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Cablegate: Brazil and Usg Sign Maritime Transport Agreement

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

061852Z Oct 05

UNCLAS SECTION 01 OF 04 BRASILIA 002672

SIPDIS

STATE FOR WHA/BSC
STATE FOR EB/TRA MILLER AND HAYWOOD
NSC FOR CRONIN
TRANSPORTATION FOR DAVID DECARME
USCG FOR MARIO MERCADO
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/DDEVITO/DANDERSON/EOL SON
BUENOS AIRES FOR TSA

E.O. 12958: N/A
TAGS: EWWT ETRD PHSA PREL ASEC
SUBJECT: BRAZIL AND USG SIGN MARITIME TRANSPORT AGREEMENT

REF: BRASILIA 2452

1. Summary. On September 30, after several years of
negotiation, Brazil and the USG signed a Maritime Transport
Agreement in Washington, DC. The agreement still must be
ratified by the Brazilian Congress, which we do not
anticipate will happen in the near-term. The signing was,
nevertheless, one more positive area of cooperation on
maritime issues. The English text of the agreement is
included below. End Summary.

2. A Maritime Transport Agreement was signed by Secretary
Norman Mineta of the U.S. Department of Transportation and
Brazilian Ambassador Roberto Abdenur on September 30 in
Washington, D.C. Others present at the signing included
Flavio Marega, Transportation Counselor, Embassy of Brazil;
John J. Danilovich, U.S. Ambassador to Brazil; Jeffrey
Shane, DOT Under Secretary of Transportation for Policy; and
Karan K. Bhatia, DOT Assistant Secretary for Aviation and
International Affairs.

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3. The agreement culminates a four year effort to renew the
previous accord, and will facilitate maritime transportation
between the U.S. and Brazil. It represents a positive step
in continuing to provide market access for U.S. carriers to
Brazilian commercial cargoes that Brazilian authorities have
designated as government controlled. Specifically, the
agreement ensures equal access for each country's carriers
to the other country's government-controlled cargo. (Brazil
reserves a significant portion of what are in fact
commercial international cargoes to its own carriers,
claiming these cargoes are "government-controlled.") In
addition, the agreement includes a new provision that
confirms each country's ability to protect its security
interests. Finally, the agreement encourages liberalization
of the maritime sector and provides for non-discriminatory
treatment of each side's carriers with respect to maritime-
related services and facilities and other issues such as
shipping taxes. This agreement will particularly benefit
U.S. carriers moving Export-Import Bank financed project
cargoes to Brazil.

4. While the revised agreement is along the lines of the
previous (expired) one, the Brazilian Congress still must
ratify the new accord. Because the current political crisis
in Brazil has stalled much of the government's legislative
agenda, we do not expect ratification to happen in the near-
term. Indeed, the provisions calling for non-discriminatory
treatment for U.S. carriers in both countries' cross trades
(i.e., trade with third countries) may raise concerns in the
Brazilian Chamber of Deputies and Senate regarding granting
market access to exclusionary trade arrangements within
MERCOSUL. From the U.S. side, as an executive agreement,
there is no need for Senate ratification.

5. Other areas of positive maritime cooperation with Brazil
include the Department of Homeland Security Container
Security Initiative (CSI), which was inaugurated at the Port
of Santos on September 22. In addition, there are on-going
discussions regarding the Department of Energy's Megaports
Initiative, which seeks to detect radioactive and/or nuclear
materials at foreign ports in conjunction with CSI.
Finally, the U.S. Coast Guard successfully concluded its two-
week visit to several ports in Brazil on September 23 under
a reciprocal agreement negotiated earlier in September
(Reftel).

6. The English language version of the agreement is below.

Begin text.

AGREEMENT ON MARITIME TRANSPORT BETWEEN THE GOVERNMENT OF
THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE
FEDERATIVE REPUBLIC OF BRAZIL

The Government of the United States of America
and
The Government of the Federative Republic of Brazil
(hereinafter the "Parties"),

Reaffirming their interest in the free flow of maritime
trade and improved competitive access to such trade for
national-flag carriers of both Parties, taking into
consideration the interests of third-flag carriers;

Noting the continued interest of the Parties in the
liberalization of their maritime trades;

Taking into account the increasing use of intermodal
transport of cargoes in the bilateral trade;

Recognizing that free and fair competition is the effective
way to encourage efficient shipping services at favorable
costs and that such shipping conditions enhance the growth
of the economies of both countries and their foreign trade;
and

Recognizing the desirability of limiting, insofar as
possible, restrictions on the access of carriers to
government-controlled cargo and other cargoes;

