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### Viewing cable 05BRASILIA2672, BRAZIL AND USG SIGN MARITIME TRANSPORT AGREEMENT

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05BRASILIA2672 | 2005-10-06 18:52 | 2011-07-11 00:00 | UNCLASSIFIED | Embassy Brasilia

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

    061852Z Oct 05

` `

    UNCLAS SECTION 01 OF 04 BRASILIA 002672

    SIPDIS

    STATE FOR WHA/BSC
    STATE FOR EB/TRA MILLER AND HAYWOOD
    NSC FOR CRONIN
    TRANSPORTATION FOR DAVID DECARME
    USCG FOR MARIO MERCADO
    USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
    USDOC FOR 3134/ITA/USCS/OIO/WH/RD/DDEVITO/DANDERSON/EOL SON
    BUENOS AIRES FOR TSA

    E.O. 12958: N/A
    TAGS: EWWT ETRD PHSA PREL ASEC
    SUBJECT: BRAZIL AND USG SIGN MARITIME TRANSPORT AGREEMENT

    REF: BRASILIA 2452

    ¶1. Summary.  On September 30, after several years of
    negotiation, Brazil and the USG signed a Maritime Transport
    Agreement in Washington, DC.  The agreement still must be
    ratified by the Brazilian Congress, which we do not
    anticipate will happen in the near-term.  The signing was,
    nevertheless, one more positive area of cooperation on
    maritime issues.  The English text of the agreement is
    included below.  End Summary.

    ¶2. A Maritime Transport Agreement was signed by Secretary
    Norman Mineta of the U.S. Department of Transportation and
    Brazilian Ambassador Roberto Abdenur on September 30 in
    Washington, D.C.  Others present at the signing included
    Flavio Marega, Transportation Counselor, Embassy of Brazil;
    John J. Danilovich, U.S. Ambassador to Brazil; Jeffrey
    Shane, DOT Under Secretary of Transportation for Policy; and
    Karan K. Bhatia, DOT Assistant Secretary for Aviation and
    International Affairs.

    ¶3. The agreement culminates a four year effort to renew the
    previous accord, and will facilitate maritime transportation
    between the U.S. and Brazil.  It represents a positive step
    in continuing to provide market access for U.S. carriers to
    Brazilian commercial cargoes that Brazilian authorities have
    designated as government controlled.  Specifically, the
    agreement ensures equal access for each country's carriers
    to the other country's government-controlled cargo.  (Brazil
    reserves a significant portion of what are in fact
    commercial international cargoes to its own carriers,
    claiming these cargoes are "government-controlled.")  In
    addition, the agreement includes a new provision that
    confirms each country's ability to protect its security
    interests.  Finally, the agreement encourages liberalization
    of the maritime sector and provides for non-discriminatory
    treatment of each side's carriers with respect to maritime-
    related services and facilities and other issues such as
    shipping taxes.  This agreement will particularly benefit
    U.S. carriers moving Export-Import Bank financed project
    cargoes to Brazil.

    ¶4. While the revised agreement is along the lines of the
    previous (expired) one, the Brazilian Congress still must
    ratify the new accord.  Because the current political crisis
    in Brazil has stalled much of the government's legislative
    agenda, we do not expect ratification to happen in the near-
    term.  Indeed, the provisions calling for non-discriminatory
    treatment for U.S. carriers in both countries' cross trades
    (i.e., trade with third countries) may raise concerns in the
    Brazilian Chamber of Deputies and Senate regarding granting
    market access to exclusionary trade arrangements within
    MERCOSUL.  From the U.S. side, as an executive agreement,
    there is no need for Senate ratification.

    ¶5. Other areas of positive maritime cooperation with Brazil
    include the Department of Homeland Security Container
    Security Initiative (CSI), which was inaugurated at the Port
    of Santos on September 22.  In addition, there are on-going
    discussions regarding the Department of Energy's Megaports
    Initiative, which seeks to detect radioactive and/or nuclear
    materials at foreign ports in conjunction with CSI.
    Finally, the U.S. Coast Guard successfully concluded its two-
    week visit to several ports in Brazil on September 23 under
    a reciprocal agreement negotiated earlier in September
    (Reftel).

    ¶6. The English language version of the agreement is below.

    Begin text.

    AGREEMENT ON MARITIME TRANSPORT BETWEEN THE GOVERNMENT OF
    THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE
    FEDERATIVE REPUBLIC OF BRAZIL

    The Government of the United States of America
    and
    The Government of the Federative Republic of Brazil
    (hereinafter the "Parties"),

    Reaffirming their interest in the free flow of maritime
    trade and improved competitive access to such trade for
    national-flag carriers of both Parties, taking into
    consideration the interests of third-flag carriers;

    Noting the continued interest of the Parties in the
    liberalization of their maritime trades;

    Taking into account the increasing use of intermodal
    transport of cargoes in the bilateral trade;

    Recognizing that free and fair competition is the effective
    way to encourage efficient shipping services at favorable
    costs and that such shipping conditions enhance the growth
    of the economies of both countries and their foreign trade;
    and

