Cablegate: Usg-Gob Commercial Dialogue: Continuing a Strong Forward

DE RUEHBR #2082/01 3051915
P 011915Z NOV 07




E.O. 12958: N/A

1. Summary: The reporting session of the third meeting of the
U.S.-Brazil Commercial Dialogue, an hour-long event held October 10,
2007 in Brasilia, Brazil, was a positive and productive example of
current USG-GOB bilateral cooperation. Visiting U.S. Secretary of
Commerce, Carlos Gutierrez and Brazilian Minister of Development,
Industry and Commerce (MDIC), Miguel Jorge, both expressed
satisfaction with the consultative mechanism's progress to date and
listened to accomplishments and future objectives from working group
members present. Approximately 20 people attended for each side,
with additional spectators in the room. Each side touted progress
achieved in the past year, and favorably referred to their
interactions leading up to Gutierrez's visit. The meeting
delineated future plans for collaboration on everything from
business facilitation, intellectual property rights, customs
facilitation, cooperation in services and information exchange,
franchising, fostering venture capital and private equity
investments, developing new international standards for biofuels as
well as cooperation and training for two-way trade promotion
focusing on a variety of industries including energy, aerospace and
defense and medical devices, as well as information and
communications technology. Brazil's Development, Industry and
Commerce Minister Jorge stressed the positive bilateral relationship
the Dialogue is helping to foster. He noted that while trade flows
are up, representing US$50 billion per year, this level is "still
short of what we can expect in the future." That said, he opined
that the Dialogue was already achieving more than President Bush and
President Lula ever had imagined. Jorge also emphasized the social
and political multiplier effects that such collaboration has.
Secretary Gutierrez thanked the US and GOB interlocutors for their

effort, time and commitment to the Dialogue, discussing its impact
on not just our two countries, but also throughout the region,
hemisphere, and the world. He echoed Jorge's positive comments,
saying that the Dialogue has thus far exceeded his expectations, not
just in terms of increased trade and participation, but with the
added benefit of having evolved from an exchange into a "real
friendship." End Summary.

Patent and Trademark Cooperation

2. Margaret J.A. Peterlin, Deputy Under Secretary of Commerce for
Intellectual Property and Deputy Director of the Patent and
Trademark Office (USPTO), and Jorge Avila, head of Brazil's
counterpart, the National Institute for Industrial Property (INPI),
discussed three areas that had been the focus of their successful
bilateral work under the Commercial Dialogue: helping to achieve
automation in the patent and trademark application and examination
processes, capacity building and substantive training, and outreach.
With regard to capacity building and training, 78 Brazilian
intellectual property officials have trained at the USPTO's Global
Intellectual Property Academy or via digital videoconferences (DVCs)
during the past year. Regarding automation, USPTO provided INPI
with guidance on its automated trademark application and examination
system; this past year, INPI established an on-line electronic
trademark application system of its own.

3. Peterlin and Avila highlighted several new joint initiatives
planned for the coming year. These include: training in the field
of biotechnology and semiconductors, sharing information on US and
Brazilian special retrieval systems, exchanging new examiner
training modules and materials, and sharing reports on quality
assessment processes for new patent applications. Regarding quality
assessment processes, Peterlin noted that 80 to 90 percent of new
patent applications filed in the U.S. are rejected upon first-filing
because such applications are either incomplete or of poor quality.
In this respect, the goal of this initiative would be to identify
and implement quality assessment processes in Brazil to be able to
determine similar problems in their first review, and thus reduce
the backlog for applications that do merit approval. In addition,
they noted plans to conduct public outreach through Intellectual
Property Awareness Campaign (IPAC) road shows in Brazil, in which
USPTO would hold seminars discussing how to protect intellectual
property rights in the U.S.

Business Facilitation

4. David Bohigian, the Commerce Department's Assistant Secretary
for Market Access and Compliance, referred to the strong cooperation
in business facilitation, saying that the USG and GOB are working
together to reduce drastically last year's World Bank statistic of
152 days to register a business in Brazil, with the goal of a
one-stop, 15-day registration process. On customs facilitation,
Bohigian said Brazil is poised to make significant progress in the
next few months, with the projected launch of an electronic, totally
automated, paperless system for the processing of express

BRASILIA 00002082 002 OF 003

consignments. He highlighted the extensive cooperation and
technical exchanges between DOC and MDIC on services statistics, and
noted a continued interest in working together on tourism
statistics. He reported that both governments welcomed the addition
of remanufacturing to the Commercial Dialogue, noting that it was an
area ripe for significant discussion and improvement. Bohigian
welcomed the presence of ANVISA, the Brazilian medical device
regulator, at the meeting, saying that Commerce and ANVISA hoped to
achieve cooperation in the months ahead. He complimented the
Embassy on working hard to reduce the number of days to issue visas.

