BRAZIL: AMBASSADOR SOBEL DISCUSSES UPCOMING ECONOMIC

UNCLAS SECTION 01 OF 02 BRASILIA 002140

SIPDIS

SENSITIVE
SIPDIS

STATE PASS TO E FOR TOM PIERCE
STATE FOR WHA/EPSC LISA KUBISKE
STATE FOR S/P WILLIAM MCILHENNY
STATE FOR EEB/CIP, EEB/TRA

E.0. 12958: N/A
TAGS: ECON ETRD ECIN EAIR ECPS TSPA BR
SUBJECT: BRAZIL: AMBASSADOR SOBEL DISCUSSES UPCOMING ECONOMIC
DIALOGUE WITH UNDER SECRETARY AZEVEDO



1. (SBU) Summary: Ambassador Sobel and Brazilian Ministry of
External Affairs (MRE) Under Secretary Roberto Azevedo met on
November 9 at the MRE to discuss the upcoming State-MRE Economic
Dialogue scheduled for December. During the meeting, Azevedo said
the only deliverable he expected from the bilateral discussions was
an agreement to increase flight frequencies. (In fact, negotiations
led by State and ANAC are expected December 5-7 in Rio). Azevedo
indicated that he would also like to pursue sectoral discussions on
the textile industry. He noted that the GoB was still exploring the
possibility of OECD participation, but needed to determine the
long-term effect of membership before continuing. He did not place
much emphasis on discussions of import safety or GMOs. Azevedo
indicated that the GOB was interested in discussing joint
cooperation, both "offensive and defensive," in third markets, such
as China and Korea. The Ambassador encouraged the GoB to become
involved in the discussion on the Chinese renminbi. End Summary.


2. (SBU) On November 9, the Ambassador met with Brazilian Ministry
of External Affairs (MRE) Under Secretary Roberto Azevedo at the MRE
to discuss the upcoming December State-MRE Economic Dialogue.
During the meeting, Azevedo stressed that both sides should find
areas where they can successfully work together. Azevedo said that
although he thinks the discussions should not exclude the private
sector, there should be a point when the USG and GoB select economic
and commercial topics that address the overall strategy concerning
the direction the USG and the GoB will take in the future. Except
for aviation, Azevedo did not expect any early deliverables as a
result of the talks. He told the Ambassador that, barring an
unexpected senior officials meeting in Geneva, he would be available
on December 13 and asked to hold the meeting on that date.


3. (SBU) The Ambassador asked Azevedo what he felt were the most
promising opportunities for the Economic Dialogue. Azevedo
(referring to sectoral discussions) replied that he felt positive
results came out of a recent Washington meeting with textile
industry representatives and suggested both governments explore this
further. He opined that USG and GoB support for private sector
involvement in the talks would play well in the media.

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OECD Participation
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4. (SBU) The Ambassador inquired about Brazil's consideration of
deeper OECD involvement, adding that it was Brazil's choice on how
it wanted to proceed. He noted that there are many opportunities
for engagement in individual areas and asked if Azevedo thought
there would be ready deliverables from discussion of this topic.
Azevedo relayed that the GoB is looking for the correct approach to
deepen its participation in the OECD. One avenue being considered
is the designation of a GoB official to establish OECD contacts and
determine if a dialogue about key issues was possible, but he did
not believe this discussion would necessarily have to produce
deliverables at this time. Instead, he preferred strategic talks on
potential opportunities. He said he was much less concerned about
what committees Brazil should join than where OECD membership would
lead, in order to determine if OECD membership makes sense for
Brazil.

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Other Issues
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-- Aviation


5. (SBU) The only major deliverable Azevedo believed may come out
of the December meeting is an agreement on increased flights between
the U.S. and Brazil. The Ambassador noted that there was interest
on all sides for increased air frequencies.

-- Import Safety


6. (SBU) Azevedo said there was some discussion (in Washington) on
an import safety dialogue. He indicated that he did not feel this
was a strategic item and was not sure if this topic would yield any
short-term deliverables.

-- Genetically Modified Organisms (GMOs)


7. (SBU) Azevedo brought up the topic of genetically modified
organisms (GMOs),explaining that the country has a "split
personality" on the issue. While GMOs are an important business in
Brazil, he pointed out that the subject is controversial with NGOs.
He said it was an issue that "we can talk about and look at the

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implications."

-- Joint Cooperation in Third Countries


8. (SBU) Azevedo stated that the GoB was interested in discussing
joint cooperation, both "offensive and defensive," in third markets
such as China and Korea. As justification, he noted unspecified
subsidy concerns. The Ambassador encouraged the GoB to become
involved in the discussion on the renminbi.

Sobel