BRAZIL: NEC Hubbard and DOC Gutierrez with Casa Civil

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SENSITIVE
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E.O. 12958:N/A
TAGS: ECON ETRD BR
SUBJECT: BRAZIL: NEC Hubbard and DOC Gutierrez with Casa Civil
Rousseff and MDIC Jorge October 10, 2007



1. (SBU) SUMMARY: The meeting between Casa Civil Dilma Rousseff,
MDIC Secretary Jorge, Secretary of Commerce Gutierrez, NEC Director
Hubbard, DPA/DNSA Price and Ambassador Sobel focused primarily on
Doha. Both sides agreed we must seize the moment to come to closure
on a Doha agreement. The delegation discussed the CEO Forum and
both sides endorsed the value and significance of the Brazilian and
American private sector coming together to recommend priorities
jointly to governments. The group briefly discussed US-Brazil work
to develop a regional infrastructure initiative. END SUMMARY

DOHA


2. (SBU) The meeting between Casa Civil Dilma Rousseff, MDIC
Secretary Jorge, Secretary of Commerce Gutierrez, NEC Director

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Hubbard, DPA/DNSA Price and Ambassador Sobel focused primarily on
Doha. Secretary Gutierrez said we had an enormous
once-in-a-generation opportunity to create jobs, lift people out of
poverty (perhaps 500 million),create prosperity, and bring hope.
Nothing else could do as much for world prosperity and alleviation
of poverty. Many countries looked to Brazil as a leader of the
developing world; he hoped Brazil would exercise its leadership now
and, in so doing, leave a powerful positive legacy.


3. (SBU) Al Hubbard emphasized the President's commitment to Doha,
and that he is "absolutely passionate about free and open markets"
because he has seen how they raise the standard of living. The
President recognizes that reaching a Doha agreement is difficult and
requires leadership by "Europe, Brazil, India, and especially Brazil
and the United States." The President meets regularly with USTR
Schwab, and he pushes her to stretch and find solutions, and we
needed President Lula to have a similar engagement with his
negotiator. The U.S. had stretched to agree to the chairs texts in
Agriculture and NAMA, and had encouraged APEC to accept them as
well. Hubbard noted that we interpreted the October 9 paper
submitted in Geneva by Brazil and other countries as a step backward
from where Presidents Bush and Lula were when they met on the
margins of the UN General Assembly. We interpreted the paper as
saying that Brazil didn't support the current text and as indicating
that agriculture would have to be done before services and NAMA.
Hubbard encouraged Chief of Staff Rousseff to encourage President
Lula to (1) be engaged and (2) show leadership.
(SBU) Dan Price noted the good spirit that existed between our
presidents at UNGA. Though President Lula hadn't committed to the
ranges and flexibilities in the text, the spirit was one of working
together to bring Doha to a successful conclusion. The October 9
paper "took the wind out of the sails" of the negotiations and he
asked whether Brazil was still interested in the success of Doha.
When our two presidents meet, he added, they understand each other
and agree, but when our trade ministers meet, that sense of
commitment is lacking from the Brazilian side. Our president was
encouraging USTR Schwab, and so we hoped President Lula would talk
with Foreign Minister Amorim.


4. (SBU) Chief of Staff Rousseff agreed that there was a "crystal
clear understanding" between our presidents that Doha would have a
highly favorable impact for the world and that this was an historic,
groundbreaking opportunity. Brazil believed a successful Doha
conclusion would lead to qualitatively different relations between
nations and create fairer and more just rules of trade. Brazil is
committed to Doha, she affirmed, and Lula recognized that
negotiations would soon move beyond the ministerial level to the
prime minister and presidential level. At the same time, Foreign
Minister Amorim was well instructed by Lula. He fully understood
how important it was for the world for Doha to succeed. Rousseff
added that President Lula reads President Bush's deep pro-Doha
interest as a unique opportunity. She and President Lula agreed
that now is our window of opportunity and that we have the
conditions (including the US president's commitment and the personal
sense of trust between the two presidents) in place to conclude the
Round successfully. Brazil recognized that there might not be
another opportunity in the near term. Still, for a successful
conclusion, Brazil insisted that there not be asymmetries. The
problem was that no one wants to give in first. Brazil agreed that
we must move forward clearly and give signals at the right moment.
Rousseff pointed to Brazil's upcoming meetings with India and South
Africa as an opportunity to make progress. Rousseff promised to
convey to President Lula what Gutierrez, Hubbard, and Price had
said. She acknowledged that we must all seize the moment before us
to make Doha a success. NOTE: Lula re-affirmed this commitment
later that night at the dinner he hosted for the CEO FORUM. END
NOTE

CEO FORUM


5. (SBU) Secretary Gutierrez emphasized the importance of this Forum
for being private-sector led and aimed at helping both governments
create an environment conducive to trade, investment, and job
creation. He emphasized the importance of the joint business
community coming to governments and attesting: "This is what we

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want." He noted that Spanish companies were more active in Brazil
than US ones, thus far, and said there was enormous potential for
greater involvement by US companies. Al Hubbard said the India CEO
Forum, in which he was also involved, had been successful. He
looked forward to the CEO Forum for the important ideas it would
offer our governments. Rousseff agreed that the US-Brazilian trade
and investment relationship fell far short of its potential, given
the size of the two countries and our historic closeness. With the
CEO Forum, we were opening a new door.

INFRASTRUCTURE


6. (SBU) With respect to increasing investment in infrastructure,
Secretary Gutierrez expressed USG interest in helping Brazil, if the

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GOB believed it could use help, with technical capacity-building and
by involving OPIC, ExImbank and others. Ambassador Sobel closed the
meeting by referencing the Brazilian planning ministry officials'
meeting at Treasury in early October on infrastructure. He was
optimistic that with the ministry's continued interest, we would be
able to develop US-Brazilian cooperation on infrastructure
investment in a positive way.

COMMENT


7. (SBU) The meeting with Rousseff was encouraging in that she
acknowledged the importance of coming to closure on Doha, seemed
encouraged that the relationship between our leaderships would
assist in achieving a final result on the Round, and was supportive
of the goals of the CEO Forum. She clearly briefed President Lula
well going into the dinner and he too underlined these themes.


8. (U) DOC and NSC delegations cleared this message.