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Cablegate: Ambassador, Brazil's Foreign Minister Review

VZCZCXRO4530
OO RUEHRG
DE RUEHBR #0531/01 1131236
ZNY CCCCC ZZH
O 221236Z APR 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1468
INFO RUEHAC/AMEMBASSY ASUNCION 6724
RUEHBU/AMEMBASSY BUENOS AIRES 5445
RUEHLP/AMEMBASSY LA PAZ 6120
RUEHMN/AMEMBASSY MONTEVIDEO 7324
RUEHSG/AMEMBASSY SANTIAGO 0272
RUEHRG/AMCONSUL RECIFE 7931
RUEHRI/AMCONSUL RIO DE JANEIRO 6041
RUEHSO/AMCONSUL SAO PAULO 1912

C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 000531

SIPDIS

SIPDIS

DEPARTMENT FOR WHA MCMULLEN AND WHA/BSC

E.O. 12958: DECL: 04/22/2018
TAGS: PREL ECON SNAR EINV MARR SOCI SENV ENRG BO
IR, BR
SUBJECT: AMBASSADOR, BRAZIL'S FOREIGN MINISTER REVIEW
BILATERAL ISSUES, BOLIVIA, IRAN

REF: 2007 BRASILIA 1368

Classified By: AMBASSADOR CLIFFORD M. SOBEL, REASON 1.4 (b) and (d)

1. (C) Summary. The Ambassador met with Minister for
External Relations Celso Amorim on April 3 to review the
state of play on several bilateral initiatives. Amorim
agreed to help move forward the Tropical Forests Conservation
Act (TFCA) debt swap and the counternarcotics letter of
agreement (LOA). He indicated interest in extending from
five to ten years the validity for business visas, a high
priority item in the U.S.-Brazil CEO Forum, and agreed that
it was important to include high-impact non-governmental
representatives in the bilateral working group being set up
under the new joint action plan to fight racial
discrimination. Amorim said that Defense Minister Nelson
Jobim's trip appeared to have advanced cooperation in
concrete ways, but complained that technology transfer issues
were still a problem. The Ambassador raised US interest in
both a Bilateral Investment Treaty (BIT) and a tax treaty,
and informed Amorim that Brazil's request for approval for
Santa Catarina state beef and pork exports is being reviewed
in Washington. He raised his interest in seeing the U.S.
remove the tariff on sugar cane-based ethanol, and said he
would be happy to meet with Energy Secretary Bodman when he
visits Brazil in May. Amorim told the Ambassador that, at
Bolivia's request, he was planning to travel the next day to
La Paz to see how Brazil could help mediate the conflict
there; although he sees no easy answer, he believes both
sides are amenable to outside help. Amorim and the
Ambassador briefly discussed the Middle East peace process
and, in a one-on-one at the end of the meeting, the
Ambassador raised our concerns about Iran. Amorim said
Brazil is not considering new investments in Iran and that no
high-level visits are "imminent"--but they are possible. End
summary.

The Secretary's Travels
-----------------------

2. (SBU) The Ambassador, joined by PolCouns (notetaker), met
on April 3 for about fifty minutes with Foreign Minister
Amorim. Amorim was joined by chief of staff Ambassador Maria
Nazareth Azevedo, Counselor Ricardo Maschietto Ayrosa, who
handles North America and Asia for Amorim, and North America
Office Director Counselor Joao Tabajara. The Ambassador
began by showing Amorim pictures from the Secretary's March
14 visit to Salvador, Bahia. Amorim was clearly pleased that
she had taken him up on his suggestion, and that she had
enjoyed the visit, saying, "It was a good decision on her
part to go, and on my part not to go."

3. (C) The Ambassador asked Amorim for his views on
developments in the Middle East. Amorim asked the Ambassador
to pass along his congratulations to the Secretary for her
most recent trip, noting that she had focused on humanitarian
issues among the Palestinians, which the two had discussed
during their March 13 meeting.

Review of Bilateral Initiatives
-------------------------------

4. (C) The Ambassador raised the following bilateral
initiatives with Amorim:

-- TFCA: The Ambassador told Amorim that Treasury had secured
USD 30 million in funding, the largest program so far for a
single country, but that we need to move quickly to conclude
the agreement because the money must be obligated before the
end of the fiscal year. Amorim said he was unaware of the
TFCA, but agreed to look into it and asked Nazareth for a
briefing. (NOTE: Reftel reports Treasury Secretary
Paulson,s conversation with Amorim regarding the TFCA. End
note.)

-- Counternarcotics LOA: The Ambassador raised the LOA,
noting that INL had responded to comments from Itamaraty (the
Foreign Ministry) and that a working level meeting was
planned for the following week with Virginia Toniatti, head
of the Office to Coordinate the Fight Against Transnational
Crimes (COCIT), to go over our responses. We were concerned,

BRASILIA 00000531 002 OF 003


the Ambassador said, that Toniatti had indicated that
Itamaraty had additional concerns, and hoped that we could
finalize the LOA soon. Amorim agreed to look into it.

-- Joint Action Plan to Eliminate Racial Discrimination: The
Ambassador told Amorim that he had just met with the
Brazilian Bar Association (OAB), which had expressed
enthusiasm for helping implement the Joint Action Plan. The
Ambassador indicated his interest in finding appropriate
high-impact non-governmental representatives to serve on the
working group that will be established under the Plan, and
suggested that Itamaraty should be considering this, as well.
When the Ambassador suggested that one idea would be to ask
a member of the Congressional Black Caucus to be a member,
Amorim agreed that congressional representation from both
sides would be valuable, and indicated they would consider
the issue.

