Identifier
Created
Classification
Origin
09BRASILIA282
2009-03-10 20:32:00
UNCLASSIFIED
Embassy Brasilia
Cable title:  

BRAZIL: OFFICIALS DISCUSS CUBA, BOLIVIA, ENERGY

Tags:  PAO ETRD PREL ECON BR 
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UNCLAS SECTION 01 OF 05 BRASILIA 000282 

SIPDIS

DEPARTMENT FOR WHA/BSC

E.O. 12958: N/A
TAGS: PAO ETRD PREL ECON BR
SUBJECT: BRAZIL: OFFICIALS DISCUSS CUBA, BOLIVIA, ENERGY
COOPERATION WITH STAFFDEL LEWIS

REF: A. 09 BRASILIA 000262

B. 08 BRASILIA 1638

C. 08 BRASILIA 1637

D. 08 BRASILIA 1636

E. 09 BRASILIA 00158

UNCLAS SECTION 01 OF 05 BRASILIA 000282

SIPDIS

DEPARTMENT FOR WHA/BSC

E.O. 12958: N/A
TAGS: PAO ETRD PREL ECON BR
SUBJECT: BRAZIL: OFFICIALS DISCUSS CUBA, BOLIVIA, ENERGY
COOPERATION WITH STAFFDEL LEWIS

REF: A. 09 BRASILIA 000262

B. 08 BRASILIA 1638

C. 08 BRASILIA 1637

D. 08 BRASILIA 1636

E. 09 BRASILIA 00158


1. (SBU) Summary: On February 19, Jessica Lewis, Senior
Foreign Policy Adviser to Senate Majority Leader Harry Reid
and Caroline Tess, Professional Staff Member and Senator Bill
Nelson,s designee to the Senate Select Committee on
Intelligence met with Brazilian government officials from the
office of the presidency, Ministry of Exterior Relations,
Ministry of Finance (ref a),Ministry of Environment, and the
Brazilian Senate to discuss Brazil,s role in the global
financial crisis, regional politics, hemispheric energy
initiative, and climate change. Brazilian interlocutors
expressed support for increased bilateral cooperation on
energy, but sent mixed signals on hemispheric cooperation in
that area. Brazilian officials also expressed hope that the
United States would begin showing signs of a shift in its
policy on Cuba, and greater understanding of the fundamental
changes taking place in Bolivia, Ecuador and Venezuela which
require a more nuanced U.S. approach to the region. End
summary.

--------------
Planalto: Cuba Should Be U.S. Priority
--------------


2. (SBU) During the visit, Staffdel Lewis met with Ambassador
Marcel Biato, Assistant to Marco Aurelio Garcia, President
Lula,s foreign policy adviser. Biato was pleased to note
the frequent opportunities the two governments will have over
the coming weeks to move the bilateral relationship forward,
including Foreign Minister Amorim,s meeting with Secretary
Clinton, the upcoming Lula visit to Washington in March and
the Summit of the Americas. Biato also noted that in a
conversation with Chilean President Bachelet, President Obama
had pledged to send a high-level representative to the
Progressive Governance Conference that will take place in
Chile from 27-28 March and will count on the participation of
President Lula as well as dozen other world leaders.


3. (SBU) Asked about Brazil,s impressive hosting of four
simultaneous summits in Salvador late last year (see refs
b-d),Biato noted that it was part of Brazil,s effort to
form an institutional basis for a formal and more intensive
regional agenda that reflects a region that is capable of

taking responsibility for its own problems and a re-alignment
in terms of the power structure of the region. As part of
that more intensive agenda, Biato added, Brazil has made it a
priority to include Cuba in these fora. Without Cuba, Biato
observed, "you would have a black hole and not a truly
regional approach". Commenting the expectations of the
Brazilian government had for the new U.S. Administration,
Biato noted that Brazil hoped that President Obama would
signal a greater openness on the Cuba question. Any change
in approach to Latin America, Biato added, must include Cuba
as a priority. He emphasized that Cuba is not a monolithic
society, even in among the ruling class, and noted that
during a visit to Cuba by President Bachelet to meet with
Raul Castro, Fidel Castro made critical comments about
Chile,s relations with Bolivia, to which Raul Castro had
dismiss to Bachelet. Biato noted, however, that while the
Brazilian government understood that it would be difficult to
expect a major shift in policy before the Summit of the
Americas, what it was looking for was a gesture or a "sense
of momentum" towards an overall change of approach.


