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SCOTT SIMON, HOST:

This month on WEEKEND EDITION, we've been taking a look at the so-called fiscal cliff from the perspective of other countries. After all, the government's automatic spending cuts and tax increases scheduled for January could have impacts throughout what's an increasingly linked global economy.

Tomorrow, my colleague Rachel Martin checks in with Hong Kong. Right now, we'll go to Latin America. We're joined now by Joseph Leahy. He's the Brazil bureau chief for the Financial Times. Joe, thanks very much for being with us.

JOSEPH LEAHY: Yeah, thanks, Scott.

SIMON: We're using the phrase fiscal cliff here. It's in the news every day, really every hour. What about Brazil? Are they paying attention to it?

LEAHY: They've been paying remarkably - I wouldn't say little attention. You do see it on TV, on chat shows - but it's not something that's drawing people away from watching futbol matches or regular programming on Sunday.

SIMON: Don't think that's been happening here either, come to think of it.

(LAUGHTER)

SIMON: Brazil's economy, almost a standout in the world, has actually been doing pretty well. Does that mean that Brazilians are indifferent to what's happening in the United States?

LEAHY: Well, no. I think, particularly now, Brazilians are becoming more sensitive to what's happening in the United States, because the Brazilian economy has been doing very well. But in the past few quarters, it's actually been slowing down. And the government is concerned. They're trying to get the Brazilian economy back on a growth path.

SIMON: At the same time, has Brazil's economic relationship with China become more important than their relationship with the United States?

LEAHY: China has been the, if you like, the X-factor of the past decade for Brazil. The trade relationship has gone from something that wasn't that great to now China is Brazil's biggest export market. The relationship with China is one of the most important relationships, not only for Brazil, but for the rest of Latin America because it's one that will only continue to grow. But at the same time, the U.S. remains a very large trading partner with Brazil and also a huge investor.

SIMON: Let me ask you about a few other countries in the region - Argentina, for example.

LEAHY: Yes. Now, Argentina, now they've been struggling with their own version of the fiscal cliff, if you like, which is they have a problem with their restructured debt. Now, you remember that their economy came close - or it did in fact collapse - in 2001, and they had to restructure $100 billion of debt, and they did that successfully. But some of their creditors held out and didn't accept their restructuring terms. And now they've persuaded a judge in New York to order Argentina to pay them in full. Now, Argentina can't pay these hold-out creditors, as they're called, without violating its agreement with the ones who agreed to the restructuring. So, Argentina, I think, will be looking on at the fiscal cliff perhaps with some level of irony given the problems that it's facing itself.

SIMON: What about Venezuela, where Hugo Chavez has had, obviously, health problems but has also recently been returned to office?

LEAHY: Chavez had some advice for Obama when he got reelected, which was, you know, look to your own house and get that in order before you start doing anything else on the global stage. But I think that his traditional, if you like, antagonists of the U.S. in the region, a fiscal cliff will be a source of glee, because they have traditionally been in a position where the U.S. has warned them about political risk in their own countries. And now the U.S. is subject to political risk in terms of the direction of its own economy. And I think for these leaders, it's a particularly ironic time.

SIMON: Are there some quarters in Latin America, beyond Brazil, that, if they're not exactly glad to see the United States confront this challenge, they, at the same time, think it's chickens coming home to roost?

LEAHY: I think, you know, there's a sense of sort of friendly rivalry among, at least down here in the southern part of Latin America, where after decades of crises and after numerous IMF packages and rescues and lecturing from not only the U.S. but Europe, it's interesting to see this happening in a country like the United States. There is a level of irony here about what's going on over there.

SIMON: Joseph Leahy of the Financial Times joining us from Rio. Thanks so much for being with us.

LEAHY: Thanks very much.

(SOUNDBITE OF MUSIC)

SIMON: And you're listening to WEEKEND EDITION from NPR News.

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