Brazilian President Dilma Rousseff has scrapped a scheduled state visit to the White House amid Brazilian outrage over news that the U.S. spied on her and a Brazilian oil company.
The cancellation of the Oct. 23 visit is the first public diplomatic fallout prompted by the revelations of National Security Agency spying and represents a serious rift between the two economic powerhouses and trading partners.
Obama has sought repeatedly to allay Brazil's concerns, meeting privately with Rousseff at an economic summit in St. Petersburg, and dispatching several top members of his administration to speak to the Brazilians. Obama spoke with Rousseff by phone Monday, and White House spokesman Jay Carney said they agreed to postpone the state visit – which would have been the first of Obama's second term.
Carney said the two presidents believed the visit "should not be overshadowed by a single bilateral issue, no matter how important or challenging the issue may be."
Brazil's O Globo television network reported earlier this month that the NSA had spied on the emails, telephone calls and text messages of Rousseff, as well as Mexico's president. It also showed the U.S. had spied on Brazilian oil company Petrobras. The reports were based on documents obtained by journalist Glenn Greenwald, who lives in Rio de Janeiro, from Edward Snowden, the former NSA contractor who's living in Russia. Other reports that the U.S. had conducted surveillance on Brazil surfaced earlier this summer.
Carney said Obama "understands and regrets the concerns that disclosures of alleged U.S. intelligence activities have generated in Brazil and made clear that is he committed" to working with Rousseff and her government "to move beyond this issue as a source of tension in our bilateral relationship."
But the Brazilian government said Tuesday the issue has yet to be resolved to its satisfaction.
"The illegal practice of intercepting communications and data of citizens, businesses and members of the Brazilian government constitute(s) a serious act which threatens national sovereignty and individual rights, and which is incompatible with democratic coexistence between friendly countries," it said in a statement.
And, it continued, in the absence of a timely investigation and a "commitment to cease interception activities, the conditions are not present for the aforementioned visit to be conducted."
Carney stopped short of saying whether Obama had expressed regret for the U.S. spying.
"As a broad matter, obviously, this country collects intelligence, as do most countries," Carney said.
U.S. surveillance in the country is "under review," Carney said, adding the administration is discussing "with the countries who have concerns about them, the nature of the work that we do."
He said Obama did not make a final attempt to persuade Rousseff not to cancel, agreeing with her that the state visit – typically a day of pomp and ceremony – should not be overshadowed by the rift.
The revelations remain a "matter of intense focus, especially in the Brazilian media," Carney said, and likely would have drowned out anything else the two leaders discussed.
Carney said the U.S. would continue to work with Brazil on a host of critical issues, including energy.
"The implications go beyond US-Brazil relations," said David Rothkopf, chief executive officer and editor at large of Foreign Policy magazine. "This is one of the first big formal diplomatic aftershocks of the NSA scandal."
Rousseff's decision came despite several public attempts by the administration to convince her otherwise.
Vice President Joe Biden spoke to Rousseff in July by telephone, lamenting the impact on U.S.-Brazil relations, in what local press described as a cordial conversation.
In August, Secretary of State John Kerry visited Brasilia and met with Rousseff and the foreign minister. And on Monday Obama himself telephoned Rousseff.
In August, Brazil's Justice Minister Jose Eduardo Cardozo came to Washington and met with Biden and Attorney General Eric Holder, proposing that the interception of data could only be done with a Brazilian court order.
He said at an August news conference that the U.S. didn't agree with the proposal "not only with Brazil but with any country in the world."
It was unclear what the impact of the rebuff will be. The cancellation won't have much short-term effect on the U.S., said Peter Hakim, president emeritus of the Inter-American Dialogue, a Washington-based policy group, who noted that "Obama has a million problems, and this is not one of the top five."
But Hakim called the episode a setback for long-term relations as it "reinforces Brazil's distrust of the U.S."
By Lesley Clark and Vinod Sreeharsha
McClatchy Washington Bureau