BAHIA SUMMITS, PART 1: BRAZIL HOSTS FOUR REGIONAL

C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 001636

SIPDIS

E.O. 12958: DECL: 12/19/2018
TAGS: PREL PGOV PHUM KSUM ECON OAS XL XM BR
SUBJECT: BAHIA SUMMITS, PART 1: BRAZIL HOSTS FOUR REGIONAL
SUMMITS

REF: A. BRASILIA 1301

B. BRASILIA SEPTEL: BRINGING LATIN AMERICA AND THE
CARIBBEAN TOGETHER...AROUND CUBA

C. BRASILIA SEPTEL: THE SURPRISE OF BAHIA: MEXICO
COZIES UP TO BRAZIL

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Classified By: Ambassador Clifford M. Sobel. Reasons: 1.4 (b) & (d)


1. (SBU) SUMMARY: Over a two-day period, December 16-17,
Brazil hosted a series of four summit meetings at the seaside
resort of Costa do Sauipe, Bahia, involving the heads of
state or high-level government officials of 33 Latin American
and Caribbean countries: The Common Market of the South
(MERCOSUL),the Union of South American Nations (UNASUL),the
Rio Group, and the first-ever summit of all Latin America and
Caribbean leaders (CALC). The results of the MERCOSUL
meeting were notably thin, while UNASUL approved Brazil's
proposed South American Defense Council (SADC). Rio Group
leaders' endorsement of Cuba's membership provided the
unexpected unifying theme from Bahia: a message to the
United States that it is time to reintegrate Cuba into the
hemispheric community, and that the success of the April
Summit of the Americas (SOA) depends on it (ref B). Although
the press highlighted the exclusion of the United States and
Canada and the anti-American rhetoric on the part of some
leaders, the Bahia events, which were the largest regional
gathering held without extra-regional participation, prompted
observers to comment on Brazil's growing influence and
ability to convene its neighbors to a meeting of hemispheric
proportions. Mexico provided the final surprise when, during
the closing of the CALC December 17, Mexican President Felipe
Calderon called for the formation of a permanent Latin
America and Caribbean Union to serve as either an alternative
or complement to the Organization of American States (OAS)
(ref C). Observers agree that Brazil's calling and hosting
of this two-day multi-summit event demonstrated that the GOB
is able and willing to exercise increasingly visible regional
leadership, with an eye toward gaining legitimacy as the
principal regional representative on the global stage. END
SUMMARY.

MERCOSUL
--------------


2. (SBU) Brazilian President Luiz Inacio Lula da Silva was
joined by his MERCOSUL counterparts from Argentina
(Kirchner),Uruguay (Vazquez),Paraguay (Lugo),and Venezuela
(Chavez),at meetings on December 16. Bolivia (Morales) and
Chile (Bachelet) attended as observers. The group agreed to
absorb Bolivian textile exports without tariff, to offset
Bolivia's loss of preferential access to the U.S. market.
Otherwise, results were remarkably thin. The group was
unable to come to consensus agreement on eliminating double
tariff collection or on how tariff-revenue would be allocated
among MERCOSUL members. At the end of the meeting Brazil
passed the rotating six-month presidency to Paraguay. On
December 17, Brazil's lower house approved admission of
Venezuela into Mercosul. It now faces a tough battle in the
Brazilian senate, and is still under consideration by
Paraguay's legislature, as well, before Venezuela can be
officially admitted.

UNASUL
--------------


3. (C) Chilean President Michele Bachelet, chaired a quick
meeting of the Union of South American Nations (UNASUL) on
December 16, in which the group of 12 nations approved the
formation of the South American Defense Council (SADC) -- a
key Brazilian objective since the founding of UNASUL. The
SADC will hold its first formal meeting in March 2009.
UNASUL leaders reaffirmed that deepening regional integration
and strengthening trade ties and investment flows are
important to growth and pledged to increase commercial flows
between themselves and with the world. Fears that Argentina
might press for a majority vote on the candidacy of former
Argentine president Nestor Kirchner to be UNASUL Secretary
General did not materialize. While not resolved, Uruguayan
diplomats told poloff that the group had come to an agreement
that the decision should be made by consensus which, in light
of Uruguay's explicit objection and the lukewarm support of
other members, will effectively block Kirchner's candidacy.
Members agreed that Chile, which stepped into the breach
earlier this year after Colombia withdrew during its dispute

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with Ecuador, should remain as UNASUL president at least
until April 2009 when leaders are due to meet again.

