Will Brazil Unravel the Net?

So now it’s official. After days of frantic diplomatic overtures and in spite of a 20-minute call from President Obama, Brazil’s President Dilma Rousseff called off next month’s state visit to the United States. New revelations that her personal email and web searches were monitored by the National Security Agency (NSA) were apparently the final straw. Her decision not to dine with the American president was designed to send a message and assuage the country’s wounded pride.

There is no doubt that her public rebuke is playing well in the local Brazilian media. To her credit, President Rousseff has manipulated the embarrassment of the NSA intercepts to her benefit. In nationalizing the narrative, she has shifted attention away from her government’s much-maligned handling of the popular protests that shook Brazil in June and July. Rousseff’s defiant stance may also shore-up her popularity at home after a dramatic decline in recent months. She has an eye firmly on the 2014 elections and her decision to stand up to Obama will satiate her Worker’s Party base, the members of which are hugely critical of the NSA spying scandal.

Even so, her political posturing comes at a cost, and it will do little to reverse the country’s economic slide. The Brazilian economy is floundering at the moment and its business leaders are eager for more American investment and export opportunities. Both Brazil and the U.S. have spent the past several years trying to deepen ties, and more Brazilians are traveling, buying real estate and shopping in the U.S. than ever before. This may partly explain why press statements issued by the President’s office described the visit as “postponed” and likely to “quickly occur” once the dust settles.

Some analysts see her decision to call off the visit as a shrewd political move. After all, there were no likely breakthroughs on the horizon for the two giants. Few analysts anticipated any practical dividends emerging from the bilateral talks, noting instead that the “potential costs were high, and the benefits were limited.” Instead, assuming she wins the election (as is predicted), she can take up the offer to visit Washington D.C. later in 2014 or 2015.

The hullabaloo about her cancelled visit conceals a much more ominous set of developments. The revelations of the full extent of NSA spying on Brazil and Mexico by Guardian journalist (and Rio resident) Glenn Greenwald has set off an explosive chain reaction. He has testified to Congress, highlighting the ways in which the NSA spied on top officials and also the communications of the country’s largest oil company, Petrobas. After dressing down the U.S. ambassador, Brazil demanded that the United States undertake a full investigation. The word from the White House is that they’ll get on top of it, eventually.

The Brazilian authorities are now preparing to take their message of “cyber neutrality” to the United Nations General Assembly this month. President Dilma has pulled together an Internet Steering Committee made up of over 20 representatives. For its part, the Brazilian Congress has debated the so-called neutrality principle in the past, to little avail. But the word on the wire is that Brazil intends to take the debate on Internet privacy to a new level.

Brazil is now flirting with the idea of divorcing itself from the web, since most Internet traffic passes through the United States. A proposal floating around Brasilia is that data be locally stored and that more exchange points be developed, ostensibly to protect citizens against NSA espionage. President Rousseff has also said she intends to lay underwater fiber optic cables directly to Europe to link all South American states and a U.S.-free network. Some have described this as a new form of national privacy sovereignty that threatens to fragment the global network.

It is hard to gauge how seriously Brazil is in its efforts to isolate itself from cyber-interference. There are concerns in some circles that such moves could set off a global backlash, emboldening China and Russia, among others, to balkanize the net. Some analysts contend that a more effective approach would be to strengthen international laws that hold nations accountable for ensuring online privacy, an argument that should resonate with Brazil’s multilateralist instincts. Either way, expect fireworks in the months ahead.