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Cablegate: August 4-5 Visit of U.S. National Security Advisor

DE RUEHBR #1113/01 2472103
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E.O. 12958: DECL: 09/03/2019


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1. (C) Summary: In an August 4-5 visit to Brasilia dominated
by Brazilian concerns over USG intentions and the regional
implications of expanded U.S. access to Colombian military
bases, National Security Advisor General James L. Jones
assured senior GOB officials that President Obama desires a
transparent relationship with Brazil and wants to expand our
bilateral cooperation. The GOB encouraged greater U.S.
dialogue and engagement with Venezuela, Bolivia, and Cuba,
and more forceful U.S. action against the de facto government
in Honduras. In discussions concerning the Middle East peace
process, Iran, and non-proliferation, General Jones made
clear to Brazilian officials that Brazil,s growing
international role implied taking greater responsibility.
GOB officials described a Brazil that is seeking ways to
expand its global economic reach: ready to become an IMF
creditor, to finalize a global trade agreement, to engage in
bilateral and regional cooperation on energy, and to tackle
the difficult issues surrounding climate change. Although
the Colombia bases issue caused longstanding regional
security concerns to resurface, GOB officials were
complimentary of the new Administration,s initial approach
to Latin America and expressed interest in looking for new
ways to cooperate. End summary.

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- - - Colombia Bases Dominate, with Venezuela Sub-Text - - -

2. (SBU) General Jones, joined by State U/S for Arms Control
and International Security Ellen Tauscher, Defense U/S for
Acquisitions, Technology and Logistics Ashton Carter, and NSC
Director for South America Luis Rosello, met with Foreign
Minister Celso Amorim, Presidential Foreign Policy Marco
Aurelio Garcia, Defense Minister Nelson Jobim, Casa Civil
Minister (Chief of Staff) Dilma Rousseff, Mines and Energy
Minister Edison Lobao, Petrobras CEO Sergio Gabrielli,
Central Bank President Henrique Meirelles, and a number of
other MRE, Defense, Energy, and Presidency officials, as well
as senior opposition and business figures. Ref B addressed
energy issues discussed during the visit.

3. (C) The Amorim, Garcia, Rousseff, and Jobim meetings all
included lengthy discussions of the Colombia bases issue.
Amorim ran through a series of questions that the news of the
bases had raised, recalling alleged statements in the past by
(unnamed) U.S. military officers suggesting that the
Argentina-Brazil-Paraguay tri-border area might be a
"legitimate U.S. target" if terrorist activity were
discovered there, and that "U.S. Congressional reports"
accusing Venezuela of supporting drug trafficking (a
reference to a recent GAO report), combined with the stated
counternarcotics mission of the bases, raised concern that
they might be used to launch actions against Venezuela.
Amorim said that what for the United States was "business as
usual" was exacerbating tensions in a sensitive (and in
Chavez's case, hypersensitive) region.

4. (C) Garcia said he appreciated the frankness of the
dialogue and expected that we would overcome the current
"malaise." He noted that President Lula would meet Colombian
President Uribe later that week, and that Garcia had spoken
with Venezuelan President Chavez about the issue; in his
view, Chavez did not see it as a big problem, but the issue
"smelled of Cold War" and was surprising to the GOB after the
"very positive" overtures by the Administration and
considering that, in his view, the FARC had never been so
weak and the only security threat to the United States in
Latin America comes from Mexico. Garcia dismissed the
discovery in FARC hands of Swedish anti-tank weapons that had
been sold to the Venezuelan government as overblown noting
that the weapons were old and that, in any case, they would
be of limited value since "there are no tanks in insurgency
conflicts." Garcia added that he did not believe the GOV was
supporting the FARC because "the FARC is involved in drug
trafficking, and everyone knows that involvement with the
drug trade is destructive." He noted that the current crisis
is the continuation of a longstanding love-hate relationship
between Colombia and Venezuela, and that this was the third

BRASILIA 00001113 002.2 OF 004

Colombia-Venezuela crisis that he had had to deal with.
Garcia stressed that Brazil's overriding interest is in
ensuring a peaceful region that can live with the differences
among countries, and cited this as the reason Brazil supports
the Colombia-U.S. Free Trade Agreement.

5. (C) Dilma Rousseff told Gen. Jones that the GOB finds it
disconcerting to be faced with questions from the press
regarding why the United States needs such bases. According
to Rousseff, issues such as this open the door for radicals
who want to create problems in the region. Gen. Jones
emphasized Colombia's need for assistance in maintaining its
security against drug traffickers and the FARC, and then
recounted Uribe's concerns that his fight against the FARC
was made more difficult because of FARC positions in other
countries. In all three meetings, Gen. Jones explained the
nature of the agreement as largely formalizing the current
relationship. He said he was willing to send a team of USG
civilian and military officials to provide additional
information, but stressed that it was unfortunate that others
were playing up this issue in the press since USG officials
including himself were available to talk whenever GOB
officials had concerns about USG actions.

