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Brazil under Cardoso thus required a low-cost means of defending its nationalinterests; this meant that it could not accept large costs for the provision of regionalor global goods, such as institutionalising MERCOSUL. 496 During Cardoso’s term,external threats to Brazil were minimal, and the primary policy issue for theBrazilian government was the task of stabilising the domestic economy. Thisentailed considerable limits on Brazil’s foreign policy, including only mutedopposition to increasing US unilateralism by the end of Cardoso’s presidency in2002. 497 Nonetheless, Brazil grew increasingly obdurate in the FTAA negotiations,citing differences with the US on intellectual property rights, and access to USmarkets in steel and farm produce. 498A number of factors combined to ease Brazil’s external environment underCardoso. While the US was less able to exert influence on South American affairs,having its hands full with the North American Free Trade Association (NAFTA)and Haiti, 499 Brazil was slowly emerging as a regional hegemon, as it managed tobreak away from decades of parity with Argentina, owing to the latter’s economicwoes. Rapprochement with Argentina was a primary factor in Brazil’s continentalrise. Lesser regional actors, while expanding their capabilities, were highlyconstrained by incomplete political transitions and rampant poverty. Two furtherfactors in the regional balance of power were the increasing prominence ofgeostrategic issues, such as control of certain ocean passes, and the incipientinvolvement of external powers, 500 such as China. As noted by Morris as early as1989 in his discussion of the geostrategic significance of the Straits of Magellan,496 Under Cardoso, for example, the military expenditure as a percentage of GDPremained steady, and at a level highly approved of by the military (1.8% throughout histenure). This policy is attributed to Cardoso’s desire to avoid the slightest conflict withthe military in order to pursue his economic stabilisation without let or hindrance. SeeJoão R Martins Filho and Daniel Zirker, “The Brazilian Military under Cardoso:Overcoming the Identity Crisis”, Journal of Interamerican Studies and World Affairs, 42,No.3 (Autumn 2000): 144.497 This did not preclude Cardoso’s pronouncement in mid-2002 that Bush was still “in alearning stage” on the subject of foreign policy in Latin America. See Tony Smith, “Bushlooks Cardoso in the eye on free trade, but Brazil stands firm”, in Associated PressWorldstream, March 31, 2001.498 Ibid.499 See , Robert A. Pastor, “The Clinton Administration and the Americas: The PostwarRhythm and Blues”, Journal of Interamerican Studies and World Affairs, 38, No.4(Winter 1996): 99-128, especially 108.500 Michael A. Morris, The Strait of Magellan (Dordrecht: Martinus Nijhoff Publishers,1989):192.205