4. (SBU) Discussing Brazilian expectations heading into the
Summit of the Americas, Biato noted that more than specific
laundry list of policies, which would imply that the United
States had decided on its own the course its Latin American
policies would follow without first consulting with the
region,s leaders, Brazil hoped for an overall sense of
direction. For example, on the issue of hemispheric energy
cooperation, Biato noted that Brazil would be open to such a
concept, but that it would be surprising if President Obama
offered a structured approach, rather than broad themes and
goals. (Note: Biato,s openness on hemispheric energy

BRASILIA 00000282 002 OF 005


cooperation stands in contrast with the more negative
reception the idea has received in Itamaraty as reported in
ref e and below. End note.)

--------------
Brazil will help on Bolivia, Venezuela
--------------


5. (SBU) Turning to the three most problematic countries from
the U.S. perspective, Bolivia, Ecuador, and Venezuela, Biato
noted that the United States will have to accept a certain
level of discomfort as these countries were undergoing
fundamental changes that both the United States and Brazil
will have to learn to accommodate. He added that both Brazil
and the United States are in similar situation, in that there
is anti-Americanism and a growing anti-Brazilianism in these
countries, and that Brazil, despite suffering graver
consequences than the United States, when these countries
undergo periods of instability, has learned to live with it
for the sake of stability in the region. He noted, as an
example, that despite a healthy rainy season providing
sufficient hydroelectric power to obviate the necessity to
import Brazilian gas, Brazil has decided to keep the gas
imports going for the sake of providing support and revenue
for Bolivia.


6. (SBU) Staffdel members raised the issue of Bolivia,
expressing concern about the Bolivian Government,s actions
on regarding the presence of the U.S. Ambassador and the DEA.
Biato noted that it was a concern for Brazil as well, and
that President Lula will raise these concerns with President
Morales and ask for a gesture from the Bolivian president,
adding that it was not in Brazil,s interest to have DEA out
of Bolivia, since Brazil lacked the capability to pick up the
slack in that area. In a similar vein, Biato added that
President Chavez had asked President Lula for help in
re-establishing dialogue with the United States.
-------------- --------------
Itamaraty: Bilateral, Not Hemispheric, Energy Cooperation
-------------- --------------


7. (SBU) The Ministry of Exterior Relations, (MRE) Director
of the Department of Energy, Andre do Lago, discussed both
international energy policy and climate change. With respect
to biofuels, he thought that the United States and Brazil
were natural partners, since they are the two largest
producers and consumers. He said that while some had tried
to drive a wedge between the two countries based on the
differences between corn and sugarcane based ethanol, the
Brazilians realized that this would be counterproductive.
Also, he said that both countries had overcome internal
concerns over biofuels. He would like to see increased
efforts on turning biofuels into a global commodity. Brazil
had developed a good bilateral energy relationship with the
United States during the Bush Administration, and do Lago
sought to build and expand that relationship.


8. (SBU) Brazil was in its early days in developing its oil
and gas policy, do Lago commented. Until the recent off
shore discoveries, the GOB had not thought of itself in terms
of a major oil producer. There is concern about the oil
"curse" and Brazil hopes to pursue a "balanced" course, close
to what Norway has done, he added. One element is
determining what sort of national entity will be responsible
for developing the new offshore oil finds. Referring to the
ongoing deliberations of the intergovernmental ministerial
committee, Do Lago predicted that this should be sorted out
by the time President Lula goes to the United States in
mid-March. (Note: There have been predicted timelines for
announcement for a final decision on the oil sector regime,
all of which have come and gone as the committee continues to
consider alternatives. According to sources taking part in
the negotiations, there is no clear date for decision making
on the horizon. End note.) Moreover, he added, the energy
relationship with the United States is maturing, as shown by
the state-dominated oil company Petrobras making major
investments in the United States. Still, he commented,
Brazil has not yet decided what to do with its new found oil
riches. There is disagreement over whether to partner with
the United States or Europe, or possibly with China or Japan.