5. Bohigian's counterpart, Mauricio Lucena do Val of the Department
of Commercial and Services Policies and the Dialogue's Business
Facilitation Group Coordinator, agreed with Bohigian's assessment
with minor additions. He expressed Brazil's "bewilderment" at the
recent statistics presented by the World Bank on business
facilitation, and indicated that the GOB would like to amend
legislation that imposes extra steps. He mentioned the relevance of
the Commercial Dialogue to the Ministry of Tourism, ANVISA, and
IBGE, among other organizations, and said that the Dialogue's
"extremely positive results" can be shown by the increasing
accession of other government ministries and entities to the
discussions. He further discussed the idea of developing best
practices within that group of ministries on health, environmental
protection, and other important issues. On another customs
facilitation issue, Brazil reported to the USG immediately prior to
this meeting that Brazil's Customs and Internal Revenue Service
(Receita Federal) was prepared to move forward on the ATA Carnet,
taking internal steps that it would hoped would lead to Brazil's
accession to the Istanbul Convention.

Export and Investment Promotion

6. Fabio Faria, Director of the Department of Planning and
Development of Foreign Trade and the Dialogue's Export and
Investment Promotion Group Coordinator, talked about the
strengthened ties that the Dialogue is creating. More than two
thousand Brazilians visited the United States to participate in
trade fairs in the last year as a result of joint promotion by MDIC
and the US Commercial Service, Faria said. This was a deliverable
from the first Commercial Dialogue. For this third session of the
Commercial Dialogue, the Export and Investment Promotion working
group discussed and developed a work plan to implement an MOU
between the Associacao Brasileira de Franchising (Brazilian
Association of Franchising), ABF, and its U.S. counterpart IFA. The
Group is working on a white paper that contains market information
and best practices on franchising worldwide to promote franchising
in both Brazil and the United States. In addition, the Group
highlighted the "Institutional Investment Learning Journey" as a
deliverable, during which 10 U.S. representatives from pension funds
and endowments visited Brazil to learn more about investment
opportunities. The group also plans to target between three and
five industry sectors for coordinated trade show promotion in the
United States and Brazil using online web seminars, among other
tools. Other training opportunities, such as identifying priority
states on both sides for investment, fostering partnerships, and
conducting a customs workshop in Brazil for US Commercial Service
staff, were mentioned as future collaboration possibilities.
Finally, a Venture Capital Task Force will be formed as part of a
new Entrepreneurship and Private Equity work plan. Commerce's ITA
will work with ABDI to organize a one-day venture capital workshop
in March, 2008 and a Venture Capital Forum by May of 2008. Faria
characterized this portion of the Dialogue as a "promising and
ambitious agenda."

Measurements and Standards

7. Dr. Willie May, Director of Commerce's National Institute of
Standards and Technology (NIST), outlined collaborative efforts with
Brazil's counterpart agency, the Instituto Nacional de Metrologia,
Normalizacao, e Qualidade Industrial (INMETRO), during the past
year, particularly on biofuels. NIST and INMETRO have started
taking positive steps toward defining measurements and standard
variances, with the goal of the commoditization of biofuels. The
two organizations had a productive meeting in Rio de Janeiro, and
then expanded it to a larger meeting in the U.S., in which 20
countries participated. The end result was a tripartite agreement
with the European Union to try to harmonize biofuels standards and
provide mutual verification. Depending on what kind of source was
being used, a "chemical fingerprint" can be ascertained, along with
source IDs based on isotopic indicators. NIST is planning a visit
to INMETRO in January, 2008 to finalize internationally accepted
biofuels standards and certifications, and they hope by January of

BRASILIA 00002082 003 OF 003

2009 to put together a biofuels certification plan. In addition,
the working group plans to develop a post-doctoral program with
Brazil. Right now, NIST has a program whereby they train 60
scientists per year and keep the top one-third on staff. They would
like to assist the GOB in developing a similar program, wherein NIST
would host select Brazilian post-doctoral candidates for a year,
followed by a year at INMETRO, and then have INMETRO choose the best
graduates for its own staff. Separate to this program, two INMETRO
staff members will be chosen to be at NIST. The two organizations
are trying to identify a similar opportunity for NIST to go to
INMETRO for training, especially on biofuels.

8. Heidi Hijikata, Standards Liaison for Commerce's International
Trade Administration, discussed a series of three DVCs that they
have held with INMETRO on general trade-related standards regulation
and assessments and one regarding biofuels. Future collaboration was
envisioned for cosmetics, off-road equipment, medical devices, and
information and communication technology, incorporating the
Associacao Brasilieira de Normas Tecnicas/Brazilian Association of
Technical Norms (ABNT), the National Association of Manufacturers,
and other private sector entities into the discussion.

9. Dr. May's counterpart from Brazil's INMETRO, Dr. Humberto
Brandi, said that from his organization's viewpoint, the Dialogue
has been extremely productive, especially on biofuels collaboration,
metrology and nanometrology, e.g. the effect of biofuels in steel,
iron, and the combustive process.

From Dialogue to Results, with Friendship

10. Minister Jorge expressed his pleasure with the working groups'
presentations and perspectives, saying that transforming ethanol
into a global commodity is truly "part of the heart, mind, and soul
of our President," and something very positive. Characterizing the
discussion as emotional and emblematic of our two countries'
friendship, Jorge reiterated his hope that we can continue to
establish fruitful relationships. "I was expecting a lot," he said,
"but not as much as I heard today." Gutierrez echoed the
sentiments, saying his expectations were exceeded, and that the
bilateral progress so far is impressive. Furthermore, he expressed
his feeling that there was a real friendship forming between the two
countries' groups, bettering each side through the exchange of
experiences and information.

11. This cable has been cleared with the visiting delegation.


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