AMBASSADOR DISCUSSES FTAA AND OTHER ISSUES WITH

UNCLAS SECTION 01 OF 02 BRASILIA 003047

SIPDIS

SENSITIVE

STATE PLEASE PASS TO USTR
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USDOC FOR 4332/ITA/MAC/WH/OLAC/MWARD

E.O. 12958: N/A
TAGS: PGOV ETRD ETTC MNUC SENV BR FTAA
SUBJECT: AMBASSADOR DISCUSSES FTAA AND OTHER ISSUES WITH
BRAZILIAN LEGISLATORS


1. (U) SUMMARY AND INTRODUCTION, ON DECEMBER 9 AMBASSADOR
MET WITH MEMBERS OF THE BRAZILIAN CHAMBER OF DEPUTIES
FOREIGN AFFAIRS AND DEFENSE COMMITTEE TO REVIEW OUTSTANDING
ISSUES IN THE USG-GOB BILATERAL RELATIONSHIP. ALTHOUGH THE
MEETING AGENDA INCLUDED POTENTIAL TOPICS SPANNING A VARIETY
OF DISCIPLINES, IN REALITY THE LION'S SHARE OF THE
DISCUSSION CENTERED ON FTAA ISSUES. OUR CONGRESSIONAL
INTERLOCUTORS STRESSED A NUMBER OF THEMES, INTER ALIA: THE
IMPORTANCE OF FREQUENT PARLIAMENTARY EXCHANGES BETWEEN U.S.
AND BRAZILIAN LEGISLATORS, THE DESIRABILITY FOR THE GOB TO
CONSULT WITH THE BRAZILIAN CONGRESS AS THE COUNTRY MOVES
FORWARD ON THE FTAA AND OTHER TRADE INITIATIVES, AND THE
NEED FOR U.S. POLICYMAKERS TO UNDERSTAND HOW BRAZIL'S UNIQUE
CULTURAL HERITAGE COMPLICATES GOB DECISION-MAKING ON TRADE
MATTERS. END SUMMARY AND INTRODUCTION.


2. (U) AS PART OF THE EMBASSY'S CONTINUING OUTREACH
EFFORTS, ON DECEMBER 9 AMBASSADOR VISITED THE CHAMBER OF
DEPUTIES TO MEET (INFORMALLY) WITH MEMBERS OF THAT BODY'S
FOREIGN AFFAIRS AND DEFENSE COMMITTEE. PRESENT AT THE
MEETING WERE COMMITTEE CHAIR CARLOS MELLES (PFL),DEP. LUIZ
CARLOS HAULY (PSDB),DEP. FERNANDO GABEIRA (SOCIALIST
PARTY),DEP. LEONARDO MONTEIRO (PT),DEP. IVAN CESAR
RANZOLIN (PP),DEP. ZARATTINI (PT),DEP. FEU ROSA (PP),
FORMER AMBASSADOR TO THE U.S. PAULO TARSO FLECHA DE LIMA
(DESCRIBED BY MELLO AS A "CONSULTANT" TO THE COMMITTEE),AND
MFA NORTH AMERICAN DESK OFFICER PAULO ALVARENGA.
ACCOMPANYING THE AMBASSADOR FROM THE U.S. SIDE WERE EMBASSY
POLCOUNS, ECONCOUNS, CONSUL, PRESS OFFICER, AND FO SPECIAL
ASS'T.


3. (U) IN HIS OPENING REMARKS, COMMITTEE CHAIR MELLES
NOTED THE IMPORTANCE OF THE U.S.-BRAZIL BILATERAL
RELATIONSHIP AND STRESSED THE NEED FOR CONTINUED
PARLIAMENTARY EXCHANGES BETWEEN THE U.S. CONGRESS AND THE
CHAMBER OF DEPUTIES. MELLES NOTED THAT COMMITTEE MEMBERS
HAD RECENTLY TRAVELED TO THE U.S. PURSUANT TO A PAS-
SPONSORED PROGRAM AND THAT THIS TRIP HAD PROVED TO BE
EXTREMELY WORTHWHILE. MELLES URGED THE EMBASSY TO PROMOTE
FURTHER SUCH ENGAGEMENT, EITHER UNDER OAS AUSPICES OR
PURSUANT TO AD HOC CODELS. HE SUGGESTED BOTH SIDES SEEK TO
CREATE A FORMAL EXCHANGE BETWEEN THE TWO CONGRESSES. ON
SUBSTANTIVE ISSUES, MELLES QUERIED THE AMBASSADOR ABOUT U.S.
POLICY WITH RESPECT TO NUCLEAR ACTIVITIES BY ROGUE NATIONS
SUCH AS NORTH KOREA AND IRAN, ADDING THAT BRAZIL WANTS PEACE
AND THAT THE U.S. HAS A SOMEWHAT RIGID POINT OF VIEW.