-- Extension of NIV Terms: The Ambassador noted that
extension of the terms of NIVs was an issue being addressed
in the bilateral CEO Forum. Amorim agreed, saying that the
first step was to ensure that changes to the relevant
legislation being drawn up by the Ministry of Justice (MOJ)
did nothing to prejudice that possibility. He asked Nazareth
to get in touch with MOJ to make them aware of the issue.

-- Bilateral Investment Treaty (BIT): The Ambassador noted
that there is a great deal of Brazilian and US private sector
interest in a BIT. Amorim stated the problem had always been
an appearance of discrimination against domestic companies,
claiming the BIT gave foreign companies differential access
to arbitration mechanisms outside the Brazilian court system.
He thought he had read that the U.S. might be changing its
model in a way that would make this less of an issue. The
Ambassador agreed to get back to him on that (NOTE: Post
confirmed with EB/OIA that no changes to the 2004 Model BIT
are being considered, and will convey this to MRE officials).
The Ambassador also asked if we could see the investment
agreement Brazil was developing with Argentina, which would
help us see what Brazil found acceptable. Amorim agreed to
provide it. (Note: The Finanance Ministry (Fazenda) has told
us they want to negotiate a BIT with Argentina, but it is
still in the works. End note.)

-- Bilateral Tax Treaty: The Ambassador told Amorim that he
was going to be hosting a lunch April 10 with key business
people and legislators to discuss possibilities for a
bilateral tax treaty. He suggested that we could work
together effectively to sway the Brazilian congress on the
matter. Amorim was skeptical that Itamaraty could have much
impact, asserting that Brazil's revenue agency (Receita
Federal) continues to resist, and that in congress it was a
question of economic philosophy, rather than practical
issues, that was generating opposition. Amorim felt that the
CEO Forum was the right group to work the issue, and that
pressure from Brazilian multinationals would be important to
make it happen. The Ambassador agreed to provide Itamaraty a
readout from the lunch.

-- Brazilian Beef Exports: In the wake of growing pressure
from Brazilian producers for access to the U.S. market for
Brazilian meat products, the Ambassador informed Amorim that
Brazil's request for approval for Santa Catarina state beef
and pork exports is being considered. Amorim was pleased to
hear this, noting that it was a growing issue.

-- Defense Cooperation: The Ambassador invited Amorim to fly
with him onto the deck of the USS George Washington when it
visits Brazil in late April for UNITAS exercises. He
provided a brief readout of Defense Minister Jobim's trip,
noting in particular the support Jobim had received for his
idea of a South American Defense Council, and that we had
agreed to establish a working group on technology transfer.
Amorim said that he understood that a sale of troop transport
vehicles looked likely. He noted that third-country transfer
restrictions continued to be a sore spot, citing USG
prohibition on sales of Tucanos to Venezuela. He conceded
that, even had the sale gone forward, Venezuela would likely
have bought Russian fighters. He added, however, that it
made it impossible for Brazil to argue that Venezuela should
not purchase the fighters. The inability of Brazil to sell

BRASILIA 00000531 003 OF 003


the Tucanos highlighted to Venezuela the dependent
relationship created by arms purchases from the United
States.

-- Biofuels and Bodman Visit: Amorim raised removal of the
U.S. tariff on sugar cane-based ethanol as a priority for the
GOB. The Ambassador noted that Energy Secretary Bodman was
scheduled to come in mid-May, and Amorim said he would be
pleased to meet with him, schedule permitting.

-- Embassy Aircraft: Amorim and Nazareth indicated they were
aware the ball was in their court in terms of approval for
stationing a C-12 in Brazil. They indicated that a meeting
would be held the following week between Itamaraty and
Ministry of Defense officials to determine how to proceed,
and committed to providing a readout immediately afterward.

Brazil to Engage on Bolivia Problem
-----------------------------------

5. (C) The Ambassador asked about news reports that Brazil
had agreed to help mediate between the Bolivian government
and opposition. Amorim confirmed that the Bolivian
government had asked Brazil to engage with a number of other
countries, and said that he was planning to leave the next
day for La Paz for an initial assessment of how Brazil could
help. He said that he was pleased that the Argentine foreign
minister and Colombian vice minister were there, and that
they would meet separately after their respective trips to
compare notes and explore ideas for moving forward. Amorim
stressed that he saw no easy answers to the current crisis.
Even if terms acceptable to both sides could be found, it
would take months to reach an agreement. Despite press
reports to the contrary, Amorim said the opposition seems
open to Brazil's engagement and understands the potential for
other countries to be helpful. Amorim acknowledged that
there was some pressure to act, as the referendum planned for
the end of May would certainly exacerbate the problems.

Iran
----

6. (C) At the conclusion of the meeting, the Ambassador
pulled Amorim aside to express our continuing concern about
Iran, particularly as we move to implement the most recent UN
sanctions. Amorim said that there would be no new Brazilian
investment in Iran. The Ambassador added that there is
concern about the appearance of high-level visits at this
time, as well. Amorim bristled somewhat, insisting that
Brazil considers itself a friend of both the United States
and Iran. He suggested that, should the United States decide
to engage Iran, countries like Brazil that had maintained
friendly relations with Iran could prove useful.
Nonetheless, he said, no high-level visits are
"imminent"--but they are possible.
SOBEL

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