[Senate Hearing 118-50]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 118-50

                  THE FUTURE OF U.S.-BRAZIL RELATIONS

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION
                               __________

                             MARCH 15, 2023
                               __________



       Printed for the use of the Committee on Foreign Relations
       
       
       
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]       



                  Available via http://www.govinfo.gov

                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
52-837 PDF                  WASHINGTON : 2023  



                 COMMITTEE ON FOREIGN RELATIONS        

             ROBERT MENENDEZ, New Jersey, Chairman        
BENJAMIN L. CARDIN, Maryland           JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire          MARCO RUBIO, Florida
CHRISTOPHER A. COONS, Delaware         MITT ROMNEY, Utah
CHRISTOPHER MURPHY, Connecticut        PETE RICKETTS, Nebraska
TIM KAINE, Virginia                    RAND PAUL, Kentucky
JEFF MERKLEY, Oregon                   TODD YOUNG, Indiana
CORY A. BOOKER, New Jersey             JOHN BARRASSO, Wyoming
BRIAN SCHATZ, Hawaii                   TED CRUZ, Texas
CHRIS VAN HOLLEN, Maryland             BILL HAGERTY, Tennessee
TAMMY DUCKWORTH, Illinois              TIM SCOTT, South Carolina
                Damian Murphy, Staff Director          
       Christopher M. Socha, Republican Staff Director          
                   John Dutton, Chief Clerk          



                              (ii)        


                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page

Menendez, Hon. Robert, U.S. Senator From New Jersey..............     1

Risch, Hon. James E., U.S. Senator From Idaho....................     3

Nichols, Hon. Brian, Assistant Secretary of State, Western 
  Hemisphere 
  Affairs, U.S. Department of State, Washington, DC..............     4
    Prepared Statement...........................................     6

Duke, Richard, Deputy Special Presidential Envoy for Climate, 
  U.S. Department of State, Washington, DC.......................     7
    Prepared Statement...........................................     9

              Additional Material Submitted for the Record

Responses of Mr. Brian Nichols to Questions Submitted by Senator 
  Robert Menendez................................................    28

Responses of Mr. Brian Nichols to Questions Submitted by Senator 
  Marco Rubio....................................................    29

Responses of Mr. Brian Nichols and Mr. Richard Duke to Questions 
  Submitted by Senator John Barrasso.............................    34

Responses of Mr. Richard Duke to Questions Submitted by Senator 
  Brian Schatz...................................................    35

Responses of Mr. Brian Nichols to Questions Submitted by Senator 
  Bill Hagerty...................................................    36

                                 (iii)

  

 
                  THE FUTURE OF U.S.-BRAZIL RELATIONS

                              ----------                              


                       WEDNESDAY, MARCH 15, 2023

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:39 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Robert 
Menendez presiding.
    Present: Senators Menendez [presiding], Cardin, Shaheen, 
Murphy, Kaine, Van Hollen, Risch, Young, Hagerty, and Ricketts.

          OPENING STATEMENT OF HON. ROBERT MENENDEZ, 
                  U.S. SENATOR FROM NEW JERSEY

    The Chairman. This hearing of the Senate Foreign Relations 
Committee will come to order.
    Consider the following. After a fractious election cycle, 
the defeated yet dangerous demagogue spews lies about election 
fraud. He urges his supporters to reject reality, inciting them 
to commit a violent attack on government buildings just a few 
days into the start of the new year.
    The shocking images of the insurrection are then broadcast 
all over the world, a stark example of how even the strongest 
democracies can falter when they are pushed to their limit.
    If you are listening to this and wondering which 
insurrection is he referring to, then I have made my point. 
Similarities between the January 6 assault on the U.S. Capitol 
and its Brazilian sequel on January 8 of this year reminds us 
that we must stand vigilant against anyone anywhere who 
corrodes democratic norms, even when those attacks come from 
the highest levels of government.
    For just as we know who was responsible for instigating the 
attacks on the very institution in which we hold this hearing, 
we know that former President Jair Bolsonaro, through his lies 
and disinformation, fomented the attacks on Brazil's democracy.
    Democracies are resilient only as long as we reinforce 
their resiliency. We must look inward, commit to our own 
democratic values, and continue to stand with democratic 
movements and institutions throughout the world, which brings 
us to today's hearing.
    Despite the painful bond of these horrific attacks, the 
United States and Brazil have a unique opportunity for renewed 
cooperation. From addressing democratic challenges to 
protecting the environment to the regional migration crisis, we 
must succeed together or we will fail apart.
    On the environment, in the span of about 2 years while 
Bolsonaro was in charge human development ravaged more than 
34,000 square miles of Brazil's Amazon rainforest, an area 
roughly the size of South Carolina.
    The astronomical damage inflicted lasting harm to the 
ecosystem, to biodiversity, and to our efforts to combat global 
climate change. Without drastic measures to reverse Bolsonaro's 
actions, the lungs of the earth could become a net emitter, 
preventing us from addressing catastrophic climate change.
    Make no mistake, Brazilians are fighting for the Amazon, 
but under Bolsonaro that proved hazardous in and of itself, 
particularly for indigenous populations.
    In 2021 alone, invasions of and attacks on indigenous 
communities increased nearly threefold to more than 300 
documented cases. That same year 176 indigenous people were 
murdered for their activism to protect their homeland, the 
highest numbers ever recorded.
    Brazil under Bolsonaro was one of the deadliest places for 
environmental defenders in the world, which is why I am 
heartened that President Lula has made restarting Amazon 
conservation and protecting environmental defenders a top 
priority and the United States stands ready to support these 
steps.
    Last Congress I introduced the bipartisan Amazon 21 Act, 
crucial legislation that rewards both conservation goals and 
economic competitiveness. Addressing climate change while 
promoting positive economic growth are not mutually exclusive, 
and I look forward to once again engaging in that effort this 
Congress.
    After all, it is only by working with our partners, 
particularly those in our own hemisphere, that we can combat 
climate change, mitigate damage to the ecosystem, protect 
environmental defenders, and spur economic growth.
    Protecting environmental defenders is about much more than 
just the Amazon. Organized civil society and the ability of 
citizens to hold their government accountable are bedrocks of a 
functioning democracy.
    Given Brazil's important economic and geostrategic role, we 
must be partners as we address democratic backsliding across 
the Americas. We must defend democracy when it is under attack 
around the world.
    In Havana, Miguel Diaz-Canel continues to lock up hundreds 
of protesters.
    In Caracas, the Maduro regime is under investigation for 
crimes against humanity.
    In Managua, U.N. experts have said that Daniel Ortega's 
reign of terror has perpetuated ``Nazi style crimes.''
    These human rights abuses and the migratory outflows that 
stem from citizens fleeing these countries demand our full 
attention in cooperation. It also means that our countries must 
stand shoulder-to-shoulder with the people of Ukraine in the 
face of Putin's unjustified war.
    The time is now for a U.S.-Brazilian partnership that leads 
the way on environmental, economic, and democratic issues.
    Next month, I look forward to leading a CODEL to Brazil 
where we will solidify these ties as we hopefully meet with 
President Lula and the senior members of his government. We 
look forward to that.
    Now let me turn to the ranking member, Senator Risch, for 
his remarks.

               STATEMENT OF HON. JAMES E. RISCH, 
                    U.S. SENATOR FROM IDAHO

    Senator Risch. Thank you, Mr. Chairman.
    The United States has an enduring interest in our 
prosperous, democratic, and stable Western Hemisphere. Strong 
relations with Brazil are important to attain these goals.
    Next year, we will celebrate 200 years of diplomatic 
relations. The Administration should seize this moment with a 
bold bilateral agenda. Such an agenda should include deepening 
our security and commercial relations, working with Brazil 
against malign state and nonstate influences, and encouraging 
Brazilian support for the Organization of American States.
    Like other emerging economies in Latin America, Brazilians 
have benefited enormously from the international norms and 
institutions which were created, led by us at the end of World 
War II.
    These norms and institutions have helped Brazil become a 
top destination for U.S. foreign direct investments, which are 
crucial to the stability and prosperity of the country.
    At the same time, Brazil has drawn increasing attention 
from malign foreign influences such as China, Russia, and Iran. 
The Brazilian people should ensure their sovereignty and 
freedoms are not compromised by these malign actors.
    There is deep concern about President de Silva's recent 
decision to welcome two sanctioned Iranian warships into 
Brazilian ports. More importantly, President Biden should have 
canceled his meeting with President de Silva.
    I am disturbed by reports that the President instead just 
asked them to move the port visit until after their meeting. I 
was also disappointed President de Silva turned down Germany's 
request for ammunition Ukraine needs to defend its sovereign 
territory against the unprovoked Russian invasion and 
occupation.
    We should also remember that while the title of this 
hearing focuses on Brazil, there are many other challenges in 
the Western Hemisphere. The illegal immigration and the illicit 
narcotics trafficking crisis at our Southwest border are 
relentless. The Administration's response is to waste 
taxpayers' money abroad and weaken enforcement of immigration 
laws at home.
    Venezuela is an unabated disaster. Last week marked 1 year 
since Ambassador Story and White House officials sat down with 
Maduro to find accommodation with the regime.
    The results have included pardoned corrupt criminals, 
division among democratic forces, and legitimacy for Maduro, 
but no progress on restoring democracy in that country.
    Colombia, for the first time in two decades, has failed to 
eradicate a single hectare of coca. Seizures of heroin and 
cocaine have dramatically fallen while their production has 
increased.
    Haiti has no constitutional government, faces growing 
levels of violence, and is the epicenter of a migration crisis 
overwhelming communities in Florida. The Administration's 
response is to wait for Canada to take the lead.
    I look forward to hearing from Ambassador Nichols on the 
Administration's approach to these issues and our relations 
with Brazil, more broadly.
    Thank you for the witnesses. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Risch.
    Let me turn to our witnesses.
    It is an honor introduce Assistant Secretary Brian Nichols, 
heads the Bureau of Western Hemisphere Affairs at the 
Department of State. Assistant Secretary Nichols previously 
served as U.S. Ambassador to Zimbabwe and Peru as well as 
Principal Deputy Assistant Secretary of State for International 
Narcotics and Law Enforcement. We look forward to hearing from 
you today.
    We are also joined by Deputy Special Envoy for Climate 
Richard Duke. Mr. Duke previously served as Special Assistant 
to President Obama and Deputy Assistant Secretary of the 
Department of Energy. He has also worked at NRDC, McKinsey, and 
Brookings.
    Welcome to you both. Your full statements will be included 
in the record without objection. I would ask you to try to 
summarize your statements in about 5 minutes or so so the 
members of the committee can have a conversation with you.
    Before I ask you to start, Secretary Nichols, let me offer 
a warm welcome to the Brazilian charge d'affaires, Bernardo 
Velloso. Thank you for joining us as well.
    With that, Mr. Secretary, you are recognized.

 STATEMENT OF THE HONORABLE BRIAN NICHOLS, ASSISTANT SECRETARY 
OF STATE, WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Mr. Nichols. Thank you, Mr. Chairman.
    Chairman Menendez, Ranking Member Risch, distinguished 
members of the committee, thank you for the opportunity to 
discuss our relationship with Brazil.
    As the world's seventh most populous country and 12th 
largest economy, Brazil is a global actor and strategic partner 
with whom we work closely to advance shared priorities.
    President Biden and President Lula reaffirmed our vital and 
enduring partnership during their February 10 meeting at the 
White House. Nine Cabinet officials joined the presidents, 
reflecting the breadth and depth of our bilateral relations.
    The two presidents agreed that strengthening democracy, 
protecting human rights, and addressing the climate crisis 
would anchor our shared agenda.
    The troubling events in Brasilia on January 8 highlighted 
the threats that polarization and misinformation pose even for 
established democracies.
    President Biden, Secretary Blinken, and I quickly and 
forcefully condemned that day's violent attacks. In their 
February 10 meeting both presidents condemned political 
extremism and violence, hate speech, and disinformation. They 
agreed to work together to address these challenges, including 
through this month's second Summit for Democracy.
    The United States and Brazil will continue working together 
to advance human rights at home and abroad. President Biden and 
President Lula committed to reinvigorate the U.S.-Brazil Joint 
Action Plan to Eliminate Racial and Ethnic Discrimination and 
promote equality, known as JAPER, to promote the human rights 
and well-being of marginalized racial and ethnic communities, 
including indigenous people and people of African descent in 
both countries.
    We anticipate productive conversations on these subjects 
during the upcoming human rights dialogue and technical level 
meetings on JAPER.
    Home to 30 percent of the world's tropical rainforests, 
Brazil plays a vital role in addressing the climate crisis. The 
Biden-Harris administration stands ready to support President 
Lula's commitments to advance environmental protection and 
sustainable development.
    President Biden and President Lula intend to work together 
to enhance global food security. Brazil's status as the world's 
largest agricultural net exporter and one of the largest 
fertilizer importers makes it an important partner in our 
efforts to address food security challenges we now face.
    Both our governments are interested in expanding trade and 
investment in developing supply chain resiliency. The United 
States is by far Brazil's largest foreign investor, and Brazil 
represents a top export market for the United States, receiving 
nearly $47 billion in U.S. goods in 2021.
    U.S. Trade Representative Ambassador Katherine Tai's trip 
earlier this month reinforced our desire to grow bilateral 
trade in line with our shared values.
    Under Secretary of State for Economic Growth, Energy, and 
the Environment Jose Fernandez will similarly engage with 
Brazilian Government officials and private sector leaders later 
this month to discuss trade, critical minerals, agriculture, 
and clean energy.
    We work closely with Brazil in multilateral fora including 
in the United Nations Security Council where Brazil serves as 
an elected member through the end of 2023. We expect Brazil 
will remain a committed leader in the U.N. on humanitarian 
issues, peacekeeping operations, and efforts to promote 
international peace and security.
    Brazil will also serve as G-20 president in 2024. We know 
we must work diligently to keep the relationship strong and 
pull together on tough issues facing the world. President Lula 
places an emphasis on South-South cooperation and seeks to 
position Brazil as a leading voice for peace, including in 
Ukraine.
    The Russian Federation is solely responsible for the war in 
Ukraine. However, we welcome all genuine efforts to secure a 
comprehensive, just, and lasting peace in Ukraine based on the 
U.N. Charter's principles.
    Brazil voted in favor of the February 23 U.N. General 
Assembly Resolution demanding Russia's immediate withdrawal 
from Ukraine and we look forward to continued cooperation to 
address the dire human rights and humanitarian consequences of 
Russia's war.
    We understand our countries will not always see eye-to-eye 
and Brazil as a sovereign nation makes its own foreign policy 
decisions. We conveyed our consternation that Brazil recently 
hosted two Iranian naval vessels beginning February 28, 
emphasizing the Iranian regime's brutal suppression of its own 
people, provision of weapons to Russia, and destabilizing 
activities around the world.
    We will continue to engage with our Brazilian partners to 
discourage cooperation with malign actors, including Iran.
    In conclusion, the Biden-Harris administration is committed 
to working diligently to ensure U.S.-Brazilian relations remain 
strong and productive for the benefit of U.S. citizens, the 
Brazilian people, and the world.
    Next year we will celebrate 200 years of bilateral 
relations and we are confident that our partnership will 
continue to thrive for many generations to come.
    [The prepared statement of Mr. Nichols follows:]