BRASILIA 00000282 003 OF 005


(Note. Do Lago reported that earlier in the day Brazil had
signed four agreement with China on energy, including one
calling for China to invest US$10 billion in developing the
offshore finds in return for agreeing to sell a portion of
the oil produced to China. Regardless of what type of
governmental cooperation may be developed, the GOB has
expressed its continued interest in U.S. private sector
involvement in exploiting its oil reserves, where several
U.S. firms are currently active with Exxon in a partnership
role with Petrobras in some of the new deep sea blocks. End
note.)


9. (SBU) Do Lago would like to see closer and stronger ties
with the United States in the energy sector. He pointed to
the 2003 energy Memorandum of Understanding (MOU) as the
vehicle for enhanced cooperation. At the same time, do Lago
voiced skepticism about a hemisphere wide approach, as
envisioned in legislation proposed by Senator Lugar last
year. He explained that with Venezuela,s Hugo Chavez and
his friends there did not seem much chance for proceeding;
though he did not say that Brazil itself would be obstructing
(nor helping) such hemisphere-wide efforts. Do Lago noted
that the South American regional organization UNASUL was
working on energy, and it expected to launch negotiations of
a regional treaty in March. He opined that if the USG
pursued a Western Hemisphere energy agreement that it would
fail just as did the Free Trade Agreement of the Americas
(FTAA),which was not a happy experience. (Note: These
comments echo a conversation Ambassador Sobel had with Do
Lago,s immediate superior, Andre Amado reported ref d. End
note.)

-------------- --------------
Climate Change and Copenhagen: The United States is being set
up
-------------- --------------


10. (SBU) Turning to climate change, Do Lago explained that
he was very familiar with the subject, though no longer had
direct responsibility within MRE. He stated that Brazil
firmly felt that negotiations should be just under the UN
Framework Convention on Climate Change (UNFCCC) and that
discussions elsewhere -- such as at the G-8 and the Major
Economies Meeting -- were distractions and counterproductive.
He was gloomy about the UNFCCC conference in December in
Copenhagen, lamenting the overly high expectations. There
are two things going on he explained: (1) the members of the
Kyoto Protocol with obligations (which excludes the United
States and Brazil) are working out the next round of their
commitments; and (2) the members of the UNFCCC will negotiate
a set of national targets. In the latter case, the United
States, China, India and Brazil should present "interesting
national climate change plans" and the Europeans and other
Kyoto Protocol members will have to take on new targets. He
warned that the Europeans really want to get out of Kyoto
Protocol obligations and are setting up the United States for
the blame. He said, the Europeans, Canada and Japan are
"preparing something very nasty for you in Copenhagen." They
want to see an agreement come out that is unpalatable to the
United States, which would lead to a failure in Copenhagen
and so would excuse them from taking on new obligations under
the Kyoto Protocol. Thus, the United States and Brazil need
to work together, he said, to avoid letting the Kyoto
Protocol members off the hook.

--------------
Brazil,s New Climate Change Plan
--------------


11. (SBU) Vice Minister of Environment Izabella Teixeira
described the efforts of the GOB in addressing climate change
in Brazil. She highlighted the new National Plan on Climate
Change, which was promulgated in December, and which covers
the full gamut of issues. The Environment Ministry leads the
GOB,s efforts to coordinate efforts that involve not just
environmental concerns, but also economic and social ones.
Implementation of the plan means working with the economic
and political actors, such as the Ministry of Mines and
Energy and the Finance Ministry. In fact, the National
Climate Change Plan involves 17 ministries coordinated by the

BRASILIA 00000282 004 OF 005


President,s office. This plan constitutes a first draft of
a roadmap for Brazil and the focus is not just on
deforestation, but also energy generation, energy efficiency,
and industrial activity.
With respect to deforestation, she stressed the importance
placed on straightening out the lack of land titles in the
Amazon. Further, President Luis Inacio Lula da Silva
intended to meet in March or April with the mayors of the 36
municipalities with the highest rates of deforestation to
seek a political pact on how to address this problem. The
GOB intends to link access to government support, including
that from the national Amazonia Fund, to the municipalities
efforts to control deforestation. Teixeira stated that today
the Environment Ministry looks at more than just the "Green
Agenda" of biodiversity and conservation, they also deal with
"complex economic and political issues surrounding climate
change."


