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Cablegate: First Mercosul-Asean Ministerial: Baby Steps, But

VZCZCXRO7435
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBR #1610/01 3511155
ZNR UUUUU ZZH
R 161155Z DEC 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 3106
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHAC/AMEMBASSY ASUNCION 7265
RUEHBU/AMEMBASSY BUENOS AIRES 5977
RUEHCV/AMEMBASSY CARACAS 4308
RUEHLP/AMEMBASSY LA PAZ 6742
RUEHMN/AMEMBASSY MONTEVIDEO 7615
RUEHSG/AMEMBASSY SANTIAGO 0759
RUEHRG/AMCONSUL RECIFE 8807
RUEHRI/AMCONSUL RIO DE JANEIRO 6989
RUEHSO/AMCONSUL SAO PAULO 3204
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 001610

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL ETRD BR ASEAN
SUBJECT: FIRST MERCOSUL-ASEAN MINISTERIAL: BABY STEPS, BUT
CONTINUITY IS ENSURED

BRASILIA 00001610 001.2 OF 002


1. (SBU) Summary. At the first Mercosul-ASEAN ministerial,
delegations discussed global affairs, trade and investment,
people-to people ties, and future cooperation. A joint
declaration highlighted the blocs' "firm commitment to
successfully concluding the Doha Round in a fair and balanced
manner." Brazilian diplomats said the meeting revealed
divergent views among ASEAN members on whether to pursue a
free trade agreement with Mercosul, despite an ASEAN
moratorium on new negotiations. Ministers agreed to continue
the ASEAN-Mercosul meetings, which Brazil considers a
significant achievement and a path toward eventual trade
negotiations. End summary.

2. (SBU) Ministers from all Mercosul and ASEAN member
states met in the first ministerial meeting of the two blocs
on November 24 in Brasilia for talks on global affairs, trade
and investment, people-to people ties, and future
cooperation. The agenda began with discussions of the
international financial situation, energy security, food
security, and the WTO and Doha Round, followed by sessions on
developments in ASEAN and Mercosul, enhancing trade and
economic ties between ASEAN and Mercosul, promoting
people-to-people ties, and an action agenda for future
ASEAN-Mercosul cooperation.

Differences Among ASEAN Members Over Trade Talks

3. (SBU) Second Secretary Andre Saboya Martins, Department
of International Negotiations of the Brazilian Ministry of
External Relations, said the meeting revealed divergent views
among ASEAN members on whether to pursue a free trade
agreement with Mercosul. Singapore and a few other ASEAN
members were clearly in favor of trade talks with Mercosul,
while others opposed such a course, according to Martins. He
reported that that one (unnamed) ASEAN country's embassy
phoned him afterwards to ask about opening trade talks as
soon as possible.

Continuity Ensured for ASEAN-Mercosul Meetings

4. (SBU) Ministers agreed to continue meeting, an outcome
that was not a foregone conclusion because ASEAN had adopted
a moratorium on new negotiations. Mercosul members were
pleased because they wanted to ensure continuity, Martins
said, and now there is a mechanism to continue talking
without actually entering into economic and commercial
negotiations, something ASEAN is not open to as a bloc.
(Note: ASEAN countries may conduct trade negotiations
individually, but Mercosul members may do so only as a bloc.
End note.) The next ASEAN-Mercosul meeting, scheduled for
March 2009 in Kuala Lumpur, is to be a high-level meeting to
develop a Plan of Action and Road Map for ministers'
consideration on the margins of the September 2009 UN General
Assembly, followed by a second ministerial in an ASEAN
country not later than June 2010.

Multilateral Negotiations Should Meet Emerging Economies'
Needs

5. (SBU) During the discussion of the global financial
crisis, ministers agreed on the need to create both a global
architecture of financial institutions and a Doha Round
result closer to the needs o emerging economies, according
to Martins. The oint press statement also reflected a view
in favor of more favorable conditions for emerging economies
in the Doha Round, calling for a successful conclusion of the
Round "in a fair and balanced manner," expressing opposition
to export subsidies for agricultural products and suport for
"incorporating a development dimension n international
discussions concerning intellectual property."

Comment

6. (SBU) Part of the cntext for Brazil's interest in
engaging ASEAN naions is President Lula's push to strengthen
sout-south contacts, build new trade relationships, sek
support for Brazil's UN reform aspirations, and advance the
interests of Brazil and like-minded tates in multilateral
negotiations. The rest ofthe context, as Martins pointed

BRASILIA 00001610 002.2 OF 002


out, is that Mercosul is already in negotiations with the EU,
Israel, Morocco, Jordan, Egypt, the Gulf Cooperation Council,
and the South African Customs Union, and the ASEAN talks
should also be viewed in that other, larger picture of bloc
to bloc outreach. Mercosul may be ready to go faster than
ASEAN as a whole, so ASEAN will hold the pace back, but we
can also expect to see individual ASEAN members break out of
the pack and make trade negotiation overtures to Mercosul, as
one already has.
SOBEL

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