President Reagan preached the virtues of free enterprise, unrestricted world trade and individual liberty to Brazilian industrialists today and declared that the United States and Brazil should jointly explore the frontiers of space.
"Today, I would like to propose . . . to have a Brazilian astronaut train with ours so that Brazil and the United States can one day participate in a shuttle launch together as partners in space," Reagan said to a group of U.S. and Brazilian businessmen assembled in the governor's palace here.
Aboard Air Force One en route from Brasilia to Sao Paolo, Secretary of State George P. Shultz said that Brazil, while it does not have an astronaut training program, is "very much interested in space . . . ." He also told reporters that Brazilian President Joao Figueiredo, when told about the joint space proposal by Reagan, replied, "That's wonderful, and I know just who the first astronaut is going to be. Me."
Reagan's celebration of U.S.-Brazilian cooperation won enthusiastic applause from his audience. Afterward, Joseph J. Sanchez, president of General Motors Brazil, said that Reagan had accomplished more in 1 1/2 days to improve relations between the two countries than had been accomplished in 20 years.
But not all Brazilians were as ecstatic about Reagan's goodwill efforts. The influential Jornal do Brasil quoted a Brazilian official as saying that Reagan's speech in Brasilia yesterday had "a touch of Banana Republic to it" despite the U.S. president's evident sincerity.
While stressing that Reagan had initiated a welcome new climate in U.S.-Brazilian relations, Brazilian officials in the capital today told Washington Post correspondent Jackson Diehl that the closer ties sought by the United States remained more a matter of potential than reality.
Although praising Reagan's personal style, they said that U.S. handling of its new initiatives with Brazil had at times appeared heavy-handed, and that U.S. expectations of a "special relationship" with Brazil in the future were overdrawn and unrealistic.
"If anyone is thinking in terms of a special relationship," said a senior Brazilian Foreign Ministry official, using the phrase for close U.S.-Brazilian ties developed by Henry A. Kissinger during the Ford administration, "forget it, it's not going to happen.
"The important thing is to modernize relations. We have to stick to the middle ground and not try and go back to the past."
The Brazilian official, who asked not to be named, said that as a result of talks during the visit "we are on the threshold of achieving results." But he added that real progress depended on future negotiations between the countries through five new bilateral working groups established yesterday and today -- on space, nuclear issues, science and technology, military and industrial development and economic matters.
"We are in a gray area. Relations are evolving very fast," the official said.
The Brazilians generally praised what they saw as a significant U.S. policy shift toward the region from what they had perceived as a lack of interest in South America early in the Reagan administration. Officials in Brasilia described the new U.S. financial assistance to Brazil, including a $1.2 billion loan announced yesterday, as an important measure.
But they emphasized that Brazil's response to such U.S. support would not extend beyond the economic arena, and confirmed that one objective of Figueiredo's toast to Reagan last night was to underline the continued independence of Brazilian foreign policy and its divergence from U.S. views on such key issues as Namibia, Central America and the Middle East.
Reagan had spoken of the "destabilization of our governments and economies" by insurgents "armed by the surrogate of a faraway power" in an apparent reference to Cuban activities in Central America. Figueiredo asked for a regional peace process that would search for the "economic and social roots" to problems stemming from "a climate of general poverty and social instability."
During a day's trip to the industrial and financial center of Sao Paulo today, Reagan stressed to Brazilian businessmen and industrialists the theme of hemispheric cooperation he had sounded the day before to government leaders in the capital.
Robert M. Gerrity, president of Ford Brazil, called it "the most fantastic support of Brazilian-U.S. relations I've seen."
U.S. Treasury Secretary Donald T. Regan met with a core group of Brazilian industrialists here before the Reagan speech and engaged in what Luiz Eulalio Bueno Vidigal, president of the Sao Paulo Industry Federation, called "an extremely frank and favorable" conversation.
Speaking of what he called his "dream" of improving relations with Brazil and other nations in the Western Hemisphere, Reagan said: "On this shrinking planet, the drive for renewal, economic progress and the leadership for world peace must increasingly come from the new world."
He warned against the dangers of "protectionism," couching his statement so that it did not appear to be a sharp criticism of Brazilian export-subsidy policy, which the United States has opposed.
In a conciliatory move, Brazilian officials have said that these subsidies will be phased out over a two-year period.
"With so many out of work--in my country, yours and others -- protectionism has become an ugly specter stalking the world," Reagan said. "One danger is protection against imports, erecting barriers to shut down the competitive goods and services of others in one's own markets. Another danger is protection of exports, using artificial supports to gain competitive advantage for one's own goods and services in the markets of others.
"The aim of these actions may be to protect jobs, but the practical result, as we know from historical experience, is the destruction of jobs," Reagan continued. "Protectionism induces more protectionism and this leads on to economic contraction and, eventually, dangerous instability."
Reagan began his second full day in Brazil with a speech to U.S. Embassy personnel in Brasilia. He told them he had experienced "only one slip-up" on the trip, when he awoke at 7 a.m. this morning instead of 8:30 because of the time difference.
In fact, Reagan suffered a much more public slip-up the night before, when, during a dinner hosted by Figueiredo, Reagan called for a toast to his host and "the people of Bolivia."
Trying to recover from this gaffe, Reagan said that Bolivia is "where we're going next." The president is, in fact, going to Colombia when he leaves Brazil on Friday and is not scheduled to visit Bolivia on this trip.
In an unusual move, the White House press office altered the transcript of this toast that was distributed to the press. The changed transcript said that Reagan had toasted "the people of Bogota," which is the capital of Colombia. Video and broadcast tapes, however, showed that Reagan had clearly said "Bolivia."
The incident demonstrated the increased sensitivity that some White House officials have demonstrated about oral slip-ups.
One of these officials yesterday called Reagan's slip "a human error" and recalled that Gerald Ford, when he was president, had once referred during a toast to late Egyptian president Anwar Sadat as the leader of Israel.