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

141943Z Dec 05

UNCLAS SECTION 01 OF 02 BRASILIA 003262 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR WHA/BSC, WHA/EPSC 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEM/ADRISCOLL/MWAR D 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/DDEVITO/DANDERSON/EOL SON 
USDA FOR JB PENN, U/S, FFAS 
NSC FOR SCRONIN 
 
E.O. 12958: N/A 
TAGS: ETRD PGOV BR
SUBJECT: BRAZIL'S CONGRESS CONTINUES TO DELIBERATE 
PARAMETERS FOR TRADE NEGOTIATORS 
 
REF: A) BRASILIA 3185 B) 03 BRASILIA 2967 
 
¶1. SENSITIVE BUT UNCLASSIFIED 
 
¶2.  (SBU)  Summary.  In a bid to exert greater control over 
trade policy, Brazil's Congress continues to weigh 
legislation to establish parameters for the country's trade 
negotiators.  While some provisions would pose challenges for 
the U.S., it is unclear whether final passage will be in a 
timely fashion and if so, to what extent Brazilian 
negotiators would actually be bound by its provisions.  Post 
is sending this follow-up report given recent movement of the 
legislation in the Brazilian Chamber of Deputies and mention 
of the pending legislation by local deputies during Codel 
Hyde's visit to Brasilia in early December.  End Summary. 
 
¶3.  (SBU)  Brazilian legislators continue to evince an 
interest in exerting greater influence over the country's 
trade policy.  They are increasingly present as part of 
Brazil's official negotiating delegations, including for the 
WTO Hong Kong Ministerial, and have sought to keep alive 
draft legislation to define parameters for trade negotiators. 
 The bill was mentioned by Brazilian Congressional leaders in 
conversations with Codel Hyde on December 2 (ref A). 
 
¶4.  (U)  The legislation currently under review in the 
Chamber of Deputies was initially conceived in 2003 in the 
midst of the contentious debate in the hemisphere over the 
future of FTAA negotiations, and has since continued to 
slowly wind its way through Congress. As reported in ref B, 
the bill is the brainchild of Sao Paulo Senator Suplicy (PT), 
former chair of the Senate Foreign Relations and National 
Defense Committee, although it was significantly cleaned up 
by the bill's rapporteur Senator Marcelo Crivella (PMR) 
before clearing the Senate in October 2004.  On November 30, 
2005, the Chamber of Deputies' Committee for Economic 
Development, Industry and Trade approved the bill, now PL 
4291/2004, without amendment, before passing it to the 
Chamber's Foreign Relations and National Defense Committee. 
The bill will also have to clear the Chamber's Constitution 
and Justice Committee before gaining final approval by the 
Chamber. 
 
¶5.  (U)  Although the local press refers to the bill as 
Brazil's TPA-like legislation, it varies markedly from U.S. 
Trade Promotion Authority.  The Brazilian legislation is 
designed to provide some general guidance to negotiators so 
they may have a sense of Congress' disposition on certain 
issues, but it's provisions are not binding on negotiators, 
nor is Congress bound to use an abbreviated or expedited 
approval process should negotiators conform with its 
guidance.  There is no provision for an up or down vote, thus 
leaving intact the Brazilian legislature's ability to press 
the executive branch for changes after the negotiation's 
conclusion.  The proposed legislation applies to all of 
Brazil's trade negotiations, including intra-Mercosul 
discussions, and has no expiration date. 
 
¶6.  (SBU)  The bill lays out some straightforward objectives 
for negotiators, such as expanding Brazil's export markets 
and productive sectors and shifting the composition of 
Brazil's exports toward greater value-added products.  It 
also identifies some specific outcomes negotiators should aim 
for, which in an FTAA or bilateral context would pose 
challenges for the U.S., including the confinement of issues 
described as systemic or regulatory, such as IPR, government 
procurement, investment and services, to the WTO, Mercosul or 
negotiations with other developing countries; rejection of 
commitments on labor and environment; equal treatment of all 
four modes in services negotiations; elimination of the 
excessive use of antidumping and countervailing duty laws; 
and apparent rejection of investor-state provisions.  The 
bill also prompts negotiators to preserve Brazil's right 
within GATT provisions to treatment as a developing country 
for the purposes of infant industry protection and cases of 
balance of payment problems, and in securing special and 
differential treatment broadly. Consistent with the GoB's 
current negotiating stance, negotiators are tasked with 
seeking the accelerated reduction/elimination of export and 
production subsidies for agricultural products.  While 
negotiators are directed to seek commitments for restraining 
the exportation of counterfeit goods, they are also tasked 
with seeking protection for phyto-genetic resources and 
securing proper compensation for there commercial use. 
 
Comment 
------- 
 
¶7.  (SBU)  Although the bill's recent approval by the 
Economic Development,Industry and Trade Committee, after one 
year of deliberation, signals a continuing interest in the 
project, it is less  than clear that it will gain final 
approval in a timely fashion given the other matters 
preoccupying the Chamber, or that once passed it would impact 
significantly Brazil's negotiations with the United States in 
the context of the WTO or elsewhere.  The bill is not very 
well-written and a number of provisions seem to reflect the 
less-than-full understanding that many Brazilian 
Congressional members have of technical trade issues.  The 
rather open introductory language extolling negotiators "to 
aim" for certain outcomes, would also seem to give the 
Foreign Ministry significant leeway should it choose to use 
it.  Nonetheless, former Ambassador to the United States 
Rubens Barbosa recently criticized what he characterized as 
the Brazilian Legislature's attempt to duplicate the control 
exercised by the U.S. Congress over trade matters by shifting 
responsibility for trade negotiations from the Executive to 
the Congress, a move he said is inconsistent with Brazil's 
Constitution.  Criticism notwithstanding, Brazil's Congress 
likely sees the bill as an important vehicle if not to 
pre-determine negotiating outcomes, at least to force 
Brazilian negotiators to consult more frequently and in more 
depth than past tradition, in order to secure eventual 
approval of future trade accords. Post will continue to 
monitor the bill's progress. 
Chicola