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Cablegate: Brazilians Highlight Positive Bilateral Relations

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RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHBR #1405/01 2982008
ZNY CCCCC ZZH
P 242008Z OCT 08 ZDK
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 2729
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUEHRG/AMCONSUL RECIFE 8622
RUEHRI/AMCONSUL RIO DE JANEIRO 6789
RUEHSO/AMCONSUL SAO PAULO 2962
RHMFISS/CDR USSOUTHCOM MIAMI FL//SCJ2-I/J5/HSE/DIA REP//
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUCNDT/USMISSION USUN NEW YORK 0277

C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 001405

SIPDIS

NSC FOR FISK AND TOMASULO

E.O. 12958: DECL: 10/24/2018
TAGS: PREL ETRD ENRG BR
SUBJECT: BRAZILIANS HIGHLIGHT POSITIVE BILATERAL RELATIONS
FOR UNDER SECRETARY BURNS

REF: A. BRASILIA 1301
B. USUN NEW YORK 0928

BRASILIA 00001405 001.2 OF 003


Classified By: Ambassador Clifford M. Sobel, Reasons 1.4 (b) and (d)

1. (C) During his October 17 visit to Brazil, Under Secretary
Bill Burns was told repeatedly by GOB officials and others
that relations between the United States and Brazil are
excellent and that they hope a new U.S. administration will
make an early effort to build on them. GOB officials focused
on their efforts to manage difficult relations with their
neighbors and to increase political and economic integration
in the region. In particular, they encouraged the USG to
respond positively to the first Latin America/Caribbean
Summit (all Western Hemisphere countries, including Cuba,
except the United States and Canada) that Brazil will host in
December. Foreign Ministry officials highlighted their
interest in cooperating on Haiti, UN Security Council reform,
the Middle East, the financial crisis, and the Doha trade
round. End summary.

-- Defense Minister Jobim Offers His Insights --

2. (C) In Brasilia, Minister of Defense Nelson Jobim provided
U/S Burns an overview of Brazil's relations with neighboring
countries, noting Brazil's ongoing issues with Bolivia (gas,
and the political crisis), Ecuador (Odebrecht), Paraguay
(Itaipu), and Argentina (gas and economic concerns). Without
specifying, he described many of the leftist leaders in South
America as "primitive." Jobim stressed that, although
relations between the United
States and Brazil are excellent, it would not do for our
countries to appear too close, as it might scare Venezuelan
President Chavez, who is already looking to use external
threats to divert attention from his internal problems.
Jobim suggested that the new U.S. administration should look
at changing U.S. policy toward Cuba. He added that there is
no better analyst of the region than President Lula's foreign
policy advisor, Marco Aurelio Garcia, and recommended that
advisors to the new U.S. president meet with Garcia early on
to get his perspective.

3. (C) In discussing possible sale to Brazil of F-18s, Jobim
raised Brazilian concerns with technology transfer,
explaining that it is a critical element in Brazil's
decision.

4. (C) At the same meeting, Chairman of the Senate Defense
and Foreign Affairs Committee Heraclito Fortes said relations
between our two governments have never been better, including
with the Brazilian congress, as a result of increased USG
efforts. Jobim agreed, saying that SouthCom's recent efforts
have improved relations with the Brazilian military. Fortes
said the new U.S. administration needs to continue and
enhance engagement of this nature with Brazil, citing
peacekeeping in Haiti as a positive, concrete example of how
our countries can work together.

5. (C) Fortes expressed concern with growing Iranian and
Russian influence as a result of Venezuela's ties, and
suggested that the United States should give more support to
Mercosul as an organization aimed at preserving democracy.
At the same time, Fortes voiced his opinion that Ecuador's
President Correa presents a greater long-term threat to
stability in the region than Venezuela's Chavez because
Correa is educated and his moves are planned. Fortes also
raised his continuing frustration with the absence of the
United States at the Inter-Parliamentary Union (IPU).

-- Mexican Ambassador to Brazil Offers Thoughts on CALC --

6. (C) Mexican Ambassador to Brazil Andres Valencia Benavides
provided his views of the December 17-18 conference of Latin
American and Caribbean heads of state (CALC) in Bahia (Reftel
A). Benavides lamented that, with the demise of negotiations
for a Free Trade Area of the Americas, the Summit of the
Americas process had lost the hemisphere-wide unifying theme
that drove it. He suggested that the new U.S. administration
should seek to provide such a theme.

-- Finance Ministry Chief of Staff Discusses Region, Energy,
and Economy --

BRASILIA 00001405 002.2 OF 003

7. (C) In a separate meeting, Finance Ministry Chief of Staff
Luiz Melin said that the CALC meeting represents another way
for Brazil to manage Chavez, and suggested that the USG
should find ways to broaden dialogue with the region across
sectors, including through acknowledgement of and respect for
the role of the various regional and sub-regional mechanisms
that have been put in place. He emphasized that these
mechanisms do not represent a barrier to cooperation with the
United States. "You need to give them legitimacy and welcome
them," he said. Melin sees the region as being at a tipping
point,
and stressed that Brazil must sell regional mechanisms as
"fair and useful" as it works to bring countries like
Venezuela on board with a more constructive approach. Andean
Development Bank (CAF) Brazil Representative Moira
Paz-Estenssoro, a Bolivian, agreed with Melin, urging the
U.S. "to build partnerships with respect, acknowledging good
actions."

