Uruguay Saw Opportunity in China. It Got Schooled in the Hazards of Trade.

In April, Mr. Lula traveled to China, where he received red carpet treatment, including a visit with the country's top leader, Xi Jinping. "No one is going to prohibit Brazil from improving its relationship with China," Mr. Lula said. Whatever interest the Chinese government had in striking a deal with Uruguay soon yielded to its focus on Brazil, a calculation grounded in basic arithmetic: Uruguay is a country of 3.4 million people, while Brazil is South America's largest economy and home to 214 million. Yet despite the Brazilian president's avowed interest in brokering a trade deal, prospects for an agreement…