6. (C) Jobim told Gen. Jones that Brazil has great
expectations of the Obama Administration, noting that
transparency was a very important component of the U.S.
relationship with South America. He noted that issues like
the Colombia bases become more difficult when the GOB learns
of them through the press, but added that Brazil, too, is
often surprised by the sensitivities of "Spanish America"
regarding issues that would be considered innocuous
elsewhere. Gen. Jones encouraged Jobim to call if there were
further doubts about U.S. intentions.

7. (C) While insisting they did not want to engage in
mediation between the USG and GOV, both Garcia and Amorim
used the opportunity to encourage the United States to
establish "a direct channel of communication with President
Chavez." Amorim suggested that a good USG-GOV dialogue would
have an impact on the domestic situation in Venezuela, as
well, because much of the opposition to Chavez has ties to
the United States.

- - - Other Regional Issues on Brazil,s Mind - - -

8. (C) With regard to Honduras, Amorim said that Chavez had
wanted to make President Zelaya "a martyr," but the GOB had
convinced him that "only the United States can influence what
happens in Honduras" and needed to be consulted. Amorim said
he had declined OAS SYG Insulza's request to participate in a
foreign ministers' group, saying that the prospects had
"slipped" since the Arias initiative had begun. He felt that
the possibility of the de facto government rejecting yet
another initiative made it too risky. Amorim described USG
actions against the de facto government as "surface
scratches" that were not deep enough to do damage. There had
been enough concessions to Micheletti, he said. The United
States needs to tell him in clear terms that he must allow
Zelaya back. The situation in Honduras needs a resolution
that is "both quick and peaceful," Amorim said, although he
recognized the difficulty of achieving both. For his part,
Garcia noted that President Zelaya would be coming to Brazil
shortly, and encouraged the USG to apply stronger pressure on
the de facto government to allow Zelaya to be restored to
power quickly*he suggested revoking more visas. Garcia
stressed that Zelaya "is not a dangerous revolutionary," that
returning him to power to run the elections "will not lead to
significant changes," and that the de facto government cannot
be allowed to run elections.

9. (C) Garcia said that Brazil is seeking to increase its
investment in Bolivia, and particularly to compensate for
Bolivia's lost ATPDEA benefits. Amorim called removal of
ATPDEA benefits "a mistake." Garcia said that there no
longer appeared to be grave problems in Bolivia, but stressed
that it was important for the USG to build a positive agenda
with Bolivia.

10. (C) Garcia said that the USG "embargo" (sic) on
Brazilian sales of Super Tucano aircraft in the region was
"very negative" and raised serious questions in Brazil
regarding defense cooperation with the United States. If the

BRASILIA 00001113 003.2 OF 004

United States is going to place limits on what Brazil can do,
then partnership "is no good" for Brazil. Tauscher and
Carter explained to Garcia, as well as to Amorim and
Rousseff, that the Administration recognized the need to
overhaul the procedure for protecting technology. Tauscher
stressed that there is no embargo and that, going forward,
such decisions will be made on a case-by-case basis taking
into account the impact they might have on Brazil.

11. (C) Jobim stressed the importance of regional stability
for Brazil, but cautioned that Brazil resists being labeled
the regional leader because they do not see it as helpful in
resolving problems. Brazil's concessions to Paraguay on the
Itaipu dam were an example of Brazil putting stability
interests over commercial interests, an approach that many in
Brazil criticized.

12. (C) Discussing Cuba, Garcia and his deputy, Amb. Marcel
Biato, laid out their view that Raul Castro is more pragmatic
and less ideological than Fidel, with a focus on getting
short-term economic results. They see Cuba as taking a path
similar to that of Vietnam under Raul, whom they acknowledged
was a transitional leader. Given that the United States has
a relationship with Vietnam, Garcia said, there is no reason
the United States can't have a similar relationship with
Cuba. In their view, Brazilian support for Cuba and efforts
to "create a new niche" for Cuba in the hemisphere open
additional space that Raul needs to engage the United States.
They noted that their plans to help Cuba construct a
deep-water port at Mariel only make sense on the assumption
that Cuba and the United States will eventually develop a
trading relationship.

- - - Middle East, Iran, Non-Proliferation - - -

13. (C) FM Amorim and MRE Under Secretary for the Political
Affairs II Roberto Jaguaribe told Gen. Jones that they had
heard from the Palestinians how pleased they were with his
appointment and listened keenly to his assessment of the
situation following his trip to the region the previous week.
Jaguaribe said it is the GOB's view that the
Israel-Palestine conflict is the key to resolving most
questions in the Middle East. He stressed that Brazil was
pleased with the Annapolis process, but acknowledged that
neither Israel nor the Arabs seemed to want it to continue.
Referring to his trip to the Middle East in 2008, Amorim
highlighted the importance of engaging Syria in the process.

