Lula signals support for China’s offensive to use the Brics against the US

In a sign of greater alignment with China, President Luiz Inácio Lula da Silva (PT) took advantage of his visit to the Asian country to send a message to the United States. In Shanghai, the PT gave a speech against the dollar and defended the strengthening of the Brics, a group formed by Brazil, Russia, India, China and South Africa.

The PT movement comes amid an effort by China to give a political character to the originally economic bloc of the Brics. Beijing’s objective is to face the hegemony of the United States and other blocs such as the G-7, the group of the seven largest economies in the world.

The idea of ​​BRICS was created in 2001 by Goldman Sachs bank economist Jim O’Neill, who initially grouped Brazil, Russia, India and China in an acronym to designate developing economies with the potential to lead the global economy in the middle of the 21st century. The countries adopted the idea and held the first meeting of the economic bloc in 2009. South Africa was incorporated the following year.

But when Russia invaded Ukraine in 2022, China, which was in the rotating presidency of the bloc, began to maneuver to increase it and use it to politically confront its biggest rival, the United States. Beijing has thus been using anti-American sentiment to bring countries like Iran and Uruguay closer together. Other countries began to take an interest in understanding that the US would no longer be interested in protecting them, as in the case of Saudi Arabia.

In this context, Lula embraced one of the main flags of China and Russia: trying to weaken the hegemony of the dollar, used as the main currency of global exchanges.

“Who decided that the dollar was the currency after gold disappeared? Why wasn’t it the yen? Why wasn’t it the real? Why wasn’t it the peso? Because our currencies were weak, our currencies don’t have value in other countries. So, a currency was chosen without taking into account the need that we need to have a currency that transforms countries into a slightly more peaceful situation”, said Lula.

Last month, the Brazilian Central Bank announced that it had closed an agreement with the Chinese for the direct conversion of the two countries’ currencies into commercial operations. Until then, institutions needed to carry out operations with the intermediation of the US dollar.

However, Finance Minister Fernando Haddad denied that Lula’s attacks on the dollar have geopolitical grounds. He stated that, from an economic point of view, despite the new system, dollar transactions will continue to take place.

The dollar became the standard of international trade when the dollar ceased to be backed by gold in the 1970s.

In addition to the statement against the US currency, Lula visited a research center belonging to the technology giant Huawei, considered by the US to be a security risk and an arm of the Chinese government. However, Huawei is a private company that finds itself at the center of Sino-US disputes.

Lula’s statements follow a diplomatic pattern that began in his first government – a time when the world was less polarized. The Brazilian president tries to dialogue with antagonistic powers and even with autocratic countries, such as Iran and Venezuela. For this, he tries to adjust his speech according to the country he visits.

For Manuel Furriela, professor of International Law at Faculdades Metropolitanas Unidas (FMU), Lula’s movement, for the time being, does not yet have the weight to generate wear and tear with the US government.

“The United States will probably make some criticisms of these statements by Lula, but I do not believe that this, at this moment, will lead to an erosion of relations between Brazil and the United States or any more serious problem. At least at the current moment”, he evaluates Furriela.

China defends that Brics be expanded and strengthen the political ties of the members

China, however, has been defending an expansion of the Brics and moving to attract other countries to the bloc. In May last year, for example, the Chinese Minister of Foreign Affairs, Wang Yi, held a meeting of the bloc’s foreign ministers with the presence of nine other guests, including Saudi Arabia and the United Arab Emirates.

The following month, as host of a BRICS summit, Chinese leader Xi Jinping championed the group’s expansion and proposed new cooperative efforts in the digital economy, trade and investment, and the supply chain. Jinping also invited at least 13 world leaders to participate in a global development dialogue with the BRICS countries, including Iranian President Ibrahim Raisi and Cambodian Prime Minister Hun Sen.

In July, Russian President Vladimir Putin even suggested that members of the group “create a new world reserve currency to better serve their economic interests”. The strategy would be a way for Moscow to soften the effects of international sanctions by the West after the invasion of Ukraine. China and other countries that antagonize the US want to protect themselves from possible future sanctions.

