BRAZIL: SCENE SETTER, USTR/MRE BCM DECEMBER 9

UNCLAS SECTION 01 OF 07 BRASILIA 001385

SENSITIVE
SIPDIS

STATE PASS USTR FOR EVERETT EISSENSTAT, KATE KALUTKIEWICZ
STATE FOR WHA AND EEB

E.O. 12958: N/A
TAGS: ETRD KIRP ECON EFIN EINV EAGR BR
SUBJECT: BRAZIL: SCENE SETTER, USTR/MRE BCM DECEMBER 9

REF: A) Brasilia 1042, B) Brasilia 1175, C) Brasilia 1338


1. (SBU) SUMMARY: The relationship between the United States and
Brazil is productive and broad-based, with growing economic and
trade ties. The visit provides an important opportunity to
highlight the potential for increased bilateral cooperation,
emphasizing that specific trade disputes need not define our overall
positive relationship. While disputes including cotton must be
managed, excellent opportunities for increased bilateral trade and
investment cooperation exist. Private sector interlocutors in Sao
Paulo will be eager to explore possible scenarios to resolve the
cotton dispute, will lobby for GSP renewal, and may raise the
GOB-proposed legislation that would provide a significant government
role in development of potentially vast new off-shore oil resources.
Your trip to Recife provides an opportunity to discuss the
importance of intellectual property rights and an enabling
environment to foster innovation, particularly in a region that has
traditionally lagged behind other areas in Brazil. END SUMMARY.

POLITICAL OVERVIEW
--------------


2. (SBU) With democracy re-established in 1988 after decades of
military dictatorship, Brazil's democratic institutions are
generally strong and stable. President Luiz Inacio "Lula" da Silva
remains a popular president -- one of the most popular in Brazil's
history and indeed in the world today, with recent approval ratings
still as high as 75 percent nearly seven years into his presidency.
This sustained popularity is based on a combination of his personal
connection with the country's lower classes, orthodox economic
policies, and expanded social programs. Ongoing public scandals
involving the leadership of the Senate and various members of
Congress have further eroded the legislature's power vis-a-vis the
executive and its ratings among the Brazilian public. The court
system remains cumbersome and unreliable, but has recently taken
limited steps to curb impunity among public officials, which have
been well received by a public accustomed to abuses by authorities.
The Brazilian political elite and media are already focused on the
October 2010 national elections for president, governors of all 26
states and the federal district, two-thirds of the senate, and all
federal deputies. Lula is constitutionally barred from seeking a
third term and has designated Civil Household Minister (Prime
Minister-equivalent) Dilma Rousseff as his party's candidate to
succeed him. At this point, Rousseff is a distant second in the
polls to likely opposition candidate Sao Paulo Governor Jose Serra,
but with almost a year to go, the race remains unpredictable.


3. (SBU) The United States and Brazil share the basic goals of
fostering hemispheric stability and integration, promoting democracy
and human rights, and preventing transnational illicit activity.
The attainment of a permanent seat on the UN Security Council has
been a central goal of Brazil's foreign policy under President
Lula's government. Regionally, Lula has maintained Brazil's
historic focus on stability, seeing good relations with all parties
as the best way to achieve this goal. As a result, Brazil maintains
an active dialogue with Venezuela and Cuba, has worked to foster
good relations with Bolivia and Ecuador, and has stood firmly on the
principle of respect for sovereignty in the region. In line with
Lula's demonstrated interest in Brazil playing a larger role in
global issues, as well as expanding Brazil's commercial ties, Lula
hosted separate visits from Iranian President Ahmadinejad, Israeli
President Peres, and Palestinian President Abbas, among others, in
November.

ECONOMIC OVERVIEW
--------------


4. (SBU) Brazil is the ninth largest economy in the world and holds
investment grade status from the major rating entities. Annual
Gross Domestic Product (GDP) grew 5.1 percent in 2008, and inflation
was 5.8 percent. The global economic crisis eroded previous
predictions for annual GDP growth for 2009 from four per cent to
essentially flat or slightly negative. Despite this decline in
immediate prospects, Brazil has thus far weathered the crisis better
than most major economies and has recently shown signs of a
recovery, led by strong domestic demand. Conservative macroeconomic
policies in the years prior to the crisis, and targeted responses
during the crisis -- including credit injections in the financial
system and tax cuts on automobiles and consumer durables -- played a
role in lessening the impact of the global crisis on Brazil.


