SOCRATES' BRAZIL TRIP WINS FRIENDS, INFLUENCES NO

C O N F I D E N T I A L LISBON 002002 SIPDIS SIPDIS E.O. 12958: DECL: 09/15/2016 TAGS: ETRD PREL SMIG PO SUBJECT: SOCRATES' BRAZIL TRIP WINS FRIENDS, INFLUENCES NO ONE REF: LISBON 1921 Classified By: Dana M. Brown, Pol/Econ Officer, Embassy Lisbon Reason 1.4 (b) and (d) ¶1. (U) Summary: Portuguese Prime Minister Jose Socrates visited Brasilia, Sao Paolo and Rio from August 9 to 11 on his first official visit to Brazil. The trip received wide press coverage and aimed to establish closer economic links to Brazil as well as generate additional Brazilian investment in Portugal. Although business was the main focus of the visit, Socrates also discussed regional security concerns with Brazilian President Lula da Silva including Brazil's relationship with Bolivia and Venezuela. The three day trip was amicable but did not receive any public response from Brazilian business. End summary. -------------- Improving the Portugal-Brazil Relationship -------------- ¶2. (U) PM Socrates visited Brazil on a three-city round in early August and Diplomatic Advisor to the Prime Minister's Office Jose Federico Ludovice subsequently offered us a readout and the GOP's impressions of the trip. Prime Minister Socrates began his visit by meeting with Brazilian government officials in Brasilia on August 9. Ludovice said Portugal is enjoying warm relations with the GOB especially since illegal Brazilian migration, a problem which clouded Lula's 2005 visit, had been addressed. (Note: On August 9, the Portuguese Council of Ministers released a new migration provision to streamline residency requirements, toughen measures against smuggling and trafficking, and address the significant illegal population in Portugal, most notably from Brazil. End note.) Ludovice also remarked that the GOP hoped to work with Brazil to enhance EU-Mercosul relations and discussed strategies to achieve trade barrier reduction between the markets. ¶3. (C) While in Brasilia, Socrates raised Latin America regional security concerns with Lula, specifically Brazil's efforts to engage Bolivia and Venezuela. In a subsequent meeting with Ambassador Hoffman in Lisbon on September 8, Portuguese Foreign Minister Amado stressed that Portugal believes Brazil can play a major role in engaging Venezuela. Amado urged the United States to work closely with Brazil as a moderating force when dealing with Venezuela. Amado added that he believes both Lula and Venezuelan President Hugo Chavez will be reelected. Both Amado and Ludovice commented that, assuming Lula wins the election this fall, Portugal plans to work more closely with Brazil in Lula's second term. -------------- --- Select Portugal: GOP Pitch to Brazilian Business -------------- --- ¶4. (U) On August 10 and 11, in both Sao Paolo and Rio de Janeiro, GOP officials focused on business groups and trade federations to encourage trade and business cooperation. Ludovice reported that the GOP targeted aviation (Embraer) for the construction of executive jets Phenom 100 and Phenom 300 in Portugal, petrochemicals (Petrobras),and highway companies (CCR) as the most likely potential investors for the Portuguese market. He said the Portuguese delegation met with representatives from the three companies to urge joint ventures with OGMA, GALP, and Brisa respectively or for direct investment in Portugal, especially since Portuguese investment in Brazil far outpaces Brazilian investment in Portugal. ¶5. (U) Ludovice outlined the visit's cultural and Portuguese citizen outreach components. Socrates met with almost 4,000 Portuguese citizens in Rio de Janiero alone and also met the smaller community of Portuguese citizens in Sao Paolo. The GOP showcased the Lusophone cultural links with several literature events including Portuguese authors. At the conclusion of the visit, Portugal and Brazil signed an agreement allowing citizens to streamline the process of receiving retirement benefits. -------------- Comment: High Hopes, Little Return -------------- ¶6. (C) The GOP aimed for a tangible commercial payoff on this trip but achieved only a minor bilateral agreement. Ludovice concluded that Brazil seemed more focused on its own neighboring problems and Mercosul partners than on Portugal or Europe writ large. Portugal plans to use future encounters such as the Iberian-American Summit in Uruguay and UNGA to maintain the dialogue with Brazil to attempt to attract future investment, but Socrates' initial overture fell flat somewhat, even by Ludovice's own recount. End comment. O'Neal