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Cablegate: Brazil: Ftc Chairman Meetings in Brasilia

VZCZCXRO0319
PP RUEHRG
DE RUEHBR #2326/01 3611456
ZNR UUUUU ZZH
P 271456Z DEC 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 0716
INFO RUEHSO/AMCONSUL SAO PAULO 1379
RUEHRI/AMCONSUL RIO DE JANEIRO 5610
RUEHRG/AMCONSUL RECIFE 7529
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 002326

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ECIN BR
SUBJECT: BRAZIL: FTC CHAIRMAN MEETINGS IN BRASILIA


1. (SBU) Summary: On November 29, Federal Trade Commission (FTC)
Chairman Deborah Majoras met in Brasilia with Ministry of Justice
(MoJ) and Administrative Council for Consumer Defense (CADE)
officials. Majoras discussed deepening the cooperation between the
FTC and the MoJ on consumer protection issues with Ricardo Morishita
Wada, Director of the Department of Consumer Protection and Defense
(DPDC), and Mariana Tavares, Secretary of Economic Law. Tavares
proposed establishing an exchange program with the FTC for MoJ
employees, similar to an existing program between FTC and CADE. She
described a planned GoB national security program that will have a
consumer protection component and noted the introduction of a new
bill in the Brazilian Congress that would combine the antitrust
functions of two other GoB agencies with that of CADE. Majoras and
Tavares also explored the possibility of incorporating Brazil into a
multinational consumer complaint database maintained by the FTC. In
a separate meeting with Majoras, Vice Minister of Justice Luiz
Barreto enthusiastically supported an enhanced relationship between
the FTC and MoJ and noted concerns about low quality Chinese
imports. Majoras later met with CADE president Elizabeth Farina and
the organization's commissioners. The CADE officials were
interested in the FTC pre-merger review process, the U.S. "state
action" doctrine, and other details about the FTC's organizational
structure. End Summary.

--------
OVERVIEW
--------

2. (U) In the U.S., antitrust enforcement is divided between the FTC
and DOJ while consumer protection falls under the FTC. In Brazil,
antitrust issues are handled by the Administrative Council for
Consumer Defense (CADE), the Secretariat of Economic Monitoring
(SAEA) at the Ministry of Finance and the Secretariat of Economic
Law (SDE) at the Ministry of Justice. Consumer protection in Brazil
is the responsibility of the Department of Consumer Protection and
Defense (DPDC), also under the Secretariat of Economic Law at the
Ministry of Justice.

-----------------------------------------
Meetings at the Ministry of Justice (MoJ)
-----------------------------------------

3. (SBU) Majoras discussed the need to strengthen cooperation
between USG and GoB consumer protection agencies with Ricardo
Morishita Wada, Director of the Department of Consumer Protection
and Defense (DPDC), and Mariana Tavares, MoJ Secretary of Economic
Law. Majoras and her MoJ interlocutors agreed that consumer
protection cooperation has lagged behind the FTC's antitrust
dialogue with GoB agencies. In particular, Taveras was interested
in establishing an exchange program with the FTC for MoJ employees,
similar to the existing employee exchange program between FTC and
CADE. Majoras said the FTC program, made possible by a new law that
eliminated some of the confidentiality issues that previously
limited participation by officials from other governments, applies
equally to both antitrust and consumer protection exchanges.

4. (SBU) Majoras noted the need for enhanced international
cooperation in light of increasing global interest in eliminating
consumer fraud. She called for sharing best practices such as the
U.S. consumer fraud database, accessible to over 1,600 U.S. law
enforcement agencies. Majoras noted that the FTC has made consumer
protection a high priority and had increased its efforts in areas
such as internet fraud, health care fraud, and consumer education
targeting at-risk groups such as Hispanic immigrants. Majoras and
Tavares also discussed the possibility of incorporating Brazil into
a multinational consumer complaint database maintained by the FTC.


5. (SBU) Tavares described a planned GoB national security program
that will include a consumer protection component and will utilize a
consolidated state and federal consumer complaint database (launched
in 2005) to identify and focus on regions of the country most in
need of consumer protection assistance. This program will also
incorporate existing GoB consumer education programs at consumer
protection units around the country in order to target teenagers and
young adults. Tavares also described a bill recently introduced in
the Brazilian Congress that would combine the antitrust functions of
the MoJ and the Ministry of Finance (MoF) into those of CADE. The
bill would also revise the country's licensing and anti-cartel
systems.

6. (SBU) In a separate MoJ meeting with Vice Minister Luiz Barreto
and Secretary for Economic Law Tavares, Barreto told Majoras that
the MoJ would be open to strengthening its consumer protection
cooperation with the FTC. He outlined GoB concerns regarding
competition with China and regarding the quality of imported items
from China that may pose a direct danger to consumers. He said it
was easier to police product quality in cases where Chinese-made
products were not entering Brazil using accepted brand names.

BRASILIA 00002326 002 OF 002


Majoras noted the USG is monitoring Chinese implementation of its
new competition law in order to determine the law's overall
effectiveness in light of Chinese market dynamics.

7. (SBU) Tavares told Majoras that, while Brazil was in "good
shape" on competition issues, the country needed further
improvements in addressing consumer protection. She said the GoB
would like to share more information with the USG on its experiences
in working on consumer protection issues with multi-national
companies.

------------------------------------------
Meeting at the Administrative Council for Consumer Defense (CADE)
------------------------------------------

8. (U) Majoras next met with Elizabeth Farina, President of the
Administrative Council for Consumer Defense (CADE) and the
organization's commissioners at CADE headquarters. CADE is an
autonomous GoB agency charged with adjudicating whether business
mergers or suspected cases of anticompetitive business conduct
violate Brazilian antitrust law based on investigations conducted by
the Secretariat of Economic Law at MoJ and the Secretariat of
Economic Monitoring at the Ministry of Finance (MoF). It is
comprised of a Plenary Council or Board with a Chairman and six
Commissioners who are appointed to two-year terms by the Brazilian
President with the consent of the Senate.
This agency has a history of close bilateral cooperation with the
FTC and the meeting explored several technical issues.

9. (SBU) CADE Commissioners were interested in the FTC pre-merger
review process, the respective roles of lawyers and economists at
FTC, the function of Commissioners at the FTC in the case review
process, the role of Administrative Law Judges in the FTC's work,
and the circumstances in which FTC meetings are open or closed to
the public. CADE officials also asked about the U.S. "state action"
doctrine, which limits the ability of antitrust agencies to review
allegedly anticompetitive activities authorized and supervised by
the states. At Farina's request, Majoras agreed to allow the CADE
employee currently working at FTC to participate in pre-merger
review work there. After the meeting, Majoras answered questions
from around 40 CADE employees on the functioning of the FTC in the
U.S.

10. (U) Comment: The Chairman's visit provided an excellent
opportunity to further U.S.-Brazilian information exchange on
antitrust issues and provided an important opening for expanding
U.S.-Brazilian cooperation on consumer protection. End Comment.

11. (U) This cable was cleared by the Federal Trade Commission
delegation.


Chicola

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