mercosur. The main opposition political party, the PSDB, also sought to reorient Brazilian regional foreign policy. Critics of what they described as ideologisation of foreign policy, the party leaders advocated for the restoration of open regionalism, greater ties with the countries of the Pacific Alliance and, as with some groups of the business community subsidized by the studies of academic specialists, flexibilisation of Mercosur.

Finally, the terrain of politics involved two main elements: (i) electoral and political turnover in the executive and legislative branches and (ii) the engagement of interest groups. Rousseff’s impeachment resulted in the rise of a new political coalition under the government of Temer that counted with the support of PSDB leaders and important economic groups, some of them former allies of PT administrations. Historically critical of the PT’s foreign policy guidelines, the PSDB assumed the command of Itamaraty, allowing it to put into practice policies favourable to interests related to trade and economic liberalisation. This movement contributed to changing the foreign policy agenda to the region, altering the dynamics of Mercosur and bringing it closer to the Pacific Alliance. That way, Rousseff’s impeachment opened a policy window that provided an opportunity for PSDB leaders along with the business community to exert crucial influence on the redefinition of the Brazilian foreign policy towards South America.

In addition to empirically detailing recent and still under-studied events in the history of Brazilian foreign policy, this article, without offering a general model capable of explaining changes in foreign policy, proposed an analytical exercise in order to expand the FPA’s tools. To this end, it sought to mobilise alternative models in the PPA that allow investigating the nature and process of foreign policy changes, especially with regard to when or under what conditions they tend to occur. In this sense, we believe that the concept of political paradigms and the MSF can provide valuable insights into the development of new theoretical and empirical studies about the phenomenon of foreign policy changes.

Notes

• 1
  We utilise the concepts of open regionalism and post-liberal regionalism, which are consolidated in the specialized literature, to refer to the orientation/logic that guided Brazilian regional policy in different periods, and not to the regional integration projects per se. In other words, by focusing specifically on Brazilian foreign policy, we treat these concepts more as foreign policy paradigms than as regionalism paradigms.
• 2
  For a critical compilation of some of these models, see Gustavsson (1999). For a contemporary effort to formulate a general theory of foreign policy change, see Welch (2005).
• 3
  Rubens Barbosa is historically linked to the PSDB. He coordinated the area of foreign policy of the government programs of the PSDB candidates for the Presidency of the Republic in 2014 and 2018.
• 4
  The ‘Car-Wash Operation’ (Operação Lava-Jato in Portuguese) was initiated in March 2014 to investigate corruption and money-laundering involving public agents, politicians, businesspeople, and money changers in contracts with the state-owned company Petrobras. In addition to the national impacts, the operation had international ramifications regarding the payment of bribes and works by Brazilian building contractors in countries of the American, African, Asian, and European continents. As of 2017, investigations were in place in 49 nations (Souza 2017).
• 5
  In addition to public hearings, in June 2015, a committee of Brazilian senators attended by Neves, Nunes and other members of the opposition to the Dilma government, traveled to Venezuela to visit and press for the release of political prisoners. However, the entourage was surrounded by pro-Maduro protesters and could not even leave the vicinity of the airport in Caracas; they had to return to Brazil earlier than planned.
• 6
  After the executive secretariat of Camex was moved to the command of the MRE in July 2016, an inter-bureaucratic dispute culminated again in the transfer of this secretariat to the MDIC in 2017.

Acknowledgements

Leandro and André acknowledge the support from Ministério da Ciência, Tecnologia e Inovação, Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPQ) (Grants: 870002/2014-7).

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Publication Dates

• Publication in this collection
  01 Dec 2021
• Date of issue
  Sep-Dec 2021

History

• Received
  1 June 2020
• Accepted
  6 July 2021