                Prepared Statement of Mr. Brian Nichols

    Chairman Menendez, Ranking Member Risch, distinguished members of 
the Committee, thank you for the opportunity to discuss our 
relationship with Brazil. As the world's seventh-most populous country 
and 12th-largest economy, Brazil is a global actor and strategic 
partner with whom we work closely to advance shared priorities.
    President Biden and President Lula reaffirmed our vital and 
enduring partnership during their February 10 meeting at the White 
House. Nine cabinet officials joined the presidents, reflecting the 
breadth and depth of our bilateral relations. The two presidents agreed 
that strengthening democracy, protecting human rights, and addressing 
the climate crisis would anchor our shared agenda.
    The troubling events in Brasilia, on January 8, highlighted the 
threats that polarization and misinformation pose, even for established 
democracies. President Biden, Secretary Blinken, and I quickly and 
forcefully condemned that day's violent attacks. In their February 10 
meeting, both presidents condemned political extremism and violence, 
hate speech, and disinformation. They agreed to work together to 
address these challenges, including through this month's second Summit 
for Democracy.
    The United States and Brazil will continue working together to 
advance human rights at home and abroad. President Biden and President 
Lula committed to reinvigorate the U.S.-Brazil Joint Action Plan to 
Eliminate Racial and Ethnic Discrimination and Promote Equality, known 
as JAPER, to promote the human rights and wellbeing of marginalized 
racial and ethnic communities, including Indigenous people and people 
of African descent, in both countries. We anticipate productive 
conversations on these subjects during the upcoming Human Rights 
Dialogue and technical-level meetings on JAPER.
    Home to 30 percent of the world's tropical rainforests, Brazil 
plays a vital role in addressing the climate crisis. The Biden-Harris 
administration stands ready to support President Lula's commitments to 
advance environmental protection and sustainable development.
    President Biden and President Lula intend to work together to 
enhance global food security. Brazil's status as the world's largest 
agricultural net exporter and one of the largest fertilizer importers 
makes it an important partner in our efforts to address the food 
security challenges we now face.
    Both our governments are interested in expanding trade and 
investment and developing supply chain resiliency. The United States is 
by far Brazil's largest foreign investor, and Brazil represents a top 
export market for the United States, receiving nearly $47 billion 
dollars in U.S. goods in 2021. U.S. Trade Representative Ambassador 
Katherine Tai's trip earlier this month reinforced our desire to grow 
bilateral trade, in line with our shared values. Under Secretary of 
State for Economic Growth, Energy, and the Environment Jose Fernandez 
will similarly engage with Brazilian Government officials and private 
sector leaders later this month to discuss trade, critical minerals, 
agriculture, and clean energy.
    We also work closely with Brazil in multilateral fora, including in 
the UN Security Council, where Brazil serves as an elected member 
through the end of 2023. We expect Brazil will remain a committed 
leader in the UN on humanitarian issues, peacekeeping operations, and 
efforts to promote international peace and security. Brazil will also 
serve as G20 president in 2024.
    We know we must work diligently to keep the relationship strong and 
to pull together on the tough issues facing the world. President Lula 
places an emphasis on South-South cooperation and seeks to position 
Brazil as a leading voice for peace, including in Ukraine. The Russian 
Federation is solely responsible for the war in Ukraine. However, we 
welcome all genuine efforts to secure a comprehensive, just, and 
lasting peace in Ukraine, based on the UN Charter's principles. Brazil 
voted in favor of the February 23 UN General Assembly resolution 
demanding Russia's immediate withdrawal from Ukraine, and we look 
forward to continued cooperation to address the dire human rights and 
humanitarian consequences of Russia's war.
    We understand our countries will not always see eye-to-eye--and 
Brazil, as a sovereign nation, makes its own foreign policy decisions. 
We conveyed our consternation that Brazil recently hosted two Iranian 
naval vessels beginning February 28, emphasizing the Iranian regime's 
brutal suppression of its own people, provision of weapons to Russia, 
and destabilizing activities around the world. We will continue to 
engage with our Brazilian partners to discourage cooperation with 
malign actors including Iran.
    In conclusion, the Biden-Harris administration is committed to 
working diligently to ensure U.S.-Brazilian relations remain strong and 
productive, for the benefit of U.S. citizens, the Brazilian people, and 
the world. Next year, we will celebrate 200 years of bilateral 
relations, and we are confident that our partnership will continue to 
thrive for many generations to come.
    Once again, thank you for the opportunity to appear before you 
today. I welcome your questions.

    The Chairman. Thank you.
    Mr. Duke.

 STATEMENT OF RICHARD DUKE, DEPUTY SPECIAL PRESIDENTIAL ENVOY 
     FOR CLIMATE, U.S. DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Duke. Chairman Menendez, Ranking Member Risch, thank 
you for the opportunity today to provide more detail about our 
engagement with Brazil on climate issues.
    Assistant Secretary Nichols already outlined the global 
importance of Brazil in the range of our strategic cooperation. 
I will focus on how cooperation on climate change fits within 
these strategic priorities.
    In addition to being the world's seventh most populous 
country, Brazil is the sixth largest emitter of greenhouse 
gases globally. Due to its abundant hydropower resources, 
renewable power supplies nearly four-fifths of its electricity 
and has a clean energy economy, relatively speaking, already.
    As the world's third largest exporter of agricultural 
products, Brazil has significant agricultural-related 
emissions, but the largest source of emissions comes from the 
loss of forests and other carbon-rich ecosystems.
    The Amazon rainforest plays a critical role in the 
regulation of global climate, not to mention its importance for 
the millions of people that live within the region and the 
unique biodiversity found only in this biome.
    It covers almost 2.8 million square miles and stores over 
120 billion metric tons of carbon, equivalent to more than a 
decade of global energy sector emissions. Sixty percent of the 
Amazon rainforest falls within Brazil's territory. This land 
and its resources are unquestionably Brazilian.
    The risks posed by Amazon forest loss have global 
implications. Deforestation rates in the Brazilian Amazon have 
soared over the past 4 years as speculators cleared forests to 
claim land, ranchers expanded pasture, and illegal loggers and 
miners encroached into protected areas and indigenous 
territories.
    Scientists fear that the Amazon rainforest is nearing a 
tipping point where natural tree die off accelerates and the 
Amazon no longer naturally regenerates, turning it into a net 
source of emissions.
    The implications would be catastrophic for the climate, 
also catastrophic for agricultural production and global food 
security, which depends on rainfall patterns regulated by the 
Amazon.
    It would affect the livelihoods of more than 25 million 
people who live in the Brazilian Amazon, including hundreds of 
thousands of indigenous peoples who have conserved the forest 
for millennia. It would also cause an unprecedented loss of 
biodiversity.
    Any successful conservation approach must create value for 
healthy ecosystems so that people who depend on them benefit 
from standing forests more so than from deforestation.
    On February 10 in Washington, Presidents Biden and Lula 
instructed the U.S.-Brazil Climate Change Working Group to 
reconvene promptly.
    During his recent trip to Brazil, Special Presidential 
Envoy for Climate John Kerry and Minister of Environment and 
Climate Marina Silva identified key areas for engagement, 
focusing on deforestation, the bioeconomy, low-emissions 
agriculture, as well as clean energy and resilience.
    The truth is we cannot fail. We cannot fail because of 
Brazil's importance for the global climate, food security, and 
biodiversity, but we also cannot fail because of the importance 
of our strategic partnership with Brazil.
    The United States has worked for decades to create a closer 
relationship with Brazil. This eroded over the last few years 
and at the same time the role of the PRC has been in 
ascendance.
    The People's Republic of China is currently Brazil's 
largest trade partner and the largest market for many Brazilian 
commodities. It is also the largest investor in infrastructure 
projects in Brazil, and the PRC has invested in building strong 
relationships with Brazilian legislators and other leaders.
    There is a strong pro-China constituency in the country, 
but the Lula administration is committed to a close working 
relationship with the United States across a range of issues.
    The United States is the second largest trading partner and 
the largest source of foreign direct investment in Brazil, and 
Brazil has a strong cultural affinity with the United States, 
creating opportunities for closer political ties.
    To achieve this, we need to ensure that funding flows to 
support Brazil's priorities--conserving forests, building a 
strong bioeconomy and transitioning to productive and low-
emission agriculture and clean energy.
    We also have the opportunity to work with a range of 
partners--government, private sector, multilateral, and 
philanthropic--to bring support for Brazil's forests and 
climate efforts. We see the Amazon Fund with its results-based 
approach and mobilizing private sector investment for Brazil's 
deforestation as key.
    This is a must-succeed year for the Amazon and for Brazil. 
Brazil has asked us to step up and be a strategic partner in 
their efforts. This is a request we cannot ignore for the 
climate, for the people of Brazil, and for the future of one of 
the world's largest democracies.
    Thank you again for the opportunity to testify today.
    [The prepared statement of Mr. Duke follows:]

                 Prepared Statement of Mr. Richard Duke

    Chairman Menendez, Ranking Member Risch, distinguished members of 
the Committee, thank you for the opportunity today to provide more 
detail about our engagement with Brazil on climate change issues. 
Assistant Secretary Nichols already outlined the global importance of 
Brazil, and the range of our strategic cooperation. I will focus on how 
cooperation on climate change fits within these strategic priorities.
    In addition to being the world's seventh-most populous country, 
Brazil is the sixth largest emitter of greenhouse gases in the world. 
Due to its abundant hydropower resources, renewable sources supply 
nearly four-fifths of its electricity. As the world's third-largest 
exporter of agricultural products, Brazil has significant agriculture-
related emissions. The largest source of emissions come from the loss 
of forests and other carbon-rich ecosystems.
    The Amazon rainforest plays a critical role in the regulation of 
global climate--not to mention its importance for the millions of 
people that live within the region, and the unique biodiversity found 
only in this biome.
    It covers almost 2.8 million square miles and stores an estimated 
123 billion metric tons of carbon, equivalent to more than a decade of 
global energy sector emissions.
    Sixty percent of the Amazon rainforest falls within Brazil's 
territory. This land, and its resources, are unquestionably Brazilian, 
but the risks posed by Amazon forest loss have global implications.
    Deforestation rates in the Brazilian Amazon have soared over the 
past 4 years as speculators cleared forests to claim land, ranchers 
expanded pasture, and illegal loggers and miners encroached into 
protected areas and Indigenous territories.
    Scientists fear the Amazon rainforest is nearing a tipping point, 
where natural tree die off accelerates and the Amazon no longer 
naturally regenerates, turning the Amazon into a net source of 
emissions. The implications would be catastrophic for the climate. It 
would also be catastrophic for agricultural production and global food 
security, which depends on rainfall patterns regulated by the Amazon. 
It would affect the livelihoods of the more than 25 million people who 
live in the Brazilian Amazon--including the hundreds of thousands of 
Indigenous Peoples who have conserved the forests for millennia. It 
could also cause an unprecedented loss of biodiversity.
    Any successful conservation approach must create value for healthy 
ecosystems, so that the people who depend on them benefit from standing 
forests more than from deforestation.
    On February 10 in Washington, Presidents Biden and Lula instructed 
the U.S.-Brazil Climate Change Working Group to reconvene promptly. 
During his trip to Brazil, Special Presidential Envoy for Climate John 
Kerry and Minister of Environment and Climate Marina Silva identified 
key areas for engagement, focusing on deforestation, the bioeconomy, 
low emissions agriculture, as well as clean energy and resilience.
    The truth is, we cannot fail. We cannot fail because of Brazil's 
importance for the global climate, food security, and biodiversity. But 
we also cannot fail because of the importance of our strategic 
relationship with Brazil.
    The United States has worked for decades to create a closer 
relationship with Brazil. This relationship eroded over the last few 
years, and at the same time, the role of the PRC has been in 
ascendance. The PRC is currently Brazil's largest trade partner, and 
the largest market for many Brazilian commodities. It is also the 
largest investor in infrastructure projects. The PRC has invested in 
building strong relationships with Brazilian legislators and other 
leaders, and there is a strong pro-China constituency in the country.
    But the Lula administration is committed to a close working 
relationship with the United States across a range of issues. The 
United States is the second-largest trading partner for Brazil, and 
largest source of foreign direct investment. Brazil has a strong 
cultural affinity with the United States, creating opportunities for 
even closer political ties.
    To achieve this, we need to ensure that funding flows to support 
Brazil's priorities: conserving forests, building a strong bioeconomy, 
and transitioning to low emission agriculture and clean energy.
    We also have the opportunity to work with a range of partners--
government and private sector, multilateral and philanthropic--to bring 
significant support for Brazil's forest and climate efforts. We see the 
Amazon Fund and mobilizing private sector investment for Brazil's 
deforestation efforts as key.
    This is a must-succeed year for the Amazon, and for Brazil. Brazil 
has asked us to step up to be a strategic partner in their efforts. 
This is a request we cannot ignore--for the climate, for the people of 
Brazil, and for the future of one of the world's largest democracies.
    Thank you again for the opportunity to testify today. I welcome any 
questions.