5. (SBU) Brazil's relatively successful management of the crisis
has encouraged the GOB to engage proactively and constructively in
the debate over how to handle the economic crisis including through
the G20 process. Brazil has called for increased regulation of the
global financial system, increased global access to trade finance,
and an expanded voice and vote for large emerging countries like

BRASILIA 00001385 002 OF 007


Brazil in the International Financial Institutions.


6. (SBU) Brazil is a major producer and exporter. Agriculture
makes up 36 percent of exports, and the agribusiness sector accounts
for 25 percent of Brazil's GDP. Brazil is a leading exporter of
soybeans, beef, sugar, coffee, and orange juice. Brazil also
distinguishes itself as a major exporter of civilian aircraft,
steel, and petrochemicals. The United States is Brazil's top
trading partner overall, although in March China became Brazil's
primary export destination. Prior to the current financial crisis,
U.S.-Brazil trade experienced significant annual growth, surpassing
USD 60 billion in 2008.Brazil typically experiences a slight
positive balance in the trade relationship.

--------------
BCM AGENDA TOPICS
--------------

TRADE AND INVESTMENT FRAMEWORK AGREEMENT (TIFA)
-------------- --


7. (SBU) The GOB, including the Ministry of External Relations
(MRE),the Ministry of Development, Industry and Trade (MDIC),and
the External Trade Chamber (CAMEX) Secretariat, has indicated
interest in exploring ways to deepen bilateral trade cooperation
with the United States. There is a great deal of GOB interest in
implementing the CEO Forum recommendation to pursue a TIFA with the
United States - albeit by another name, given negative connotations
associated the word "tifo" (typhoid) in Portuguese. While tariff
negotiations could only occur in 4+1 format with Brazil's Mercosul
partners, Embassy interlocutors agree there is scope for bilateral
cooperation, with the potential to expand eventually to 4+1
cooperation if there is mutual interest (NOTE: given recent forward
movement in the Brazilian Congress on Venezuela's Mercosul
membership application, you may wish to ask your interlocutors how
Venezuela's potential membership in Mercosul will affect cooperation
among the four existing members and potential third country
partners. END NOTE). In areas of joint interest, Brazil and the
United States could potentially make common cause in approaches to
third countries. Some in the Brazilian trade associations (Sao
Paulo-based FIESP and its umbrella association CNI) have indicated
interest in more strategic bilateral engagement. Possible areas to
explore with the GOB or that may be raised in your Sao Paulo private
sector discussions include:

BILATERAL INVESTMENT TREATY (BIT)
--------------


8. (SBU) With respect to investment, the USG and the Brazilian
government have had productive consultations on BIT elements,
although Brazil is still cautious about negotiating BITs given
historical congressional opposition. CNI has traditionally been
cautious about BITs, seeing them as a constraint on industrial
policy, but has recently begun re-examining this position as
Brazil's overseas FDI increases. MRE plans a side session on the
margins of the December 14 EPD to further discuss investment
agreement elements.

TRADE FACILITATION
--------------


9. (SBU) GOB and Brazilian industry have provided significant
feedback that intensified cooperation on trade facilitation would be
welcome. USDOC and CAMEX have sponsored two week-long trips this
year for GOB agencies to learn how customs clearance and
inter-agency coordination works in the United States. Other
activities include seminars held by CBP in Brazil for Brazilian
Customs and the Federal Police, and a Commercial Dialogue Trade
Facilitation meeting which was held in Manaus in November. The CEO
Forum has also prioritized trade facilitation. There is some
sensitivity regarding the CBP Trade Facilitation and Supply Chain
Security Program within MRE. While CAMEX, MDIC and the trade
promotion department within MRE support and welcome the program, the
MRE transnational crimes office is not familiar with the program and
would benefit from a briefing explaining the advantages to Brazil in
participating. MRE has also requested to add this topic to the
December 14 U.S.-Brazil Economic Partnership Dialogue agenda in
Washington.

WTO COTTON DECISION
--------------


10. (SBU) On November 11, the Brazilian External Trade Chamber
(CAMEX) published for public comment a list of goods that could
potentially be subject to increased tariffs (100 percentage points)
as part of Brazil's retaliation against U.S. cotton subsidies.
CAMEX accepted public feedback on the list until November 30 and is

BRASILIA 00001385 003 OF 007


expected to present a refined list to CAMEX ministers by
mid-December. If approved, the increased tariffs could take effect
as early as January, 2010.


