BRAZIL: MFA DISCUSSES UPCOMING LULA CAMP DAVID VISIT WITH

UNCLAS BRASILIA 000554

SIPDIS

SENSITIVE
SIPDIS
USDA FOR FAS
STATE FOR E/GREGORY MANUEL, EPSC/LKUBISKE, FCORNEILLE
USDOE FOR COURTNEY GILLESPIE
STATE PASS TO USTR SCRONIN

E.O. 12958: N/A
TAGS: ECON ENIV ENRG DR ES HA SC
SUBJECT: BRAZIL: MFA DISCUSSES UPCOMING LULA CAMP DAVID VISIT WITH
POTENTIAL THIRD-COUNTRY BIOFUELS PARTNERS

REF: STATE 40124


1. (SBU) Summary: The GOB's Ministry of Foreign Affairs (MFA)'s
Under Secretary General for Political Affairs, Everton Vieira
Vargas, met with the Ambassador of the Dominican Republic, and the
Charge d'Affaires of Haiti on March 29. DCM and EconOff were also
invited to attend. Per reftel, the meeting discussed Brazilian
President Luiz Inacio Lula da Silva's upcoming March 31 visit to
Camp David, where it is hoped that both presidents will be able to
announce that Haiti, the Dominican Republic, St. Kitts and Nevis,
and El Salvador will work with the U.S. and Brazil on biofuels
pursuant to the March 9, 2007 Memorandum of Understanding (MOU) on
biofuels between the two governments. (Comment: the Ambassador of
El Salvador was also invited but is currently out of the country;
St. Kitts and Nevis, the fourth nation under consideration per
reftel, does not have an accredited representative to Brazil. End
Comment.) Also attending for the MFA were Minister Igor Kipman of
the Division of Mexico, Central America and Caribbean, and First
Secretary Claudia Vieira Santos of the Division of Renewable Fuels.

SIPDIS
Vargas said Minister Antonio Simoes of the MFA's Department of
Energy is already in Washington for the first organization meeting
pursuant to the MOU.


2. (SBU) Discussion was cordial, centering on the need for the
third countries invited to agree to the plan before it is announced
at Camp David. All players emphasized future private industry
involvement, the possibility of increased job creation and
investment, and the end goal of making ethanol into a
globally-traded commodity. Responses from the representatives from
the Dominican Republic and Haiti representatives were cautiously
positive - though neither were able to provide a definitive
commitment. End Summary.


3. (SBU) Vargas emphasized that the MOU would help: a) spur
global, regional, and local cooperation; b) establish, via the
International Biofuels Forum (IBF) patterns and norms that will lead
to the commoditization of ethanol; c) develop and exchange new
technology; d) job and income creation; e) foreign direct
investment; and e) a reduction of greenhouse gases. He also
emphasized the importance of what he called a "symmetry of
understanding" for all countries involved. All of these points were
well received by Ambassador Manuel Morales Lama of the Dominican
Republic and Minister-Counselor Jean-Baptiste Reynold Leroy of
Haiti. Vargas also discussed the recent IBF meeting in New York as
an example of other countries' interest in the topic of biofuels
development. He emphasized that the IBF is an intergovernmental
operation with the goal of significant private sector involvement.


4. (SBU) Morales Lama indicated that the Dominican Republic already
has a keen interest in sugar cane and in establishing a free trade
zone, but that he could not definitively provide his country's
acceptance of the USG-GOB plan without first consulting his
president. Leroy expressed some trepidation as the sugar cane
industry in Haiti already had failed ostensibly due to falling
prices. Kipman indicated that the goal would be the development of
the sugar cane market in Haiti's economically depressed north. U.S.
DCM reemphasized that the future of the ethanol market is very
promising, and that the IBF and bilateral USG-GOB cooperation will
go a long way toward bolstering and sustaining sugar cane prices in
the third countries under discussion. Vargas agreed that the GOB
and USG are very conscious of the fact that sugar cane price levels
would be very important for all countries involved.


5. (SBU) Vargas and DCM closed the meeting by reiterating the GOB's
and USG's desire to reaffirm the MOU at Camp David and discuss
third-country partners. As Vargas stated, "it would not be proper
to indicate that countries are part of the plan without first asking
them whether they want to be involved." He indicated that he looked
forward to the Dominican Republic's and Haiti's official replies, as
well as to hear from the two nations which could not attend the
meeting.

SOBEL