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Cablegate: Brazil: New Leadership Gives Green Light to Creating A

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RR RUEHAST RUEHDH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHRG RUEHSL
RUEHTM RUEHTRO
DE RUEHBR #1426/01 3421220
ZNR UUUUU ZZH
R 081218Z DEC 09
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 0036
INFO ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHRG/AMCONSUL RECIFE 0021
RUEHRI/AMCONSUL RIO DE JANEIRO
RUEHSO/AMCONSUL SAO PAULO

UNCLAS SECTION 01 OF 03 BRASILIA 001426

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: SENV EFIN EAID KGHG BR
SUBJECT: BRAZIL: NEW LEADERSHIP GIVES GREEN LIGHT TO CREATING A
TROPICAL FOREST CONSERVATION ACT PROGRAM

(U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR INTERNET
DISTRIBUTION.

1. (SBU) SUMMARY. The Government of Brazil (GOB) on November 30
informed the U.S. Government (USG) that it wants to establish a
debt-for-forest program under the Tropical Forest Conservation Act
(TFCA). The GOB submitted specific changes it wanted to make in
the proposed text of an agreement creating such a program, which
draft text the USG had submitted in October 2008. This step
forward follows a changing of the guard near the top of the
Ministry of External Relations. Now, the GOB - not just the
Environment Ministry - is favorable toward creating a TFCA program
and is eager to finalize the text and bring the program to life. A
successful conclusion of the TFCA negotiations could be helpful for
the bilateral relationship in general and specifically with respect
to the anticipated negotiations of a forest credit/offset agreement
under U.S. climate change legislation now in the U.S. Congress.
END SUMMARY.

2. (SBU) On November 30, the Government of Brazil (GOB) through
its Embassy in Washington informed the U.S. Government (USG) that
it would like to establish a program under the Tropical Forest
Conservation Act (TFCA) and provided detailed changes they would
like to see in the draft text presented by the USG in October 2008.
Shortly afterwards, in a December 2 meeting about climate change
the Ministry of External Relations' (MRE) Under Secretary for
Policy, Ambassador Vera Machado, raised the matter of a TFCA
agreement with Charge d'Affaires, a.i. Lisa Kubiske. Machado
indicated that the MRE thought a TFCA agreement was important and
wanted to conclude it soon. Earlier in November, the MRE's new
Secretary-General (or Deputy Minister) Antonio Patriota had told
the Charge that the GOB wanted to establish a TFCA program and
promised to have a detailed response, with their suggested changes,
by November 30.

3. (SBU) COMMENT. Deputy Minister Patriota, who just assumed
office a month ago, and Ambassador Machado, who arrived less than a
year ago, are key new faces handling bilateral and multilateral
matters filling the senior ranks of the MRE. Previously, the GOB's
response to the USG's TFCA proposal, which had been prepared by
staff many months ago, just sat on the desk of Patriota's
predecessor. While the TFCA matter has come up from time to time
with Minister of External Relations Celso Amorim, it seems that
Amorin has been content to let the Deputy Minister handle the
matter. His previous Deputy Minister chose not to send the USG a
response even though the Ministry of Environment had been pushing
hard to do so. In contrast, Patriota within his first month
presented a clear signal that the GOB wants at TFCA program and
provided a detailed response to the draft text. Moreover, the MRE
through Machado is now pressing the USG to move quickly. The
recent changeover in the senior positions at the MRE have opened
the door for better ties and greater cooperation with Brazil, not
just with environmental matters, such as in the case of the TFCA,
but also in a variety of other areas. END COMMENT.

NEXT STEPS

4. (SBU) Science Counselor met on December 2 with the MRE's
Director of the Environment Division, Fernando Coimbra, and his
deputy Pedro Andrade (who will soon replace Coimbra, at least on an
acting basis) to discuss next steps. Coimbra recognized that now
the MRE at the political level was behind concluding a TFCA
agreement. He said that for the GOB the best way to proceed would
be to receive written comments back from the USG to the suggest
changes, indicating what was acceptable and what was troublesome or
not possible. With that information, the MRE, which leads in these
negotiations, would hold an inter-ministerial meeting to decide how
to respond. After that, the USG and GOB could hold negotiations,
either by videoconference or, even better, face-to-face. Coimbra
felt strongly that this two-step approach was better than going
directly to a videoconference or face-to-face meeting.

BRASILIA 00001426 002 OF 003


5. (SBU) The Environment Ministry is eager to go forward because
they want to start up conservation programs in the tropical forests
of the Mata Atlantica, as soon as possible, and also for concern
that continued repayment of the debt might reduce the amount of
funds available below the US$20 million level under consideration.
We understand the Finance Ministry is supportive of having a TFCA
program, though they would have preferred to include the entire
debt to the United States and not just US$20 million.

6. (SBU) Assuming that both sides come to acceptable language for
the TFCA agreement, the GOB would have one more step to take, i.e.,
submit it for approval to the Senate for fast-track approval.
Ordinarily, a bilateral agreement such as the TFCA would need to be
approved by both chambers of the Brazilian congress. However,
during the September 2008 negotiating session, the GOB identified a
way to configure the agreement as essentially a financial
arrangement, which means it would only need to go to the Senate and
on a fast-track procedure. The GOB estimated that it would take
approximately three months for the Senate to approve the
arrangement. With Senate approval, then the TFCA could then enter
into force.

KEY SUGGESTED CHANGES

7. (SBU) The specific changes requested by the GOB have already
been provided to the State Department, the Treasury Department, and
USAID. Patriota summarized for the Charge in a brief non-paper the
main amendments requested, which are:

- the resources should be directed to Brazilian tropical forests
that do not currently benefit from international cooperation,
namely, the Mata Atlantica (along the east coast), the Cerrado (in
the central-west), and the Caatinga (in the north-east);

- the resources should go to "Brazilian" non-governmental
organizations (NGOs), governmental agencies and other appropriate
local or regional entities (NOTE: Almost all the NGOs operating in
Brazil are "Brazilian," including The Nature Conservancy, World
Wildlife Fund, etc. END NOTE.);

- the agreement should stipulate how the U.S. Government will
declare that the Brazilian debt has been paid (The GOB is proposing
that USAID issue a document called a "quittance" as a written
acknowledgement (receipt)discharging the GOB after each installment
is paid);

- changes should be made in the criteria for composition of the
board.

COMMENT

8. (SBU) A sea change within the MRE's decision makers has now
cleared the way to proceed forward in establishing a TFCA
agreement. The suggested changes are not trivial and will require
careful analysis by the USG. Nonetheless, the new goodwill
unveiled by the GOB and the USG's long-standing support for a TFCA
program in Brazil provide a solid basis for going forward,
understanding that, in the end, it simply might not be possible
The ramifications of the TFCA negotiations will likely be felt in
other areas. The GOB team working on the TFCA agreement will is
also the same one handling work on bilateral and multilateral
environmental issues. Most notably, this GOB team will probably be

BRASILIA 00001426 003 OF 003


basically same as that team that will handle negotiations of a
bilateral agreement on forest conservation, offsets and credits, as
called for in the draft climate legislation in the U.S. Congress.
That climate change agreement will involve several magnitudes
larger sums. Success with the TFCA negotiations would be a helpful
start to those subsequent negotiations. Furthermore, the TFCA
matter is one of the first matters to come up for Deputy Minister
Patriota and his team, as they try to improve relations with the
United States. We should give it our best efforts to try to
successfully conclude those negotiations. END COMMENT.

KUBISKE
KUBISKE

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