12. (SBU) On energy, Teixeira stated that Brazil wanted to
have a cleaner energy matrix, which mean generating more
renewable energy, using biofuels, and replacing older,
dirtier fossil fuel plants with ones that use cleaner natural
gas. She said that Brazil would need to modify its licensing
regime for infrastructure projects. Also, she wanted to use
the U.S. Minerals Management Service (MMS) as a model for
auctioning off oil and gas blocks. (Note: The revision of
the Brazilian system for the auctioning or contracting of oil
and gas blocks is currently under examination by an
inter-governmental ministerial committee. While Teixeira,s
expressed preference is interesting, it does not necessarily
represent the view of the deciding committee. End note.)
Teixeira expressed interest in increasing collaborative
research with the United States in the areas of biofuels,
other energy sources, and climate change. In general, she
looked forward to developing a more robust bilateral
relationship with the United States. Teixeira was optimistic
about the upcoming Lula-Obama meeting in March. She intended
to reach out to Brazilian Senators and Deputies planning to
accompany Lula to the United States on possibilities of
greater collaboration.

-------------- -
Congress: Pleased with Cooperation on Biofuels
-------------- -


13. (SBU) In a meeting with Thalis Murrieta, senior staffer
to Senator Joao Tenorio primarily to discuss energy issues,
Murrieta shared his interest in seeing both congresses more
involved in the bilateral biofuels MOU. He noted that while
there was strong interest in Brazil in seeing the United
States eliminate the ethanol tariff, his senator,s
particular view was that it helped ensure a continued U.S.
ethanol demand in the long run by developing a domestic U.S.
market for ethanol. He noted his pleasure with the expansion
of third country ethanol development assistance. In
Murrieta,s assessment, this expansion is a positive step
towards biofuels becoming a viable worldwide commodity,
recognizing that the United States and other potential large
markets were unlikely to trade dependence on foreign oil for
dependence on foreign ethanol. Lewis suggested that once
administration officials were in place and better able to
indicate priorities for energy and the region that Congress
would be in a better position to determine its agenda on
these issues. She pointed to the Senate Foreign Relations
Committee where Chairman John Kerry has made global climate
change a signature issue, as one committee that may have
receptivity to working on energy issues with Brazil.

-------------- --------------
Opposition: Foreign Policy is Government,s Weakness
-------------- --------------


14. (SBU) In a meeting with Senator Arthur Virgilio,
Brazilian Social Democracy Party (PSDB) leader in the Senate,
the senator emphasized the need for Obama Administration to
reverse what he saw as a trend of policy toward the region
that has been too distant in recent years, while noting that
it would be natural for the economic crisis and pressing
matters in the Middle East to remain top priorities. Asked
about his views on the current government and what

BRASILIA 00000282 005 OF 005


differences would characterize a future PSDB presidency,
Senator Virgilio offered blistering criticism of the
direction of the current government,s foreign policy,
particularly its overly acquiescent approach to Bolivia,
Ecuador, and Venezuela, and what he thought was an
overemphasis on the current South-South approach to foreign
relations, to the detriment of Brazil,s relationships with
its traditional partners in the United States and Europe.
Regarding Venezuela,s chances of geting into Mercosul,
Virgilio noted that he woulddo everything in his power to
keep Venezuela out but it was only a matter of time before
the Senae accepted its entry.


15. (SBU) Turning to dometic politics, Senator Virgilio
noted that he peronally wished that Sao Paulo Governor Jose
Serr would be the PSDB,s standard bearer in the 2010presidential elections, but that he hoped that the SDB would
hold some kind of primary in order to etermine the
candidate, rather than the party eltes picking him.
Ultimately, he added, a primary would force both Serra and
Minas Gerais governor Aecio Neves to travel the country and
be forced to visit states like his own, Amazonas, to truly
learn of the concerns of the different states, and would
ultimately make for a stronger candidacy. He added, in
reference to possible Workers Party candidate Dilma Rouseff,
that she was a leftist ideologue who would have made a "great
minister for Peron", but lacked the charisma, personal charm,
and pragmatism to govern effectively.


16. (U) Staffdel Lewis reviewed this message.


KUBISKE