Exclusive: U.S. bets on Brazil, extends new invitation to Rousseff

Brazil's President Dilma Rousseff reacts during the ceremony to sign a Provisional Measure of Policy Wage Minimum, at the Planalto Palace in Brasilia March 24, 2015. REUTERS/Ueslei Marcelino

By Brian Winter SAO PAULO (Reuters) - The Obama administration has again invited Brazil's President Dilma Rousseff for a state visit to Washington, a diplomatic breakthrough that both sides hope will lead over time to greater trade between the two biggest economies in the Americas. Rousseff had originally been scheduled to make a state visit, which involves a black-tie dinner at the White House and is considered the strongest expression of friendly ties between allies, in October 2013. But the leftist leader canceled her trip after she was angered by revelations that the U.S. National Security Agency (NSA) spied on her personal communications. She said it was "incompatible" with a relationship among allies. The dust-up led one former top aide to President Barack Obama to describe Brazil and the United States as "two countries that just fundamentally don't understand each other." Yet, after more than a year of efforts by both sides to heal relations, Vice President Joe Biden re-extended the invitation to Rousseff in a phone call on March 13, sources with knowledge of the conversation told Reuters on condition of anonymity. Biden offered Rousseff a choice between a state visit in 2016 or a high-profile but less formal trip this year, the sources said, since this year's calendar of state visits is already considered full with leaders from Japan and China. Rousseff will discuss the timing of the visit with Obama when the two leaders meet on the sidelines of a summit in Panama next month, a senior Brazilian official said on Tuesday. The invitation for a state visit, which would be the first by a Brazilian leader to Washington since 1995, is a rare piece of positive news for Rousseff. Her popularity has tumbled due to a huge corruption scandal at state-run oil company Petroleo Brasileiro SA and an economy that has struggled since a long boom last decade. Despite Rousseff's problems, and a relatively thin policy agenda for her visit at present, U.S. officials believe a strong demonstration of support for Brazil will eventually unlock greater access to its $2.2 trillion economy, which is about 75 percent bigger than Mexico's. "While our relations have sometimes been rocky, we're betting on Brazil to succeed and grow in importance," a senior U.S. official said, calling Brazil "a key global actor." Rousseff has said she hopes a visit will lead to a closer defense relationship, including technology transfers that could help Brazilian companies like Embraer SA . She is also keen for greater access for Brazilian beef to the U.S. market, an official said. The two countries have disagreed in recent years about some hot-button foreign policy issues, with Brazil for the most part declining to join Washington in its criticism of Venezuela's left-wing government, for example. But economic ties have continued to grow unabated. The U.S. consulate in Sao Paulo issues more visas than any other U.S. mission abroad, with roughly 600,000 in 2014, nearly double the number seen in 2010. Diplomats often joke that Brazilian travelers single-handedly revived the economies of Miami and Orlando in recent years. Bilateral trade totaled $72 billion in 2014, up 20 percent from 2010, with a $12 billion surplus in favor of the United States, according to the U.S. Department of Commerce. The United States is Brazil's second-biggest export market behind China. Meanwhile, Brazilian officials have spoken of a renewed emphasis on trade, especially with the United States, as a way to stir the economy from its recent funk. Its new trade minister, Armando Monteiro, went to Washington in February for his first trip abroad in the job. "Our countries' private sectors are way ahead of the public sectors in terms of integration," said Susan Segal, president of Council of the Americas. She said a state visit would be "a great development." (Editing by Kieran Murray and Cynthia Osterman)