Identifier
Created
Classification
Origin
08BRASILIA1265
2008-09-22 21:02:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Brasilia
Cable title:  

LULA, AMORIM DISCUSS TRADE, CUBA, UNSC REFORM WITH

Tags:  PAO ETRD PREL ECON BR 
pdf how-to read a cable
VZCZCXRO8733
RR RUEHRG
DE RUEHBR #1265/01 2662102
ZNR UUUUU ZZH
R 222102Z SEP 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 2500
INFO RUEHAC/AMEMBASSY ASUNCION 7072
RUEHBU/AMEMBASSY BUENOS AIRES 5813
RUEHCV/AMEMBASSY CARACAS 4249
RUEHLP/AMEMBASSY LA PAZ 6593
RUEHPE/AMEMBASSY LIMA 3956
RUEHMN/AMEMBASSY MONTEVIDEO 7524
RUEHQT/AMEMBASSY QUITO 2599
RUEHSG/AMEMBASSY SANTIAGO 0588
RUEHRG/AMCONSUL RECIFE 8484
RUEHRI/AMCONSUL RIO DE JANEIRO 6637
RUEHSO/AMCONSUL SAO PAULO 2778
UNCLAS SECTION 01 OF 03 BRASILIA 001265 

SENSITIVE
SIPDIS

STATE FOR BSC

E.O. 12958: N/A
TAGS: PAO ETRD PREL ECON BR
SUBJECT: LULA, AMORIM DISCUSS TRADE, CUBA, UNSC REFORM WITH
SENATOR HAGEL

REF: BRASILIA 001218
UNCLAS SECTION 01 OF 03 BRASILIA 001265

SENSITIVE
SIPDIS

STATE FOR BSC

E.O. 12958: N/A
TAGS: PAO ETRD PREL ECON BR
SUBJECT: LULA, AMORIM DISCUSS TRADE, CUBA, UNSC REFORM WITH
SENATOR HAGEL

REF: BRASILIA 001218

1.(SBU) Summary: In separate meetings, President Lula and
Minister Amorim discussed with Senator Hagel their views on
Doha, Brazil,s growing engagement with Cuba, and the need
for a multilateralist U.S. approach to international
problems. Both Lula and Amorim highlighted common themes,
focused on the need for the U.S. to take a more multilateral
approach to global problems and expressing the hope that the
new U.S. administration will be more willing to work within
existing international framework. Both also focused on the
changes they perceive in Cuba and how Brazil,s vigorous
engagement there will help it achieve what Brazil sees as
Cuba,s desire to become more like Brazil than Venezuela.
End summary.

2.(U) This cable is the second of five on Senator Hagel,s
August 31-September 2 visit to Brasilia and Sao Paulo. Ref A
addressed Lula,s and Amorim,s comments on Iran, Venezuela,
and their desire for continuity in the bilateral relationship
when a new U.S. Administration takes office.

-------------- -
Amorim Discusses Multilateralism, Ethanol Tariff, Cuba
-------------- -


3. (SBU) During an expansive meeting that lasted almost two
hours, Minister for External Relations Celso Amorim said that
he felt the United States faced a continual dilemma in its
foreign policy between unilateralism and multilateralism. He
sees a greater tendency lately for the United States to rely
on multilateral instititutions *- the UN and WTO, in
particular -* which is very welcome for Brazil and &allows
us to cooperate more.8 Cooperation in Haiti, for example,
was only possible because of the UN sanction for the
peacekeeping mission there. Amorim is confident the next
president*whether Senator Obama or Senator McCain*will be a
multilateralist. This will be good for the relationship and
good for Brazil, as the United States is Brazil,s largest
trading partner and the largest chunk of outward Brazilian
investment now goes to the United States. The GOB
particularly appreciates U.S. efforts to continue the Doha
Round, as there are some issues that are only correctible in
a multilateral negotiation. Sen. Hagel responded that
Brazil,s leadership in Doha was very much appreciated.


4. (SBU) Minister Amorim raised the U.S. tariff on sugar cane

ethanol, saying it should come down. Senator Hagel said he
agreed and that this would occur, but cautioned that
agriculture is a cultural and societal issue as much as an
economic one. Nonetheless, he sees a gradual shift coming in
the entire U.S. agriculture policy with regard to tariffs and
trade. When he noted that cattle and poultry producers were
being hurt by the high price of corn, Amorim observed that it
was interesting that lowering the tariff on ethanol would not
be an unmitigated good for Brazil, as lower U.S. prices for
cattle and poultry would hurt Brazilian exporters of those
commodities.


5. (SBU) Ambassador Sobel raised the need to increase
bilateral investment between our two countries through a tax
information exchange agreement, a tax treaty, and eventually
an investment treaty. Amorim said the tax treaty is the
place to start, as it might be difficult to gain
congressional ratification for an investment treaty.


6. (SBU) When General Spears mentioned our interest in more
military-military cooperation with Brazil, Amorim cautioned
that this required careful explanation, citing the &strong
reaction8 to the announcement of the re-establishment of the
Fourth Fleet. He suggested it would be important to discuss
the issue with key Brazilian senators. (Note: the Brazilian
congress was not in session during Senator Hagel,s visit,
making it impossible to arrange meetings with key members of
congress. End note.)