Have agreed as follows:

ARTICLE 1

The Parties shall conduct their bilateral maritime
transportation relations in accordance with the following
provisions relating to international ocean-borne cargo
trade, excluding bulk cargoes and cargoes transported
between ports or points in the territory of either Party:

a) The Parties recommit themselves to the pursuit of free
and open maritime trade through administrative and
legislative measures;

b) The Parties shall afford fair and nondiscriminatory
opportunity to national-flag carriers of both Parties and to
third-flag carriers to compete for the carriage of
commercial cargo in the bilateral trade. Each Party shall
further afford fair and nondiscriminatory opportunity for
national-flag carriers of the other Party to compete for the
carriage of commercial cargo in third-country trades;

c) National-flag carriers of each Party shall have equal
and nondiscriminatory access to the government-controlled
cargo of the other Party, excepting defense cargoes and
agricultural assistance cargoes, for carriage in vessels
owned or chartered by those carriers. If any unintended
imbalance develops in the carriage of the government-
controlled cargoes, the Parties shall hold consultations
expeditiously pursuant to Article 2 of this Agreement, in
order to find a solution;

d Waivers for the carriage of government-controlled cargo
by foreign-flag vessels shall be issued expeditiously. The
availability period used by each Party to determine whether
waivers for the carriage of government-controlled cargo in
vessels operated by foreign-flag carriers may be granted
shall consist of no more than three days before and seven
days after the shipper's requested sailing date. Each
Party's competent authority will respond to waiver requests
within three working days of receipt;

e) The Parties, upon request by a shipper, carrier or other
interested party, shall make every effort to advise within
three working days if a specific cargo falls under the laws
of controlled cargo and the basis for such characterization;

f) The Parties shall afford fair and nondiscriminatory
treatment with respect to commercial operations of each
Party's carriers, including the establishment of business
offices, the ownership and operation of maritime facilities,
the intermodal movement of cargo, and the establishment of
such other facilities as may be necessary to the efficient
conduct of maritime services;

g) In order to facilitate efficient operation of maritime
transport, the Parties shall not impose any restrictions on
the transshipment or relay shipment of cargoes in the
bilateral trade, subject to cabotage laws of each Party;

h) On a reciprocal basis, each Party shall afford vessels
of the other Party the same treatment as its own vessels
with respect to taxes assessed on tonnage or freight value
and other taxes and levies;

i) The tariffs of and shipping documents issued by
multimodal transport operators or ocean transportation
intermediaries organized under the laws of either Party
shall be recognized and accepted by the Parties in their
bilateral trade;

j) The Parties shall regularly exchange updated information
on the value and tonnage, by flag and type of vessel, of
their respective government-controlled cargo in the
bilateral trade; and

k) For the purposes of the present Agreement, "government-
controlled cargo" means cargo, all or some portion of which
under the law of the Party is reserved for transportation by
its national-flag carriers.

ARTICLE 2

The Parties shall consult on changes in internal legislation
deemed likely to affect the application of the Agreement, as
well as on further matters affecting the bilateral maritime
trades, or on any matter involving the application or
interpretation of this Agreement.

ARTICLE 3

The provisions of this Agreement shall not limit the right
of either Party to take any legitimate action under
international law for the protection of its security
interests.

ARTICLE 4

For purposes of implementation of this Agreement, the
competent authorities shall be, for the United States of
America, the Maritime Administration (MARAD) of the U.S.
Department of Transportation, or such body as the United
States Government may designate, and, for the Federative
Republic of Brazil, the National Agency for Waterways
Transportation (ANTAQ), following the guidelines issued by
the Ministry of Transportation. Each Party shall notify the
other through diplomatic channels of any change in the
identity of its competent authority.

ARTICLE 5

The Agreement shall enter into force upon completion of an
exchange of notifications that internal procedures necessary
for its entry into force have been completed. It shall
remain in force for a period of five (5) years, its validity
being automatically renewed thereafter for successive one-
year periods, unless a contrary notification is presented by
any one of the two Parties. Either Party may, at any
moment, terminate the present Agreement. The termination
shall be effective sixty (60) days after the receipt of the
written notification by the other Party, through diplomatic
channels.

DONE at Washington, this thirtieth day of September, 2005,
in duplicate in the English and Portuguese languages, both
texts being equally authentic.

FOR THE GOVERNMENT
OF THE UNITED STATES
OF AMERICA:

FOR THE GOVERNMENT
OF THE FEDERATIVE REPUBLIC
OF BRAZIL:

End text.

7. This cable was coordinated with the Department of
Transportation.

DANILOVICH

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