    The Chairman. Thank you both for your testimony. We will 
start a round a 5-minute questioning.
    As Brazil's institutions were under attack, the person 
responsible for instigating these attacks was on vacation in 
Florida. Former President Bolsonaro has been in the United 
States since December. He is requesting a 6-month tourist visa 
to extend his stay. At the same time he continues to spew 
disinformation about Brazil's elections.
    I raise the question, what does it say if the United States 
is to provide safe haven to a foreign official responsible for 
seeking to undermine democracy and free and fair elections 
abroad?
    Assistant Secretary Nichols, is the Biden administration 
committed to swiftly reviewing any extradition requests for Mr. 
Bolsonaro?
    Mr. Nichols. It is a long-standing policy not to comment on 
extradition matters. Certainly, we have a strong relationship 
with Brazil and we will handle any request that we receive from 
the Brazilian Government expeditiously.
    The Chairman. Okay. Yes, I did not ask you how you are 
going to decide. I asked you whether you--the Administration is 
committed to doing it expeditiously because my understanding is 
that the Lula government suggested they would like to see his 
return to Brazil by the end of March. Do we have an extradition 
request pending?
    Mr. Nichols. Sorry, but we do not comment on whether or not 
countries have submitted extradition requests, but if such a 
request were received we would handle it expeditiously in 
accordance with law.
    The Chairman. We do not ever comment as to whether even a 
request exists?
    Mr. Nichols. Yes, Mr. Chairman.
    The Chairman. We have to think about changing that because 
it seems to me that it is difficult to make public policy if 
you do not know what are at least the facts that are pending 
before the government.
    A key driver of deforestation in the Amazon is the 
extractive industry and agricultural activities backed by 
Chinese state-owned corporations.
    Economic pressure to convert the Amazon is tremendous, 
which is why the legislation that I introduced aims to 
establish market-based values for forest conservation and offer 
assistance based on the achievement of conservation results.
    How important is it for the United States to help generate 
economic value for conserving the Amazon, Mr. Duke?
    Mr. Duke. Mr. Chairman, thank you for the question. We 
share your concern about illegal activities in the Amazon and 
indeed in global forest basins as a driver of deforestation and 
would note that deforestation globally is one of the main 
causes of climate change and we simply have to address it for 
biodiversity reasons and to tackle climate change properly.
    Part of that is making sure that we build on measures like 
the Lacey Act that has helped to ensure that we have ways to 
enforce against illegally harvested wood, and I will note that 
we have engaged in the U.S. China-Glasgow Declaration with 
China on that issue, pushing them to enforce their own laws 
about illegally traded wood products from the Amazon or other 
regions and we will continue to work on this agenda and welcome 
the legislative proposals that you have put forward.
    The Chairman. I appreciate enforcing laws to not violate 
certain laws, whether they be in Brazil or here, but the 
question is do we not need to establish some type of market-
based values for achievement of conservation results?
    I mean, part of the challenge here is an economic one. Do 
we not want to find some market-based value so that we can 
ultimately help countries do what is in everybody's interest?
    Mr. Duke. Thank you, Mr. Chairman.
    We agree that it is crucial to support countries like 
Brazil that seek to end deforestation and to create economic 
opportunities for Government of Brazil and for the people that 
live in the Amazon region of Brazil instead of illegal 
activities like mining and deforestation.
    The Chairman. How do we best do that?
    Mr. Duke. We welcome the opportunity to work with Congress 
on legislative approaches that properly resource that sort of 
support and we are eager to also look to other countries, to 
philanthropy, and to the private sector including through 
carbon markets such as jurisdictional approaches to reducing 
deforestation in order to support that objective that we very 
much share with you.
    The Chairman. All right.
    I think we need some robust--I love the private sector and 
I love private conservation efforts, but I am not sure we are 
going to save the Amazon that way.
    Finally, as the largest democracy in the region, Secretary 
Nichols, I strongly believe that Brazil has a responsibility to 
proactively engage and help ensure accountability where we see 
it, not by my remarks, but by U.N. remarks, in the hemisphere, 
about what is happening in Nicaragua and Venezuela, for 
example.
    In the past, President Lula has been reluctant to do so. I 
hope he understands the critical role that Brazil can and 
should play in upholding regional democratic values.
    What is your assessment of this term now, President Lula's 
willingness to play a role in addressing human rights 
challenges in the region, especially in Cuba, Venezuela, and 
Nicaragua?
    Mr. Nichols. Thank you, Mr. Chairman. I wholeheartedly 
agree.
    The presidents, during their February 10 meeting, discussed 
the importance of defense for democracy on a global level 
during their meeting and recalled the threats that both of our 
countries had faced.
    The Administration will vigorously engage Brazil on issues 
of democracy in our hemisphere and we look forward to 
cooperating with them across various multilateral fora. We are 
pleased that Brazil has voted with us on issues like condemning 
Russia's brutal invasion of Ukraine in the U.N. General 
Assembly.
    We note the interest that President Lula has shown in 
helping to address the challenges to democracy in this 
hemisphere, particularly noting his interest in neighboring 
Venezuela.
    The Chairman. Okay.
    Senator Risch.
    Senator Risch. Thank you, Mr. Chairman.
    The fact that there is no comment on extraditions is news 
to me. I do not know if you have heard about that before, but 
it seems to me there is robust discussion of that regularly in 
the media.
    I am surprised to hear that. I can understand where there 
would be occasions where people would want to have 
confidentiality or something, but as a blanket policy that 
seems to me to be not appropriate. We maybe ought to get a 
formal response where that is written down or something.
    Ambassador Nichols, the first thing I want to ask about is 
the two U.S.-sanctioned Iranian warships that were docked in 
Brazil. What are you going to do about that?
    Mr. Nichols. We shared--well, first of all, they have no 
place in our hemisphere. The Iranians should not be here. They 
have a horrific record on human rights. They support Putin's 
illegal war in Ukraine.
    We have raised the concerns about their presence with all 
of the governments in the hemisphere, and the sovereign 
decision of Brazil to allow the Makran and the Dena to dock in 
February and their subsequent departure on March 4 was deeply 
disappointing.
    We will continue to discuss the importance of responding to 
Iran's efforts to destabilize its neighbors, to export 
violence, to oppress its own people, with all of our partners 
around the hemisphere and I am sure this will be a robust part 
of our conversations, not only with Brazil, but all the 
countries in our region.
    Senator Risch. I appreciate all those remarks, but the 
question was what are you going to do about this. I mean, we 
all know how bad Iran is and what they are doing. That is why 
they were sanctioned in the first place.
    We have sanctioned before on things like this. I mean, just 
talking about it, what good--let me ask this, what good does 
sanctioning do if you do not do anything about it when a 
country like this takes the action it did?
    Mr. Nichols. As you note, Senator, the two ships themselves 
have been sanctioned. The United States does not discuss 
sanctions designations before they take place, but we will look 
at the facts carefully, going forward, and as I have noted, we 
will continue to talk to all of our partners in the hemisphere 
about the noxious role that Iran plays around the world.
    Senator Risch. I guess if I was sitting in Iran I would say 
the U.S. sanctioned us--so what. What do we care? I mean, this 
is a joke. I mean, they put out sanctions and this is supposed 
to mean something. Nothing happens.
    We sailed into Brazil, we docked our ships, and business as 
usual. It just seems to me that why bother doing this? In fact, 
if anything, I think it undermines us by doing something like 
this and then it not having any consequences.
    Mr. Nichols. I note that every other country in the 
hemisphere decided against receiving these ships----
    Senator Risch. Fair point.
    Mr. Nichols. --and that is not by accident. That is because 
we engaged every other country in the hemisphere to talk about 
the risks that Iran poses, and we continue to have that 
conversation with our friends and partners in Brazil.
    Senator Risch. That is a really good point, but it also 
undermines or it underlines the fact that not taking any action 
is an indication that we are not going to do anything about it.
    If I was another country I would say well, look, the U.S. 
asked them not to dock. If they would have docked here we could 
have picked up a bunch of money and what have you.
    We agreed with the U.S. and did not let them dock here, but 
they went to Brazil and docked there and the U.S. did not do 
anything about it--why should we do anything about it.
    Mr. Nichols. We look forward to continuing our 
conversations around this topic with all of our partners, 
particularly with Brazil, and we have a number of high-level 
visitors from the Administration going to Brazil.
    I note that the chairman of this committee will also lead a 
delegation in Brazil and I am sure there will be robust 
opportunities to discuss the importance of keeping our 
hemisphere free of the noxious Iranian influence.
    Senator Risch. My time is short here, but let me just ask 
briefly.
    In January, Colombia halted eradication of illicit coca, 
but seizures of heroin and cocaine have slowed down since 
August. Is it your opinion that Colombia is abiding by its 
counter narcotic obligations?
    Mr. Nichols. We have a robust dialogue with the Government 
of Colombia on counter narcotics and rule of law issues.
    We believe that a holistic approach is vital in Colombia 
and that approach should include interdiction, eradication, 
alternative development opportunities, care for the environment 
in rural areas, and opportunities to support rural livelihoods.
    That process is ongoing. We have a high-level dialogue with 
Colombia that will take place later this month and we will have 
an opportunity to address those issues and how important it is 
not just for the United States, but for our entire region that 
strong cooperation on counter narcotics continue.
    Senator Risch. That is good talk, but can you tell us why 
Colombia halted eradication in January?
    Mr. Nichols. President Petro said that he wished to 
reevaluate the counter narcotics policies of preceding 
administrations and as part of that reevaluation he wanted to 
have a purely voluntary eradication policy.
    Those discussions on how that would work are ongoing and we 
believe that it is very difficult to succeed if there is no 
downward pressure on cultivation and particularly before a 
voluntary eradication program is up and running.
    Senator Risch. It sure seems to me that it would be very 
difficult to argue that there is not backsliding going on with 
that very clear and simple thing that they were doing to 
eradicate it. To just cease it sure seems like backsliding.
    My time is up. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Cardin.
    Senator Cardin. Thank you, Mr. Chairman. Let me thank both 
of our witnesses for their service to our country.
    Brazil is certainly a very important strategic partner for 
the United States. With the election of President Lula it 
presents new opportunities. Certainly going to be a change in 
direction in that country and the question is how do we deal 
with the changes that are occurring in Brazil to improve our 
strategic partnership with the country.
    Secretary Nichols, let me start with a comment you made 
complimentary of Brazil's vote in the United Nations in regards 
to Ukraine, but the truth is that the Brazilians have not been 
supportive of a lot of the sanction issues in regards to 
Russia.
    Go over with me where our strategy is to improve the 
actions of Brazil to further isolate Russia in its brutal war 
against Ukraine.
    Mr. Nichols. The February 10 joint statement issued when 
the two presidents met here in Washington unequivocally 
condemned Russia's invasion of Ukraine. It talked about the 
threat to food security that Russia's invasion has presented.
    We continue to consult closely with Brazil in the United 
Nations and secured Brazil's support for the February 28 
resolution condemning Russia's invasion.
    We have regular high-level engagement with our Brazilian 
partners. Our ambassador to the United Nations, Linda Thomas-
Greenfield, will be traveling to Brazil in a few weeks to 
discuss these issues with them and I also look forward to 
visiting Brazil soon.
    Senator Cardin. Let me sort of focus in on--it looks like 
the importation of fertilizer from Russia has had an impact on 
Brazilians' willingness to support our sanctions.
    Are we looking at that, trying to provide a way in which we 
can further isolate Russia?
    Mr. Nichols. Absolutely, Senator.
    We consult closely with Brazil on global food security 
issues and we work with them and others on looking at 
alternatives to the types of fertilizer imported from Russia, 
whether it be seeds that require less fertilizer, whether it be 
different types of fertilizers, and we believe that severing or 
reducing that need for outside fertilizer is an important way 
of strengthening Brazil and limiting the influence of Russia on 
Brazil.
    Senator Cardin. Let me just underscore the point that 
Chairman Menendez made on the environment and the Amazon 
because I totally agree that we have to be more aggressive in 
providing incentives or alternatives on those who make their 
livelihood that impact on the Amazon.
    I want to spend my remaining 2 minutes on China. Brazil has 
an incredible amount of partnerships with China today.
    What is our game plan in order to try to minimize China's 
influence in Brazil in our hemisphere? Where are we working to 
get not just governmental activities, but private sector 
activities that can counter what China is doing in these deals 
that they present that are usually too good to be true and they 
are really not true, but it does give them a foothold in these 
countries?
    Mr. Nichols. We continue to follow our invest-align-compete 
strategy with regard to China globally. That means investing in 
the United States, aligning our policies with key allies, and 
competing to demonstrate that the offers that China puts on the 
table are often false, lead to high debt, and do not deliver 
the kinds of things that the PRC promises.
    With regard to Brazil----
    Senator Cardin. We hear that a lot, but unless there are 
alternatives available for dealing with the needs, China 
sometimes is the only player.
    Mr. Nichols. Absolutely, Senator.
    Among the things we are doing is continuing to leverage the 
unprecedented levels of U.S. foreign direct investment in 
Brazil. It was $200 billion last year.
    We are using the Development Finance Corporation, Export-
Import Bank, USAID, the Inter-American Foundation as ways to 
help promote alternatives to Chinese investment.
    We are working on open radio access networks to compete 
with Chinese 5G. We are directing investments towards a 
critical minerals area to provide alternatives. I am happy to 
discuss further areas because I think we are out of time.
    Senator Cardin. Thank you. Thank you, Chairman.
    The Chairman. Thank you. Senator Ricketts is next and then 
Senator Shaheen is going to preside for a few minutes and I 
will be back after that.
    Senator Ricketts.
    Senator Ricketts. Great. Thank you very much, Mr. Chairman, 
and I thank both of you for attending here today and joining 
us.
    Obviously, this is a very important relationship. My state 
of Nebraska, for example, is an agricultural state. We produce 
a lot of soybeans.
    Who else produces a lot of soybeans? Brazil, right. It is a 
very important relationship for us.
    Secretary Nichols, are territorial and integrity and 
sovereignty key tenets of the U.N. Charter?
    Mr. Nichols. Absolutely.
    Senator Ricketts. Does the Biden administration support 
Brazil's ascension to a permanent member status on the U.N. 
Security Council, given its lack of support for Ukrainian 
territorial integrity?
    Mr. Nichols. The Government of Brazil voted in favor of the 
U.N. General Assembly resolution condemning Russia's invasion 
and also joined us in a statement when the two presidents met, 
condemning it on February 10 as well.
    The United States supports the modest expansion of elected 
members to the U.N. Security Council. It is a conversation for 
each region to have as to which countries those would be, but 
we believe that an expanded Security Council can more 
effectively represent global interests.
    Senator Ricketts. Even though Brazil has come out and 
condemned the invasion, they have not been exactly supportive, 
right? They rebuffed the German chancellor's attempts to get 
ammunition to be able to help Ukraine defend itself, correct?
    Mr. Nichols. President Lula has met virtually with 
President Zelensky and, again, Brazil has voted to condemn 
Russia's invasion in the United Nations as well as some United 
Nations specialized bodies.
    The importance of working with Brazil on a whole host of 
issues is crucial for the United States and right now Brazil is 
a nonpermanent elected member of the Security Council until 
next year, and we are working closely with them in that fora.
    Senator Ricketts. Great. Thank you.
    The Monroe Doctrine has been a cornerstone of U.S. foreign 
policy for two centuries, warning other powers against 
interfering in the Western Hemisphere, and over the last two 
decades what we have seen is China has been allowed extensive 
access to tighten its grip across Latin America, including 
Brazil.
    By the end of President Lula's first presidency in 2010, 
Brazil-China trade had gone up from virtually none to $60 
billion and in 2009 China became Brazil's top trading partner. 
Brazil received a record deal of $7 billion from the China 
Development Bank for offshore development.
    In the decades since, China-Brazil economic ties have 
transformed and, in fact, Brazil accounts for 47 percent of 
China's foreign direct investment in Latin America, totaling 
more than $66 billion in 2010.
    There are obvious concerns that China will continue to 
leverage these economic ties to expand influence in the region.
    Earlier this month the United States Trade Representative 
Katherine Tai visited Brazil where she emphasized the improving 
labor rights and environmental protections as common areas--
interest and common areas for the United States.
    However, there seems to be little interest from the 
Administration negotiating far more ambitious trade agreements 
for making significant investments.
    Secretary Nichols, is the Biden administration doing enough 
to discourage countries like Brazil from pursuing investments 
from China and seeking trade with China? Should we be doing 
more to be able to develop that relationship?
    Mr. Nichols. We are focused on demonstrating that the U.S. 
is the best partner for the countries around the region, 
particularly Brazil. The United States is the largest source of 
foreign direct investment in Brazil, providing high-quality job 
opportunities and growth for the benefit of both of our 
peoples.
    We see around the hemisphere that the promises that the PRC 
makes about the quality of its investments, about the debt 
associated with its investments, are false.
    I have been to numerous countries in this hemisphere and 
have people point out to me stadiums with problems in their 
construction, buildings with problems, highways that are 
falling apart, and hidden debts that countries did not know 
that they were going to have to assume that are crushing the 
budgets.
    Telling the stories of these experiences and bringing 
others together to say, hey, you took this deal from China. 
Tell your neighbor what your experience was. I think that makes 
a very compelling case.
    Obviously, Brazil is a sovereign country and they can make 
their own decisions, but I think we are putting on the table 
the kind of financing, the kind of investment, that will help 
both of our nations prosper and provide a reliable transparent 
alternative to what the PRC has on an offer.
    Senator Ricketts. Are you concerned about what the PRC is 
doing, though, with regard to Latin America and Brazil?
    Mr. Nichols. Absolutely, and I thank this body for the 
resources that you have recently appropriated to help us 
compete even more strongly against the PRC.
    Senator Ricketts. Great. Thank you, Secretary Nichols. 
Appreciate it.
    Senator Shaheen [presiding]. Thank you, Senator Ricketts, 
and thank you both for your testimony this morning.
    I want to follow up both Senator Ricketts' and Senator 
Cardin's questioning on China because, as has been said, China 
has become Brazil's main economic partner in terms of trade, 
investment, and finance \1\ and it is curious to me that it is 
still the only country in Latin America \2\ that has not joined 
China's Belt and Road Initiative, which says to me that there 
is still lots of opportunity for the United States to step up 
in ways that we have not so far in terms of investment.
---------------------------------------------------------------------------
    \1\ Although China was Brazil's largest trading partner as of 
December 2022, the United States was Brazil's largest source of foreign 
direct investment stocks by final beneficiary in 2021, almost four 
times the amount of the next largest country source of investments, 
according to data from the Central Bank of Brazil.
    \2\ As of December 2022, Brazil was not among the 21 countries in 
Latin America and the Caribbean participating in China's Belt and Road 
Initiative (BRI).
---------------------------------------------------------------------------
    Secretary Nichols, do you think that is an accurate 
assessment, that there is more opportunity, and what can we do 
to encourage U.S. investment?
    You mentioned a number of the public entities that can 
provide resources, but are there ways that we could also 
encourage the private sector to do more to invest in Brazil?
    Mr. Nichols. Thank you, Senator.
    I absolutely agree. I think that the--one, the United 
States is the largest source of foreign direct investment in 
Brazil, but we need to redouble those efforts. I think U.S. 
Trade Representative Ambassador Tai's recent visit and the 
rejuvenation, the reinvigoration, of our agreement on trade and 
economic cooperation is an important step to doing that.
    Under Secretary for Economic Business and Environment 
Affairs Jose Fernandez will be traveling later in the month to 