14. (C) Amorim praised the "excellent" opening to Iran made
by President Obama--"If they don't respond," he asked, "then
what do they want?" Amorim described the Brazil-Iran
relationship as "not deep, but pragmatic" and dominated by
commercial concerns. He said the nature of the relationship
should not be "overvalued"--"we are not buddies"--but that
there is a channel between them, and Brazil was willing to
help if it can, although "not just to pressure" Iran.
Petrobras CEO Gabrielli told Gen. Jones that Petrobras is
terminating exploratory activity in Iran, although a small
office will be left open. Amorim and other officials
expressed concern that there might be an effort to prevent
Iran from pursuing enrichment even for peaceful purposes, and
Amorim said, in particular, that the "zero-for-zero" approach
"did not sound right." Gen. Jones told both Garcia and
Amorim that we would be pleased to share our views on Iran as
the process moves forward.

15. (C) All GOB interlocutors stressed the importance of the
President's initiative on disarmament, which Amorim
characterized as "the best argument for non-proliferation."
U/S Tauscher noted the importance of Brazil in the 2010
review conference on the NPT and asked for Brazil's
assistance in making it productive. (Note: See also ref A
on State/NSC discussions with GOB officials on
non-proliferation. End note.)

- - - Prospects for Defense Partnership - - -

16. (C) Jobim highlighted the fact that Brazil's new
National Defense Strategy was crafted to ensure the defense
sector would be an "enabler of development." Brazil is no
longer an "off the shelf" buyer of defense equipment.
Rather, it wants to be a partner in joint ventures with
countries that want to sell equipment. Jobim said that, as a

BRASILIA 00001113 004.2 OF 004

lawyer and judge, he is inclined to look at precedents when
considering the possibilities for technology transfer. The
U.S. precedents "are not very encouraging." Tauscher and
Carter acknowledged the complexity and history attached to
the relationship, suggesting we focus on the way forward: a
relationship of full partnership that allows both parties to
prosper. (See ref C for additional reporting on their

- - - A Dissenting View - - -

17. (C) Former Brazilian ambassador to London and Paris and
communications minister Sergio Amaral and former agricultural
minister Roberto Rodrigues criticized GOB foreign policy for
being too ideological. Arguing that foreign policy had
become politicized under Lula to compensate for his orthodox
economic policies, Amaral described it as too lenient with
South American neighbors, favoring leftist governments in the
region rather than remaining in a position to resolve
disputes, and focused too heavily on South-South relations
and too little on relations with the United States.
Rodrigues criticized Brazil's rejection of the Free Trade
Area of the Americas (FTAA), saying it had hurt the Brazilian

- - - Trade and Finance - - -

18. (SBU) Noting the excellent relations President Lula had
with President Bush, Garcia stressed the "enormous
expectations" that Brazil has for President Obama, adding
that he saw "extraordinary possibilities" for the United
States coming out of the current economic crisis.

19. (C) Amorim commented that countries had gone a long way
toward concluding the Doha trade round, but criticized the
current U.S. position, saying it seemed to be identical to
that of the last Administration. Gen. Jones stressed that
the United States wants to see a "balanced and ambitious"
Doha agreement, and U/S Tauscher noted the difficulty the
President faced in recasting the trade agenda to the American
people in the midst of a recession. Amorim said he believed
the last Administration had "lost sight of the big picture,"
and encouraged greater political-level involvement from the
USG, saying that "trade negotiations cannot be left to the
trade negotiators."

20. (SBU) Brazilian Central Bank Governor Henrique Meirelles
told Gen. Jones he anticipated the September G20 meeting
would focus on regulation of the global financial system, and
confirmed that although Brazil had not yet made its USD 10
billion disbursement to the IMF, "it will happen." Regarding
the global financial crisis, Meirelles credited Brazil's
relatively strong position in part to strong domestic demand.
He also pointed to the fiscal austerity law, passed
following the financial crisis of the 1990s, which brought
down domestic debt and allowed Brazil to become a net foreign
exchange creditor. He indicated that the bigger surprise was
that Brazil had been affected as much as it was; a fact he
attributed to Brazilian reliance on foreign commercial credit
for financing. This problem however, had been mitigated by
the low level of credit in Brazilian society, previously as
low as 22 percent of GDP, now at 43 percent, compared to over
200 percent in the United States.

21. (C) In response to a question from Ambassador Sobel
regarding the increasing discussion around countries
abandoning the dollar in favor of local currencies in
bilateral trade transactions, Meirelles commented that "it is
happening and is operationally positive." Meirelles noted
that, due to the large number of goods traded internationally
that are priced in dollars, the volume of goods traded in
local currency is never going to be too high.

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