11. (SBU) Press reports indicate that CAMEX has also prepared a
draft law on cross-retaliation against U.S. intellectual property
and submitted it to the Office of the Presidency (Casa Civil) for
analysis. The draft reportedly proposes to tax IP royalties and to
withdraw IP rights. The Casa Civil can decide to send the draft law
to Congress as a provisional measure (which would give it procedural
precedence over other agenda items),a new draft law, or as a
substitute for an existing draft law on cross-retaliation (sponsored
by Deputy Paulo Teixeira). Whether MRE would actually invoke
cross-retaliation remains an open question. While MRE sees the
threat of cross-retaliation as a potential tool to encourage US
compliance with the cotton decision, the Ministry is aware of
potential repercussions on the Brazilian investment climate were it
actually to revoke or tax IPR. Mission has no indication that GOB
is considering cross-retaliation on services at this time.


12. (SBU) Brazilian business groups have stated opposition to
cross-retaliation. Business contacts have encouraged focus on
compensation rather than retaliation, and if necessary prefer
retaliation to focus on goods. Some have also suggested increased
U.S. trade assistance in third countries, such as low-income African
nations, as an offset to increased Brazilian tariffs. Mission
understands that CNI and the US Chamber are working to develop joint
Brazil-United States Business Council (BUSBC) recommendations to
resolve the cotton dispute, with a hope to finalize their proposal
by the December 4 BUSBC Plenary in Washington.

DOHA ROUND
--------------


13. (SBU) Brazil has been a significant voice in the WTO's Doha
Round negotiations and concluding Doha remains a high priority for
Brazil. However, Brazil has been clear that while it is interested
to hear what specific access USG seeks, it is reluctant to engage in
bilateral negotiations on scheduling. Foreign Minister Amorim has
criticized the United States for "greed" in the negotiations and
called for, on behalf of developing countries, a new negotiating
meeting in March. GOB, reflecting FIESP/CNI industry positions, has
been resistant to WTO sectorals, including electronics or chemicals.
Amorim's public rhetoric puts responsibility for progress on the
Doha Round on the USG's shoulders.

GSP
---


14. (U) Private sector representatives at your Sao Paulo AmCham
event or business roundtable at the Sao Paulo Federation of
Industries (FIESP) may raise this issue. Industry keeps a close eye
on developments in the U.S. Congress on GSP renewal, and strongly
advocates remaining in the GSP program. MRE will press for
continued inclusion in GSP, arguing the program benefits US
producers and disadvantaged suppliers in the Northeast of Brazil.

STANDARDS AND SPS MEASURES
--------------

--Beef and Pork Regulations:


15. (SBU) Brazil prohibits imports of live cattle, beef, and beef
products from the United States and has proposed new regulations
that are more restrictive than international guidelines for safe
trade in such products, particularly with respect to Bovine
Spongiform Encephalopathy (BSE). In October 2008, Brazil notified
to the WTO a draft regulation (G/SPS/N/BRA/483) tat establishes its
sanitary requirements for importation of ruminants and ruminant
products from cuntries affected by BSE. Brazil's draft regulatio
exceeds World Organization for Animal Health (OE) guidelines for
trade of these products from cntrolled-risk countries, such as the
United States. The USDA Animal and Plant Health Inspection Serice
(APHIS) presented technical comments to Brazl's draft regulation
requesting Brazil's MAPA relign its import regulation with OIE
guidelines. During September 2008 bilateral technical discussions,
USDA-APHIS responded to a MAPA risk assessmen questionnaire on the
U.S. control and surveillace system for BSE. To date, there has
been no ation by Brazil's MAPA to move forward on this issu.


16. (SBU) Brazil restricts imports of pork and pork products from
the United States due to reqirements for Trichinosis. USDA-APHIS
received nw requirements for imports of these products from APA.
USDA-APHIS has established a voluntary certfication program for
Trichinosis and presented a certification proposal to MAPA in May

2009. MAPArejected the USDA proposal in October 2009. MAPA s
currently insisting on testing and will not alow for certification

BRASILIA 00001385 004 OF 007


or treatment.


17. (SBU) At the same time, MRE will press USTR for forward
movement in the APHIS rule-making process for access for pork from
the State of Santa Catarina as well as overall progress in the APHIS
assessment of Brazil for foot and mouth disease.