7. (SBU) Senator Hagel asked about Amorim,s view of Cuba.
Amorim described the changes there as &irreversible,8 a

BRASILIA 00001265 002 OF 003


&Chinese glasnost8 comparable to the changes in Vietnam.
He said he could not understand why the United States could
turn around its relations with Vietnam, and not with Cuba.
Senator Hagel expressed his view that the U.S. needs to shift
its Cuba policy. Amorim replied that he believes the Cuban
government would rather be &more like Brazil than
Venezuela8*adding quickly that Brazil and Venezuela are of
course not competitors*but that the U.S. embargo and
Venezuela,s offers of cheap oil are forcing Cuba into a
closer relationship with Venezuela.


8. (SBU) Senator Hagel asked Amorim about the situation in
Argentina. Amorim said that they are experiencing &a
difficult moment8 as a result of pursuing unorthodox
economic policies. Engaging the GOA is important, he said,
praising WHA Assistant Secretary Shannon,s recent visit to
Argentina as an important, especially as A/S Shannon
&understands the region well.8


9. (SBU) Under Secretary for Political Affairs Everton Vargas
raised the work going on in the Nuclear Suppliers Group with
regard to India, saying that Brazil has been working closely
with the United States on this. Amorim noted the important
link between non-proliferation and disarmament, saying that
it was important to continue working on both issues. Senator
Hagel agreed.


10. (SBU) Finally, saying that he had to walk a careful line
between &showing he was interested and appearing obsessed,8
Amorim raised UN Security Council reform, stressing the
importance of U.S. leadership. Senator Hagel agreed that it
was important for the make-up of the UN Security Council to
reflect present-day realities.

-------------- --
Talking Growing Involvement in Cuba with Lula Advisor
-------------- --


11. (SBU) Marcel Biato, deputy national security affairs
adviser, told Senator Hagel just before the meeting with
President Lula that Brazil authorized on August 31 the second
tranche of aid in &soft loans8 to Cuba, bringing the total
to USD 800 million. He estimated that Brazilian lending to
Cuba could reach a billion dollars. He said their term is
15-20 years and they are like Exim Bank loans.


12. (SBU) He said Petrobras, the Brazilian state oil and gas
firm, is currently exploring two &strongly promising8
blocks, one off Varadero, the other in the Gulf of Mexico.
He said Cuba has an old Russian oil refinery that has been
modernized, but Cuba will still need additional spare
capacity. He mentioned that about ten years ago Petrobras
also had a series of oil and gas projects in Cuba but nothing
came of them.


13. (SBU) Biato,s impression of Raul Castro is that of a
&pragmatist8 looking for ways to provide a &soft landing8
from a transitional period. Biato noted he is &the last of
the commanders who came down from the Sierra8 and &no one
else has the ability to get the public to bear with him8 in
support of &wishy-washy Caribbean socialism.8


14. (SBU) Biato told Senator Hagel that at the end of 2008
Brazil will host a Latin American conference dealing with
regional integration and Raul Castro may attend. &It could
be an interesting moment,8 Biato added.

-------------- --------------
Lula: Much Work to be Done Together on Africa, Trade, Biofuels
-------------- --------------


15. (SBU) President Lula for his part discussed the problems
Brazil faces, but focused on the positive strides the country
has made during the past several years. He focused on the
youth bulge in demographics, noting that meeting the
expectations of all of the world,s young people is a
challenge. For two decades, according to Lula, Brazil
experienced low development and little income distribution

BRASILIA 00001265 003 OF 003


and mistaken economic policies. &Today,8 he noted, &is a
magical moment for Brazil.8 There is clear movement to the
middle class, he added. Brazil, according to Lula, is
focused more and more on professional, vocational training.
The target, according to him, is 4.5 million young people
between 10-15 years old for this training. Brazil, he added,
is also using subsidies to attract youth to this training.
&It is my conviction,8 he stressed, &that the state must
create opportunity and solutions for young people.8


16. (SBU) Lula noted two main concerns for Brazil going
forward. First, the nonconclusion of the Doha round. The
disagreements, according to Lula, pale in comparison to the
implications of a successful agreement. &We can resume
talks in September,8 he added. Second, the U.S. and
European financial crisis. Contradicting earlier public
statements he has made to the effect that Brazil is immune to
financial turmoil in the U.S., Lula noted that &if the U.S.
crisis last much longer and you go into a recession, that can
impact developing countries. & So far, he added, &we have
been lucky, in part because of China,s and India,s economic
growth.8


17. (SBU) Echoing a constant theme in all meetings with
Brazilian government officials that focus on Brazil,s
foreign policy, Lula also touched on the need to reform the
United Nations Security Council (UNSC). &This has been very
slow,8 he noted. &I said to Bush, & What will be your
legacy? Security Council reform is one option.,8 There
needs to be an opening, Lula noted. Completing Doha is a
second option for Bush,s legacy, according to Lula. &Iraq
cannot be your only legacy,8 he said he had told President
Bush.


18. (SBU) On Africa, Lula noted that he remarked to President
Bush, &Europe has forgotten Africa, the U.S. has forgotten
Africa, Brazil forgot Africa for 50 years. China has
discovered Africa and is active and strong.8 He added that
he sees China active in Angola, Ghana, Benin, &wherever
there are raw materials.8 He also noted that China,s entry
to Africa has been a &predatory8 entrance. To counteract
this, Lula noted, &we should have a U.S.-Brazil partnership
on Africa.8 Africa, he highlighted, has the same climate as
Latin America and can produce grain and biofuels. He ended
by noting that, &Africa is a prime opportunity for
U.S.-Brazil cooperation on agricultural projects to help the
world.8




KUBISKE