Brazil to continue those conversations. Ambassador Bagley, in 
country, is very much focused on strengthening our economic 
relations with Brazil.
    It is a large, vibrant market. There are huge opportunities 
for American companies. One of the ways that those 
opportunities can be strengthened is regulatory harmonization 
and that will be among the things that we talk about with 
Brazil.
    Senator Shaheen. Thank you. I would also point out that 
there is legislation, Greater Exports to Africa Act, that I am 
co-sponsoring along with other members of this committee that 
would require a strategy to increase trade to Africa, Latin 
America, and the Caribbean by at least 200 percent over the 
next 10 years.
    I hope we will also think about a more directed strategy to 
do this.
    Mr. Duke, following Special Envoy Kerry's trip to Brazil 
last month, can you talk about what was identified either there 
or as we are thinking about the best opportunities to partner 
with Brazil to address climate change and the destruction of 
the Amazon?
    Mr. Duke. Thank you, Senator Shaheen, for the question.
    When we look at the global climate challenge very high on 
the list is stopping deforestation in the Amazon region and in 
other tropical forest regions including in the DRC and in 
Indonesia.
    In the case of Brazil, we are eager to partner with the 
Lula administration to build on their track record of prior 
success in reducing deforestation, over 80 percent in their 
prior administration over a decade ago, and we see that the 
deforestation rates over the last 4 years in Brazil really 
skyrocketed and there is an opportunity now in partnership with 
President Lula and his impressive team to reverse that and to 
decisively slow and end deforestation together.
    There is a range of cooperation that we have initiated 
through our Climate Change Working Group now that President 
Lula and President Biden urged us to propel this year and that 
we have now put on a fast track with our visit just a few weeks 
ago under Special Presidential Envoy for Climate Kerry's 
leadership.
    That includes working on the bioeconomy. It includes 
working on productive and low-carbon agriculture. It includes 
directly tackling deforestation through measures around 
enforcing against illegal activities like illegal mining in the 
Amazon region and it includes mobilizing support from a range 
of other governments, from the private sector, and from also 
philanthropy to make sure that the Lula team has the 
opportunity to create different pathways for the people that 
live in the Amazon region instead of illegal activities. We are 
optimistic about the overall approach.
    Senator Shaheen. When we talk about those alternatives to 
illegal activities, are we talking about trying to help them 
identify resources that will allow them to provide support for 
people who are faced with that choice?
    Mr. Duke. Thank you, Senator.
    Yes, when it--it is the case, of course, that Brazil is an 
upper middle income country, according to the World Bank, 
overall.
    When you look at the people that live in the Amazon region, 
it is often very marginal economic activity that we are talking 
about there and people that are really struggling just to get 
by and so they turn to illegal activities like mining or like 
marginal agriculture on deforested or degraded lands.
    What we seek to do and seek to engage with Congress 
regarding is to mobilize support to allow for Brazil to enforce 
its own laws and to provide economic opportunity for the people 
living in the Amazon region and manage the Amazon region in a 
more effective manner.
    Senator Shaheen. Is there a price tag on what you are 
looking at?
    Mr. Duke. Senator, thank you for the question.
    I think it is fair to say that it is a major climate 
imperative to address deforestation in the Amazon. It is a 
major biodiversity imperative. It has ramifications. It is a--
--
    Senator Shaheen. Right. I agree with that. Cost? Do you 
have a cost?
    Mr. Duke. It is a--let us just say that the kinds of 
proposals that have been advanced recently we think are 
commensurate with the scale of the opportunity and the 
challenge in the Brazilian Amazon.
    Senator Shaheen. Okay. I assume there is a cost, but we do 
not know what it is yet?
    Mr. Duke. Senator, if I could indicate, it is certainly 
going to be something that needs to be in the seven-figure 
range over time and where we will be needing to mobilize across 
resources that we hope to work with Congress to secure, but 
also from these other sources--other governments and the 
private sector, philanthropy, and other stakeholders that can 
contribute.
    Senator Shaheen. Thank you.
    Senator Young.
    Senator Young. Thank you, Chairman.
    Secretary Nichols, I appreciate you being here today to 
discuss a number of issues surrounding our bilateral 
relationship with Brazil.
    Farmers and manufacturers in my home state of Indiana 
depend quite a bit on market access to ensure they can continue 
to grow and stay relevant in this globalized world in which we 
live.
    Brazil is our 14th largest trading partner and, therefore, 
presents a real opportunity to forge new trading relationships, 
but also to address issues like Brazil's history of tariff 
barriers on things like ethanol and a wide range of commodities 
like corn and soybeans.
    Over the past few months, the Administration has announced 
a number of efforts to support trade, but unfortunately the 
common theme is that market access is off the table.
    Ambassador Tai has launched the America's Partnership for 
Economic Prosperity to increase cooperation on trade in the 
Western Hemisphere, but it excluded Brazil.
    The Administration has also announced an effort to 
strengthen trade ties through the U.S.-Brazil Agreement on 
Trade and Economic Cooperation, but details have not been 
transparent.
    Secretary Nichols, I realize we do not have a 
representative of USTR here. That is a problem with the 
Administration's doing. These are public hearings. I certainly 
will presume that they could contact the committee if they had 
an interest in having their voice heard on this important 
issue.
    I will ask you how would American farmers and businesses 
benefit from increased trade with Brazil under the U.S.-Brazil 
Agreement on Trade and Economic Cooperation?
    Mr. Nichols. Thank you, Senator Young.
    The opportunities to strengthen our trade with Brazil are 
wide and varied. I note that Ambassador Tai's visit was one of 
the--came early in the Lula administration and reflects our 
desire to have a strong trade relationship and open up markets 
and opportunities for American farmers and businesses.
    As I noted, Under Secretary Jose Fernandez will soon follow 
that. Under Secretary Fernandez is the State Department's lead 
on America's Partnership for Economic Prosperity.
    When the initial 11 countries were discussing APEP, we were 
in the midst of Brazil's election. This is an opportunity to 
engage with them now that they have a new government.
    I believe that as we look at opportunities across different 
sectors, American private sector agriculture will see benefits 
in different commodity exchanges, farm equipment where we 
continue to have a robust presence, manufacturing, services, 
and technology.
    Senator Young. Yes, you have listed a lot of things. You 
have alluded to market opportunities that exist there and I 
just really question whether we are going to have much success 
gaining substantial market share anywhere without offering 
reciprocal access to other countries. It just sort of stands to 
reason.
    I wish the Administration continued success there while 
offering a lot of encouragement to rethink that anti-trade 
position.
    Secretary Nichols, ag production has experienced a lot of 
growth in Brazil, leading the nation to become a top exporter 
of commodities. This is partly--I think there are some lessons 
to be learned from Brazil because of their favorable regulatory 
system for biotech approvals. In fact, Brazil is the second 
largest producer of biotech crops in the world, right behind 
the United States.
    As you may know, 90 percent of corn in the U.S. is 
considered genetically modified and this has proved challenging 
with our close neighbor in the region: Mexico.
    Mexico's decrees to phase out and to ultimately ban 
genetically-modified corn is going to have rippling 
implications throughout their own market, but also throughout 
our global supply chains and export markets, hurting American 
and Brazilian farmers alike.
    The U.S., I think you would agree, must pursue science-
based approaches with our trading partners. Otherwise, we risk 
losing market access and market share that cannot be easily 
replicated.
    I am going to ask you what I hope will be a yes or no 
response. Do you think that science should play a key role in 
establishing trade policies with our partners? Yes or no.
    Mr. Nichols. Yes.
    Senator Young. Thank you. What are the implications to 
global commodity markets should Mexico's decree to ban GMO corn 
be implemented?
    Mr. Nichols. I know that it would have a significant 
negative effect on food security in Mexico and it is vital for 
our partners around the world, particularly in a time of 
climate change, to use the seed types that are resilient to 
climate shocks, are proven safe by thousands of studies, and 
provide opportunity for farmers in our country and around the 
world to produce even under more challenging conditions, 
whether it is greater floods or greater droughts.
    Senator Young. I completely agree, which is why we need to 
do whatever we can working with our counterparties in other 
countries to ensure that they break down barriers to GMO 
products, that we can produce more, innovate more, and 
ultimately feed the world. This is how we are going to do it.
    Thank you, Chairman.
    The Chairman [presiding]. Senator Hagerty.
    Senator Hagerty. Thank you, Mr. Chairman.
    Assistant Secretary Nichols, welcome. It is good to see you 
again today.
    While the subject of the hearing today is Brazil, I would 
like to take my time today to ask you some questions about 
another country of your responsibility and that is Mexico. I 
think you and I are going to be on the same page today, but I 
just want to make sure with a few questions.
    Last Thursday, Mexican President Andres Manuel Lopez 
Obrador threatened to directly interfere in future U.S. 
elections. AMLO said this--I am going to quote--``If they do 
not change their attitude and think that they are going to use 
Mexico for their propaganda, electoral, and political purposes, 
we are going to call for them,'' --meaning Mexicans and other 
Hispanics--``we are going to call for them not to vote for that 
party.''
    Assistant Secretary Nichols, does the State Department 
oppose foreign interference in U.S. elections? Just a yes or no 
answer would be fine.
    Mr. Nichols. Yes, Senator.
    Senator Hagerty. I appreciate that.
    Does the State Department condemn AMLO's threat to 
interfere in future U.S. elections?
    Mr. Nichols. Just as we respect Mexico's sovereignty, we 
ask that President Lopez Obrador respect U.S. sovereignty.
    Senator Hagerty. I certainly agree with that.
    Earlier this month Mexican drug cartels kidnapped four 
American citizens and murdered two of them.
    Assistant Secretary Nichols, does the State Department 
condemn the murder of Americans by drug cartels?
    Mr. Nichols. Absolutely, Senator, and the protection of 
American citizens around the world is our highest priority.
    Senator Hagerty. I appreciate that.
    After these tragic murders of American citizens, the 
Mexican President publicly claimed, ``Mexico is safer than the 
United States. There is no issue with traveling safely through 
Mexico.''
    Yet, last month the State Department issued a level four 
``Do Not Travel'' warning for many parts of Mexico. Assistant 
Secretary Nichols, does the State Department agree with AMLO's 
claim here that Mexico is safer than the United States?
    Mr. Nichols. I do not want to get into direct comparisons 
with the United States, but I will note that it is vital that 
we work together with the Mexican Government to improve 
security for the benefit of Mexicans and the benefit of 
Americans who wish to visit Mexico.
    Obviously, those who suffer the most from the cartel 
violence in Mexico are its own citizens and we are committed--
--
    Senator Hagerty. I understand. My primary right now is to--
--
    Mr. Nichols. --to cooperating with them to attack those 
cartels.
    Senator Hagerty. The U.S. intelligence community has 
reportedly estimated that Mexican drug cartels control more 
than 20 percent of Mexican territory. The cartels also control 
large swaths of terrain across our southern border. These 
cartels are responsible for facilitating the passage of a 
record number of illegal migrants into the U.S. and almost all 
of the illicit drugs that come across that border.
    My next question for you is is it the State Department's 
position that the government of President Lopez Obrador should 
do more to counter drug cartels operating in Mexico?
    Mr. Nichols. It is vital that we redouble our efforts under 
the Bicentennial Framework to cooperate to attack the cartels, 
to take down the networks that traffic in drugs, people, 
illicit precursors----
    Senator Hagerty. My question, Assistant Secretary, is 
should President Lopez Obrador be doing more to counter the 
drug cartels in Mexico.
    Mr. Nichols. We should all be doing more.
    Senator Hagerty. I agree with that, too.
    President Lopez Obrador said that Mexico does not produce 
fentanyl. In particular, AMLO said, ``Here, we do not produce 
fentanyl.'' That is a direct quote from him.
    Assistant Secretary Nichols, is fentanyl produced in 
Mexico?
    Mr. Nichols. Fentanyl is produced in Mexico.
    Senator Hagerty. Absolutely. AMLO--are AMLO's comments 
accurate or are they inaccurate?
    Mr. Nichols. Mexico receives chemical precursors from 
around the world. Those precursors are used to produce 
fentanyl----
    Senator Hagerty. In Mexico.
    Mr. Nichols. --in Mexico.
    Senator Hagerty. I think it is quite clear that these 
cartels have flourished because the Lopez Obrador government 
has made a deliberate choice not to take them on.
    President Lopez Obrador also continues to take arbitrary 
and punitive actions against U.S. businesses in Mexico, 
including threats of expropriation. You and I have talked about 
this before.
    I should add that we are seeing a similar disturbing 
dynamic against U.S. businesses in other Western Hemisphere 
countries including Honduras, which, as of last night, I 
understand, is pivoting away from Taiwan, apparently preparing 
to recognize Communist China.
    Do you agree, Assistant Secretary, that these threats 
against American businesses are unacceptable?
    Mr. Nichols. The promotion and defense of free markets, 
access for American business, is a priority for this 
Administration and we believe that American jobs and American 
investment and trade are beneficial for countries around the 
hemisphere, not just the United States.
    Senator Hagerty. I look forward to working with you. This 
committee, I am certain, looks forward to working with the 
State Department to lock arms to right the ship with respect to 
election security here in America, with respect to the safety 
of Americans traveling in Mexico, with respect to cartels that 
are committing human and drug trafficking that are impacting 
our country, and certainly dealing with these expropriation 
threats coming from Mexico.
    Thank you. I look forward to working with you, Assistant 
Secretary Nichols.
    Mr. Nichols. Likewise. Thank you, Senator.
    Senator Hagerty. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Chairman of the Western Hemisphere Subcommittee, Senator 
Kaine.
    Senator Kaine. Better late than never with a lot of 
hearings going on, and I know that there is a vote underway and 
many of the questions that I wanted to ask--I was just 
chatting--I think had been covered pretty well.
    I expect to introduce a bill soon to help strengthen the 
U.S.-Brazil rule of law cooperation in support of protecting 
the Brazilian Amazon, which will be critical to attracting 
greater and more sustainable investment in the region.
    To you, Mr. Duke, if we are serious about deepening the 
partnership with Brazil, environmental cooperation is a really 
important way to do that. It is very good to see the 
Administration plan to commit financial resources to the Amazon 
Fund.
    Do you believe the amount is sufficient, and what are other 
steps that we can take to deepen this U.S.-Brazil partnership 
on the Amazon?
    Mr. Duke. Thank you, Senator Kaine, and we share your 
concern with this issue.
    When we look at what is required on climate change stopping 
deforestation in the Amazon is very high on that list and it 
also is important for agricultural systems, including 
potentially our own agricultural systems due to the way that 
the health of the Amazon reverberates in the whole region and 
the whole hemisphere.
    We want to ensure that whatever we do we support the Lula 
administration in replicating and even extending its prior 
success in reducing deforestation in the Amazon region since 
they previously cut deforestation rates over 80 percent and 
they are committed now to working quickly to end deforestation 
and illegal activities in the Amazon region.
    To do that, though, does require resources and it requires 
substantial resources for results-based approaches like the 
Amazon Fund, for broader approaches that can be involving the 
private sector, and we are committed to working with partner 
governments and with Congress and with the private sector in 
order to get the job done.
    Senator Kaine. I understand my colleagues have 
significantly raised the issue of concern about Brazilian-
Iranian relations and I am appreciative that colleagues have 
raised that and hopefully we will be able to do that soon in 
person during a visit that many of us hope to take soon.
    I also know that there have been questions asked and 
discussion about the need to backstop and promote democracy in 
Brazil, a populous nation, a global leader in so many ways. 
They saw what so many other nations, including the United 
States, have seen.
    I grew up and had the opportunity to work in Honduras as a 
missionary in 1980 and 1981, and it was a military 
dictatorship, and I sort of grew familiar with the fact because 
it caused me to rethink my own naivete--that an awful lot of 
people in the world live under authoritarians. I just did not 
think we would see that impulse here at home.
    What we have seen in recent years was a little bit 
different than the sort of dictatorship that I was familiar 
with. What we have seen is this tendency of people to come into 
office via democratic means, but then to try to unwind the 
democratic institutions that protect democracy--rule of law, a 
free press, independent judiciary--and that was, obviously, a 
tremendous problem with the previous administration in Brazil.
    You see it in Turkey. You see it in El Salvador. You see it 
all around. You saw it on January 6 here at the Capitol, 
efforts to undermine democracies by weakening the institutions 
that guard them.
    I do believe that Brazil and the United States can work 
together. I know my colleagues have raised that as a priority 
and I know each of you are committed to that.
    With that, Mr. Chair, I yield back.
    The Chairman. Thank you, Senator Kaine.
    Some final questions. I understand President Bolsonaro 
gutted Brazil's environment and indigenous ministries and 
replaced important officials with military personnel with no 
conservation experience.
    Are we doing anything to support President Lula's efforts 
to adequately staff the ministries tasked with combating 
deforestation?
    Either one of you who has an answer.
    Mr. Nichols. Brazil has a wealth of expertise in these 
areas and President Lula has traveled here to meet with the 
President with his minister of environment, Marina Silva. 
Special Envoy Kerry met with her during his trip to the region.
    We believe that they bring a very strong, strong team to 
the table to address these issues and we stand ready to work 
with them and support them in their effort.
    The Chairman. Okay. Are we committed to engaging 
subnational actors who are working to preserve Brazil's vitally 
important forest resources?
    Mr. Duke.
    Mr. Duke. Thank you, Mr. Chairman.
    Yes, and I will add in regards to your last question around 
indigenous communities in Brazil that when Special Presidential 
Envoy for Climate Kerry was in Brasilia, he did meet also with 
Minister Guajajara, who is the new minister for indigenous 
communities in Brazil, and we have over the last 2 years in our 
office met multiple times with stakeholders focused on human 
rights and economic welfare of the indigenous communities in 
Brazil. We will continue to engage on that.
    In regards to staffing, we recognize that Brazil has the 
capacity that Assistant Secretary Nichols just referred to and 
we are seeking through this partnership with other governments, 
philanthropy, the private sector, to help Brazil with 
resourcing its overall efforts to end deforestation and illegal 
activities in the Amazon, including through the Amazon Fund and 
other results-based approaches and that should help with 
staffing as well.
    The Chairman. I take from your answer that we are 
prioritizing the inclusion of indigenous communities to ensure 
their voices are also front and center in our Amazon 
deforestation prevention efforts?
    Mr. Duke. Thank you, Mr. Chairman.
    Absolutely, and we see in the Amazon Fund itself structured 
engagement of indigenous communities as part of how that 
mechanism works and we expect that any work we do in 
partnership with Brazil and supportive of Brazil's objectives 
to end deforestation and illegal activities in the Amazon 
region will centrally involve indigenous communities.
    The Chairman. In addition to having vast rainforest and 
terrestrial biodiversity, Brazil has a sprawling coastline 
almost twice the length of the United States.
    As a champion of Save Our Seas 2.0 Act and a follow-on that 
we are in the midst of working, we cannot forget about our 
oceans.
    How are we engaged with Brazil on efforts, for example, to 
combat plastic pollution and also is Brazil concerned about 
China's overfishing in their territorial waters?
    Mr. Nichols. We have a robust dialogue with Brazil on 
maritime and ocean issues, particularly our cooperation in the 
South Atlantic. Illegal, unregulated, unlicensed fishing is a 
threat to all of the countries with oceans in our hemisphere 
and obviously the presence of large Chinese commercial fishing 
fleets just off the territorial waters of the countries in 
South America is a major problem when they turn off their 
transponders and then who knows where they go.
    The Chairman. Do the Brazilians, though, see that as a 
problem?
    Mr. Nichols. I do not know what Brazil's specific position 
is on that topic, but I can look into that and get back to you.
    The Chairman. I would appreciate that because I know that 
they are dealing with China economically, but here they are--
China is overfishing these territorial waters in a way that is 
tremendous consequence economically, tremendous consequence in 
terms of biodiversity in the region.

