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

UNCLAS SECTION 01 OF 03 BRASILIA 003124 
 
SIPDIS 
 
SENSITIVE 
 
NSC FOR WALLACE 
TREASURY FOR SSEGAL 
 
E.O. 12958: N/A 
TAGS: ETRD PREL EFIN ECON EINV BR FTAA
SUBJECT:  BRAZIL:  NO POST-CANCUN REGRETS OR SECOND THOUGHTS 
 
REFS: (A) Brasilia 3089, (B) Brasilia 3070 (C) Brasilia 2233 
 
¶1. (U) All public and official signs are that the GoB still 
feels solid self-satisfaction over its performance at Cancun. 
It displays zero compunction over Cancun's collapse or the 
possible damage to the WTO's future, while reaffirming that 
the WTO remains the planet's indispensable multi-lateral 
trade-policy forum.  This general sentiment seems to reign 
across the spectrum of Brazilian opinion, aside from a few 
muted worries or warnings by independent commentators.  The 
common if vague Brazilian sense is that the G-21's actions 
constituted an overdue, laudably successful demand to be 
taken seriously, and that any adverse reaction by the U.S. or 
EU simply demonstrates that the rich-country club is loath to 
accept developing countries' standing up to defend their 
rights. 
 
¶2. (U) USTR Zoellick's September 22 Financial Times opinion 
column ("America will not wait for the won't-do countries") 
unquestionably hit a sensitive spot.  It was published the 
next day in Portuguese translation by top circulation daily 
`Folha de Sao Paulo,' and no-one in the GoB pretended to 
doubt that USTR's criticisms were aimed squarely at Brazil. 
However, those criticisms from abroad have had no evident 
effect in swaying Brazilian opinion. 
 
¶3. (U) If anything, official reaction to the column has just 
further tightened the GoB's rhetorical ranks.  Finance 
Minister Palocci: "Brazil has been characterized in this 
episode and in others by a clear will to negotiate. There is 
no reason to doubt the decision, the will, and the potential 
of Brazil and its partners in the negotiations."  Agriculture 
Minister Rodrigues: "Zoellick's statement was a mistake." 
Development Minister Furlan: "Brazil is simply putting its 
interest on the table, knowing that a negotiation means give 
and take."  Less restrainedly on the non-government side, 
Folha columnist Clovis Rossi summed up that "Zoellick's op-ed 
is an open declaration of war on Brazil, with the explicit 
threat of leaving the country behind in trade negotiations." 
 
¶4. (U) Foreign Minister Amorim himself, in an official 
release, responded unrepentantly to the USTR op-ed, inter 
alia by saying that "Having maintained a constructive 
position, Brazil does not consider it useful to be involved 
in an exercise of blame over the difficulty of reaching 
consensus in Cancun."  See full substantive text of the 
Itamaraty release below at Para 10.  Media have since quoted 
Amorim as asserting that "(i)f someone changed, it was the 
United States and not Brazil. The position defended by 
Brazil in Cancun coincides 70% to 80% with the earlier U.S. 
position." (NOTE:  presumably referring to specific 
agricultural issues such as export-subsidy phase-out.  END 
NOTE.)  President Lula is reported to have publicly echoed 
this assertion on September 25 in New York. 
 
¶5. (U) The Brazilians continue to declare that Cancun has not 
altered the WTO's status as the world's legitimate, necessary 
forum for multilateral trade negotiations.  The Itamaraty 
release includes the declaration: "From Brazil's perspective, 
what is most important now is, in accordance with the 
declaration approved in Cancun by the ministers, to promptly 
resume the negotiations in Geneva."  FM Amorim repeatedly 
asserted in his September 17 testimony to Brazil's Congress 
that resumption of WTO and Doha-Round business as usual may 
at worst suffer a six or twelve-month delay (Ref B). 
 
¶6. (U) FM Amorim as well as presidential foreign policy 
advisor Marco Aurlio Garcia have also gone out of their way 
to deny that the GoB's trade-policy course is a product of 
any "anti-American" bias.  Amorim told Brazil's Congress 
that "the relationship between Brazil and the United States 
has never been as good as now," and that official and 
unofficial sources confide to him that President Bush "has 
only made praiseworthy references to Lula."  Amorim seemed 
to dismiss the notion that Cancun will have far-reaching 
consequences for trade talks or relations with the U.S., 
saying that occasional criticisms during trade and political 
talks are just "part of the game." (Ref B.) 
 
¶7. (U) In like vein, top national dailies made much of the 
report that, just one day after USTR's criticism of Brazil's 
position at Cancun, U.S. Treasury Secretary Snow spoke to 
Brazilian Foreign Minister Palocci in Dubai in complimentary 
tones. "We spoke about Cancun, and (Snow) made it very clear 
that the U.S. government will continue with its multilateral 
agenda of trade negotiations, and that they have great 
interest in keeping a close cooperation with Brazil," 
Palocci was quoted repeatedly. 
 
