Porto Alegre, Brazil

Upcoming trade talks with the United States will be the big test. Lula has repeatedly called the proposed FTAA nothing less than an "annexation" of the Brazilian economy. No surprise, then, that Brazil--conscious of its role as the key player on the continent--clearly wants to get tough and insist that the terms not be dictated by Washington. On the other hand, reaching an agreement with real benefits for both sides--overcoming low growth without too much radical experimentation--would be historic.

Lula's inner circle counters the pessimistic view of what is possible by pointing to the process that brought Lula to the presidency. The Brazilian left, said Frei Betto sardonically, did not have a "metaphysical crisis" of the sort the "academic left" did with the crumbling of the Berlin wall, because it had never lost touch with the popular movement. Davos also emitted a broad signal that the First World is moderately nervous about its own moral authority. ("Building Trust" was the theme of the $22,000-a-head Swiss confab, implying clearly enough that there isn't an overly generous supply of that in the post-Enron environment.) Although it may be a stretch to say that the Washington Consensus on free-market liberalization and monetary orthodoxy has been "defeated," as Lula's chief of staff Dirceu proclaims, some tentative struggle with the straitjacket of dogma is undoubtedly taking place. Unnoticed in much of the commentary about Lula's rise, for example, is the simple fact that his inauguration marked the first normal transfer of power between elected presidents in Brazil in forty years.

Negotiations, several PT spokespeople implied, are the way to go forward, both domestically and internationally; and Brazilians are famously skilled diplomats. Lula, who gained negotiating experience as a union leader under military rule, has said his government's approach will be both tough and loyal: Agreements will be respected but Brazil will not buckle to unfavorable demands. "We will say yes to some things, no to others," said PT chief Genoino. "We will not just denounce, nor just accept; we will get them to change." Just how the coming negotiations over free trade between Washington and Brazil play out could greatly influence the course of overall hemispheric relations. If Brazil holds fast and wins tangible concessions from the United States or if it ultimately refuses to sign the FTAA, Lula will emerge as a key regional leader and US hegemony will be weakened, if not directly challenged.

But, to quote the cliché, four years is an eternity in politics, and reality can intervene in many ways to alter US-Brazilian relations during Lula's tenure, starting with war in Iraq. Some have argued that US preoccupation with Iraq has distracted Washington from taking a harder line against Lula. The Brazilians, for their part, are unlikely to consume scarce political capital fighting Washington over issues not directly related to Brazil.

Yet Lula has consistently criticized Washington's war plans and is likely to be an even more vocal opponent once the bombs start falling. Such a war could be economically devastating to Brazil and to Lula's social plans. Former labor federation official Jakobsen notes that "war in Iraq could raise oil prices. And Brazil imports oil. You can imagine the rest."

In the meantime, Brazil's new leftist government is forgoing all ritual denunciations of "imperialism," eschewing the Sandinista tack of declaring the "yanquis" the "enemy of humanity," and staying away from the rhetorical rants of Venezuela's Chávez. Instead, its response to Washington on all matters is: Let's talk. Filtering through these constant references is the suggestion that President Lula can turn his subjective resources into real facts, including, if need be, direct appeals to the conscience of the world, as he did at Davos.

There is an important precedent for this approach: Brazil faced down and defeated the powerful pharmaceutical multinationals in defending its patent-free generic AIDS drugs; its tactics included confrontational full-page ads in the New York Times. The strategy: Set the stage by building a convincing and respected national program, show it to the world and then go out and kick butt. The message was so simple and compelling--sick people dying of AIDS while drugs are denied them--that Big Pharma was disarmed. Even the notoriously impervious World Trade Organization had to cave briefly; at its 2001 meeting in Doha, Qatar, the WTO exempted some drug patents from its intellectual property protections, a concession the United States is now scrambling to take back. George W. Bush even tried to climb aboard in a way, with his mawkish State of the Union announcement of concern for AIDS-beleaguered African states.

Doing the same for the hungry and malnourished now at the center of Lula's social program won't be as easy. Frei Betto said that during a visit to Santa Monica, California, he found dozens of AIDS groups in the phone directory but none dealing with hunger. "AIDS can affect anybody," he explained, "so everybody feels sympathy. But hunger is only a problem for the poor." Nevertheless, he continued, slavery was once normal too; now, it's a crime. The same thing can happen with hunger, even poverty itself. It's certainly a long shot, but if anyone can pull this off, a soft-spoken, 57-year-old former lathe operator who never finished high school might just be the guy to do it.

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