US treats Brazil as "country X" and "Ecuador" in proposal for rare earths

The United States addressed Brazil, in an official document, as "Ecuador" and "country X" in the proposal to sign a memorandum of understanding for cooperation in critical minerals and rare earths.

The two countries opened discussions on the possibility of an agreement in the area, but there has been no significant progress so far. Meanwhile, Donald Trump's government threatens to impose 25% tariffs on Brazilian products.

In the American proposal, sent to Brasília by the State Department and to which CNN had access, there are mentions of the expression "country X" (in English), with erasures and the word "Brazil" written after it.

In a specific paragraph, due to an apparent error, Brazil was exchanged for Ecuador.

These excerpts were interpreted by Brazilian negotiators as evidence that the Trump administration has little desire to explore a partnership of mutual interest with Brazil.

CNN had partial access to the text of the American proposal, sent to Brasilia by the State Department in January, days before the meeting (on February 4) held in Washington with 54 countries to talk about the mining production chain and prospects for supplying raw materials to American companies.

Until now, however, this error in the wording of the offer was not yet known. At the February meeting, memoranda of understanding were signed with 11 countries, including Argentina, Paraguay and Ecuador.

The assessment, during the Lula government, was that the State Department sent proposals on a "cut and paste" basis, disregarding the peculiarities of each negotiation and the characteristics of countries, such as Brazil - holder of the second largest reserves of rare earths on the planet, behind only China.

A point heavily criticized in the American proposal, by presidential advisors, is that the agreement desired by the Americans would have a "non-binding nature".

In other words, there would be no legal validity and it would not need to be incorporated into domestic laws or international standards, serving only as a potential element of pressure in the event of any divergence.

On a parallel track, Itamaraty began negotiations with the USTR (Office of the White House Trade Representative), with a more technical nature and addressing more in-depth points, such as the establishment of minimum prices in the supply of rare earths.

The conversations, according to reports made to CNN, stopped evolving after the purchase of the Serra Verde mining company by the American USA Rare Earth.

The operation was announced in April and closed for US$2.8 billion. The only Brazilian company already producing rare earths, Serra Verde - located in Minaçu (GO) - signed a 15-year offtake (supply guarantee) contract for the American market.

In the opinion of Brazilian officials, this made the USTR lose momentum and reduced its appetite for an agreement with Brazil.

When contacted by CNN this Wednesday (1st), the United States embassy in Brasília has not responded so far.

Source: CNN