[Editor's note.--The requested information referred to above 
follows:]

    Brazil does not currently focus on illegal, unreported, and 
unregulated (IUU) fishing, but with our encouragement and engagement, 
departments within the Brazilian Government are starting to make 
initial strides to address the problem. This year, under the new Lula 
administration, the Brazilian Ministry of Environment and Climate 
Change told the Department of State that Brazil would put greater 
emphasis on combating IUU fishing. The president of the Brazilian 
Institute of the Environment and Renewable Natural Resources, the 
institution responsible for enforcing environmental regulations, 
reiterated to us his intention to address this problem, as well.
    The U.S. Embassy in Brasilia recently helped organize an IUU 
monitoring conference with Brazil's Management and Operational Center 
of the Amazonian Protection System focused on both the Amazon Forest 
and the ``Blue Amazon.'' The Department also continues to advocate that 
the Government of Brazil ratify the Port States Measures Agreement and 
join the newly established IUU Fishing Action Alliance. The Ministry of 
Defense refers to Brazil's territorial waters and exclusive economic 
zone as the ``Blue Amazon'' to raise attention to the need for greater 
maritime domain awareness. In February, the United States co-hosted 
with Brazil's Defense Ministry a conference on maritime remote sensing, 
the first bilateral event on IUU fishing involving military and 
civilian agencies.
    The Department of State leads the U.S. Government's efforts to 
eliminate the harmful effects that IUU fishing has on the ocean, 
vulnerable communities, and the rule of law around the world. 
Countering IUU fishing covers an expansive area of work with emerging 
connections to transnational organized crime, human trafficking and 
labor abuses, market and trade distortions, and data management. Only a 
concerted and collective global action can solve this growing problem.
    Through these essential initiatives, we aim to strengthen overall 
ocean governance, increase information sharing, apply innovative 
technologies to identify IUU fishing and hold bad actors accountable, 
grow the ranks of partners around the world, and raise our collective 
ambition to counter IUU fishing.

