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Cablegate: U.S. Aircraft in Contention to Be Brazil's Next

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RR RUEHRG
DE RUEHBR #0847/01 1721802
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R 201802Z JUN 08
FM AMEMBASSY BRASILIA
TO RUEKJCS/SECDEF WASHDC
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INFO RUEHRG/AMCONSUL RECIFE 8158
RUEHRI/AMCONSUL RIO DE JANEIRO 6285
RUEHSO/AMCONSUL SAO PAULO 2255
RUCPDOC/DEPT OF COMMERCE WASHDC
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RHMFISS/CDR USSOUTHCOM MIAMI FL//SCJ2-I/J5/HSE/DIA REP//

S E C R E T SECTION 01 OF 03 BRASILIA 000847

NOFORN
SIPDIS

DEPARTMENT FOR PM AND WHA

E.O. 12958: DECL: 06/20/2016
TAGS: MARR ETTC BR PREL ETRD EAIR EIND
SUBJECT: U.S. AIRCRAFT IN CONTENTION TO BE BRAZIL'S NEXT
PRIMARY MULTI ROLE FIGHTER

REF: A. A) BRASILIA 175
B. B) BRASILIA 643
C. C) EMBASSY BRASILIA-STATE-DTSA E-MAILS
D. MAY 2008
E. D) BRASILIA 638
F. E) BRASILIA 429

Classified By: A/DCM Frank Manganiello, reason 1.4 (b) and (d)

1. (S/NF) SUMMARY. On June 10, MLO Brasilia obtained an
unofficial copy of a Request for Information (RFI - passed
electronically to Washington agencies) from the Brazilian Air
Force (BRAF) concerning the upcoming competition for
Brazil,s next fighter aircraft. One U.S. origin fighter,
the F-18 Super Hornet, is under consideration, along with the
Eurofighter Typhoon, the SU-35, the Gripen and the Rafale.
As noted in reftels, there are a number of political factors
working against a decision to purchase the F-18, but post
believes that there is also a strong case to be made for the
Hornets and that there are several steps the USG should take
immediately to maximize the chance of Boeing winning the
contract. In addition to the economic benefit to a U.S.
business, being chosen to supply Brazil,s main combat
aircraft for the next generation would carry important
political benefits and provide a foundation for improved
defense cooperation. END SUMMARY.

2. (S/NF) Brazil is seeking replacements for the majority
of its obsolete combat aircraft, which have been plagued by
readiness problems. During the recent visit of the George
Washington Carrier Strike Group, the Brazilian Navy was
unable to muster a single working fighter for a joint flight
with Navy F-18s. Key points of the RFI have been leaked to
the British journal "Flight," but the details remain
close-hold. While the RFI contains considerable detail on
performance requirements for the new fighter, post believes
that the key criterion for the decision will be the economic
benefit to Brazil, i.e. the offset packages to be offered by
bidders. With no immediate airborne threats to Brazil,
combat lethality will be a lesser consideration, although the
GOB will also consider what they perceive to be the prestige
of owning a modern fighter. We believe that the lesser
prestige of an older design led to the F-16 being left out,
even though it could fulfill most Brazilian defense
requirements at a lower cost than other options.

PROS AND CONS
-----------------------
3. (C/NF) There are several factors that favor the success
of the F-18 sale and several that could thwart it.

Pro:

-- The F-18 has a proven combat record with unmatched
reliability and durability.
-- The likely beneficiary of any offsets, Embraer, would
find the opportunity to enter into a business partnership
with Boeing desirable, especially if Boeing intends to offer
additional cooperation in commercial aviation.
-- Many members of the BRAF would be eager for closer
cooperation with the U.S.
-- The F-18 has been selected for use by Canada, India and
Australia, large countries with similar operational
requirements.

Con:

-- Key members of the Brazilian political leadership believe
it would be to Brazil,s advantage not to be dependent on the
U.S. for military technology. France and Russia are seen as
more desirable partners.
-- Government owned competitors could be able to offer a
broader range of offsets.
-- There is a perception in Brazil, encouraged by the
Ministry of External Relations, that the U.S. refuses to
transfer technology.

4. (C/NF) The negative factors cited above will make a
successful outcome difficult, but post recommends that the
USG make the greatest possible effort to achieve a sale.
Although the RFI states that the BRAF will make its decision

BRASILIA 00000847 002 OF 003


on the factors cited, it is likely that political
considerations, some driven by anti-U.S. sentiments, will
also come into play. The political benefits to be gained by
a clear affirmation of U.S.-Brazilian defense partnership
would be enormous. Even an unsuccessful effort could help
undermine the assumption that the U.S. is unwilling to
transfer technology.

