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Cablegate: Brazil and Indonesia: A Relationship for the Future

VZCZCXRO9651
RR RUEHDT RUEHRG
DE RUEHBR #1622/01 3531342
ZNR UUUUU ZZH
R 181342Z DEC 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 3122
INFO RUEHAC/AMEMBASSY ASUNCION 7273
RUEHBU/AMEMBASSY BUENOS AIRES 5985
RUEHDT/AMEMBASSY DILI 0001
RUEHJA/AMEMBASSY JAKARTA 0198
RUEHMN/AMEMBASSY MONTEVIDEO 7617
RUEHSG/AMEMBASSY SANTIAGO 0767
RUEHRG/AMCONSUL RECIFE 8816
RUEHRI/AMCONSUL RIO DE JANEIRO 7000
RUEHSO/AMCONSUL SAO PAULO 3219
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 001622

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL ETRD EINV ENRG EAGR BR ID
SUBJECT: BRAZIL AND INDONESIA: A RELATIONSHIP FOR THE FUTURE

1. (SBU) Summary: During a November 18-19 visit to Brazil by
Indonesian President Susilo Yudhoyono, Indonesia and Brazil
agreed to cooperate in agriculture, including biofuels;
mining; and poverty eradication. They formalized a strategic
partnership for ongoing dialogue and cooperation. Brazilian
diplomats characterized the budding ties as "a relationship
for the future" that will take time to develop. The top
priority is to increase bilateral trade, now at only about
two billion dollars a year. End summary.

Taking Their Rightful Places
- - - - - - - - - - - - - - -

2. (SBU) First Secretary Ricardo Portugal, the Indonesia
desk officer at the Brazilian Ministry of External Relations,
told poloff it is "a relationship for the future" that is
just getting started. Brazil and Indonesia signed a Strategic
Partnership Declaration under which they will "intensify
politico-strategic, economic-commercial, socio-cultural,
scientific-technical, and environmental cooperation." In
public remarks, Lula emphasized Brazil's interest in working
with Indonesia "to mold a more humane and equitable
globalization," and described the strategic partnership as
one between "two countries determined to assume the place
that corresponds to them in a world of profound
transformation." Lula also said UN reform, especially UNSC
reform, is the "first step toward building true
multilateralism." Both First Secretary Purnawan Adi Sujasa,
political officer at the Indonesian Embassy in Brasilia, and
Ricardo Portugal said the two countries agreed the UNSC
should be enlarged to give developing countries more
representation.

Trade, Above All
- - - - - - - - -

3. (U) The primary goal of both countries is to increase
bilateral trade, now at about two billion dollars a year, and
Lula said bilateral trade could reach three billion dollars
in 2009 if the current trend continues. At present, Brazil
has a slight trade surplus with Indonesia, but the surplus
has flipped back and forth: it was in Brazil's favor in five
of the last eight years. The trading profiles are similar,
with extractive and unprocessed agricultural products high on
both countries' export lists, although Brazil's top export is
semi-finished iron or steel products. Brazil's other main
exports to Indonesia are bagasse, iron ore, cotton, and
tobacco. Indonesia's top exports to Brazil are rubber, palm
oil, cacao, and polyester fibers, followed by manufactured
goods such as automotive gearboxes, artificial fibers, and
fiber optic cables. Sujawa said that, in spite of strong
interest in increasing trade on both sides, the prospects of
a free trade agreement between Indonesia and Mercosul are
remote in the near term. (Note: Mercosul members may not
individually enter into bilateral FTAs, but the bloc may.
End note.)

Second Priority: Cooperation
- - - - - - - - - - - - - - -

4. (SBU) Portugal said Brazil's goal with Indonesia is to
establish a "strategic partnership" focusing on energy,
trade, and agriculture. The MOU on agriculture includes
biofuels development and builds on previous bilateral
biofuels agreements signed in 2007 and July 2008 to
strengthen cooperation, exchanges, and technology sharing.
Brazil and Indonesia also signed MOUs on mining and energy
and poverty eradication, where Indonesia would like to learn
from Brazil's experience with the "family stipend" (bolsa
familia) program, Sujasa said.

Previous Summits
- - - - - - - - -

5. (U) Presidents Lula and Yudhoyono last met at the G-20
summit just days before the Brasilia summit, and in Jakarta
in July 2008 during Lula's multi-country Asia and G-8 trip.
Earlier summits were in 2001, when Fernando Henrique Cardoso
visited Abdurrahman Wahid in Jakarta, which was the first
visit of a Brazilian president to Indonesia, and in 2000,
when Wahid visited Brazil.

BRASILIA 00001622 002 OF 002

Comment: Indonesia as Part of Lula's Larger Plan
- - - - - - - - - - - - - - - - - - - - - - - - -

6. (SBU) Brazil's interest in strengthening its
relationship with Indonesia should be viewed within the
larger context of President Lula's foreign policy goals of
actively diversifying trade partners, fortifying south-south
ties, and raising Brazil's global profile. Brazil's outreach
to new partners is also intended to garner support for its
aspiration for a permanent UN Security Council seat and its
positions in various international fora such as the WTO.
SOBEL

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