¶8. (SBU) There are a few well-informed exceptions to the 
breezy trend.  Aside from the occasional media commentator 
warning that Brazil will be left behind in a future process 
of bilateral trade negotiations, these include Itamaraty U/S 
for WTO Clodoaldo Hugueney.  Over lunch with us on September 
25, Hugueney left no doubt that he felt "the Doha train had 
been derailed," due, in his judgment, to poor preparation 
that had left the WTO leadership badly unaware of the state 
of play over Singapore issues.  Hugueney said he believed 
that, were it not for the abrupt Singapore-issue fiasco, 
Cancun could have produced an agricultural paper "albeit 
with brackets" that could have met minimum Doha-Round needs. 
Now, it was hard to see how a way out or forward could be 
found, he opined. 
 
¶9. (U) In public, the GoB front remains united behind 
Itamaraty, but there is the occasional suggestion of 
dissension in the ranks.  One post-Cancun media article has 
referred to Ministers Furlan, Palocci and Rodrigues lining up 
against Itamaraty over a specific trade-policy issue at a 
recent meeting of the CAMEX.  Supposedly, they rejected 
Itamaraty's advocacy that Brazil unilaterally revise its 
schedule for submission of FTAA offers.  It was not plain 
from the article whether the offers in question are ones 
Brazil has already made, on schedule, or ones for the well- 
known areas vis-a-vis which Brazil is already months behind 
the FTAA timetable. 
 
¶10. (U) Following is the Itamaraty release responding to 
USTR Zoellick's September 22 opinion piece in the Financial 
Times. 
 
(Begin text) 
 
In regard to the article published today (.) by the U.S. 
Trade Representative (USTR), about the results of the Fifth 
Ministerial Conference of the World Trade Organization (WTO) 
- in which Brazil is explicitly cited five times - Minister 
Celso Amorim has the following comments to make: 
 
-- each country has the right to present its own evaluation 
of Cancun; 
 
-- Brazil, secure that it maintained a constructive 
position, does not consider it useful to get involved in the 
attribution of guilt over the difficulties in reaching a 
consensus in Cancun; 
 
-- Brazil would rather focus on strengthening the WTO, in 
coordination with trade partners that are interested in the 
liberalization of agricultural trade and in the elimination 
of subsidies, according to the Doha mandate; 
 
-- if the explicit references to Brazil reflect the 
importance that is attributed to our performance in the WTO, 
this criticism, either implicit or explicit, comes in 
contrast with the comments made by the USTR to the head of 
the Brazilian delegation - on the eve of the closing of the 
conference - that the declaration made just hours before in 
the name of the G-20 "plus"  had been "businesslike," which 
constituted in and of itself a positive indication; 
 
-- this criticism is also surprising because, until 
recently, the United States shared in large measure the same 
level of ambition expressed by the G-20 "plus" in regard to 
the three pillars of agricultural trade reform; 
 
-- from Brazil's perspective, what is most important now is, 
in accordance with the declaration approved in Cancun by the 
ministers, to promptly resume the negotiations in Geneva; 
 
-- Brazil will continue to commit itself to building genuine 
consensus leading towards the legitimate aspirations of all 
participants, especially developing countries. 
 
(End Text of Statement) 
 
COMMENT 
------- 
¶11. (SBU) We judge there to be little chance in coming weeks 
of the GoB repenting or reforming its recent Cancun actions 
and current trade-policy attitude.  Ill-advised and 
ultimately damaging to Brazil itself though they may prove, 
those actions and attitude have not been a matter of caprice. 
They have evolved consistently from the stew of GoB 
priorities and considerations -- political, social, 
developmental as well as "just" commercial -- which we tried 
to describe in detail last July in Ref C, and recently 
updated in Ref A.  Politically, Lula, FM Amorim and Congress 
alike for now perceive this as a sure domestic and 
international winner. 
 
¶12. (SBU) We credit the GoB with believing its own rhetoric 
that it will be better to delay than to accept a "bad" deal, 
i.e., one insufficiently attentive to their demands. 
Implicit in its position is the assumption that trade talks 
cannot move forward without Brazil, that, in effect, the 
latter has a kind of veto on real progress.  One positive 
aspect to underline is that, despite what we do see as tinges 
of 1970s ideological antipathy amongst the professional 
castes of Itamaraty, GoB actions are not/not being propelled 
by anti-U.S. antagonism.  On the contrary:  the GoB is 
unrealistically counting on being able to both have its cake 
and eat it -- to stand up to the rich nations with developing- 
country demands, while paying little or no price in terms 
either of the WTO's future effectiveness or of overall 
bilateral relations with the U.S. 
 
VIRDEN