Identifier
Created
Classification
Origin
06SAOPAULO387
2006-04-10 11:40:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Sao Paulo
Cable title:  

"TUCANO" TALKS CAMPAIGN, CHICKENS, CHINA

Tags:  EAGR TBIO PGOV PREL PINR ETRD BR CH 
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VZCZCXRO7872
PP RUEHRG
DE RUEHSO #0387/01 1001140
ZNR UUUUU ZZH
P 101140Z APR 06
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC PRIORITY 4838
INFO RUEHBR/AMEMBASSY BRASILIA 5981
RUEHBU/AMEMBASSY BUENOS AIRES 2152
RUEHAC/AMEMBASSY ASUNCION 2498
RUEHMN/AMEMBASSY MONTEVIDEO 1905
RUEHLP/AMEMBASSY LA PAZ 2703
RUEHSG/AMEMBASSY SANTIAGO 1647
RUEHBJ/AMEMBASSY BEIJING 0380
RUEHRI/AMCONSUL RIO DE JANEIRO 6981
RUEHRG/AMCONSUL RECIFE 2831
RHEHNSC/NSC WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/USDA FAS WASHDC 0612
RUCPDOC/USDOC WASHDC 2361
UNCLAS SECTION 01 OF 03 SAO PAULO 000387 

SIPDIS

SENSITIVE
SIPDIS

NSC FOR CRONIN
STATE PASS USTR FOR SULLIVAN/LEZNY
TREASURY FOR OASIA, DAS LEE AND FPARODI
USDOC FOR 4332/ITA/MAC/WH/OLAC/SHUPKA
USDOC ALSO FOR 3134/USFCS/OIO/EOLSON/DDEVITO/DANDERSON
STATE PASS EXIMBANK
STATE PASS OPIC FOR DMORONESE, NRIVERA, CMERVENNE
AID/W FOR LAC/AA

E.O. 12958: N/A
TAGS: EAGR TBIO PGOV PREL PINR ETRD BR CH
SUBJECT: "TUCANO" TALKS CAMPAIGN, CHICKENS, CHINA

REF: (A) BRASILIA 609; (B) BRASILIA 603
(C) SAO PAULO 316 AND PREVIOUS

SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY.

-------
SUMMARY
-------

UNCLAS SECTION 01 OF 03 SAO PAULO 000387

SIPDIS

SENSITIVE
SIPDIS

NSC FOR CRONIN
STATE PASS USTR FOR SULLIVAN/LEZNY
TREASURY FOR OASIA, DAS LEE AND FPARODI
USDOC FOR 4332/ITA/MAC/WH/OLAC/SHUPKA
USDOC ALSO FOR 3134/USFCS/OIO/EOLSON/DDEVITO/DANDERSON
STATE PASS EXIMBANK
STATE PASS OPIC FOR DMORONESE, NRIVERA, CMERVENNE
AID/W FOR LAC/AA

E.O. 12958: N/A
TAGS: EAGR TBIO PGOV PREL PINR ETRD BR CH
SUBJECT: "TUCANO" TALKS CAMPAIGN, CHICKENS, CHINA

REF: (A) BRASILIA 609; (B) BRASILIA 603
(C) SAO PAULO 316 AND PREVIOUS

SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY.

--------------
SUMMARY
--------------


1. (U) Poloffs met April 3 with Christian Lohbauer, until recently a
municipal official in the administration of Sao Paulo Mayor Serra
and now a lobbyist for Brazil's poultry association. Lohbauer
ventured some predictions about the upcoming presidential campaign,
described some of the challenges facing Brazil's poultry industry,
and expressed disappointment over his recent visit to China in
connection with Vice-President Alencar's high-level meetings. End
Summary.


2. (SBU) Christian Lohbauer is a long-time contact of the Consulate
who served from January 2005 through January 2006 as Deputy
Secretary for International Relations in the municipal government of

SIPDIS
Sao Paulo. He departed to take a position as International
Relations Manager for the Brazilian Chicken Producers and Exporters
Association (ABEF). Lohbauer is a loyalist of the Brazilian Social
Democracy Party (PSDB) - party members are called "tucanos," after
their toucan bird emblem - and the former International Affairs
Manager of the influential Federation of Industries of Sao Paulo
State (FIESP). He met with Poloffs April 3 to exchange views on the
current political scene and talk about his new job. He thought his
party's presidential candidate, former Sao Paulo Governor Geraldo
Alckmin, had a good chance to beat President Lula, but was not
sanguine about the current status of the poultry industry and was
critical of the Lula government's trade promotion efforts, as
illustrated by Vice President Alencar's recent visit to China, in

which Lohbauer participated as an industry representative.

--------------
ALCKMIN AND SERRA
--------------


3. (U) In Lohbauer's view, Alckmin waged a remarkable campaign
within the PSDB to wrest the nomination away from Mayor Serra (ref
C). Particularly impressive was the way Alckmin's acolytes rounded
up support among party legislators. For example, the mid-February
election of a Serra supporter as PSDB leader of the federal Camara
dos Deputados by a very small margin was a clear indication that
Alckmin's support among party office-holders was stronger than
previously realized. Shortly thereafter, PSDB deputies in the Sao
Paulo state Legislative Assembly voted overwhelmingly to support
Alckmin.


