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Cablegate: Brazil: Iranian Diplomacy Moves Into High Gear

VZCZCXRO6042
RR RUEHRG
DE RUEHBR #0420/01 0871055
ZNY CCCCC ZZH
R 271055Z MAR 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 1309
INFO RUEHAC/AMEMBASSY ASUNCION 6656
RUEHBU/AMEMBASSY BUENOS AIRES 5380
RUEHCV/AMEMBASSY CARACAS 4010
RUEHLP/AMEMBASSY LA PAZ 6043
RUEHMN/AMEMBASSY MONTEVIDEO 7275
RUEHSG/AMEMBASSY SANTIAGO 0209
RUEHRG/AMCONSUL RECIFE 7840
RUEHRI/AMCONSUL RIO DE JANEIRO 5950
RUEHSO/AMCONSUL SAO PAULO 1799
RUEKJCS/SECDEF WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 BRASILIA 000420

SIPDIS

SIPDIS

DEPARTMENT FOR WHA AND WHA/BSC

E.O. 12958: DECL: 03/18/2018
TAGS: PREL IR BR
SUBJECT: BRAZIL: IRANIAN DIPLOMACY MOVES INTO HIGH GEAR

REF: A. RIO DE JANEIRO 000044
B. BRASILIA 00304

Classified By: Ambassador Clifford M. Sobel. Reasons: 1.4 (B) & (D)

1. (C) Summary: An Iranian delegation headed by Vice-Foreign
Minister Alireza Sheikh Attar held a series of high-level
meetings with Brazilian officials from the Ministries of
External Relations (MRE, aka Itamaraty), Mines and Energy,
and Development, Industry and Commerce at the same time
Secretary Rice was visiting Brazil the second week of March.

SIPDIS
The talks represent another in a series of Iranian moves that
have the ostensible purpose of drumming up increased
Brazilian investment in Iran, developing closer bilateral
ties, and securing a long-delayed meeting between Iranian
President Ahmadi-Nejad and President Lula. From their
perspective, Brazil pursues what Itamaraty contacts call a
"correct" relationship with Iran, one cognizant of Iran's
troubled status within the international community, but one
that does not repudiate or create any problems for Tehran
either. End Summary.

--------------------------------------------- -----
Meetings Part of Brazil-Iran Bilateral Mechanism
--------------------------------------------- -----

2. (U) The meetings were the sixth to take place under the
aegis of the bilateral political consultation mechanism
established between the two countries in 1999. The Brazilian
delegation was headed by Ministry of External Relations Under
Secretary for Political Affairs II Roberto Jaguaribe, who

SIPDIS
covers Africa, Asia, the Middle East, and Central Asia, and
also included a meeting with Foreign Minister Celso Amorim.
News reports indicated that Sheikh Atar also met with
Minister of Mines and Energy Edson Lobao and Development,
Industry, and Commerce Minister Miguel Jorge.

3. (C) Secretario Carlos Goncalves de Oliveira, from
Itamaraty's Middle East Division II, which handles the
Persian Gulf states, told poloff the meetings focused
primarily on expanding the bilateral relationship,
strengthening diplomatic ties between the two countries, and
spurring Brazilian investment in Iran, particularly by
Petrobras. Goncalves indicated that news reports were
correct in noting that Iran was mounting an outreach effort
in Brazil in order to defend its "peaceful" nuclear energy
program, particularly to lobby for Brazilian support in
international fora by drawing parallels between Iran and
Brazil's nuclear program.

4. (C) Asked whether other issues outside the bilateral
relationship were brought up, Goncalves indicated that the
Brazilian delegation asked their Iranian counterparts about
reports that Tehran was supplying lethal support against
coalition operations in Iraq and to Hizballah in Lebanon.
The Iranians vehemently refuted the allegations, calling them
lies advanced by "foreign powers."

---------------------------
Miffed with Petrobras
---------------------------

5. (U) Trade made up an important component of the visit.
Iran is looking for increased opportunities to balance its
trade, which currently overwhelmingly favors Brazil. Exports
to Iran account for about 30% of total Brazilian exports to
the Middle East, or about US$1.8 billion, which accounts for
about 99% of trade volume between the two countries. In
particular, Iran was fishing for increased Petrobras
investment, although the Iranians seem to be growing
impatient with Petrobras' unresponsiveness.

6. (C) In an interview in the daily newspaper Folha de Sao
Paulo, Sheikh Atar discussed how Iran could facilitate entry
of Petrobras into the Iraq market. According to Sheikh Atar,
Iran has supplied a US$1 billion line of credit to be used by
the Iraqi government under the condition that it be used with
Iranian companies. Sheikh Atar hoped that this would entice
Petrobras to consider joint ventures with Iranian companies

BRASILIA 00000420 002 OF 002


in Iraq. Asked by poloff about Sheikh Atar's comments that
Iran would not wait forever for Petrobras to decide,
Secretario Leopoldo Goncalves de Oliveira told poloff that

SIPDIS
they have repeatedly stressed to Iranian officials that
Petrobras makes its own decisions. According to Goncalves,
despite Iranian pressure to increase investment in Iran, it
was his belief that Petrobras would not increase its stake in
Iran in the near to mid-term. A canceled meeting with the
President of Petrobras during this visit, he stated, is an
indication of Petrobras' disinterest. (Comment: Per Ref A,
Petrobras will wind down its operations in Iran as soon as
its current contracts expire later this year. End comment.)

--------------------------------------------
Brazil, Lula in Ahmadi-Nejad's Sights
--------------------------------------------

7. (C) In public interviews, Atar made no secret of
Ahmadi-Nejad's personal interest in strengthening bilateral
ties to Brazil. Underscoring this interest, Sheikh Atar
reached out to Members of the Brazilian Congress, meeting
Senate Foreign Affairs and National Defense Committee head
Heraclito Fortes (septel). Asked about these meetings,
Goncalves stated that Brazil was aware that Tehran was taking
a growing interest in Latin America, and Ahmadi-Nejad was
concentrating his efforts on Brazil. Still, he added, Iran's
interest in Brazil does not begin to approach the level of
Iranian links with Venezuela. Asked what would follow the
bilateral talks, Goncalves replied that nothing specific was
agreed to during the talks but an understanding was reached
that a presidential-level visit would be preceded by one at
the ministerial level, which could take place in the second
half of the year. (Comment: Per Ref B, President Lula has
expressed an interest in visiting Iran. End comment.)

-------------
Comment:
-------------

8. (C) Iran seems to be placing a significant number of eggs
in the Brazil basket as part of its strategy for enhancing
relations with Latin America, as indicated by the bilateral
meetings, the outreach to congress, and the push for a
presidential meeting. Brazil, as usual, is playing it both
ways. Indications that Petrobras is winding down its
operations in Iran is a positive sign. On the other hand,
Brazil makes only the mildest of statements calling on Iran
to comply with the IAEA and UNSC resolutions, lapsing into
occasional defenses of Iran's right to nuclear energy for
peaceful purposes, declaring that Iran should have a role in
Middle East peace talks, and refusing to vote for issuance of
Interpol capture notices against Iranians suspected of
involvement in the 1994 AMIA bombing in Argentina. And while
up to now there seems to have been some resistance within the
GOB to arranging a presidential-level meeting, Itamaraty
contacts candidly admit that a meeting is inevitable. As is
often the case with its Mideast diplomacy, Brazil's pursuit
of a "correct" relationship likely will continue to produce
decidedly mixed results which at times will not conform to US
policy objectives. End Comment.

SOBEL

SOBEL

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