-- Medical Devices:


18. (SBU) In late 2006, Brazil adopted a regulation (Resolution
185) which requires companies to submit economic information (some
of it proprietary),including projected worldwide pricing
intentions, in order to register and re-register certain medical
devices. Registration is a requirement for these products to be
placed on the Brazilian market. The United States continues to
express its concern that Brazil's National Health Surveillance
Agency (ANVISA) requires the submission of certain economic data
with each registration that does not appear to be related to the
safety and efficacy of medical devices and is unnecessarily costly
and burdensome. U.S. industry has indicated that it would be very
challenging to comply since some of the information required by
ANVISA either does not exist, is sensitive commercial information,
or is only available if obtained from other companies, which raises
potential antitrust issues. Brazil and the United States are
currently engaged in discussions aimed at resolving the issue.


19. (SBU) ANVISA's Resolution 25, implemented on May 18, 2009
requires ANVISA inspections of facilities that produce certain "high
risk" medical devices to be sold in the Brazilian market. Industry
alleges that ANVISA does not have sufficient resources to inspect
all overseas facilities by the May 22, 2010 deadline, and that
failure to do so by the deadline could lead to the disruption of
hundreds of millions of dollars in trade. Brazil and the United
States are coordinating meetings with the private sector to address
their concerns about the implementation of the regulation. On
November 4, ANVISA chaired a seminar with members of the medical
device industry to discuss the regulation. ANVISA committed to
publish a technical note clarifying the regulation and answering
industry-submitted questions and also to post instructions on their
website regarding how to request an inspection appointment. In the
last week of November, ANVISA did publish a technical note with
clarifications of some definitions and procedures, but has not yet
published answers to specific industry-submitted questions.

--Toys


20. (SBU) In late 2007, U.S. industry reported that toy exports to
Brazil were being affected by a new Brazilian measure requiring
certification and testing of toys. On October 16, 2007, Brazil
notified the WTO TBT Committee of additional requirements for
toxicological test methods for toys marketed in Brazil. Industry
argued that the regulation discriminated against imports in
requiring testing by lots in Brazil, noting that the additional
costs for importers were projected at 8-12 percent of the toy's unit
costs and $30-50 million for toy importers annually, with the
possibility of those figures running much higher. After extensive
USG advocacy efforts, on November 5, 2009, Brazil notified to the
WTO the final toy regulation which included many recommendations
suggested by U.S. industry. The discriminatory provisions have
been removed and testing by ILAC accredited labs will be allowed.
Industry has also requested a transition period to comply with the
new rules. Post is consulting with industry to see if any
clarification is needed from the Brazilian National Institute of
Metrology, Standardization, and Industrial Quality (INMETRO)
regarding the final regulation.

--Standards Cooperation


21. (SBU) On November 20 at the Joint Commission Meeting on Science
and Technology, the U.S. National Institute for Standards and
Technology and INMETRO signed a Memorandum of Understanding (MOU)
for physics, chemistry, and standards cooperation. A similar MOU
between the two organizations expired in 2007.

TRADE AND ENVIRONMENT
--------------


22. (SBU) On November 13, the GOB unveiled its position for the
Conference of the Parties-15 (COP-15) to the UN Framework Convention
on Climate Change (UNFCCC) in Copenhagen. The GOB has announced
that it will seek to reduce its economy-wide greenhouse gas
emissions by between 36.1 and 38.9 percent by 2020 compared with
projected "business as usual" emissions. This position represents a
significant advance over Brazil's previous position that only the
developed countries should have emissions reductions targets and the
developing ones needed to preserve room for growth. Brazil,
however, insists that developed countries provide substantial

BRASILIA 00001385 005 OF 007


technology transfer and financial assistance to developing countries
so that they can take mitigation and adaptation measures. Moreover,
Brazil has joined with China, India, and South Africa in vigorously
demanding that developed countries agree at Copenhagen not to create
trade measures related to climate change. MRE plans to raise its
concerns regarding Waxman-Markey legislation provisions that would
allow imposition of trade measures. Brazil has opposed efforts to
reduce or eliminate tariffs on "green" goods because the list of
products in last year's initiative did not include biofuels.

