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Cablegate: Brazil's Fighter Competition - the Importance Of

VZCZCXRO7523
RR RUEHRG
DE RUEHBR #1373/01 2902054
ZNY CCCCC ZZH
R 162054Z OCT 08
FM AMEMBASSY BRASILIA
TO RUEHBR/AMEMBASSY BRASILIA
RUEHC/SECSTATE WASHDC 2689
RUEKJCS/SECDEF WASHDC
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUEHFR/AMEMBASSY PARIS 0462
RUEHSM/AMEMBASSY STOCKHOLM 0071
RUEHRG/AMCONSUL RECIFE 8600
RUEHRI/AMCONSUL RIO DE JANEIRO 6766
RUEHSO/AMCONSUL SAO PAULO 2938
RUEKJCS/JOINT STAFF WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL

C O N F I D E N T I A L SECTION 01 OF 02 BRASILIA 001373

SIPDIS

STATE FOR WHA/BSC AND PM/RSAT, COMMERCE FOR ADVOCACY CENTER
AND MAC/ANN DRISCOLL

E.O. 12958: DECL: 10/10/2018
TAGS: BR PREL MARR ETTC
SUBJECT: BRAZIL'S FIGHTER COMPETITION - THE IMPORTANCE OF
TECH TRANSFER

REF: A. BRASILIA 1061
B. BRASILIA 847
C. BRASILIA 175

Classified By: AMBASADOR CLIFFROD SOBEL. REASON: 1.5(d)

1. (U) This is an action request -- see paragraph 8.

2. (C) SUMMARY. On September 29th, the Brazilian Air Force
(FAB) announced its three finalists for Brazil's next
generation fighter aircraft (FX2): the Boeing F18 Super
Hornet, the Dassault Rafale and the Saab Gripen. The winner
of the competition will become the backbone of Brazil's Air
Force for the next thirty years. Should Boeing get the sale,
it would provide us a key building block for a U.S.-Brazil
strategic partnership on defense issues. While the French
plane is widely viewed as the front runner, the relevant FAB
personnel maintain that the competition remains open. The
F18 has significant advantages of cost, technology and
partnership with the United States, but suffers from a
perception that U.S. technology transfer policies will
inhibit the sale. Rather than focus discussion with Brazil
on the bureaucratic procedures we must follow and what may or
may not be possible, our message should highlight that we are
fully behind the Super Hornet sale and that the USG's record
of tech transfer to friendly countries such as Brazil is
extensive. By addressing the tech transfer concern both
privately and in the public and by providing confidence that
planes will be delivered should the FAB decide in Boeing's
favor, the USG can clear the major perceived obstacle to a
Boeing purchase and allow the Super Hornet's natural
advantages to speak for themselves. END SUMMARY.

3. (C) As noted in ref c, Brazil is undertaking a major
modernization of its armed forces, creating a critical
opportunity for the U.S. to enhance its partnership with
Brazil into one where Brazil can play a real role as a
regional power in promoting stability and democracy. The
purchase of a new primary fighter aircraft may be the most
important component of this process, both because of the
practical cooperation that a sharing of billions of dollars
of equipment and technology will bring and for the symbolic
value of treating Brazil as a valued U.S. partner by sharing
one of our most capable and advanced combat systems.
Purchase of U.S. planes would be a mutually beneficial
outcome. The United States gains a more capable,
interoperable partner. By selecting a U.S. aircraft, Brazil
would also be gaining access to support training both in the
use of advanced aircraft and in employment of high tech
fighters as part of integrated, net centric operations.

4. (C) Thus far, most public discussion in Brazil of the
possible Super Hornet purchase has not gone beyond a
repetition of the mantra that Washington does not transfer
technology. Most of the blame for the perceived anti-Brazil
policy is placed with the State Department (coincidentally,
State is also being depicted in the media as single-handedly
responsible for forcing Brazil to drop the Russian fighter
bid). The assumption that the U.S. will withhold export
approval is based upon Cold War era reluctance to introduce
new military technology into Latin America, and enhanced by
the denial of re-exportof U.S. components of Brazilian-made
Super Tucan aircraft to Venezuela. This case was not, in
fct, a question of technology transfer, but was pereived in
Brazil as evidence of U.S. policy aimed at keeping Brazil
from becoming a major regional ilitary power.

5. (SBU) Local media on the prspects for the F18 has been
generally negative. One Brazilian newspaper, however,
asserted that ere it not for U.S. tech transfer policies,
the Super Hornet would have advantages of economies of sale.
Another claimed that Boeing was included oly as a courtesy
to Washington. Strangely, althugh both of the Super
Hornet's competitors have SML content and will require U.S.
retransfer approval, no one in Brazil seems to have noticed
thatthe purchase of the French plane will also require
clearance by the State Department's much maligne export
control system. Without a clear messagefrom the U.S.

BRASILIA 00001373 002 OF 002


government, both through public statements and to the GOB,
perception that we are unwilling to transfer technology will
become the political reality. Failure to correct the
misperception risks losing a key facilitator of military
cooperation for the next thirty years and closes an important
avenue for commercial relations as well.

6. (C) It is critical to the sale for the USG to overcome
as soon as possible the presumption that our technology
transfer policies are grounds for rejecting the F18. On
August 18 FAB chief Saito told Ambassador Sobel clearly that
technology transfer will be the most important determining
factor in Brazil's final decision. While post understands
that U.S. regulations do not permit "pre-approval" of
decisions to transfer F18 technology, we need to find ways to
assure the GOB, publicly at the highest possible levels, that
the USG fully supports Boeing's sales effort and that we do
so with the understanding that sale of advanced fighters will
necessarily involve transfer of technology. Post understands
that there are decisions to be made as to precisely what
levels of technology any Super Hornets eventually transferred
to Brazil would carry. Rather than focus discussion with
Brazil on the bureaucratic procedures we must follow and
what may or may not be possible, our message should highlight
that we are fully behind the Super Hornet sale and that the
USG's record of tech transfer to friendly countries such as
Brazil is extensive.

7. (C) By putting the tech transfer question behind us, we
open the door for Boeing to use its strengths and experience
in marketing its products effectively. As noted in refs a
and b, The F18 on offer has significant advantages over it
competitors in performance and life cycle cost. In addition,
it will confer upon Brazil the prestige of operating one of
the world's top multi-role aircraft, while putting Brazilian
aerospace in partnership with the world's leader in that
field.

8. (C) Action Request: Embassy Brasilia would like to
participate as appropriate as soon as possible in discussions
with Washington agencies and Boeing to develop a strategy for
addressing the GOB's technology transfer concerns and taking
other steps necessary to put Super Hornets into Brazil's
skies.
SOBEL

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