One year after cancelling exclusive military aid and supply agreements with the United States, Brazil is being courted by leading Western European arms manufacturers to establish joint ventures here for supplying the local market and for export.
Negotiations have already yielded several major weapons-plant deals and more are expected. West German, French, Italian, Belgian and British interests are proving eager to increase their role in what is seen as Latin America's most lucrative and sophisticated arms market.
They are finding the Brazilian government a willing partner - if the terms are right.
"Naturally, we're interested in acquiring state-of-the-art weapons for our armed forces," a Brazilian official said, "but our main interest is exporting the equipment made here. By 1980, arms exports are going to be a billion-dollar-a-year item in our balance of trade."
Local manufacturers are already exporting some military items, such as armored cars and light aircraft, either designed here or built under license.
A recent Rand Corp. study, saying Brazil is already the Third World's "most advanced" arms producer and exporter, predicts that Brazil's arms production will grow as a result of programs in conjunction with West Germany, France, Italy and the U.S. for "the assembly or manufacture of jets, transport aircraft, helicopters, tanks and land-to-land and land-to-air missiles."
In one typical deal, Italy's Oto Melara, one of Europe's leading manufacturers of heavy armaments, has joined two Brazilian firms in installing an arms production complex in the northeastern city of Recife. Under the agreement signed early this year, Oto Brazil will use Italian technology but will be 66 percent Brazilian-owned and will be headed by the former chief of the army's war materiel department.
In a similar arrangment, Brazil will soon begin producing Oerlikon 20mm and 35mm antiaircraft mortars in association with a West German-led arms group. Brazilian sources say that the deal calls for the weapons to be used here and exported to other Third World nations.
According to military sources and press reports, Brazil is also to make the German-designed Cobra missile.
"A limited number of prototypes have already been made at plants here with technology transferred from Germany," said a foreign military analyst," and full-scale production should begin soon."
In a widely publicized agreement two months ago, the Brazilian government and Aerospatiale of France, maker of the Concorde and the Airbus, created a new company called Helibras. The joint venture will produce Lama and Ecureil helicopters for the Brazilian and foreign markets, according to Aerospatiale president Jacques Mitterrand, brother of French Socialist leader Francois Mitterrand.
In addition, military sources say that Belgium's FNB, the main supplier of light arms to NATO, has signed an agreement to produce 90mm cannons, submachine guns, automatic rifles and ammunition in partnership with a Sao Paulo industrial group. Italy's Beretta is also reported to have signed an accord to make light arms here.
Now Brazil's military rulers are in the midst of an ambitious long-term drive to put their armed forces on an independent footing. They show little interest in the outright arms purchase deals traditionally offered developing nations.
Army Minister Fernando Belfort Bethlem said recently, "Our policy is to try to nationalize our war materiel industry and reduce our need to import military equipment."
"For the Brazilians, self-sufficiency is the name of the game," said a foreign military observer. "Every joint venture they sign with a European firm means they're that much closer to their goal."
"We have certain basic demands that any proposal from outside must meet," said a Brazilian official. "We must have majority control, the transfer of technology must be complete and without any need to pay royalties, and there must be no obligation on our part to buy anything for our armed forces."
Brazil is building two frigates here for its navy in association with Britain's Vosper shipyards, and government sources report that negotiations are under way with Vosper and Yarrow, another British shipyard, for construction in Brazil of warships and submarines.
"It's getting to be a merry-go-round," said a military observer in Brasilia. "Every time I turn around, it seems like there's another delegation in town. One month it's the Germans, the next month it's the French."
The Europeans are attracted in part by Brazil's cheap labor, abundant steel supply and proven industrial capability.
"The Brazilians have been making their own cars and trucks for 20 years," says foreign military observer. "It's no big deal for them to switch over to tanks and helicopters."
Domestic political considerations are also said to be a factor for the western Europeans. Sentiment against authoritarian regimes in Latin America and elsewhere in the Third World runs high, and in some cases, parliments have moved to forbid arms sales to countries such as Argentina and Chile.
Some might include Brazil, too. Indeed, Brazil's cancelation of the U.S. criticism of human rights violations here. But political repression apparently has eased here in comparison with neighboring countries.
By setting up shop here, said one foreign military expert, European arms manufacturers "not only gain better access to the Latin American arms market but they're beyond the reach of any prohibitions that might be applied to their parent companies by the government back home."
West Germany, whose commercial ties with Brazil have grown rapidly following their 1975 nuclear accord, appears to be especially active. Its armaments concerns negotiating with the Brazilians reportedly include:
Krauss-Maffei, for manufacture of the 30-, 40- and 60-ton Leopard artillery, assault and antiaircraft tank, considered by some military analysts to be the best in the world, in conjunction with the Bardella group of Sao Paulo.