BILATERAL COOPERATION WITH BRAZIL ON BIOFUELS

UNCLAS BRASILIA 000773

SIPDIS

STATE PASS USTR:MSULLIVAN
DOE FOR GWARD/SLADISLAW
NSC FOR CRONIN
USDOC FOR 3134/USFCS/OIO/WH/EOLSON
USDOC FOR 4332/ITA/MAC/WH/OLAC/MWARD
USDA FOR FAS/ITP AND FAS/FAA/WH
STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE
STATE PASS EXIM FOR NATALIE WEISS, COCONNER
STATE PASS USTDA FOR AMCKINNEY
TREASURY FOR OASIA:FPARODI
AID/W FOR LAC/AA

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ENRG KSCA EAGR TRGY EINV ETRD BR
SUBJECT: BILATERAL COOPERATION WITH BRAZIL ON BIOFUELS



1. (SBU) Summary and Action Request. In view of the President's
State of the Union address calling for expanded U.S. use of ethanol
and Brazil's desire for closer ties to the United States in this
area, Mission would like to stage a bilateral conference with
Brazilian government and industry on ethanol/biodiesel issues.
Prior to moving forward, however, we need guidance from the
interagency community on what approach we should pursue regarding
biofuel cooperation with Brazil. In addition, we welcome
Washington's input on the topics that might be most effectively
addressed in such an event. To cull the views of the various
concerned agencies (State, DOE, AID, USTR, USDA, Commerce, Treasury,
NSC, etc.),post suggests that a Sub-PCC level meeting be called to
expeditiously discuss the matter. End Summary and Action Request.


2. (SBU) While Brazil and the USG are at odds on a number of
high-profile issues (FTAA, WTO, UNSC expansion, among others),given
increasing sentiment in the United States in favor of renewable
fuels and the GOB's oft-stated desire to intensify ethanol
cooperation with the United States, post believes that we should
seek to transform this topic into a positive item on our bilateral
agenda. As the world's largest producer of ethanol, Brazil has
sought to reach out to the world's second largest producer - the
U.S. President Bush's State of the Union address outlining new
biofuel friendly energy policies received significant media coverage
in Brazil. In recent months in Brazil, the President's Office
(Planalto),the Ministry of Mines and Energy, the Ministry of
Development, Industry, and Commerce, the Ministry of Agriculture,
the Ministry of External Relations, and the Ministry of Science and
Technology have all raised ethanol issues in their meetings with USG
officials. Conversely, a host of congressional visitors (Codel
Coleman, Codel Hyde, Codel McConnell, Codel Specter, Codel Grassley,
and Nodel Dayton) have evinced interest in ensuring that the United
States learns from the Brazil experience. State of Florida and
State of California officials have voiced similar sentiments as
well.


3. (SBU) Similar to the various GOB ministries involved in biofuels,
ethanol is a topic that also cuts across USG interagency lines.
Inter alia, State, Commerce, Energy, Treasury, USTR, USAID, and
Agriculture all deal with it in one form or the other, whether it be
from the development, trade, investment, research, environmental, or
standards angle. Accordingly, to ensure that our approach is
consistent with emerging USG policies, we request that a Sub-PCC
meeting be convened to define the substance of our message and the
approach (most likely a conference) to best move our agenda forward.
The Department of Energy has already expressed interest in such a
conference.


4. (SBU) Post welcomes guidance from Washington.

Chicola