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Cablegate: Ambassador's April 24 Lunch with Brazilian

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DE RUEHBU #0808 1151838
ZNY CCCCC ZZH
P 251838Z APR 07
FM AMEMBASSY BUENOS AIRES
TO RUEHAC/AMEMBASSY ASUNCION PRIORITY 6127
RUEHBR/AMEMBASSY BRASILIA PRIORITY 5987
RUEHCV/AMEMBASSY CARACAS PRIORITY 1213
RUEHLP/AMEMBASSY LA PAZ APR 4611
RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 6394
RUEHSG/AMEMBASSY SANTIAGO PRIORITY 0372
RUEHC/SECSTATE WASHDC PRIORITY 7957
INFO RUEHBO/AMEMBASSY BOGOTA 1560
RUEHPE/AMEMBASSY LIMA 2035
RUEHME/AMEMBASSY MEXICO 1363
RUEHQT/AMEMBASSY QUITO 0914
RUEHVL/AMEMBASSY VILNIUS 0042

C O N F I D E N T I A L BUENOS AIRES 000808

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/05/2017
TAGS: PGOV PREL EFIN ENRG AR BR
SUBJECT: AMBASSADOR'S APRIL 24 LUNCH WITH BRAZILIAN
AMBASSADOR

REF: BRASILIA 00708

Classified By: AMBASSADOR E. ANTHONY WAYNE FOR REASONS 1.4 (B) AND (D)

1. (C) Ambassador met April 24 with Brazil's Ambassador to
Argentina, Mauro Viera, to discuss the April 26-27 visit of
President Lula to Argentina (after Lula's visit to Chile).
Following are highlights of the discussion:

2. (C) Brazil-Argentine Relations: Friday morning, Lula
will meet privately with Kirchner at the Argentine
presidential residence of Olivos and then for lunch they will
be joined by the first ladies and probably Foreign Minister
Amorim, Advisor Marco Aurelio Garcia and Ambassador Viera for
Brazil. The main purpose of the meeting is for Lula to have
private &political8 talks with Kirchner, particularly about
regional events and actors and an opportunity to shore up
personal relations.

3. (C) Bio-fuels: The Brazilians feel they have effectively
rebutted recent criticism by Chavez and Castro of their
bio-fuels cooperation with the U.S., but they are still not
happy with Chavez' populist antics. As for the Argentines,
Brazil is open to including them in broader efforts, but they
have not asked.

4. (C) Banco del Sur: Chavez clearly wants this for
ideological reasons, but it is not clear what its role would
be. The region does not need a mini-IMF. It has plenty of
development bank money available from the World Bank, the IDB
and Brazil's own development bank, plus the Andean Fund
(CAF). In fact, Argentina has borrowed almost $1.9 billion
from Brazil's bank and can borrow more. What will another
bank with $400 million in capital provide? The Brazilians
might be open to be some more specialized uses for an
institution, such as helping financing infrastructure, but
they need to be convinced.

5. (C) U.S.-Brazil, U.S.-Argentine relations: Brazil is very
pleased with its cooperative arrangements with the U.S. in
many fields, and President Lula was very pleased with his
visit to Camp David. Brazil will resist efforts by others to
turn this cooperation into something negative for relations
in South America. This is not a zero sum game, and Brazil
has little patience with Chavez and others who try to portray
it that way. Also, Brazil is aware (citing Secretary Rice's
meeting with Foreign Minister Amorim) of U.S. upset with
Argentina and with Kirchner's tendency to not remember all
the U.S. has done to help Argentina in the past. The
Brazilians think this attitude is short-sighted.

6. (C) Bolivia-Brazil: Lula had a very tough talk with Evo
Morales in Venezuela and is very upset with Bolivia's actions
in the energy sector. Serious talks between the Brazilian
energy minister and Bolivian counterparts followed, but
Brazil is still quite wary about what Morales might announce
in terms of further nationalizations in the weeks ahead.
This worry has just underscored the need to diversify sources
of energy supply.

7. (C) Petrobras-Argentine relations: The stir caused over
the critical statements by Petrobras CEO about Argentine
energy policies has blown over. But, the CEO was, in part,
responding to stockholder pressures to show more profit, when
he made his initial comments. GOA Planning Minister De Vido
sent a threatening letter afterwards, but the Brazilians did
not take up that tone and responded with a high road response
about the importance of long term relations and the
commitment of Brazil to invest. This smoothed ruffled
feathers but again showed extreme sensitivity in Argentina to
things that look even mildly critical of official policies.
WAYNE

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