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Brazil Drives a Hard Bargain on Russia

Dmitry Medvedev’s tour of Latin America is certainly making some headlines, but as I mentioned this weekend, there are still some fundamental misunderstandings about Russia’s goals in the region.  However I did see an interesting item in Reuters today, which suggests that Russia may not be the supreme diplomatic operator in the region that so many assume it to be … at least in terms of coming to agreement with the Brazilians on defense deals, France’s Nicholas Sarkozy is unexpectedly outmaneuvring the Russians with better deals (unexpected, because Europe hasn’t politically outmaneuvred Russia in any area for about five years).  We’ll see how it takes for Moscow to learn from this setback, and how much the Brazilians will be able to get out of Gazprom in exchange for access to their new offshore mega-fields (hint: not long).

“We are much more advanced in our strategic partnershipwith the French than with the Russians,” said Strategic AffairsMinister Roberto Mangabeira Unger, who has been Lula’s pointman in the talks with France and Russia.

France has agreed to allow Brazil to build Frenchhelicopters and submarines under license, giving in to aBrazilian demand to share key military technology.

Russia’s Sukhoi fighter jet, by contrast, failed to makethe cut in a Brazilian air force tender to replace up to 100aircraft over 15 years because it offered no technologytransfer. France’s Dassault qualified alongside U.S.-basedBoeing Co and Sweden’s SAAB.

“We want to import intelligence and technology, not brutelabor,” Defense Minister Nelson Jobim said last week.

Brazil will apply the same criteria in other deals theRussians are seeking. “We are interested in Glonass but as apartner, not a buyer,” a senior Brazilian diplomat said inreference to a global positioning system Russia is offering.

With an eye on Brazil’s large new-found oil reserves,Gazprom, the Russian oil and gas giant, is looking to openoffices in Brazil, but Lula wants more state control over thosereserves and would likely drive a hard bargain with Gazprom.

Brazil also says Russia is dragging its feet on reform ofthe United Nations Security Council, where the South Americangiant has been demanding a seat for years.

Brazil still sees a chance for closer cooperation withRussia in nuclear propulsion and aerospace technology, citingas an example the existing joint development of a new satellitelaunching rocket.

“I think the Russians may have learned from their botchedjet offer. Our strategic military partnership with the Frenchis not exclusive,” the Brazilian senior diplomat said.