    Recognizing the desirability of limiting, insofar as
    possible, restrictions on the access of carriers to
    government-controlled cargo and other cargoes;

    Have agreed as follows:

    ARTICLE 1

    The Parties shall conduct their bilateral maritime
    transportation relations in accordance with the following
    provisions relating to international ocean-borne cargo
    trade, excluding bulk cargoes and cargoes transported
    between ports or points in the territory of either Party:

    a)  The Parties recommit themselves to the pursuit of free
    and open maritime trade through administrative and
    legislative measures;

    b)  The Parties shall afford fair and nondiscriminatory
    opportunity to national-flag carriers of both Parties and to
    third-flag carriers to compete for the carriage of
    commercial cargo in the bilateral trade.  Each Party shall
    further afford fair and nondiscriminatory opportunity for
    national-flag carriers of the other Party to compete for the
    carriage of commercial cargo in third-country trades;

    c)  National-flag carriers of each Party shall have equal
    and nondiscriminatory access to the government-controlled
    cargo of the other Party, excepting defense cargoes and
    agricultural assistance cargoes, for carriage in vessels
    owned or chartered by those carriers.  If any unintended
    imbalance develops in the carriage of the government-
    controlled cargoes, the Parties shall hold consultations
    expeditiously pursuant to Article 2 of this Agreement, in
    order to find a solution;

    d  Waivers for the carriage of government-controlled cargo
    by foreign-flag vessels shall be issued expeditiously.  The
    availability period used by each Party to determine whether
    waivers for the carriage of government-controlled cargo in
    vessels operated by foreign-flag carriers may be granted
    shall consist of no more than three days before and seven
    days after the shipper's requested sailing date. Each
    Party's competent authority will respond to waiver requests
    within three working days of receipt;

    e)  The Parties, upon request by a shipper, carrier or other
    interested party, shall make every effort to advise within
    three working days if a specific cargo falls under the laws
    of controlled cargo and the basis for such characterization;

    f)  The Parties shall afford fair and nondiscriminatory
    treatment with respect to commercial operations of each
    Party's carriers, including the establishment of business
    offices, the ownership and operation of maritime facilities,
    the intermodal movement of cargo, and the establishment of
    such other facilities as may be necessary to the efficient
    conduct of maritime services;

    g)  In order to facilitate efficient operation of maritime
    transport, the Parties shall not impose any restrictions on
    the transshipment or relay shipment of cargoes in the
    bilateral trade, subject to cabotage laws of each Party;

    h)  On a reciprocal basis, each Party shall afford vessels
    of the other Party the same treatment as its own vessels
    with respect to taxes assessed on tonnage or freight value
    and other taxes and levies;

    i)  The tariffs of and shipping documents issued by
    multimodal transport operators or ocean transportation
    intermediaries organized under the laws of either Party
    shall be recognized and accepted by the Parties in their
    bilateral trade;

    j)  The Parties shall regularly exchange updated information
    on the value and tonnage, by flag and type of vessel, of
    their respective government-controlled cargo in the
    bilateral trade; and

    k)  For the purposes of the present Agreement, "government-
    controlled cargo" means cargo, all or some portion of which
    under the law of the Party is reserved for transportation by
    its national-flag carriers.

    ARTICLE 2

    The Parties shall consult on changes in internal legislation
    deemed likely to affect the application of the Agreement, as
    well as on further matters affecting the bilateral maritime
    trades, or on any matter involving the application or
    interpretation of this Agreement.

    ARTICLE 3

    The provisions of this Agreement shall not limit the right
    of either Party to take any legitimate action under
    international law for the protection of its security
    interests.

    ARTICLE 4

    For purposes of implementation of this Agreement, the
    competent authorities shall be, for the United States of
    America, the Maritime Administration (MARAD) of the U.S.
    Department of Transportation, or such body as the United
    States Government may designate, and, for the Federative
    Republic of Brazil, the National Agency for Waterways
    Transportation (ANTAQ), following the guidelines issued by
    the Ministry of Transportation.  Each Party shall notify the
    other through diplomatic channels of any change in the
    identity of its competent authority.

    ARTICLE 5

    The Agreement shall enter into force upon completion of an
    exchange of notifications that internal procedures necessary
    for its entry into force have been completed.  It shall
    remain in force for a period of five (5) years, its validity
    being automatically renewed thereafter for successive one-
    year periods, unless a contrary notification is presented by
    any one of the two Parties.  Either Party may, at any
    moment, terminate the present Agreement.  The termination
    shall be effective sixty (60) days after the receipt of the
    written notification by the other Party, through diplomatic
    channels.

    DONE at Washington, this thirtieth day of September, 2005,
    in duplicate in the English and Portuguese languages, both
    texts being equally authentic.

    FOR THE GOVERNMENT
    OF THE UNITED STATES
    OF AMERICA:

    FOR THE GOVERNMENT
    OF THE FEDERATIVE REPUBLIC
    OF BRAZIL:

    End text.

    ¶7. This cable was coordinated with the Department of
    Transportation.

    DANILOVICH

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