4. (SBU) Serra's lifelong dream, to be President of Brazil, may now
be impossible to achieve, Lohbauer thought. Even if Alckmin loses
to Lula this year, Serra will have trouble getting the PSDB
nomination four years from now, because Minas Gerais Governor Aecio
Neves will want to run. However, though personally loyal to Serra,
Lohbauer acknowledged that Alckmin may be the better candidate to
run against Lula, with a good chance to win. He cited a clear
distinction between Alckmin's and Lula's economic philosophies and
noted, as have other observers, that the most likely swing voters
are to be found among the lower-middle and lower classes - what
Brazilians call Classes "C" and "D" - the working poor. Lula is
perceived to be doing things for these voters, and Alckmin's
challenge will be to convince them he can improve their standard of
living and their opportunities. He's beginning with a deficit -
Lula leads by 15-20 percent in most polls - but that can be
overcome, Lohbauer opined.


SAO PAULO 00000387 002 OF 003


--------------
LULA AND THE LATEST SCANDAL
--------------


5. (SBU) Lohbauer was still shaking his head over the recent scandal
that brought down Finance Minister Antonio Palocci (ref A). It was
incomprehensible to him that senior officials of the Caixa Economica
Federal (CEF) could have been unaware of the implications of their
actions when they illegally accessed the bank account information of
Palocci's accuser, handyman/caretaker Francenildo Costa, allegedly
at the behest of the Minister and his advisors, information that was
subsequently made public. This wasn't a trivial matter. CEF was a
very important state-owned bank from which "Bolsa Familia" and other
social funds are disbursed. Lohbauer also noted with amusement that
former CEF President Jorge Mattoso, who was implicated in the
scandal, had served as Sao Paulo's Secretary for International
Relations during Marta Suplicy's first two years as Mayor (2001-02).
Normally, a career diplomat on leave or loan from the MFA would
fill such a position, but Mattoso got the job because he was a
long-time loyalist of Lula's Workers Party (Partido dos
Trabalhadores - PT).


6. (U) With Palocci's departure, Lula was "more alone than ever,"
Lohbauer said. "There's nobody left in his party except him. If he
weren't available, who would they have to run? If he wins the
election, he'll have to seek a government of national unity like
Itamar Franco did after [Fernando] Collor's resignation [in 1992],
ask the other parties to rally around and support him for the good
of the country, because he'll have nobody. It will be a big mess.
I think Alckmin will win, but it won't be easy to convince people to
change course. It will be close, and it could go either way."

--------------
TOUGH TIMES FOR CHICKENS
--------------


7. (U) Brazil's poultry industry is facing serious challenges,
Lohbauer said. Forty percent of the world's chicken exports are
from Brazil, whose annual poultry exports bring in revenues of USD
2.5 billion. Four million Brazilians depend economically on some
aspect of the poultry sector. One third of poultry production is
destined for export, with the other two thirds for the domestic
market. Due to limits on consumption and storage, right now they
almost can't give away the domestic production. Brazilian producers
are cutting back by 20 percent, with a concomitant loss of income
and jobs. This is all due to fear of avian influenza, Lohbauer
said. If and when the disease appears on the South American
continent or, worse yet, in Brazil itself, the economic consequences
will be dire. "If a few ducks in Guanabara Bay [Rio de Janeiro] are
found to have traces of the virus, the whole country will be under
quarantine before you know it."

--------------
THE CHINA TRIP
--------------


8. (SBU) Lohbauer said he had traveled to China in late March and
had attended (along with a representative of the Brazilian beef
industry) some of Vice President (and until recently Defense
Minister) Jose da Silva Alencar's meetings with Chinese officials
(ref B) on agricultural issues. He opined that Alencar had not been
well prepared and the Brazilian delegation appeared unwilling to
engage the Chinese on the substance of issues. According to
Lohbauer's account, the Chinese Minister of Agriculture had raised
an issue related to Brazilian exports of soybeans to China. Alencar
appeared embarrassingly unfamiliar with the details, and neither MFA
Secretary General Samuel Pinheiros Guimaraes nor the Brazilian

SIPDIS
Agriculture Ministry or Embassy officials present had anything to

SAO PAULO 00000387 003 OF 003


say about the issue.


9. (SBU) Likewise, when the Minister mentioned a visit to Brazil by
Chinese veterinarians to inspect meat processing facilities, the
Vice President again offered virtually no substantive comment. He
didn't even express a strong interest in exporting Brazilian beef
and poultry to China, as might be expected. Embassy officials later
told Lohbauer they had provided Vice President Alencar with abundant
briefing materials on all subjects likely to come up in the talks,
but he hadn't read them. Lohbauer noted ruefully that ABEF had paid
for his trip to China to attend the meetings, and it had been a
waste of time and money, as nothing was accomplished on the chicken
front.

--------------
COMMENT
--------------


10. (SBU) Lohbauer is a dyed-in-the-wool "tucano," and his
criticism of the Lula government, and especially its conduct of
foreign and commercial affairs, is predictable, though probably not
inaccurate. Of more concern is his assessment of the state of
Brazil's chicken sector, which is facing times of uncertainty and
anxiety. End comment.


11. (U) This cable was coordinated with Embassy Brasilia.

MCMULLEN