BRAZILIAN VICE-PRESIDENT ALENCAR HELPS LAUNCH THE

UNCLAS SECTION 01 OF 02 BRASILIA 000603

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E.O. 12958: N/A
TAGS: ETRD ECPS EAGR KIPR PGOV PREL BR CH
SUBJECT: BRAZILIAN VICE-PRESIDENT ALENCAR HELPS LAUNCH THE
CHINA-BRAZIL HIGH-LEVEL COMMITTEE ON CONSULTATION AND COOPERATION

REF: A) SAO PAULO 009, B) 2005 BRASILIA 2804, C) 2005 BRASILIA 2367,
D) 2005 BRASILIA 2295


1. (SBU) Summary. Brazilian Vice-President Jose Alencar's March
19-24 trip to Shanghai and Beijing generated little notice here as
both the public and the press instead devoted their attention to
domestic issues. While in years past the creation of the
China-Brazil High-Level Committee on Consultation and Cooperation
(COSBAN) by Alencar and PRC Deputy Prime Minister Wu Yi might have
sparked greater curiosity among Brazilian circles, the plethora of
Brazilian-Chinese summits, exchanges, and working groups since 1994
- i.e., when the two countries initiated their "strategic
partnership" -- has made such news seem mundane. In addition,
Alencar's lame-duck status -- he will not be President Lula's
running mate in the upcoming October 2006 elections -- could have
been a contributing factor in this regard. All that said, both
sides appear to be committed to trying to find a way to make
"South-South" cooperation mutually beneficial. If the Brazilian
government were to place such emphasis on intensifying its ties to
the U.S., relations between the U.S. and Brazil would certainly be
much closer. End Summary.

Enhanced Dialogue
--------------

2. (SBU) From the Brazilian perspective, the highlight of
Alencar's trip was the kick-off of the China-Brazil High-Level
Committee on Consultation and Cooperation (COSBAN),which took six
previously-existing working groups (on Political Consultations,
Economic/Commercial Affairs, Science and Technology, Space
Technology, Cultural Affairs, and Agriculture) and put them under a
coordinating committee. The Political Consultation, Cultural
Affairs, and Agriculture Committees then met; sessions of the
remaining three committees are scheduled for later in the year.

Wide Array of Joint Activities
--------------

3. (U) The 17-page report of the COSBAN meeting published by the
Brazilian Ministry of External Relations demonstrates the extent to
which both sides are seeking to construct a comprehensive working
partnership. The parties agreed to intensify bilateral cooperation
in the areas of agriculture, phyto-sanitary and zoo-sanitary
standards, biotech and biosafety, energy, mining, information
technology, infrastructure, and quality control and high technology,
while promoting private sector joint ventures and exchanges on
software and banking automation. In addition, both countries
resolved to push forward on projects in such diverse areas as steel
production, aluminum, gas pipeline construction, electricity
generation, container scanning, petroleum and regional aviation.
Specifically, in the report the parties pledge to support the
establishment of direct flights between Brazil and China (Varig and
AirChina already code-share, with flights stopping in Frankfurt) and
to conclude as soon as possible negotiations on a bilateral customs
agreement. Finally, the countries inked six bilateral pacts: three
on phyto and zoo-sanitary issues and one each on cultural and
educational cooperation, information technology and
telecommunications, and government-to-government dialogue on
financial issues.

Comment
--------------

4. (SBU) As reftel C ("Chinese Economic Involvement in Brazil --
Largely Trade Driven") makes clear, when looking at
Brazilian-Chinese engagement it is always difficult to tell how much
of the tremendous diplomatic energy devoted to this endeavor ends up
generating light and how much is dissipated as heat. According to
the press, Brazil and China have signed nearly 100 bilateral trade
agreements, the majority of them within the past 15 years. However,
projects announced with great fanfare to the press often fizzle out
later when the public spotlight has turned elsewhere. For instance,
the Brazilian government is currently selecting a digital TV
standard and three consortia, one European, one Japanese, and one
American, have been competing for several years. With a decision
only weeks away, Beijing jumped into the fray during Alencar's trip
when Chinese Ministry of Culture officials presented the Brazilians

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with a proposal to develop a joint Chinese, Indian and Russian
standard. Brazilian policymakers do not appear to be taking this
last-minute offer seriously.


5. (SBU) Moreover, even in the trade area, which is the bulk of
the Brazil-China relationship so far, Brazilian business is having
increasing concerns about competing with low-cost Chinese textiles,
shoes and toys. As Ref B notes, the Government of Brazil has had to
put in place a framework for imposing safeguards to protect its
vulnerable domestic industries from the flood of Chinese imports --
even as minerals exporters like CVRD grow even richer off the
Chinese iron ore market.


6. (SBU) Nevertheless, what is remarkable is the effort that
Brazil is putting into making this "South-South" relationship work.
Alencar brought with him on his trip key figures from the Ministries
of Agriculture, Finance, External Relations, Education, Mines and
Energy, Culture, Tourism, Science and Technology, and Development,
Industry, and Commerce, as well as the head of the Brazilian Space
Agency and telecom regulatory officials. Alencar's trip follows a
series of high-level exchanges, including an exchange of
head-of-state visits between Lula and Chinese President Hu Jintao in
2004 and a trip to China by then Brazilian Vice-President Marco
Maciel in 1999. Indeed, while Alencar was in China, Lula received
outgoing Chinese Ambassador Jiang Yuande and declared to the press
that Brazil would maintain its current policy of giving priority to
developing its ties to China. If the Brazilian government were to
place such emphasis on intensifying its ties to the U.S., relations
between the U.S. and Brazil would certainly be much closer.

Linehan