4. (U) AMBASSADOR SAID THAT NUCLEAR PROLIFERATION AND
CONTROLS GO HAND IN HAND, AND THAT TOO MANY "BAD GUYS" HAVE
WEAPONS. REGARDING NORTH KOREA, THE USG BELIEVES THAT THE
BEST APPROACH TO ADDRESSING ITS NUCLEAR WEAPONS IS VIA THE
SIX PARTY TALKS. HE EMPHASIZED THAT THIS IS NOT A
UNILATERAL PROCESS, BUT RATHER A MULTILATERAL APPROACH. HE
CONTINUED SAYING THAT THE SITUATION WITH IRAN IS MORE
COMPLICATED, AS IT IS LESS CLEAR, LESS KNOWN, AND MORE
SUSPECT. HE ADDED THAT THE U.S. HAS A DISARMAMENT PROGRAM,
AND THAT WE COULD LEAD SUCH AN EFFORT, BUT THAT THIS CANNOT
BE UNILATERAL. HE SAID THAT BRAZIL HAS COMMUNICATED ITS
RELUCTANCE TO HAVE THE ISSUE GO TO THE U.N., AND ASKED WHY
HAS BRAZIL TAKEN SUCH A POSITION? WOULDN'T IT BE BETTER, HE
ASKED, FOR MORE COUNTRIES TO KNOW AND ADDRESS THE SITUATION?


5. (U) AMBASSADOR THEN SPOKE REGARDING THE CURRENT STATE OF
U.S.-BRAZIL RELATIONS, FOCUSING ON THE CHALLENGES THE
PRESIDENT FACED IN HIS UPCOMING SECOND TERM. ON THE TRADE
FRONT, THE AMBASSADOR NOTED, THE U.S. AND BRAZIL WOULD NEED
TO WORK TOGETHER IN BOTH THE WTO DOHA ROUND AND THE FTAA TO
ENSURE THAT THESE EFFORTS PROVED TO BE SUCCESSFUL.
AMBASSADOR OBSERVED THAT BRAZIL NEEDED TO AVOID THE MIND-SET
THAT IT WAS THE USG THAT WAS NEGOTIATING THE FTAA, WHEN IN
REALITY BOTH THE GOB AND THE U.S. WERE CO-CHAIRS AND NEARLY
ALL THE COUNTRIES IN THE HEMISPHERE HAD A STRONG STAKE IN
THE OUTCOME. HE SAID THAT THE USG POSITION IS CLEAR: FREE
TRADE WILL BRING ABOUT ECONOMIC AND SOCIAL MEANS OF
BETTERMENT, BOTH FOR AMERICAN AND BRAZILIAN BUSINESSES AND
CONSUMERS. RESPONDING TO MELLE'S COMMENT THAT BRAZILIANS
ARE ESPECIALLY SENSITIVE WHEN THE U.S. CRITICIZES BRAZIL,
THE AMBASSADOR SAID THAT WE RECOGNIZE BRAZIL'S SENSITIVITY,
BUT THAT WE ALSO NEED TO RECOGNIZE THE FRUSTRATION OF NOT
DOING ENOUGH TO MOVE FORWARD THE NEGOTIATIONS.


6. (U) AFTER A BIT OF PROMPTING FROM COMMITTEE CHAIR
MELLES, DEP. GABEIRA PROVIDED HIS INPUT ON BOTH TRADE AND
ENVIRONMENTAL QUESTIONS. SPECIFICALLY, GABEIRA NOTED THAT
THE BILATERAL RELATIONSHIP WITH THE U.S. COVERED MORE THAN
JUST THE FTAA, ALTHOUGH TRADE NEGOTIATIONS OFTEN GARNERED A
DISPROPORTIONATE SHARE OF COVERAGE BY THE PRESS. WHAT WAS
NEEDED, HE CONTINUED, WAS NEGOTIATION OF AN AGREEMENT THAT
WOULD SERVE BOTH SIDES' INTERESTS. THE USG, HE STATED,
NEEDED TO KEEP IN MIND AT ALL TIMES BRAZIL'S UNIQUE
CULTURAL/CATHOLIC HERITAGE AS IT DEALT WITH THE GOB. (SEE
PARA. 8 BELOW FOR MORE ON THIS POINT). GABEIRA ALSO
INQUIRED ABOUT THE USG'S POSITION ON THE KYOTO PROTOCOL,
INQUIRING AS TO WHETHER AN ALTERNATIVE WOULD BE PROPOSED.
THE AMBASSADOR RESPONDED THAT NOTWITHSTANDING THE OBJECTIONS
THE USG HAD TO THE TREATY, AN ALTERNATIVE MAY BE
FORTHCOMING, AND BOTH FEDERAL AND STATE GOVERNMENTS IN THE
U.S. WERE MOVING FORWARD ON CLIMATE CHANGE ISSUES. HE ADDED
THAT SOME STATES HAVE INCORPORATED THEIR OWN PROTOCOL, MORE
RIGOROUS THAT KYOTO, SUCH AS IN HIS HOME STATE OF
CALIFORNIA.


