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Cablegate: Ambassador,S Meeting with Minister For

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RR RUEHRG
DE RUEHBR #2608/01 3491137
ZNY CCCCC ZZH
R 151137Z DEC 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 7653
INFO RUEHAC/AMEMBASSY ASUNCION 5848
RUEHBU/AMEMBASSY BUENOS AIRES 4481
RUEHMN/AMEMBASSY MONTEVIDEO 6656
RUEHSG/AMEMBASSY SANTIAGO 5990
RUEHRG/AMCONSUL RECIFE 6022
RUEHRI/AMCONSUL RIO DE JANEIRO 3557
RUEHSO/AMCONSUL SAO PAULO 8867
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 BRASILIA 002608

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/05/2016
TAGS: PGOV BR
SUBJECT: AMBASSADOR,S MEETING WITH MINISTER FOR
INSTITUTIONAL RELATIONS TARSO GENRO

Classified By: Political Counselor Dennis W. Hearne for reasons 1.4 b a
nd d.

1. (C) Summary. Ambassador Sobel met on November 27 with
Tarso Genro, Minister for Institutional Relations, to discuss
President Lula,s agenda in the second term,
executive-congressional relations, and other issues. Genro
said the government is still processing its first term
experience, which was "very difficult" because of a deluge of
corruption scandals, and added that the government is focused
on the economic challenges, which also proved to be difficult
in the first term. Genro said Lula has three plans in mind
for his second term: (1) work harder on the government,s
coalition so as to give his administration greater stability;
(2) open a dialogue with the opposition on political reform;
and (3) broaden economic growth without destabilizing
macroeconomic progress. Genro commented that Brazil,s
relations with the U.S. and Latin America are both important
but in the government,s view, it must not favor either
relationship because it would harm the other. Genro avoided
responding to the Ambassador,s queries about cabinet level
appointments. The Ambassador and Genro agreed to identify
areas of mutual interest to work on in the future. Genro
asked for our assistance to learn more about the U.S. federal
system, especially federal and state relations, and proposed
that we jointly organize a working group to discuss this
further. End summary.

2. (C) Ambassador, accompanied by Special Assistant, met
with Tarso Genro on November 27 at the Presidential Palace.
As Minister for Institutional Relations, Genro has chief
responsibility for managing the relationship between the
presidency and the Congress. He also handles relations with
the state governments. Genro opened by saying the government
is still processing its first term experience, which was
"very difficult" because of the series of corruption
scandals, and added that the government is focused on the
economic challenges, which also proved to be difficult in the
first term.

3. (C) On corruption, Genro said two things had happened:
first, Lula and his government worked with police to develop
mechanisms to combat corruption, and second, the Workers,
Party (PT) had become internally more "humble" owing to the
corruption experience of the first term and the PT's previous
reputation as a clean party. With that background, Genro
said, Lula was going into his second term with a greater
sense of responsibility to deepen the fight against
corruption, both in politics and as a systemic problem in
Brazilian society.

4. (C) On economics, Genro said Lula wants to take
advantage of macroeconomic progress made in the first term
and now broaden economic development in Brazil. He mentioned
the need for an increase in investment in infrastructure,
including energy, and an improved income distribution, in
which education will play a key role.

5. (C) Genro said Lula has three plans in mind for his
second term: 1) work harder on the government,s coalition
so as to give his administration greater stability; 2) open a
dialogue with the opposition on political reform; and 3)
broaden economic growth without destabilizing macroeconomic
progress. He did not elaborate on how these goals would be
accomplished.

6. (C) He added that Brazil's relationships with the U.S.
and Latin America are both important, and in the government's
view it must follow a middle path, since favoring one
relationship would harm the other. He stressed that the
Brazilian government is not anti-American, that there is no
"crisis" in U.S.-Brazilian relations, and Brazil wants to
create a relationship of responsibility with the U.S. as a
political and economic partner.

7. (C) Ambassador Sobel replied that our relationship is
not a question of priorities but one of creating the best
possible relationship. He noted that Presidents Bush and
Lula enjoy good relations, and that in the U.S. politicians
from the same political party do not always agree with each
other. He said we do note, though, how often the Brazilian
media report on regional relations and south-south relations
in comparison with U.S.-Brazilian relations.

BRASILIA 00002608 002 OF 002

8. (C) After the Ambassador discussed our interest in
possible frameworks for better U.S.-Brazilian relations,
including a possible tax and investment treaty to create a
better business environment for U.S. companies, Genro
explained that there is a "double tension" in Brazil,s
relations with the U.S. and Latin America, since if Brazil
privileges the U.S., it will disadvantage its neighbors and
create "competition" in the region over which countries can
have the best relations with the U.S. When the Ambassador
cited the positive example of Chile, Genro acknowledged the
point but said Chile,s economy is primarily export-driven,
while Brazil has a large industrial economy that includes a
spectrum from environmentally protected areas in the Amazon
to globally integrated agro-business. Ambassador and Genro
also discussed the balance between job growth and industrial
development and environmental protection. Brazil sees its
role as mediating the different political and economic issues
and needs to be friendly to both Bush and Chavez, Genro said.

9. (C) Ambassador said we appreciate Brazil,s mediating
role with Chavez, we hope Brazil could do more, and we hope
Brazil can do the same with Cuba. He added that if Brazil
wants to grow it will best do so by working with the U.S. and
other developed nations such as the European Union, as well
as developing nations. Genro and the Ambassador agreed to
identify areas of mutual interest to work on in terms of
trade and investment frameworks. We both recognized, he
said, that we must work through both the executive and the
legislative branches.

10. (C) Genro asked the Ambassador to help him learn more
about the U.S. federal system, particularly relations between
the federal and state governments, and state to state
relations. Under the federal-state rubric, Genro said he was
especially interested in discussing taxes, the environment,
and law enforcement. He proposed establishing a joint
working group to meet next April or May to discuss federalism
further. Ambassador agreed to help facilitate this project.

11. (C) Ambassador asked Genro to discuss possible changes
in the Workers Party leadership, but Genro was not
forthcoming, merely offering to put the Ambassador in touch
with leaders in relation to specific topics of interest. He
also noted that he is now in the government, hence his
involvement in PT matters is unofficial. Genro also would
not be pinned down with regard to which areas he viewed as
crucial in the bilateral relationship.

SOBEL

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