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Cablegate: Brazil: No Public Sign of Retreat From Ftaa

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 BRASILIA 002364

SIPDIS

USTR FOR SCRONIN, KLEZNY
DEPT FOR E:ALARSON; WHA:CSTRUBLE, SPINKHAM; EB:BMANOGUE
NSC FOR JOANNA WALLACE
USDA FOR JBPENN

E.O. 12958: N/A
TAGS: ETRD BR FTAA
SUBJECT: BRAZIL: NO PUBLIC SIGN OF RETREAT FROM FTAA
PROPOSAL

REF: BRASILIA 2231

1. (SBU) Summary. Following the FTAA Trade Negotiating
Committee meeting in San Salvador July 8-11, during which
Mercosul unveiled Brazil's 3-track proposal for restructuring
negotiations to unenthusiastic Vice-Ministers, public debate
in Brazil over the FTAA has been unusually quiet. Itamaraty
officials have generally declined comment. In responding to
questions after the swearing-in ceremony of Ambassador Luiz
Macedo Soares as Under Secretary for South America on July
21, Foreign Minister Amorim stated that the GOB's intention
is to continue pushing the proposal, but signaled a possible
opening for compromise on the specifics. Comments by Amorim
on the same occasion regarding the desirability of more
commitment to the pursuit of current GOB policies among, at
least, the top diplomatic echelon of the Ministry, prompted a
public rebuke by former Foreign Minister Lafer. End Summary.

BACKGROUND - THE PUBLIC UNVEILING

2. (SBU) On the eve of the FTAA Trade Negotiating Committee
(TNC) meeting in San Salvador July 8-11, Foreign Minister
Amorim wrote an op-ed in which he publicly unveiled Brazil's
Mercosul proposal to transform the FTAA by establishing three
paths or "tracks" for considering various elements of the
current negotiation, including moving some elements to the
WTO (see reftel). Amorim argued that a new approach was
needed because within the FTAA, Brazil was "encountering a
negotiating context that is complex from the standpoint of
Brazilian interests," and that the FTAA project as currently
envisioned goes far beyond the meaning of "free trade" in its
strict sense since it includes rules for services,
investment, government procurement, and intellectual property
rights, which have a "direct effect on the regulatory powers
of the countries concerned." He depicted the proposal as one
that would create an "FTAA that is possible" by balancing
Brazil's (offensive) interests with compromises on its
ability to design and execute policies for social,
environmental, technological and other types of development.

STANDING FIRM

3. (SBU) Following the less than enthusiastic response the
proposal received from Vice-Ministers attending the TNC
meeting, public discussion in Brazil of the FTAA and the
proposal has been unusually quiet. One press source claimed
that he was trying to write an article about the FTAA
proposal, but was unable to find Itamaraty officials willing
to be interviewed. However, answering questions after the
swearing-in ceremony of Ambassador Luiz Macedo Soares as
Under Secretary for South America (and FTAA lead negotiator)
on July 21, Minister Amorim stated that the GOB's intention
is to continue pushing the 3-track proposal. Amorim said the
GOB's position had not changed "by so much as a dot." He
went on to claim that the current format of the negotiations
among the 34 FTAA countries "does not suit the United States
just as it does not suit us." The article reported that
according to a government source, the U.S. negotiators at the
TNC meeting had maintained complete silence, which prompted
Amorim to comment that "silence gives consent."

COMPROMISE ON THE DETAILS?

4. (SBU) Amorim sought to distance himself somewhat from the
specifics of the proposal by stating that he does not plan to
involve himself in a debate over "formalities." According to
press reports, he said that Brazil might even accept
"agreements on investments and other systemic topics (in the
FTAA path) provided they do not go beyond the WTO's current
guidelines." Amorim also again stated a preference for a
focus within the FTAA on a market access agreement between
the United States and Mercosul.

5. (SBU) In late June, the Lula administration came under
sharp criticism from anti-FTAA forces for supposedly
providing unwarranted impetus to the negotiations by
re-committing to their conclusion by January 2005 as part of
the U.S.-Brazil presidential summit. Now, Itamaraty is
facing criticism from the opposite direction. Press has
suggested that some ministries fear Itamaraty may have
imparted a "less palatable" tone to the proposal during the
TNC meeting, leading to a lack of support. According to
press reports, the National Confederation of Industries
(CNI), which advises the GOB on trade policy through
coordination of the Brazilian Business Coalition, also has
noted concern that the current 3-track proposal is
considerably less ambitious for achieving integration than
the present FTAA scope. However, this concern is coupled
with an acknowledgment by CNI that different economic and
political circumstances in Brazil warrant some change to the
FTAA.

6. (SBU) Note. In describing the tit-for-tat approach of
"moving" elements for negotiation from the FTAA to the WTO,
Brazilian officials, industry representatives and press
continue to erroneously characterize USG and GOB motives as
each taking "sensitive" issues to the WTO. No
differentiation is made between the "sensitive" nature of
investment or intellectual property rights for Brazil, and
the structural difficulty of negotiating domestic support in
a regional forum because of domestic agricultural support
programs being global versus country specific, with two of
the three major users of such programs (EU and Japan) not
located within the hemisphere. End Note.

IDEOLOGICAL LITMUS TEST

7. (SBU) Minister Amorim stirred up a separate debate this
week when he, as one journalist characterized, "broke with
the maxim that a diplomat is an official of the State, and
therefore, will be above the ideological directives of the
(Presidential) Planalto Palace and everyday political games."
As part of his official address during Macedo Soares
swearing-in, Amorim said that in making appointments, two
things should be considered: professional competence and the
person's "natural affinity with the orientation of the
Government, the President of the Republic, and the Minister."
He went on to say that the professional (diplomatic) corps
ought to be "enthusiastically engaged" with certain political
lines and "orientations" and claimed that Macedo Soares
fulfilled these requirements. His comments drew a swift
rebuke from former Foreign Minister Lafer in the form of an
op-ed in which Lafer insisted that a diplomat's duty is
simply to serve Brazil.
HRINAK

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