The Rio Group
--------------


4. (U) Cuban President Raul Castro was treated as an honored
guest as heads of state and government of the 23 Latin
American and Caribbean Rio group member-states endorsed the
Zacatecas declaration that formally granted Cuba membership
in the organization. Overall, the two-day series of meetings
served as a coming out for Raul Castro, who was making his
first official trip outside of Cuba since taking over the
presidency from his brother Fidel in 2006. Castro, who
visited Venezuela prior to the Bahia meetings, also was
present at the MERCOSUL meeting and the CALC. He met
privately with the OAS Secretary General, reportedly to
discuss Cuba,s interest in rejoining the Organization, and
other leaders before being receive in Brasilia by Lula for a
one-day official bilateral visit December 18. As the only
concrete outcome of hemispheric significance to emerge from
Bahia, the Rio Group decision to admit Cuba set the stage for
Cuban reintegration into the hemispheric community to become
the dominant theme in the CALC, as well.

The Latin America and Caribbean Summit (CALC)
--------------


5. (C) Although Brazil called the first CALC meeting with
only the vaguest notion of an agenda (ref A),the December 17
meeting picked up where the Rio Group left off on Cuba,
issuing a declaration calling for an end to the U.S. trade
embargo on Cuba, delivering a broader message to the United
States that it is time to reintegrate Cuba into the
hemispheric community, and implicitly hinting that the
success of the April Summit of the Americas (SOA) depends on
it (see ref B). It also provided regional support for a
number of singl-country gripes, via a communique urging the
United States to renew the Andean Trade Promotion and Drug
Eradication Act (ATPDEA) preferences for Bolivia; a separate
communique on the "Malvinas Question," calling on Great
Britain to resume negotiations with Argentina on the
sovereignty issue in accordance with UN resolutions and
guidelines; and a call for the European Union to continue
granting Generalized System of Preferences (SGP-plus)
benefits, meant to foster sustainable development and
governance, to Panama. Among a slew of comments on global
topics from development to environment to energy to UN
reform, the leaders urgently called for a "balanced and
equitable" and "less than reciprocal" conclusion to the Doha
WTO round. They also called for dialogue among regional
FinMins on financial architecture and regulatory mechanisms
to address the financial crisis in language that conflicts
with recent Brazil-chaired G-20 statements on the issue.


6. (C) A surprising outcome of the CALC was Mexican President
Felipe Calderon's call at the closing session for a regional
union excluding the United States and Canada, which could act
as an alternative or complement to the Organization of
American States. The proposal made headlines in Brazil, but
did not appear in the final declaration. The Mexican
Ambassador to Brazil told Ambassador Sobel that neither the
other leaders nor the Mexican foreign ministry were consulted
before Calderon made the proposal (see ref C).


7. (C) Press coverage from Bahia highlighted the
anti-American rhetoric. Evo Morales made a call, ignored by
most of the other leaders, for all U.S. Ambassadors to be
expelled from the region if the embargo was not lifted. Hugo
Chavez hailed the CALC as Latin America's demand for
independence and respect from the United States. Lula and
others tried to moderate some of the more radical
pronouncements by expressing hopes that an Obama
Administration would change U.S. policy towards Latin
America. Lula called on his colleagues to give Obama a
chance to take office and allow him time to implement policy
changes. Yet he insisted the region should not continue to
be subservient in its relationship with the United States.
He also took the opportunity to denounce the U.S. trade
embargo on Cuba, saying at the Rio Group meeting, "there is
no more explanation for it, there is no longer an economic
explanation, there is no longer a political explanation, that
is to say, there exists no reason for it." Lula also made
harshly critical remarks about the U.S. and other developed

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nations' responsibility for the global financial crisis.
Initial editorials in major media have been highly critical
of the "exclusionary" tone of the CALC, which has been
derided as yet another misstep by Lula toward less valuable
south-south relationships and away from the global leaders
that are also Brazil's major trading partners.


8. (C) COMMENT: Media analysts, academia, and the local
diplomatic corps are currently engaged in a Bahia post-mortem
that may alter initial, mostly negative, assessments focused
on the shrillness of anti-U.S. rhetoric at this
Brazil-organized event. For or against, observers agree that
Brazil's calling and hosting of this two-day multi-summit
event demonstrated that the GOB is able and willing to
exercise increasingly visible regional leadership, with an
eye toward gaining legitimacy as the principal regional
representative on the global stage. (See additional comment
refs B and C.) END COMMENT.
SOBEL