    Lastly--and then I will turn to Senator Van Hollen--Brazil 
is the second Latin American country to be designated as a 
major non-NATO ally and since 2018 the United States has 
committed to nearly $6 million to help reinforce security, 
defense cooperation, and the rule of law.
    In particular, we have invested in efforts to bolster law 
enforcement cooperation and strengthen information sharing, 
counterterrorism, cyber crime, financial crimes, trafficking of 
narcotics and weapons.
    Going back to the ranking member's questions on the docking 
of Iranian ships, what can we do to enhance security 
cooperation between Brazil and the United States under 
President Lula?
    Mr. Nichols. We look forward to the U.S.-Brazil Defense 
Dialogue later this year as an opportunity to discuss our 
defense cooperation and defense relations with Brazil.
    Brazil is a global leader in peacekeeping, historically, 
and that role is important and one that we support. The 
opportunities for commercial sales of U.S. weapon systems to 
Brazil is something that I think we should explore more deeply 
and to continue exchanges between our law enforcement and our 
militaries.
    The Chairman. More likely or less likely to have Brazil's 
help in countering China's authoritarianism and its aim in the 
Western Hemisphere?
    Mr. Nichols. I think that we need to have a dialogue based 
on values with Brazil and talk about what are the values that 
we would like to see in our hemisphere, and I know that 
President Lula strongly supports democracy and human rights, 
and we hope that we can work to promote those values throughout 
our region.
    The Chairman. Okay. Does not answer my question.
    More likely or less likely to stand up to dictators and 
autocrats in the Western Hemisphere?
    Mr. Nichols. Brazil has condemned the actions of Nicaragua, 
for example, and the stripping of the citizenship of those who 
oppose the brutal Ortega-Murillo regime, and I hope that Brazil 
will continue to speak out against human rights abuses in our 
region.
    The Chairman. Senator Van Hollen.
    Senator Van Hollen. Thank you, Mr. Chairman. Thank both of 
you for your testimony and for your service.
    Ambassador Nichols, I know we have covered a lot of 
territory at this hearing. I want to underscore some of the 
issues that had been raised by my colleagues and then I have a 
few questions.
    One, we were, of course, all alarmed by the images of the 
attacks on democracy in Brazil following Bolsonaro's exit. I 
understand that you have not commented on the question of 
whether or not the current government has asked for an 
extradition of Bolsonaro. I think we would probably want to 
follow up on that question.
    Deforestation--I know when President Lula came in, he 
pledged that he was going to reverse the previous 
administration's policy, which led to just clear cutting and 
destruction of huge swaths of rainforest, but so far the 
numbers do not indicate that they have turned the corner in any 
way and so I hope, more than expressing concern, we work with 
the Brazilians on a strategy, going forward. It seems we need a 
plan and I look forward to following up with you and your 
colleagues on the plan.
    My questions are these. Number one, you have referenced a 
couple times the role Brazil can play in critical minerals and, 
as you know, we are working to try to develop a partnership 
among like-minded countries, nonauthoritarian countries, to 
secure a good supply of critical minerals, not just for 
ourselves, but for all the countries as part of the 
partnership. What specific role would Brazil play in that 
effort?
    Second, and this is a little bit of a follow-on to the 
chairman's question, Brazil is, of course, the ``B'' in the 
BRICS, along with Russia, India, China, and South Africa. There 
is going to be a summit in South Africa, I think, in August.
    Could you just talk a little bit about Brazil's role within 
BRICS and whether they provided a balance to the authoritarian 
members of BRICS, namely, China and Russia?
    How do you see them balancing those roles? Critical 
minerals, role in BRICS.
    Mr. Nichols. Brazil is a country with important critical 
mineral resources and United States, through the Development 
Finance Corporation, has promoted U.S. investment in mining in 
that sector.
    Brazil is an important producer of automobiles and other 
technologies that benefit from critical minerals. The supply 
chain opportunities for both of our countries are enormous.
    I think that we will see even greater U.S. investment in 
the sector, going forward. I noted earlier that Under Secretary 
Jose Fernandez will be traveling to Brazil in a couple of weeks 
and this will certainly be a topic as he also leads the State 
Department's efforts in the critical minerals initiative and 
this I consider a win-win for both countries.
    With regard to BRICS, President Lula was one of the 
founders of BRICS and a real power when it started under his 
first term in office.
    He has a unique opportunity to talk about the values of 
democracy and engagement with the other members of BRICS. He 
has an opportunity to talk about what kind of a world we want 
to see in the future--is it acceptable that one country should 
invade its neighbor just because it is bigger--and I look 
forward to his engaging on those issues. I know that he will 
play an important role in the global stage and this is a time 
where values matter.
    Senator Van Hollen. I certainly hope he will do that in 
partnership with his allies, the United States and others. 
Obviously, we are not part of BRICS, but I hope he will be that 
voice at the table, given the other countries who are part of 
that.
    Do I understand you to say the DFC has put down an 
investment with respect to critical minerals in Brazil?
    Mr. Nichols. Yes, Senator Van Hollen, twice. Initial 
investment and then they increased the investment and now 
actually mining operations have begun and they are producing.
    Senator Van Hollen. Appreciate it. Thank you.
    The Chairman. Thank you. With our thanks to both of you for 
your testimony, the record for this hearing will remain open 
until the close of business on Thursday, March 16, 2023.
    Please ensure that questions for the record are submitted 
no later than Thursday.
    This hearing is adjourned.
    [Whereupon, at 11:58 a.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


              Responses of Mr. Brian Nichols to Questions 
                  Submitted by Senator Robert Menendez

    Question. Two years ago, a violent mob--incited by dangerous 
disinformation and fueled by a former president--stormed the U.S. 
Capitol seeking to undermine American democracy. Two months ago, the 
world watched Latin America's largest democracy come under assault in 
hauntingly similar ways. These attacks failed because of the resilience 
of the Brazilian and American people, and the strength of our 
democratic institutions. But the assault on Brazil's institutions 
reminds us of the constant work needed to safeguard democracy around 
the world. That is why I introduced a resolution earlier this year 
condemning the insurrection, expressing our solidary with the Brazilian 
people, and reaffirming U.S. support for Brazil's democratic 
institutions. Has the United States received any requests for 
assistance in response to the insurrection in Brazil? Given these 
events, how can we strengthen support for Brazilian democracy moving 
forward?

    Answer. The U.S. Government remains ready to assist the Government 
of Brazil to protect its democratic institutions and investigate those 
who perpetrated and planned the violent attacks in Brasilia, on January 
8. All Government of Brazil requests for assistance to protect its 
democratic institutions and conduct associated investigations would be 
reviewed expeditiously and supported, if deemed legally appropriate.
    At their February 10 White House meeting, President Biden and 
President Lula emphasized that strengthening democracy remains a 
fundamental pillar of the bilateral relationship. The two presidents 
reaffirmed their intention to work together on ways to protect our 
societies from disinformation campaigns, as well as condemn other 
corrosive dynamics that threaten democracy such as hate speech, 
political extremism and political violence.

    Question. During President Lula's recent visit to the United 
States, President Biden expressed a desire to strengthen our economic 
partnership with Brazil. Brazil is the world's eighth largest economy, 
and the United States is Brazil's second largest trade partner. Our 
countries share significant opportunities to advance economic 
prosperity and sustainable and inclusive development, including by 
continuing to publicly support Brazil's efforts to pursue accession to 
the Organization for Economic Co-operation and Development. It is 
imperative that we continue making the case that the United States, not 
China, should be Brazil's preferred trading partner. What challenges 
and opportunities does the U.S. face in strengthening economic 
cooperation with Brazil? What impact, if any, would Brazil's proposed 
Mercosur trade deal with China have on U.S.-Brazil economic relations?

    Answer. The February 10 meeting between Presidents Biden and Lula 
reinforced the shared focus on further deepening our bilateral economic 
relationship. The leaders committed to fostering trade and removing 
barriers as well as promoting economic cooperation, including 
cooperation on supply chain resilience.
    According to the United States Census bureau, bilateral trade in 
goods between the United States and Brazil surpassed $92.6 billion. 
This marks a significant increase from the $78.2 billion in trade in 
goods from 2021, and is the highest total on record between our two 
countries.
    To consolidate and deepen these trade gains, the United States and 
Brazil conduct regular government-to-government exchanges, through the 
2011 Agreement on Trade and Economic Cooperation as well as the ongoing 
U.S.-Brazil Energy Forum, Critical Minerals Working Group, Commercial 
Dialogue, and CEO Forum. Last year, U.S. Customs and Border Protection 
launched a full Global Entry arrangement and a Customs Mutual 
Recognition Agreement with Brazil, to facilitate travel and trade.
    While Brazil and its Mercosur partners have signed and may continue 
to pursue trade agreements with other countries, we are focused on ways 
to continue to develop our strong and dynamic bilateral trade 
relationship.

    Question. Brazil and the United States have recently made 
significant inroads in strengthening space cooperation. Brazil was the 
first Latin American country to sign the NASA Artemis Accords 
establishing a common vision for space governance. It was the first 
nation to hold high-level space engagement talks with the U.S. Space 
Force. And our two countries signed a Technology Safeguards Agreement 
in 2019 to bolster Brazil's ability to engage in commercial space 
launch activities using U.S.-licensed technology from its Alcantara 
launch center. Deepening such space collaboration has significant 
benefits for U.S. companies, for the safe and peaceful exploration of 
outer space, and for strengthening Brazil's ability to respond to 
environmental challenges, including deforestation. What concrete steps 
is the Biden administration planning to take to expand space 
cooperation with Brazil?

    Answer. Civil space cooperation between the United States and 
Brazil is principally governed by a framework agreement signed in 2011 
and ratified by Brazil in 2018. Several ongoing projects operate under 
this framework, including most prominently the Scintillation Prediction 
Observations Research Task (SPORT), a heliophysics CubeSat 
collaboration between NASA and three Brazilian agencies, Brazil Space 
Agency (AEB), National Institute for Space Research, and the Instituto 
Tecnologico da Aeronautica. The small satellite launched in November 
2022, and deployed from the International Space Station in December 
2022.
    Brazil signed the Artemis Accords in June 2021. Then-AEB President 
Carlos Augusto Teixeira de Moura visited Marshall Space Flight Center, 
in August 2022, for discussions on a potential NASA-AEB collaborative 
lunar science CubeSat mission in support of the Artemis program. In 
2023, representatives from AEB have taken an active role in co-chairing 
an Artemis Accords working group tasked with exploring how nations with 
emerging space capabilities can participate in future deep space 
exploration.
    Brazil remains an active participant in several earth observation 
initiatives, including SERVIR, a joint NASA and USAID program that 
partners with geospatial organizations on a regional basis to address 
critical challenges in climate change, food and water security, 
disaster management, land use, and air quality. In January 2021, NASA 
renewed its MOU with the city of Rio de Janeiro to support city 
disaster management and response using NASA earth observation tools.
    On commercial space matters, the Foreign Commercial Service 
recently supported efforts to help bring U.S. launch companies such as 
Virgin Orbit to the Alcantara Space Center. The Federal Aviation 
Administration opened discussions to assist the Brazilian Government on 
issues of airspace regulation and safe commercial space operations.
                                 ______
                                 

              Responses of Mr. Brian Nichols to Questions 
                    Submitted by Senator Marco Rubio

    Question. President Lula da Silva won the 2022 October presidential 
election by a very small margin. Many Brazilians still assert that Lula 
was not legitimately elected. Today, his presidency faces daunting 
challenges, including slow economic growth, widespread deforestation in 
the Brazilian Amazon, and deep fissures in Brazilian society. The 
economy's dependence on Chinese imports of Brazilian beef and soybeans, 
the illegal mining of gold and land grabbing in the Amazon are also 
contributing to pressures that Brazil must face.
    Considering the existing challenges, how do you characterize our 
current bilateral relationship with Brazil?

    Answer. The long-term, strategic U.S.-Brazil relationship has never 
been more important to both countries. This year, the United States and 
Brazil celebrate 200 years of diplomatic relations. As the two most 
populous democracies in the Western Hemisphere, our commitment to 
democratic principles forms the basis of our many shared values. 
President Biden and President Lula reaffirmed our vital and enduring 
partnership during their February 10 meeting at the White House. Nine 
cabinet officials joined the presidents, reflecting the breadth and 
depth of our bilateral relations. Strengthening democracy, protecting 
human rights, and addressing the climate crisis anchor our shared 
agenda. As President Biden has said, ``There are no limits to what our 
nations can achieve by working together.''

    Question. Do you agree that Brazil is a major partner of the United 
States, not just in Latin America, but the world?

    Answer. We agree that Brazil is a major partner on both a regional 
and global level. In the region, Brazil is a leader on trade, 
migration, human rights, and democracy. Safeguarding democracy in the 
region remains the foundation of our strategic partnership with Brazil. 
In our engagement with President Lula's administration, we look to 
Brazil as a key voice in supporting the need to maintain and reinforce 
democratic governance in Latin America.
    We also recognize Brazil's longstanding global role. We work 
closely with Brazil in multilateral fora, including in the UN Security 
Council, where Brazil holds a seat through the end of 2023. We expect 
Brazil will remain a committed leader in the UN on humanitarian issues, 
peacekeeping operations, and international peace and security. 
President Lula seeks to position Brazil as a leading voice for peace. 
We look forward to working with Brazil on global issues when it serves 
as G20 president in 2024.

    Question. Why did Biden choose not to engage with Brazil during the 
administration of Jair Bolsonaro?

    Answer. Under the Biden-Harris administration, the United States 
engaged with the Bolsonaro administration bilaterally and 
multilaterally on issues of mutual interest, ranging from trade to 
regional governance. The two presidents met on June 9, 2022, when they 
pledged to continue their ongoing collaboration on trade and commercial 
matters, including through U.S. support for Brazil's candidacy for 
accession to the Organization for Economic Cooperation and Development. 
During the two presidents' overlaying administrations, Brazil signed 
the Artemis Accords, became a member in the U.S. Global Entry program, 
and entered into the bilateral Customs Mutual Recognition Agreement 
with the United States. These are just a few examples of U.S.-Brazil 
cooperation and engagement during the Biden-Harris and Bolsonaro 
administrations.

    Question. Is the political polarization in the country affecting 
our bilateral relationship?

    Answer. The United States and Brazil have enjoyed nearly 200 years 
of bilateral relations and our ties have remained strong across 
different administrations in both countries. President Biden and 
President Lula acknowledged the increased political polarization in 
their countries during their February 10 meeting at the White House. 
They also affirmed their continuing commitment to reject extremism and 
violence in politics and their intentions to make their societies more 
resistant to disinformation, which frequently encourages political 
polarization, and agreed to work together to address these concerns. We 
are confident that Brazilian institutions are fully capable of 
addressing challenges arising from political differences within the 
country.

    Question. Specifically, our defense, security cooperation and 
counter narcotics policy?

    Answer. Political polarization within Brazil does not impact our 
bilateral relations vis-a-vis security cooperation, including defense 
cooperation and counternarcotics policy. In fact, the transition 
between administrations with regard to these critical security areas 
has been seamless. We both place a priority on maintaining our military 
interoperability and security cooperation relationship, to combat 
threats such as narcotics trafficking.

    Question. Just last month, President Biden met with President Lula 
at the White House, where both issued a joint statement that identified 
``strengthening democracy, promoting respect for human rights, and 
addressing the climate crisis'' as the center of their common agenda. 
They also pledged to build on long-standing areas of cooperation, such 
as trade and investment, energy, health, science, technology and 
innovation, defense, education and culture, and consular affairs. Only 
days after that visit, Brazil allowed two Iranian warships to dock in 
Rio de Janeiro, despite withholding these permission for several weeks 
while the Brazilians were planning Lula's visit to the United States.
    Was the topic of the Iranian warships brought up during the 
Presidents' meeting?

    Answer. We made clear to countries in the region that these two 
Iranian vessels have no business making port calls anywhere in the 
Americas. Brazil is a sovereign country that can make its own decision 
about how to engage with Iran. Hosting naval vessels belonging to a 
regime that is brutally suppressing its own people at home, providing 
weapons to Russia for use in its war of aggression against Ukraine, and 
engaging in terrorism and destabilizing activities around the world 
sends the wrong message and is the wrong decision in our view.

