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### Viewing cable 08BRASILIA1265, LULA, AMORIM DISCUSS TRADE, CUBA, UNSC REFORM WITH

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08BRASILIA1265 | 2008-09-22 21:02 | 2011-07-11 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Brasilia

`

    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

    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

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