United States and Brazil must reduce dependence on China imports: Pompeo

By Anthony Boadle and Andrea Shalal

BRASILIA/WASHINGTON (Reuters) - U.S. Secretary of State Mike Pompeo warned on Monday that as the United States and Brazil reinforce their business partnership, they need to reduce their dependence on imports from China for their own security.

At a virtual summit on increased U.S.-Brazil cooperation aimed at post-pandemic recovery, Pompeo underscored the importance of expanding bilateral economic ties, given what he called "enormous risk" stemming from China's significant participation in their economies.

"To the extent we can find ways that we can increase the trade between our two countries, we can ... decrease each of our two nations' dependence for critical items" coming from China, he said.

 

"Each of our two peoples will be more secure, and each of our two nations will be far more prosperous, whether that's two or five or 10 years from now," he added.

The Trump administration is working to boost ties with Brazil and provide a counterweight to China, keen to gain some advantage in what it sees as a new "Great Power" competition.

Brazilian far-right President Jair Bolsonaro wants to follow suit but is hamstrung by China being Brazil's largest trade partner, which buys much of its soy and iron ore.

Some U.S. politicians are trying to "sow discord," said Chinese foreign ministry spokesman Zhao Lijian, when asked about Pompeo's comments.

Cooperation between China and Brazil is durable and has broad support in both countries, he said, speaking at a news conference in Beijing on Tuesday.

Bolsonaro has yet to decide whether to ban Brazilian telecom companies from buying 5G equipment from China's Huawei Technologies Co Ltd [HWT.UL] as the U.S government has sought.

At the summit organized by the U.S. Chamber of Commerce, Bolsonaro announced three agreements with the United States to ensure good business practices and stop corruption. He said the package will slash red tape and increase trade and investment.

"In the last year and a half, together with President Trump, we have elevated Brazil-U.S. relations to its best moment ever, and opened a new chapter in the relationship between the two largest economies and democracies in the hemisphere," he said.

The two countries signed the protocol outlining the three agreements late on Monday, saying they would set the stage for future talks on expanding trade ties between the two allies and identifying priority sectors to further reduce trade barriers.

Two top U.S. Democratic lawmakers slammed the Trump administration for increasing trade cooperation with Bolsonaro's far-right government despite its "abysmal record" on human rights, the environment and corruption.

"Giving President Bolsonaro ammunition to claim that the United States endorses his behavior sullies our nation's reputation as a country that demands our trade partners respect human rights and the rule of law," said U.S. House Ways and Means Committee Chairman Richard Neal.

Representative Earl Blumenauer, who heads the committee's trade panel, said the protocol was the latest mini trade deal signed by the Trump administration without congressional buy-in.

Pompeo said Brazil was getting closer to joining the Organization for Economic Co-operation and Development (OECD) grouping rich nations with the support of the United States.

"We want this to happen as quickly as we can," he said.

The U.S. Export-Import Bank would back projects valued at $450 million in Brazil this year, while the U.S. Development Finance Corp had plans involving about $1 billion in projects there, he said.

U.S. goods and services trade with Brazil totaled an estimated $105.1 billion in 2019.

 

(Reporting by Lisandra Paraguassu and Anthony Boadle in Brasilia, Humeyra Pamuk and Andrea Shalal in Washington, Leonardo Benassatto in Sao Paulo; Additional reporting by Gabriel Crossley in Beijing; Editing by Richard Chang, Cynthia Osterman and Edwina Gibbs)