    Question. Does the Administration intend to take punitive steps 
against those entities in Brazil that provided material support to the 
warships, which as I understand are under U.S. Treasury Iran-related 
sanctions as of February 3, 2023, per Executive Order 13599?

    Answer. As noted, we designated both the Dena and the Makran as 
property of the Iranian Government on February 3, pursuant to E.O. 
13599. We cannot preview potential future sanctions actions. If 
sanctions actions are warranted, we will work with the Department of 
the Treasury to take appropriate steps.

    Question. Why did the Brazilian Government ignore the public 
request made by U.S. Ambassador to Brazil Elizabeth Bagley to not allow 
the ships in?

    Answer. Brazil is a sovereign country that determines the nature of 
its relationship with Iran. We made clear to relevant countries that 
Iranian ships have no business docking in the Americas.

    Question. How long did the ships stay in Rio?

    Answer. On February 26, one Iranian naval vessel, the Dena, entered 
the port of Rio de Janeiro, while another vessel, the Makran, anchored 
offshore. The Dena left port on March 4, and both ships departed 
Brazilian waters a few days later.

    Question. What services were provided to the ships during their 
stay?

    Answer. We understand that the Dena, the vessel that docked, 
received services from commercial providers. If sanctions actions are 
warranted, we will work with the Department of the Treasury to take 
appropriate steps.

    Question. In your view, what are the positive and negative aspects 
of our current relation with Brazil?

    Answer. The positive aspects of our relationship with Brazil 
include our shared commitment to cooperate on many global issues 
including combating climate change, promoting the respect for human 
rights, strengthening democracy, reducing poverty, and increasing food 
security. As with any country, we do not always agree with the 
decisions Brazil makes, such as its recent decision to allow Iranian 
Naval vessels make a port call in Rio de Janeiro.

    Question. Yesterday, I re-introduced legislation with Senator 
Menendez to target the actors that support the illicit production and 
trafficking of gold--a major challenge to the region's security and 
stability. Many of these illicit actors use the proceeds from this 
activity to support a range of criminal entities that threaten both 
ours and Brazil's national security, including the Maduro regime in 
Venezuela. These illicit groups are causing human rights abuses and 
destroying the vulnerable ecosystems of the Amazon basin, which is a 
critical source of livelihoods to many in the region. Is the State 
Department supportive of this legislative effort?

    Answer. The Department strongly supports efforts to detect, deter, 
and dismantle the actors and facilitation networks that enable criminal 
activities, including the illicit production and trafficking of gold. 
The Department looks forward to reviewing the re-introduced legislation 
when available. As you rightly noted, criminals use the proceeds of 
their illicit activities to further their nefarious activities, 
expanding into new areas, corrupting actors, and depriving citizens of 
stable governance and human rights. The Bureau of International 
Narcotics and Law Enforcement (INL) supports multi-country initiatives 
that strengthen national capacities to address financial flows related 
to illicit gold mining and regional cooperation to counter criminal 
activity emanating from Venezuela.

    Question. What initiatives is the State Department carrying out to 
counter illicit activities in the Amazon and areas predominantly used 
by these groups?

    Answer. The Bureau of International Narcotics and Law Enforcement 
(INL) recently launched $5 million in new projects that provide 
training and equipment to strengthen bilateral and cross-border 
cooperation to counter deforestation and trafficking of illicit timber, 
gold, wildlife, and drugs across the Amazon basin. INL funds assistance 
led by the United Nations Office on Drugs and Crime, the Drug 
Enforcement Administration, and the Department of the Interior's U.S. 
Fish and Wildlife Service (FWS), among other partners. INL support 
includes training and equipment to the Brazilian Institute of the 
Environment and Renewable Natural Resources (IBAMA) and supports FWS 
joint investigations with the Brazilian Institute of Environment and 
Renewable Natural Resources.

    Question. In 2019, during the previous Administration, Brazil was 
designated a major non-NATO ally. This designation allows Brazil to 
benefit from enhanced cooperation with the U.S. defense industry, 
including joint military exchanges, exercises, and training. A 2020 
Research, Development, Test, and Evaluation Agreement enables bilateral 
collaboration on basic, exploratory, and advanced technologies at a 
``level enjoyed only by NATO allies and the closest strategic security 
partners of the United States.''
    What is your assessment of Brazil's performance as a non-NATO ally 
thus far?

    Answer. Brazil has been a major non-NATO ally since 2019, and our 
defense relationship is stronger for it. The May 2022 Research, 
Development, Test and Evaluation Agreement permitting joint development 
of defense technology is the only such agreement we currently have in 
South America. Joint training, exercises, and exchanges reached new 
heights in recent years, reinforcing interoperability and operational 
readiness. Brazil is the largest nationally funded Foreign Military 
Sales portfolio in SOUTHCOM's area of responsibility. Brazil also 
contributes to global peace and security as a member of the UN Security 
Council and a major contributor to UN peacekeeping operations.

    Question. Is President Lula honoring the commitments under this 
designation?

    Answer. Our defense relationship is based on shared values and 
history. We anticipate that our cooperation will continue under the 
current Administration and that there will be additional opportunities 
to strengthen cooperation based on our shared priorities and interests.

    Question. When Lula was last President of Brazil, and during the 
term of his successor, Dilma Rousseff, Brazil's mais medicos program 
brought thousands of Cuban doctors and medical personnel to Brazil. The 
State Department has repeatedly called out Cuba's medical missions as 
an example of human trafficking and forced labor. The administration of 
former President Bolsonaro ended this practice and has joined U.S. 
efforts to hold Cuba accountable for this despicable crime against the 
Cuban people.
    Has the Biden administration communicated to President Lula about 
the concerns with the forced labor of Cuban doctors and medical 
professionals?

    Answer. U.S. embassy officials met with relevant Brazilian 
ministries involved in the Lula administration's new medical access 
program, Mais Medicos para o Brasil. Embassy officials communicated 
that we welcome Brazil's decision not to contract with the Cuban 
Government for this program. They also reminded their Brazilian 
interlocutors of the Cuban Government's regular use of forced labor in 
its labor export programs, including the medical missions. Mais Medicos 
para o Brasil prioritizes the hiring of Brazilian medical professionals 
with Brazilian degrees, followed by Brazilian medical professionals 
with foreign credentials, and then individual foreign medical 
professionals. We will monitor this new program to verify that forced 
labor does not become part of the program.

    Question. Should President Lula reinstate the mais medicos program, 
how will our Embassy and consulates in Brazil be prepared to assist 
victims of Cuban forced labor schemes?

    Answer. On March 20, the Lula administration officially launched 
its new medical access program, Mais Medicos para o Brasil, which aims 
to hire 15,000 new medical professionals and place approximately 28,000 
medical professionals around Brazil, primarily in poorer regions, by 
the end of 2023. For this program, Brazil elected to prioritize the 
hiring of Brazilian medical professionals and to contract with 
individual medical professionals. We do not anticipate that the Lula 
administration will contract with the Government of Cuba for medical 
professionals for this program. Our embassy and consulates in Brazil 
will continue to monitor the program, as they have done even before its 
official launch, to verify that the program does not employ government-
affiliated Cuban workers who are vulnerable to forced labor.

    Question. Cuba's medical missions provide a critical source of 
funding for Cuban efforts to harbor American fugitives and provide safe 
haven for terrorist groups in Latin America. How will the Department 
counter Cuba's efforts to promote terrorism in the Western Hemisphere?

    Answer. The Administration seeks every opportunity to bring abuses 
in Cuba's labor export program to light, raising our concerns regarding 
forced labor in Cuba's labor export program with senior officials 
around the region. Every year since 2010, the Department has documented 
indicators of forced labor in Cuba's overseas missions in the annual 
Trafficking in Persons report.
    During the January 18-19, 2023 U.S.-Cuba Law Enforcement Dialogue, 
we strongly conveyed our concerns to Government of Cuba officials about 
several U.S. fugitives who reside in Cuba. We reiterated our request 
that Cuba return these individuals to the United States, noting that 
individuals who committed crimes should face justice in the United 
States, even many years later.

    Question. Do you believe that Cuba's designation as an SST is a 
beneficial tool in countering Cuban-sponsored terrorism?

    Answer. The SST designation subjects Cuba to a number of sanctions, 
including restrictions on U.S. foreign assistance, bans on defense 
exports and sales, certain controls on exports of dual use items, and 
miscellaneous financial and other restrictions. These consequences have 
had minimal direct impact on Cuba as the country is already subject to 
numerous sanctions.
    Additionally, some companies and financial institutions refuse to 
do business with countries designated as state sponsors of terrorism, 
even when the transactions are not legally prohibited.

    Question. Is the Administration considering rescinding Cuba's state 
sponsor of terrorism designation?

    Answer. The Department of State designated Cuba as a state sponsor 
of terror (SST) for repeatedly providing support for acts of 
international terrorism in granting safe harbor to terrorists. The 
Department carefully reviews available information, from many sources, 
to determine if a country meets the statutory criteria for designation 
or rescission. There is an extremely high bar to rescinding the 
designation. In accordance with U.S. law, prior to the rescission of 
any SST determination, the President would submit a report to Congress 
certifying that specific statutory criteria had been met. President 
Biden remains committed to policies that advance the democratic 
aspirations of the Cuban people and improve human rights.

    Question. Soon after assuming office, President Lula expressed his 
interest in negotiating a free trade agreement with the People's 
Republic of China. The PRC is already the top destination of Brazil's 
exports, comprising about 26.8 percent of the total. America, 
meanwhile, only comprises 11.2 percent of Brazil's exports. It is no 
wonder that the Brazilian Government is increasingly more willing to 
work with the Chinese Communist Party over us. As the world's eighth 
largest economy, it is critical that we not lose Brazil to the CCP.
    What is the status of trade talks with Brazil agreed to by the 2020 
Agreement on Trade and Economic Cooperation?

    Answer. The United States and Brazil signed the U.S.-Brazil 
Protocol Relating to Trade Rules and Transparency under the 2011 
Agreement on Trade and Economic Cooperation (ATEC) in October 2020, and 
it entered into force in February 2022. The Protocol modernizes ATEC by 
adding new commitments on Trade Facilitation, Good Regulatory 
Practices, and Anti-Corruption. The Protocol helps simplify customs 
procedures, provides traders more opportunity to participate in 
development of regulations, and builds more confidence in the rules of 
the marketplace.
    United States Trade Representative Katherine Tai visited Brazil 
earlier this month to strengthen and deepen the bilateral trade and 
economic partnership, through the ATEC. She expressed our interest in 
convening an ATEC meeting before the end of the year, and our technical 
teams will develop a work program in the months ahead.

    Question. What is your assessment of efforts to prevent Brazil from 
awarding control of its 5G network to Huawei and other Chinese firms?

    Answer. We actively engage governments and network operators, 
including in Brazil, to support informed decision-making when deploying 
5G networks. We raise awareness about the true costs and implications 
of using untrusted suppliers, which include widespread security risks 
and interoperability issues. The industry-led global movement towards 
open, interoperable approaches, such as Open Radio Access Networks, or 
Open RAN, has the potential to increase market competition, lower 
costs, and improve security. Providers and operators in Brazil are 
testing Open RAN architecture solutions, such as telehealth in remote 
areas of the Amazon.
    Brazil's November 2021 5G auction sold spectrum to 
telecommunications providers, which have the discretion to contract 
suppliers to build out their networks. Brazil also began creating a 
private government 5G network, awarding the initial design phase via a 
public, transparent tender to a U.S. company. We will continue our 
engagement to encourage the use of trusted suppliers for subsequent 
phases.

    Question. The Administration's plan for enhancing economic ties 
with Latin America is the Americas Partnership for Economic Prosperity 
(APEP). At the first round of talks this past January, Brazil was 
absent.
    What are the implications for APEP's success if the largest economy 
in South America is not participating?

    Answer. The Americas Partnership for Economic Prosperity, a 
regional initiative outlined at the Summit of the Americas in Los 
Angeles, in June 2022, launched in January, and it will soon begin its 
implementation phase. The Partnership will keep an open architecture 
and develop clear criteria for those countries that wish to join beyond 
the initial phase. We look forward to the possibility of future 
collaboration with Brazil in this effort.

    Question. What do you think are the reasons for Brazil's absence 
from the talks?

    Answer. At the time we were coordinating with the initial group of 
countries about the Partnership, Brazil was in the middle of its 
presidential election. Now that the election has taken place, we will 
engage with the Government of Brazil about this initiative. We hope to 
move as quickly as possible toward an open architecture that Brazil and 
other regional governments can join.
    Bilateral economic cooperation with Brazil is a top priority, as 
President Biden and President Lula reaffirmed in their February 10 
White House meeting.

    Question. Could the reason be that the United States is not 
prepared to discuss with other countries the prospect of increasing 
market access?

    Answer. The United States continually looks for ways to strengthen 
its economic relationships through a variety of means and dialogues. 
The United States Trade Representative (USTR) is responsible for our 
engagements with other governments about market access, and we defer to 
its expertise about the timing of such discussions. USTR Ambassador 
Katherine Tai had a productive visit to Brazil earlier this month to 
continue discussions with Brazil about cooperation under our Agreement 
on Trade and Economic Cooperation (ATEC) and proposed an ATEC meeting 
later this year.
                                 ______
                                 

   Responses of Mr. Brian Nichols and Mr. Richard Duke to Questions 
                   Submitted by Senator John Barrasso

    Question. Wyoming is seeing an astronomical increase in the amount 
of deaths related to fentanyl. At the same time, the amount of fentanyl 
in Wyoming is at an all-time high. The Wyoming Division of Criminal 
Investigation seized about 1,600 ``dosage units'' of fentanyl in 2020. 
In comparison, there was nearly 13,500 units seized in just the first 
three quarters of 2022.
    What is the Department of State doing to work with the Government 
of Mexico to stop the importation of fentanyl precursors from China?