COFFEE IS FOR CLOSERS
-----------------------------------
5. (C/NF) If we want to close the deal with the traditional
cup of Brazilian coffee, there are several ways in which U.S.
policy can help Boeing,s case pending a formal request for
advocacy. As stated above, the most important determinant of
which aircraft Brazil ultimately chooses will be the offsets,
and Boeing will be responsible for making its own sales pitch
in this regard. The most important step the USG can take is
to eliminate the idea that the U.S. does not transfer
technology. When Brazilians tell us this, it is apparent
that there is no clear understanding of what technology
transfer means or why they believe the U.S. doesn,t do it.
Boeing,s proposal should state specifically that sale of the
planes would include full technology transfer. In the
meantime, we can help improve Brazilian understanding by
providing a briefing to the BRAF and Defense Ministry of U.S.
tech transfer policies with examples of how we have managed
arrangements with other friendly countries. In doing so, we
should be prepared to answer suggestions that other nations,
tech transfer policies are more liberal than ours. As the
Defense Minister has personally raised the case as an example
(inaccurately) of U.S. restrictiveness, we should consider
waiving the proviso on the Honeywell inertial navigation
systems (ref c) so that the export licenses matches those
already approved for both Brazil and Colombia.

6. (C/NF) In addition to the key issues of offsets and tech
transfer, we can help make the case for the sale of U.S.
aircraft by ensuring the Brazilian are familiar with the
performance advantages of the Super Hornet. We can begin
doing so during the July visits by Minister of Defense Jobim
and Air Force Chief Saito to the U.S. There are already
plans for Jobim to have a demonstration flight in a Super
Hornet during his visit. A group of Brazilian F-5s will
participate in this year,s Red Flag exercise in Nevada. We
should ensure that the Brazilian pilots and crews get as much
exposure as possible to the F-18 while there, including to
any F-18s being operated by allied air forces. Should the
F-18 make the Brazilian short list (to be announced in late
August), we should ensure that Brazil has an opportunity to
work with Super Hornets again at next year,s UNITAS. The
Brazilian navy was impressed with the F-18,s performance at
this year,s UNITAS, and the participation once again of a
carrier with its air wing will provide another opportunity
for the Brazilian command to see the capabilities the Super
Hornet provides in action.

COMPETITORS: BEWARE THE GRIPEN
--------------------------------------------- ------------
7. (C/NF) While the BRAF has its reasons for including each
of the potential bidders in the RFI, there are several key
considerations with the non-U.S. aircraft that could prove
important for Brazil,s final decision. While most of
Brazil,s pilots would prefer not to have to fly Russian-made
planes, they would check the prestige box by giving Brazil
the same fighters as neighboring Venezuela. The possible
attractions of French planes are discussed in ref b. With
successful sales campaigns in South Africa, the Czech
Republic and Hungary, the Saab Gripen has emerged as a
popular alternative to U.S. aircraft. As stated above, the
most important consideration for the Brazilians will be the
offset package, and Saab has built its success on its ability
to provide the sort Brazil is seeking. Although no
manufacturer is likely to propose transferring aircraft
production facilities to Brazil (at least not for the 120
fighter fleet Brazil is considering), Saab, and the Swedish
government may be able to come up with offsets to create jobs
in Brazil,s manufacturing sector that would prove
attractive. It should also be noted that the Gripen contains
U.S. origin components, including a GE engine, that could
potentially become a factor in advocacy efforts.


BRASILIA 00000847 003 OF 003


WHY NOT THE JSF?
---------------------------
8. (C/NF) The F-35 Joint Strike Fighter (JSF) is
conspicuous in its absence from the Brazilian list for
fighter purchases. In the past, Brazilian Air Force
personnel, including Chief of Staff Saito, have indicated
that the F-35 would be preferred in the long term. In
discussions with post, the BRAF has expressed the view that
the J35 would be too expensive to allow purchase of an
adequate number of aircraft. Brazil is also concerned that
the structure of the JSF consortium would make it difficult
for new members to join and would prevent delivery of the
aircraft in the timeframe required by the RFI.

COMMENT
---------------
9. (S/NF) With resources being made available for defense
modernization for the first time in a generation (see ref a),
the purchase of Brazil,s next fighter aircraft will have
effects far beyond a fat contract for the manufacturer.
Brazil,s Defense Minister and Air Force leadership would
prefer a closer relationship with the U.S. as a partner in
guaranteeing hemispheric stability. Purchase of U.S.-origin
fighter aircraft would represent a major investment of
resources in such a partnership and would be a decisive move
away from recent Brazilian leaders, portrayal of the U.S. as
more a potential adversary than a partner. While the U.S.
Air Force manages cooperation with partners flying the other
aircraft under consideration, interoperability is obviously
much stronger when both forces fly the same aircraft. With
progress on pol/mil engagement stalled, a BRAF decision to
purchase fighters from a U.S. manufacturer will give Brazil a
monetary stake in improving cooperation in the area of
security.
SOBEL

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