7. (U) AMB. FLECHA DE LIMA (NOW RETIRED FROM THE MFA)
PROVIDED HIS PERSPECTIVE ON THE GENESIS OF THE FTAA. HE
NOTED THAT WHILE BRAZIL WAS A HEMISPHERIC GIANT, ITS ECONOMY
WAS NO RIVAL TO THAT OF THE U.S. THE INHERENT ASSYMETRIC
NATURE OF THE RELATIONSHIP, HE SAID, REQUIRED BRAZIL TO SEEK
SAFEGUARDS TO PROTECT ITS VULNERABLE INDUSTRIES. THIS VIEW,
HE CONTINUED, WAS AS MUCH THE CASE TODAY AS WHEN HE WAS IN
THE FOREIGN MINISTRY.


8. (U) DEPUTADOS MONTEIRO, ROSA, AND ZARATTINI THEN SPOKE
ABOUT THEIR VIEWS REGARDING THE PROPER ROLE OF CONGRESS IN
THE FTAA NEGOTIATIONS. IN ESSENCE, THEY MADE THE POINT THAT
THE GOB NEEDS TO CONSULT THE RELEVANT CHAMBER/SENATE
OFFICIALS EARLY AND OFTEN, AS WAS THE CASE IN UNITED STATES.
FOREIGN TRADE RELATIONS, THEY FELT, WAS AN ISSUE TOO
IMPORTANT TO BE LEFT TO DIPLOMATS AT ITAMARATY (I.E., THE
FOREIGN MINISTRY). ONLY INPUT FROM ELECTED OFFICIALS COULD
ENSURE THAT THE TRADE POLICY THAT ITAMARATY ADOPTED TRULY
REFLECTED BRAZILIAN NATIONAL INTERESTS AND WOULD BE
REPRESENTATIVE OF THE DEMOCRATIC PROCESS. COMMITTEE CHAIR
MELLO POINTED OUT THAT AT TIMES BRAZIL'S CATHOLIC HERITAGE
(SEE PARAGRAPH 6 ABOVE) LED POLICYMAKERS INTO THINKING THAT
MAKING A PROFIT WAS A SIN. THIS BIAS NEEDED TO BE
CORRECTED, HE ADDED, SINCE IT DID NOTHING TO ADVANCE TRADE
RELATIONS WITH KEY PARTNERS SUCH AS THE U.S. IN CLOSING,
DEPUTADO HAULY, WHO IS ALSO COORDINATOR FOR THE U.S-BRAZIL
LEGISLATIVE CAUCUS, PROPOSED THAT THE TWO COUNTRIES PREPARE
A WORK-PLAN FOR PROMOTING INCREASED PUBLIC INFRA-STRUCTURE
INVESTMENT IN BRAZIL.


9. (SBU) COMMENT. ALTHOUGH IN THEIR COMMENTS OUR
INTERLOCUTORS WERE GENERALLY SUPPORTIVE OF EXPANDED U.S.-
BRAZIL TRADE INTEGRATION, BASED UPON PAST EXPERIENCE WE KNOW
THAT SOME OF THEM HOLD CRITICAL VIEWS OF THE FTAA PROCESS.
WHILE IT WILL BE DIFFICULT TO CHANGE DEEPLY-INGRAINED
ATTITUDES, OUR HOPE IS THAT INCREASED DIALOGUE -
PARTICULARLY WITH U.S. PARLIAMENTARY COUNTERPARTS - WILL
LEAD SOME TO REEXAMINE THEIR OPPOSITION. EMBASSY WILL
CONTINUE WITH ITS OUTREACH TO KEY LEGISLATORS NOT ONLY ON
FTAA ISSUES BUT ON THE FULL RANGE OF OUR BILATERAL CONCERNS.

DANILOVICH