    Answer. The U.S.-Mexico Bicentennial Framework for Security, Public 
Health, and Safe Communities guides our bilateral security cooperation 
to combat synthetic drugs like fentanyl and the diversion of precursor 
chemicals. At the October 2022 U.S.-Mexico High-Level Security 
Dialogue, the United States and Mexico committed to implement a joint 
synthetic drug action plan to complement ongoing cooperation between 
our respective law enforcement agencies. The action plan brings in 
additional entities not traditionally involved in counternarcotics 
efforts--regulatory agencies, the health- and trade-focused agencies, 
and the private sector--so we can build the capacity needed to disrupt 
the broader synthetic drug supply chain. Specifically, the Department 
supports Mexico's efforts to counter drug production and trafficking 
through technical expertise, training, and equipment donations. We 
support Mexico's efforts to seize and investigate clandestine drug 
labs, regulate and prevent the diversion of precursor chemicals, and 
interdict illicit drugs and precursor chemicals, including 
strengthening Mexico's ability to secure ports of entry and mail 
facilities.
    With regard to the People's Republic of China (PRC), we have seen 
successful cooperation on counternarcotics in the past. Following a 
2019 agreement, the PRC no longer serves as a meaningful source of 
finished fentanyl flowing to the United States. However, the PRC 
remains a major source of precursor chemicals which are shipped to 
transnational criminal organizations to produce illicit fentanyl. While 
engagement with the PRC on counternarcotics remains limited in recent 
months, the growth in synthetic drug production is a global problem, 
and we actively seek to re-engage the PRC.
    The PRC can and needs to do more as a global partner to disrupt 
synthetic drug supply chains by implementing know your customer 
regulations, expanding information sharing, and strengthening 
enforcement of customs labeling agreements.

    Question. Where is the biggest security gap in the importation of 
fentanyl chemicals into Mexico?

    Answer. Transnational criminal organizations take advantage of 
limited inspection and under-resourced agencies to divert chemicals to 
produce synthetic drugs, including fentanyl. Increasing targeted 
inspections in all modes of transportation via air, cargo, land ports 
of entry, seaports, and international mail would enhance Mexico's 
capacity to prevent the use of precursor chemicals in illicit drug 
production. Our enduring security cooperation with Mexico is critical 
to our efforts to address fentanyl trafficking, reverse our overdose 
crisis, and prepare to confront emerging synthetic drug threats in the 
future.

    Question. On February 22, 2023, there was a confirmed case of 
atypical bovine spongiform encephalopathy (BSE) in the northern state 
of Para. The test samples were submitted to the World Organization for 
Animal Health (WOAH), but the WOAH report indicates that the event 
started on January 18, 2023. That is a difference of 35 days where BSE 
was not confirmed in Brazil.
    Why did it take Brazil 35 days to confirm a case of atypical BSE?

    Answer. The World Organization for Animal Health (WOAH) requires 
member countries to report listed diseases within 24 hours of 
detection, per its notification requirements. Each country determines 
how it will comply with these requirements, and many send samples to 
foreign laboratories for confirmatory testing, which comprises the 
official detection. Because these countries consider the official 
detection to be the confirmatory testing in the foreign laboratory, 
that notification can take longer than countries with in-country 
laboratory detection while still falling within the WOAH guidelines. By 
this measure, Brazil consistently reports BSE confirmatory tests or 
detections within the allotted timeframes set by WOAH. Brazil follows 
processes like other countries that do not have an in-country 
diagnostic lab. In the most recent case, Brazil sent the sample to the 
National Centre for Animal Diseases/Canadian Food Inspection Agency in 
Lethbridge, Canada.
    Brazil is currently designated negligible risk by the World 
Organization for Animal Health and has never reported a classic case of 
BSE. Since 2010, Brazil has reported six atypical BSE cases. Per WOAH 
guidelines, these atypical BSE detections do not affect a country's BSE 
status.

    Question. Brazil has a history of delayed reporting of atypical BSE 
cases. There were two atypical BSE cases, one in Minas Gerais, on June 
11, 2021, and another in Mato Grosso, on June 25, 2021. Again, WOAH was 
not notified of Brazil's two BSE cases until September 3, 2021. This 
delay in reporting of BSE cases raises serious concerns over the 
credibility of Brazil's food safety and animal health systems. The 
impacts these concerns can have on the U.S. cattle herds and public 
health are severe.
    Given Brazil's track record of failing to report animal diseases in 
compliance with WOAH standards, what steps is the Administration taking 
to ensure Brazil is held accountable for food safety standards?

    Answer. While the timeframe between Brazil's sample collection and 
confirmation testing is likely due to the additional time needed to 
complete testing at a foreign laboratory, the Chief Veterinary Officer 
of the United States did discuss these concerns with her Brazilian 
counterpart in March 2022. Since that conversation, Brazil has worked 
to decrease the time between sample collection and confirmatory 
reporting.

    Question. How is Brazil's central competent authority the Ministry 
of Agriculture, Livestock, and Food Supply (MAPA), working with the 
U.S. Department of Agriculture Food Safety and Inspection Services 
(FSIS) on beef products imported into the United States since their 
case of atypical BSE on February 22, 2023?

    Answer. Through the Foreign Agricultural Service at our embassy and 
consulates in Brazil, USDA continues to work with Brazil's Ministry of 
Agriculture, Livestock, and Food Supply (MAPA) to ensure its 
agricultural exports comply with international guidelines and U.S. 
requirements. Since the detection of the BSE case in February, MAPA has 
held dialogues with the main importers of Brazilian beef, describing 
information about the case and MAPA's actions to comply with 
international guidelines.
                                 ______
                                 

              Responses of Mr. Richard Duke to Questions 
                   Submitted by Senator Brian Schatz

    Question. Trade Measures in Reducing Deforestation: Cattle ranching 
is the biggest driver of deforestation in Brazil. Much of this is 
occurring in violation of existing Brazilian laws. U.S. imports of beef 
products from Brazil have rapidly increased in recent years, topping $1 
billion last year. The U.S. is the largest importer of processed beef 
and the second largest importer (behind China) of fresh beef and some 
of this product is known to originate from slaughterhouses connected to 
deforestation and illegal ranching in the Amazon. Leather emanating 
from Brazil and found in supply chains of U.S. car seats has also been 
linked to cattle ranching that is driving deforestation. The European 
Union is expected to soon approve a new law designed to keep products 
driving deforestation out of its markets--and I am preparing the 
reintroduce legislation (the FOREST Act)--to remove illegal 
deforestation from the products we use and consume every day.
    What role do you think such trade measures should play, as a 
complement to financial and technical assistance the U.S. can provide, 
to help Brazil reduce deforestation, to promote traceable and 
transparent commodity supply chains, and to ensure our own markets are 
reinforcing and not undermining these efforts?

    Answer. The drivers of deforestation are complex and varied, as are 
the tools needed to combat deforestation. While trade measures are a 
possible tool, a combination of financial assistance, technical 
support, and capacity building will likely have the greatest effect on 
addressing international deforestation associated with the production 
of agricultural commodities. As mandated in Executive Order 14072, the 
Secretary of State will submit a report to the President by April 22, 
2023, on options for a whole-of-government approach to combating 
international deforestation.

    Question. U.S. Assistance to Companies: In addition to the Amazon 
rainforest, the Cerrado savannah and Pantanal wetlands are under 
threat, particularly from the production of agricultural commodities 
such as beef and soy, which is leading to the rapid conversion and loss 
of these irreplaceable ecosystems and their biodiversity. Addressing 
this problem will require greater accountability and transparency from 
the companies involved, as well as incentives and financing for 
producers and a pathway to transition so that companies can meet their 
voluntary commitments and comply with emerging requirements in the 
European Union and elsewhere.
    How will the U.S. assist companies in doubling down on commitments 
to achieve zero deforestation and conversion in their supply chains, 
particularly for soy and cattle?

    Answer. The United States has been working to assist U.S. companies 
in meeting their zero deforestation and conversion commitments, and 
this includes 14 of the largest traders of agricultural commodities, 
like U.S. companies ADM, Bunge, and Cargill. The U.S. Agency for 
International Development and State-supported Forest Data Partnership 
helps generate data needed to decouple agriculture production from 
deforestation. Other programs, like USAID's Amazonia Connect and 
Business Case for Collective Landscape Action, support reductions in 
commodity-driven deforestation.
                                 ______
                                 

              Responses of Mr. Brian Nichols to Questions 
                   Submitted by Senator Bill Hagerty

    Question. China has gained significant influence in several 
strategic Western Hemisphere countries, including Brazil, the largest 
economy in South America. Brazilian President Lula da Silva moved to 
significantly strengthen China-Brazil ties during his first stint as 
president nearly 20 years ago, and Chinese trade with Brazil is now 
double that of the United States. CCP-aligned companies have made large 
infrastructure investments in Brazil, including in some of the 
country's largest deep-water ports and telecommunications sector.
    Are you concerned that the President Lula will work to further 
deepen ties with China?

    Answer. Brazil and the United States have a strong relationship 
that has grown more dynamic in recent years. Brazil also has a 
longstanding and extensive economic relationship with the People's 
Republic of China (PRC), its largest trading partner. We recognize 
Brazil's global role and expect the Lula administration will pursue 
Brazil's national interests as he and his team view necessary. We 
recognize that the United States must maintain vigilance and 
consistently emphasize why we should remain the preferred partner to 
Brazil. We will continue to convey our concerns about the PRC's 
troubling trade, environmental, human rights, and other practices, with 
Brazil and other governments in the region.

    Question. How does China's increasing economic and trade ties with 
Brazil pose a threat to U.S. economic interests and influence in the 
region?

    Answer. Brazil and the United States have a strong and growing 
trade and investment relationship. U.S. companies are the largest 
investors in Brazil with about $190 billion in investment stock as of 
2021, far more than PRC companies. U.S. firms contribute value-added 
industries in manufacturing, agriculture, steel production, energy, 
communications, and technology. U.S. investments support hundreds of 
thousands of jobs in Brazil, an enormous positive influence in our 
relationship.
    Brazil also has an important economic relationship with the PRC, 
its largest trading partner. We work with partners, including Brazil, 
to press for the PRC's economic engagement in the region to meet 
international standards of transparency, adherence to the rule of law 
and anti-corruption practices, debt sustainability, labor rights, 
environmental best practices, and the needs and concerns of local 
communities.

    Question. How might China's ability to use Brazil as a platform to 
project its influence and strategic interests in Latin America pose a 
broader threat to U.S. regional security interests?

    Answer. We echo the longstanding calls from Latin American capitals 
that the PRC's engagement and investment respect local laws and 
interests, particularly regarding the human rights of all, including 
workers, and protections for the environment. We encourage countries to 
monitor national security and data privacy threats that come with 
untrusted vendor investment in critical infrastructure and sensitive 
sectors. We work with our partners around the region to encourage 
transparency in investments, respect for individual rights and 
freedoms, and support for democratic values.

    Question. Specifically, what is the Biden administration's strategy 
to prevent China from acquiring deep water ports that could be for 
``dual-use'' purposes by the PLA Navy?

    Answer. The Department has encouraged partners to strengthen their 
national security tools, including investment screening and other 
authorities, to ensure port infrastructure investment does not raise 
national security risks. We also provide technical assistance to 
improve our partners' capacity to evaluate bids for critical 
infrastructure projects. The Strategic Ports Initiative aims to protect 
critical ports abroad from problematic actors, and we continue to work 
with government development agencies to provide access to financing for 
strategic infrastructure projects.

    Question. How has China's expanding military cooperation with 
Brazil, including joint military exercises and arms deals, impacted 
U.S. strategic interests in the region? What is the Biden 
administration doing to discourage deeper China-Brazil security ties?

    Answer. The PRC's expansionist designs on our hemisphere are a 
strategic concern--for us, and for our neighbors. While Brazil's 
interests, trade ties and economic situation necessitate pragmatism, 
Brazil continues to make it clear that we share values and desires to 
maintain interoperability. We include Brazil in strategic initiatives, 
negotiate agreements to facilitate military procurement and exchanges, 
and work with Brazilian counterparts to ensure positive outcomes for 
both of us through our many regular dialogues including Political-
Military Dialogue.

    Question. In what ways does China's growing presence in Brazil's 
technology sector and infrastructure projects raise concerns about 
potential espionage and cybersecurity risks for the U.S.? What is the 
Biden administration's strategy to mitigate these risks?

    Answer. We regularly convey to our partners in the region, 
including Brazil, our concerns about the risks of PRC investment in 
critical infrastructure like energy and technology. We also share with 
our partners the value of investment screening mechanisms to protect 
national interests, particularly in key industries such as civil 
nuclear power and telecommunications.
    In telecommunications, for example, we actively engage governments 
and network operators, including in Brazil, to support informed 
decision-making when deploying 5G networks. We have engaged with the 
Government of Brazil and with telecommunications companies in Brazil to 
raise awareness about the true costs and implications of using 
untrusted suppliers, which include widespread security risks and 
interoperability issues. The industry-led global movement towards open, 
interoperable approaches, such as Open Radio Access Networks, or Open 
RAN, has the potential to increase market competition, lower costs, and 
improve security. Brazil also committed to creating a private 
government network with enhanced security measures, and we will 
continue our engagement to ensure that commitment is carried out.

    Question. What role does China's influence in Brazilian politics 
and media play in shaping public opinion and potentially undermining 
U.S. efforts to promote our interests in the region?

    Answer. Brazilian media outlets are strong, professional, 
independent, and resistant to outside influence. With few exceptions, 
PRC-originated content does not appear in mainstream media. Brazil has 
a sophisticated, independent media environment which actively promotes 
journalistic freedoms, including through campaigns aimed at identifying 
disinformation.

    Question. Given China's use of economic leverage and predatory debt 
diplomacy to gain strategic footholds in resource rich areas, how is 
the Administration working to ensure that Chinese investments are non-
exploitive and fair?

    Answer. We continue to ensure that partners in the region, 
including Brazil, recognize the serious risks involved in the PRC's 
lending practices. In addition, we collaborate with the Development 
Finance Corporation (DFC), U.S. Trade and Development Agency (USTDA), 
Ex-Im Bank, and other U.S. agencies to provide alternatives to PRC 
financing. As one example, in 2020, DFC invested $25 million in a 
nickel-cobalt project in northeastern Brazil operated by TechMet, and 
in September 2022, the DFC board approved an additional $30 million 
equity investment in the same project. The mine achieved commercial 
nickel production in July 2022. We need nickel and cobalt to power 
electric vehicles and other clean energy technologies, and the TechMet 
investment will generate large net exports for Brazil, incorporate 
sustainable practices in mining activities, and provide hundreds of new 
jobs in one of Brazil's poorest states.

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