INTELLECTUAL PROPERTY
--------------

--Anti-Piracy:


23. (SBU) Post has previously reported on the GOB's anti-piracy
efforts, which are led by the Ministry of Justice's National
Anti-Piracy Council (CNCP). Ref A details the CNCP's current
priority projects which include: working with municipal authorities
to create legal markets and "cities free of piracy," developing an
anti-piracy website, partnering with internet service providers to
prevent the online distribution of pirated products, and working
with merchants to raise awareness of the negative economic effects
of piracy and counterfeiting. CNCP told Econoff on November 19 that
the projects are on track to make "significant progress" by the end
of 2009.

--Patents and Innovation:


24. (SBU) The Brazilian judicial and legislative branches are in
the process of examining two key pharmaceutical patent-related
issues - the role of the national health vigilance agency (ANVISA)
in reviewing pharmaceutical patent applications and the
constitutionality of Brazil's pipeline patent system. There has
been no resolution of a disagreement between the Brazilian patent
office (INPI) and the Inter-Ministerial Intellectual Property Group
(GIPI) regarding patents for polymorphs and second uses. In
addition, INPI's stated reasoning for a recent patent denial (lack
of inventive step) raises potential questions about the treatment of
incrementally innovative pharmaceutical patent applications - though
underlying political pressure to lower costs for Brazil's AIDS
program may have been at work in that case.


25. (SBU) Brazilian government officials continue to state that
innovation is one of their highest priorities and have indicated
interest in cooperation on specific initiatives (ref B). Continuing
our bilateral discussions on innovation also provides the USG with
an excellent opportunity to highlight the importance of intellectual
property rights (IPR) as a pillar of innovation. While some
Ministries' officials acknowledge the importance of IPR to
innovation, the GOB writ large does not consistently draw a link
between IPR and the development and commercialization of new
technology and invention (ref C). The GOB's consideration of
cross-retaliation on IPR (in the WTO cotton dispute) could be
perceived as a lack of commitment to the long-term value of IPR to
attracting and promoting innovation as a key element of economic
growth. MRE and Casa Civil interlocutors will not eagerly seize on
the theme of innovation's ties to IPR protection. However, MDIC and
CAMEX are well aware of IPR's importance to economic development and
growth, and FIESP has indicated concerns regarding proposals to
cross-retaliate on IPR in the cotton case.

--Copyright:


26. (U) Brazil is not a party to the World Intellectual Property
Organization (WIPO) Copyright Treaty or the WIPO Performances and
Phonograms Treaty (collectively the "WIPO Internet Treaties"). The
Ministry of Culture has held a series of public debates on amending
Brazil's Copyright Law No. 9.610 of 1998. It is expected that such
proposed amendments will be publicly released by end of 2009.


27. (U) In Recife, you will discuss the concrete impact of
intellectual property rights protection and other business climate
issues that impact the development of small business, technological
innovation, and the overall development of the impoverished
Northeast. You will visit the Center for Advanced Studies and
Systems (CESAR),which serves as an incubator for technology
projects and small businesses including and information and
communication technology cluster focusing on software development
known as Portodigital. You will also visit the port of Suape
facilities encompassing an extensive area for industries and port
services based on the concept of port-industry integration. Several
U.S. companies are active in CESAR and Suape.

BIOFUELS
--------------


BRASILIA 00001385 006 OF 007



28. (SBU) For Brazil, turning ethanol into a world commodity is a
key aspect of increasing energy security. Though Brazilian ethanol
is produced from sugar cane, Brazil sees expansion of the global
ethanol market, regardless of feed stock, as a key interest. In
March 2007, the United States and Brazil signed a Memorandum of
Understanding (MOU) on biofuels cooperation. As a result,
scientists and laboratories from the two countries are
collaboratively researching next generation biofuels technologies.
The United States and Brazil are also working together in various
multilateral fora and the bilateral Commercial Dialogue to develop
international biofuels standards and sustainability criteria. By
making it easier to treat biofuels as a tradable commodity, these
standards should foster the emergence of a vibrant global biofuels
market. The U.S.-Brazil Biofuels Steering Group will meet December
15 in Washington.


29. (SBU) One irritant in the biofuels relationship is the 54 cents
per gallon surcharge/tariff charged to imported biofuels. The
Brazilians view the tariff as a measure which supports the corn
ethanol industry to the detriment of more efficient sugar ethanol
and regularly question why there should be a trade barrier to a
clean fuel when there is no such barrier for petroleum. Another
issue of concern is the proposed EPA rule making for a renewable
fuel standard, which the Brazilians view as a non-tariff trade
barrier. The Brazilians contest the modeling that was done to
assess the greenhouse gas effects of fuel lifecycles and fear that
such assessments could be used to unfairly impede exports of
sugar-cane based biofuels from Brazil and the third countries where
we are working together to establish domestic ethanol capabilities.
In a welcome and well-received outreach effort, the EPA sent a team
to Brazil in August to share their modeling methodology and hear the
suggestions and concerns of the Brazilians.

