Latin Arms Race Heats Up: Obama Leans on Brazil To Buy Boeing Warplanes

11/28/2009 05:12 am ET | Updated May 25, 2011

Sao Paulo

While sharing his vision of a more peaceful world with the UN and demanding big Pentagon cuts, US president Barack Obama has also been lobbying Brazil to buy warplanes from shrinking defense giant Boeing. This latest chapter in the underreported arms race between Brazil and Venezuela is a reminder that the global arms bazaar is a key driver of post-crisis economic growth.

Brazil's air force wants to replace aging Mirage and US-made F-5 fighters with either the French Rafale, the SAAB Gripen, or the F-18 Super Hornet now manufactured by Boeing. Next door, Venezuela is buying a new fleet of Su-35 attack aircraft, three Kilo class submarines from Russia and Chinese aircraft and radar systems. Already Brazil's top trade partner, China has just inked a big energy deal with Venezuela that adds $15 billion to the Hugo Chavez weapons war chest. And with the United States keeping Venezuela as their #2 supplier of imported oil (Canada is #1) Hugo has an even bigger bankroll for buying arms.

The last time a Dem White House put the arm on Brazil to buy American over French it was Bill Clinton, the deal was the big SIVAM radar project that's pushing the war on drugs into the Amazon, and the bribery investigation that followed embarrassed Brazil's government. Hoping it would all go away, Planalto Palace spokesperson Marcelo Baumbach dismissed reports in Paris daily Les Echos that Obama called Lula from Marthas Vineyard to discuss the Boeing deal as "rumors."

Aviation trade publications and blogs in Brazil have tagged the French Rafale as the front runner. Washington assured Brazil that they will provide previously unavailable sensitive technologies to give the Boeing Hornets a tactical the edge over Venezuela's Russian-made Flankers. This point was driven home last month when White House national security council director James Jones and Boeing executive vice president Jim Albaugh visited Brazil to discuss the F-18 deal. If supersized the way Boeing wants it to be, the deal could involve 120 aircraft and carry a price tag upwards of $30 billion.

Obama's efforts to run off the French are consistent with Bush administration policy crafted to contain what Washington views as threats to its Monroe Doctrine bragging rights in South America. To this end the Pentagon has re-activated the old 4th Fleet- mothballed since the 1950s- to police the waters off Latin America and protect US interests in the region.

France and Brazil, meanwhile, have hooked up in a strategic alliance to promote growth and regional security in the southern hemisphere. Since Guyana is an integral part of the French Republic, Brazil and France share a common border.

Brazil is buying submarines, frigates, helicopters and military aircraft made in France. Sale of the Dassault Rafale fighters would be a natural outgrowth of that relationship. In a show of solidarity, French president Nicholas Sarkozy was on the reviewing stand with Lula for Brazil's September 7th Independence Day celebration.

Beyond the hugs and photo ops, relations between the US and Brazil have become symptomatic of greater strains created by an antiquated inter- Inter-American system that is unraveling after more than a century of primus inter pares diplomacy by Washington.

Moving from US-backed dictatorships to democracy and free markets has widened the gap between haves and have-nots creating hybrid forms of class conflict, violence and micro-communities that attempt to imitate the upscale values post-crisis America continues to promote, but can no longer afford. Whether its aircraft, ethanol or drugs, world trade has escalated into economic warfare.

While US secretary of state Hilary Clinton criticizes China and Brazil's other key economic allies for engaging in unfair trade practices the World Trade Organization recently issued a decision awarding Brazil $800 million in a cotton subsidies case in which the US exhibited classic big government behavior. And a Dem controlled congress refuses to remove the 54 cents per gallon tax on sugar based ethanol imported from Brazil that Obama supported as a senator. Washington also blocked Brazil's deal to sell Toucano turboprop surveillance aircraft to Venezuela because the planes in question would contain sophisticated technology similar to what the US provides Colombia in a big aid package designed to track down suspected guerrillas and drug traffickers.

Brazil likes Obama, who remains a popular but unproven global leader as he enters the long backstretch of his presidential term. But Obama is deferring to an all Bush all the time Latin policy that promotes the downsizing of government and laissez-faire economics and runs contrary to Brazil's notions of state power and workers rights as voiced by Lula in his UN speech last Wednesday.

With Obama and Jones running interference Boeing may be getting closer to the red zone. Due date for final tenders was set for last Tuesday. But Reuters reports that Brazil's defense ministry, apparently in fairness to all the competitors, has extended the deadline for tenders on the deal to October 2nd - the same day the International Olympic Selection Committee announces whether Rio de Janeiro or Obama's home town of Chicago will host the 2016 Olympic Games.