Lula defends peace plan for Ukraine that benefits Moscow

Earlier this year, Russia defended the peace plan proposed by China to end the war in Ukraine. The proposal is welcomed by members of the Lula government and will be the subject of debate during the Brazilian’s meeting with Xi Jinping this Friday (14).

“My suggestion is that we create a group of countries that try to sit at the table with Ukraine and Russia to try to find peace,” declared Lula before leaving for Beijing, adding that Brazil is willing to participate in the mediation and that China would play an important role in negotiating an end to the war.

China’s plan, however, is considered pro-Russian and has already been discarded by Ukraine and other Western countries. This is because it does not provide for the withdrawal of Kremlin troops from the invaded Ukrainian territory in Luhansk, Donetsk, Zaporizhzia, Kherson and Crimea.

After suffering criticism in Brazil and abroad, Lula made new statements without mentioning the regions taken in 2022 and started to defend that Russia illegally takes over Crimea.

The Russian Foreign Minister, Sergey Lavrov, will arrive in Brazil next Monday (17th) to meet with the Minister of Foreign Affairs, Mauro Vieira. Lula’s position is very pleasing to Moscow, as it supports the use of war to resolve political issues. This practice had been banned by the international community after the end of World War II.

The expectation is that Vieira will present to Lavrov a scenario of the discussion between Lula and Xi Jinping about the war in Ukraine. Lavrov’s visit to Brazil comes less than a month after the Presidency’s special advisor for foreign policy, former Chancellor Celso Amorim, visited Russia.

Chinese pressure puts Brazil’s balance in the BRICS bloc at risk

In the speech, Brazil has defended that it intends to maintain neutrality in the war in Ukraine and, consequently, a controversial proposal of “multilateralism” in its diplomatic relations. Lula suggested several times that the situation in Russia and Ukraine could be equalized, which infuriated Ukraine and put Western leaders on high alert.

In a vote at the United Nations two weeks ago, Brazil was one of the only countries to side with a proposal by Russia to create an investigation group at the body to examine the explosions in the Nord Stream 1 and 2 gas pipelines in the North Sea. Next to Brazil were only China and Russia itself.

The expectation from now on is that the pressure from China and Russia for a greater political alignment among the members of the Brics will be expanded during the next summit meeting, which will take place in South Africa in August.

The South African leader, Cyril Ramaphosa, who occupies the rotating presidency of the Brics, has already shown signs of giving in to pressure. He went further than abstaining from criticism of Moscow at the UN. This year, for example, South Africa began a joint naval exercise with Russia’s navy.

The alignment, which went beyond the line of political discourse, is already causing wear and tear for South African diplomacy. Putin’s presence at the next Brics meeting has become an open question, after the International Criminal Court in The Hague, in the Netherlands, asked for the arrest of the Russian president for crimes in Ukraine. Moscow is trying to work out with Pretoria a way for Putin to participate in the event without being arrested.

Vicent Magwenya, spokesperson for South African President Cyril Ramaphosa, said the government was looking for “more compromises in terms of how this will be managed”, and that as soon as the negotiations are concluded the necessary announcements will be made.

India is a major economic rival of China and has maintained a position of neutrality. But, it benefited from the conflict by buying oil below the market price offered by Russia because of the war.

Publicly, the Minister of Foreign Affairs, Mauro Vieira, has already made it clear that he received from Lula the mission of rebuilding bridges and opening channels in relations with virtually all regions of the world.

At Itamaraty, the evaluation is that Brazil has returned to “presidential diplomacy”. This means that Lula will try to personally engage in the most important global discussions, in addition to traveling to the most diverse countries.

For Professor Furriela, Lula’s strategy is to try to remain independent from the US and China, while participating in a strengthened bloc like the Brics.

“The Brazilian government is not interested in demonstrating an alignment with China or the United States. Now being part of a bloc, where there will be equal treatment for all members, strengthens the proposed Brazilian agenda of international independence”, he says. Professor of International Law.