PRE-SALT
--------------


30. (SBU) The discovery in 2007 of potentially massive offshore
("pre-salt") reserves of oil and gas estimated to contain between
30-80 billion barrels of oil equivalent could put Brazil within the
top ten oil countries in terms of reserves. Though the discoveries
have generated a great deal of excitement, industry observers
caution that development will probably be slow in coming due to the
expensive technological challenges involved with ultra-deepwater
drilling, including a worldwide shortage of equipment such as
drilling rigs.


31. (SBU) On August 31, the GOB unveiled its long-awaited proposal
for a new oil regime to administer its ultra deepwater pre-salt
reserves. The proposal, which has been submitted to Congress for
consideration, has been somewhat politicized in this pre-election
year and will likely undergo significant changes. The proposed
legislation would replace the old concessions model and make
parastatal Petrobras, with a required minimum of 30 percent
participation, the operator on each block, responsible for choosing
the contractors, technology, and personnel. It also creates a new
government entity known as Petrosal to represent the government to
manage the service contracts, and establishes a Social Fund to
direct anticipated new oil state revenues against poverty
alleviation, education, and scientific and technological innovation.
Finally, the legislation provides for up to USD 50 billion to
increase Petrobras' capacity to serve its designated role in the
pre-salt exploration.


32. (SBU) U.S. oil companies operating in Brazil are concerned
about the new nationalistic model and warn that it could make their
future operations in Brazil commercially non-viable. They are
particularly concerned about the potential for Petrobras'
designation as sole operator to relegate them to essentially a
financing role, and they cite a high degree of uncertainty regarding
the model's potential impact on their investments in Brazil. ExIm
Bank has extended a USD 2 billion line of credit to support US
equipment and services in development of these reserves.

CITEL MRA AGREEMENT
--------------


33. (SBU) A U.S./Brazil Mutual Recognition Agreement (MRA) on
telecommunications/information technology products has been explored
with Brazil's telecommunications regulator ANATEL through direct
dialogue, and with Brazil's Ministry of Foreign Relations (MRE)
through the U.S./ Brazil Economic Partnership Dialogue (EPD)
mechanism. At the EPD in Brazil in 2008, Department of State
Assistant Secretary Sullivan reaffirmed USG and industry interest in
a U.S./Brazil MRA as a "win-win" for consumers and manufacturers.
During the meeting, MRE noted that Brazilian legislation in general
requires certification tests to be performed in Brazil but that some
exceptions exist for telecommunications/information technology

BRASILIA 00001385 007 OF 007


products. MRE conceded that product coverage of a potential MRA
would be limited, but committed to provide a paper detailing what
products potentially could be included.


34. (SBU) Despite several meetings with ANATEL and MRE since the
2008 EPD to obtain details of the list, to date nothing has been
produced. In MRA seminars in the United States and in meetings with
U.S. industry, ANATEL officials expressed interest in a U.S./Brazil
MRA, but cautioned that the potential transfer of certification
responsibilities to U.S. labs could jeopardize the Brazilian
priority of preserving and developing Brazilian certification labs.
ANATEL offered a limited list proposal to MRE for EPD inclusion that
was rejected. ANATEL understands the importance timing plays in
introducing IT products to market, yet does not want to pursue this
at the expense of Brazilian certification labs. MRE has indicated
that there are "no real exports" on the Brazilian side to the United
States that would create a win/win scenario and that there is
domestic interest in protecting/fostering development of the
Brazilian certifying labs. Consequently, any GOB MRA proposal will
probably cover only whatever small list of products that are
currently allowed, due to complexity/lack of domestic testing
facility, to be tested outside Brazil.

COMMENT
--------------


35. (SBU) With growing economic clout and increasing interest in
engaging in global economic issues, Brazil has seen its importance
in the region and on the world stage expand significantly. While
the government is largely friendly and open to the United States, it
does not and will not always see eye to eye with us. Your visit
provides an opportunity for the United States to advance key trade
and investment interests while once again highlighting the many
positive economic and trade ties that unite the United States and
Brazil.

KUBISKE