MEDIA REACTION - WESTERN HEMISPHERE: HONDURAS, COUP;

UNCLAS SAO PAULO 000447 SIPDIS STATE INR/R/MR; IIP/R/MR; WHA/PD DEPT PASS USTR USDOC 4322/MAC/OLAC/JAFEE E.O. 12958: N/A TAGS: KMDR OPRC OIIP XM XR XF BR SUBJECT: MEDIA REACTION - WESTERN HEMISPHERE: HONDURAS, COUP; CHAVEZ'S POLICIES; GLOBAL ECONOMY: FINANCIAL MARKET CRISIS; CLIMATE CHANGE AND ENVIRONMENT; SAO PAULO July 27, 2009 "Chavez is the problem" Op-ed in liberal Folha de S.Paulo (7-27) by Folha journalist Igor Gielow states: "The Honduran crisis.....rewards an era of mistaken regional diplomacy in Brazil...the unanimity as regards to Zelaya's legitimacy seems not to include the majority of Honduran society..... Zelaya's cooptation by Chavez and the consequent campaign for the destruction of the Constitution were rejected by an expressive part of Honduras. That's the reason for the current impasse. Brazil has opted to not enter into direct confrontation with Chavism over the past years. Under Lula, [Brazil] has supported it ideologically...and saw [the Brazilian] interests being hit and its regional influence questioned." "Climate change and trade with the U.S." Op-Ed in business oriented Valor Econtmico (7-27) by Diego Bonomo, Executive Director of the Brazil Industries Coalition (BIC) comments: "Two aspects [of the American Clean Energy and Security Act (Aces)] deserve immediate attention from Brazilian businessmen: the subsidies for U.S. industries with intensive use of energy and exposed to trade; and the requirements placed on imported products....This system....to grant subsidies and to potentially create barriers to imports presents two risks to the Brazilian private sector. The first and more immediate is on exports to the U.S. market and third countries....the second risk is.....the potential conflict in the relationship between multilateral rules in the areas of trade and environment.....The Brazilian private sector should engage in the U.S. legislative process to try to avoid risk [included in the Act]....." "Brazil's Central Bank alters the management of its reserves without leaving Treasuries aside" Editorial in business oriented Valor Econtmico (7-27) states: "....The changes in the composition of [Brazil's] international reserves [Brazil sold last week US$24.3 billion in Treasuries]....reflect only normal decisions of portfolio management [and] therefore do not have relationship with an eventual flight away from the dollar....The indications given by Brazil's Central Bank (BCB) are that it does not intend to stop financing the U.S. government. Brazil is the fourth largest holder of U.S. Treasuries, behind China, Japan and the United Kingdom.....As far as one can see, the dollar will remain the main international reserve. Nonetheless, from now on, the BCB must manage more carefully its reserve investment portfolio to face a much more volatile international environment." POPP