8. (C) Melin also discussed Brazil's response to the global
financial crisis. Noting that Brazil had learned its lesson
from its previous economic crises, the GOB slashed investment
in an effort to control government spending, which resulted
in Brazilian infrastructure suffering severely. This time,
the GOB intends to maintain its commitment to spending under
the Program to Accelerate Growth (PAC) aimed at increasing
investment in infrastructure, so as to lay a foundation for
future growth as it manages the crisis. Mines and Energy
Ministry official Francisco Wojcicki described the Brazilian
energy matrix, emphasizing that Brazil welcomes foreign
investment as it develops its pre-salt reserves and expands
and maintains its electricity infrastructure.

-- Itamaraty Luncheon: Brazilian Perspective on Global and
Regional Issues --

9. (C) The Brazilian Ministry of External Relations (MRE, or
Itamaraty) hosted a two-hour working lunch that covered a
wide range of bilateral and global topics. U/S for Political
Affairs Everton Vargas toasted the deepening bilateral
relationship and said a purpose for the talks was to see
where our convergences lie. The bilateral relationship is
characterized by positive dialogue and cooperation. It is
important to build on it. U/S for Energy and Technology
Andre Amado stressed the importance of continuing biofuel
cooperation in third countries despite the orchestrated
effort by some to &demolish8 progress.

10. (C) In discussing the financial crisis, U/S Vargas
suggested that, as the G-7 had been created to address the
oil crisis in the 1970s, so the international community needs
to consider creation of new mechanisms to address the current
crisis. This is why President Lula had proposed an ECOSOC
meeting to help develop a response. However, he added, "we
have no illusions about a magic solution." Vargas noted that
the Ibero-American Summit would be held in El Salvador at the
end of the month, saying that, although the theme is
officially energy, former Inter-American Development Bank
President and now Ibero-American Summit Executive Director
Enrique Iglesias is encouraging discussion of the financial
crisis, as both crises go hand in hand. U/S for Economic
Affairs Luiz Carneiro de Mendonca said that timing will be a
key question for the future Doha trade round, affected by
election cycles in the United States and India.

11. (C) U/S Vargas raised reform of the UN Security Council,
saying that the international community must keep reform at
the center of our collective thinking (Reftel B).

12. (C) U/S Vargas encouraged holding a donor conference on
Haiti before the beginning of 2009. Prior to holding it, it
will be important to agree on the criteria for success.
Vargas stressed the importance of linking and coordinating
GOH priorities, and of setting a timetable for disbursements.
Minister Carlos Duarte, head of the International
Organizations Department, noted that the most recent MINUSTAH
report had benchmarks
that would provide a useful basis for donors. Vargas
suggested that the USG and GOB should hold bilateral
discussions on Haiti.


BRASILIA 00001405 003.2 OF 003


13. (C) Turning to the Middle East, Vargas said Brazil views
USG efforts very positively. As a participant in the
Annapolis meeting, FM Amorim believes Brazil should help keep
the process moving, especially as it is the key to resolving
many other issues around the world. Ambassador Regina
Dunlop, representing the under secretary for Asia, Africa,
and the Middle East, said that Brazil is particularly pleased
that regional actors are at the center
of efforts toward a region-wide solution. U/S Vargas
commented that Brazil does not want to see more states,
including Iran, with nuclear weapons and fully supported UNSC
sanctions.

14. (C) Minister Joao Luiz Pereira Pinto, representing the
under secretary for Latin America and the Caribbean,
discussed the CALC, explaining that South American nations
never had meetings only among themselves to discuss regional
issues. As UNASUL provided a forum for dialogue among South
American governments, so CALC would provide a forum for the
region. The most likely focus of the summit will be the
financial crisis, he said, although energy had been the
original focus. Resolving energy issues is a principal
concern in the region, Vargas said, critical to getting South
America on its feet. Discussing the very different realities
for South American countries, Vargas stressed the need for
greater cooperation and integration on energy matter, and on
infrastructure more broadly.

15. (C) When asked what the new U.S. Administration should
know about Brazil and the region, Vargas said "Bear in mind
that people here have sensitivities". He said that Brazil
hopes the dialogue that has been established with the current
administration will continue under the new one.

-- Sao Paulo Meetings with Economic and Foreign Policy
Observers --

16. (SBU) Chairman of the Senate Economic Affairs Committee
Senator Aloizio Mercadante (Labor Party), former Development
Minister Luiz Fernando Furlan, and FIESP international
negotiations director Mario Marconini urged that the next
administration seek pre-inaugural contacts with major
countries in the region to send the clearest message about
Brazil,s and Latin America,s importance to the United
States. Brazil,s strong economy, the country,s moderating
effect on the region,s politics, and the prospect for
strategic partnership in areas such as energy (especially
biofuels) make it imperative for the new U.S. administration
to signal its interest in bilateral cooperation. Important
possibilities exist for either a Republican or a Democratic
administration, they said.

17. (SBU) Former Foreign Minister Celso Lafer and former
Brazilian ambassador to London and Paris Sergio Amaral argued
that Brazil needs to show greater resolve with its
sometimes-difficult neighbors (e.g., Bolivia and Paraguay)
and not indulge them every time they make demands. They also
stressed that the region is looking to the United States for
leadership in a time of global financial uncertainty, much as
the United States provided in the wake of World Wars I and
II. Ambassador Amaral suggested that a United States that is
"less strong8 is not all bad for bilateral relations and
that Brazil could prove a positive partner for Washington in
a number of areas. Amaral offered that Cuba and ethanol
(most notably the U.S. tariff) were areas where a strong,
positive signal from Washington would be well-received in
Brazil.

18. (U) U/S Burns cleared this cable.
SOBEL

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