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Cablegate: Brazilians, Koreans Say Relations Good, Getting

VZCZCXRO8673
RR RUEHRG
DE RUEHBR #1559/01 3391611
ZNY CCCCC ZZH
R 041611Z DEC 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 3021
INFO RUEHAC/AMEMBASSY ASUNCION 7239
RUEHBJ/AMEMBASSY BEIJING 0392
RUEHBU/AMEMBASSY BUENOS AIRES 5961
RUEHMN/AMEMBASSY MONTEVIDEO 7606
RUEHSG/AMEMBASSY SANTIAGO 0745
RUEHUL/AMEMBASSY SEOUL 0154
RUEHKO/AMEMBASSY TOKYO 0970
RUEHRG/AMCONSUL RECIFE 8775
RUEHRI/AMCONSUL RIO DE JANEIRO 6952
RUEHSO/AMCONSUL SAO PAULO 3160
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 BRASILIA 001559

SIPDIS

E.O. 12958: DECL: DECEMBER 3, 2018
TAGS: PREL EINV ETRD BR KS KN
SUBJECT: BRAZILIANS, KOREANS SAY RELATIONS GOOD, GETTING
BETTER

REF: A. SEOUL 2177
B. BRASILIA 1486
C. BRASILIA 1534
D. BRASILIA 534
E. BRASILIA 1407

Classified By: CLASSIFIED BY POLITICAL COUNSELOR STEPHEN LISTON, REASON
S 1.4 B AND D

1. (C) Summary. The four-day visit to Brazil by Korean
President Lee Myung-bak reaffirmed an already positive
relationship characterized by a rapidly growing but
unbalanced trade relationship, plans for modest exchanges in
agricultural and mining technology, and very different views
on UN reform. Before the Brasilia summit, Lee led a trade
mission to a Sao Paulo bilateral business forum. The ROK and
GOB are still far apart on Brazil's top foreign policy
priority of UNSC reform and a permanent Brazilian UNSC seat.
Brazilian diplomats complained that Lee has a "businessman's
profile" and does not like discussing political topics.
President Lula agreed to visit South Korea in 2009. End
summary.

2. (C) Korean President Lee Myung-bak visited Brazil from
November 17-20 with a trade mission of 35 Korean businessmen.
In Sao Paulo, he and the trade delegation participated in a
bilateral business forum and met with state governor Serra.
On November 19, Lee met with President Lula for talks about
the bilateral relationship. First Secretary Ricardo
Portugal, Korea desk officer at Brazil's Ministry of External
Relations, told poloff that the visit built on the good
relationship between the two countries and there are few
difficult points in the relationship, although they are very
far apart on Brazil's aspiration for a permanent UNSC seat.
Both Portugal and Dong Won Park, Economics Counselor of the
Republic of Korea Embassy in Brasilia, told poloff that the
only difficult part of the visit was preparing the joint
communique's language on the United Nations. Neither offered
specifics of the divergent views, but Portugal said, "The
Koreans don't even talk about UN reform, it was the hardest
part of the talks, and preparing the communique's text on it
was frustrating." Brazil is attractive to Korea as a
regional leader, a leader in south-south dialogues, and as an
emerging global leader, Park explained, so expanding trade
and strengthening friendship with Brazil are part of a broad
effort to develop good relations with "middle powers" (see
also ref a). Previous Brazil-Korea summits took place in
2004 in Brazil, which coincided with the Chile APEC summit,
and in 2005 in Seoul; on both occasions Lula met with
then-president Roh Moo-hyun. At this latest meeting, which
coincided with the Peru APEC summit, President Lula agreed to
visit South Korea in 2009.

North Korea

3. (C) The joint communique states that the presidents
discussed North Korea, and that both sides support the Six
Party Talks and continuing dialogue. Park said Brazil always
consults with South Korea about North Korea, and confirmed
that South Korea is pleased with Brazil's plans to open an
embassy in Pyongyang next year (ref b) because it believes
contact with Brazil could have a positive and moderating
influence on North Korea. Kyung Hung Cho, Korean Ambassador
to Brazil told Correio Braziliense (leading Brasilia daily;
11/19/08), "If (Brazil) in fact opens an embassy (in North
Korea), it will be another incentive to the North Koreans to
open their society to the world." In the context of talks on
North Korea, UN reform, and other topics, Portugal commented
that President Lee, perhaps because of his business
background, does not seem to like politics and it was harder
to discuss politics with him than with Roh, who was very
different. His comments align with those of another
Brazilian diplomat, who recently commented that Korean
diplomacy is "blunt and too rigid," and tends to "simplify
excessively" (ref c).

Trade and Investment

4. (SBU) The joint communique signaled that Brazil hopes for
Korean investment in Brazilian infrastructure works such as a

BRASILIA 00001559 002 OF 002


high-speed train, dredging, and shipbuilding. Korea already
has major investments in Brazil in high technology (Samsung),
automobiles (Hyundai), and ports technology at Suape,
Pernambuco. The two countries signed an MOU to establish a
joint committee on trade and investment promotion. Bilateral
trade between Brazil and South Korea nearly tripled in the
period 2002-07, growing from 1.91 to 5.43 billion dollars; by
November 2008, two-way trade had reached 7.36 billion and
could reach eight billion dollars by year's end (Brazilian
Ministry of Development, Industry and Foreign Trade Ministry
statistics). Top Korean exports to Brazil are electronics,
LCD devices, and automobiles; top Brazilian exports to Korea
are semi-finished iron and steel products, iron ore, and soy.
But there is a very large trade imbalance in South Korea's
favor: for 2008 it had reached 2.23 billion dollars by
November. Korea desk officer Portugal said the trade
imbalance makes the Brazilian business sector reluctant to
engage the Koreans, but Counselor Park said the Korean
president and his trade mission got an "enthusiastic
reception" from Brazilian business interests. Park said
Brazil is very important to Korean trade: it is Korea's third
largest Latin American trading relationship after Mexico and
Chile, with which Korea has an FTA. Portugal and Park also
indicated that a trade disagreement over Brazilian meat
exports to Korea was on the verge of being resolved.

Doha Round

5. (U) The joint communique called for an "early conclusion"
of the Doha round as a "key to the reinvigoration of the
global economy" and for more engagement by WTO members to
resolve Agriculture and Non-Agricultural Market access issue
by the end of the year.

Memoranda of Understanding on Agriculture and Mining

6. (SBU) Brazil and ROK signed MOUs on agricultural
cooperation and mining under which Brazil will open a
cooperative research laboratory of the Brazilian agricultural
research body EMBRAPA in Korea and Korea will open a Korean
Rural Development Administration laboratory in Brazil.
Portugal said the mining MOU, although undertaken by the
presidents, concerns commercial interests, the Brazilian
Mining Association and the Korea Resources Corporation, and
is therefore mainly private in nature.

7. (SBU) Comment. Still maturing, this relationship is
clearly on the right track, as evidenced in particular by
Brazil's consultations with ROK at every step of its
engagement with the DPRK, and a demonstrated will on both
sides to ramp up trade and investment. While the bilateral
trading profile resembles that of Brazil and China (ref d) --
Brazil exports raw materials and imports manufactured goods
-- the investment profile is quite different. Koreans have
made large investments in Brazil, such as a Samsung factory
in Manaus, a Hyundai factory in Sao Paulo state, and there
will probably be other such large investments in the future,
which should continue to foster good bilateral relations.
SOBEL

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