VZCZCXRO3099
PP RUEHRG
DE RUEHBR #0603/01 0861638
ZNR UUUUU ZZH
P 271638Z MAR 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 4931
INFO RUCPDO/USDOC WASHDC
RUEHLP/AMEMBASSY LA PAZ 4448
RUEHSO/AMCONSUL SAO PAULO 6629
RUEHRG/AMCONSUL RECIFE 4515
RUEHRI/AMCONSUL RIO DE JANEIRO 1761
RUEHAC/AMEMBASSY ASUNCION 5307
RUEHMN/AMEMBASSY MONTEVIDEO 6133
RUEHBU/AMEMBASSY BUENOS AIRES 3887
RUEHBJ/AMEMBASSY BEIJING 0298
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/USDA WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 000603 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR FOR MSULLIVAN/KLEZNY 
NSC FOR SUE CRONIN 
DEPT OF TREASURY FOR FPARODI 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
USDOC FOR 3134/USFCS/OIO/SHUPKA 
 
E.O. 12958: N/A 
TAGS: ETRD ECPS EAGR KIPR PGOV PREL BR CH
SUBJECT:  BRAZILIAN VICE-PRESIDENT ALENCAR HELPS LAUNCH THE 
CHINA-BRAZIL HIGH-LEVEL COMMITTEE ON CONSULTATION AND COOPERATION 
 
REF: A) SAO PAULO 009, B) 2005 BRASILIA 2804, C) 2005 BRASILIA 2367, 
D) 2005 BRASILIA 2295 
 
¶1.   (SBU)  Summary.  Brazilian Vice-President Jose Alencar's March 
19-24 trip to Shanghai and Beijing generated little notice here as 
both the public and the press instead devoted their attention to 
domestic issues.  While in years past the creation of the 
China-Brazil High-Level Committee on Consultation and Cooperation 
(COSBAN) by Alencar and PRC Deputy Prime Minister Wu Yi might have 
sparked greater curiosity among Brazilian circles, the plethora of 
Brazilian-Chinese summits, exchanges, and working groups since 1994 
- i.e., when the two countries initiated their "strategic 
partnership" -- has made such news seem mundane.  In addition, 
Alencar's lame-duck status -- he will not be President Lula's 
running mate in the upcoming October 2006 elections -- could have 
been a contributing factor in this regard.  All that said, both 
sides appear to be committed to trying to find a way to make 
"South-South" cooperation mutually beneficial.  If the Brazilian 
government were to place such emphasis on intensifying its ties to 
the U.S., relations between the U.S. and Brazil would certainly be 
much closer.  End Summary. 
 
Enhanced Dialogue 
----------------- 
¶2.  (SBU)  From the Brazilian perspective, the highlight of 
Alencar's trip was the kick-off of the China-Brazil High-Level 
Committee on Consultation and Cooperation (COSBAN), which took six 
previously-existing working groups (on Political Consultations, 
Economic/Commercial Affairs, Science and Technology, Space 
Technology, Cultural Affairs, and Agriculture) and put them under a 
coordinating committee.  The Political Consultation, Cultural 
Affairs, and Agriculture Committees then met; sessions of the 
remaining three committees are scheduled for later in the year. 
 
Wide Array of Joint Activities 
------------------------------ 
¶3.  (U) The 17-page report of the COSBAN meeting published by the 
Brazilian Ministry of External Relations demonstrates the extent to 
which both sides are seeking to construct a comprehensive working 
partnership.  The parties agreed to intensify bilateral cooperation 
in the areas of agriculture, phyto-sanitary and zoo-sanitary 
standards, biotech and biosafety, energy, mining, information 
technology, infrastructure, and quality control and high technology, 
while promoting private sector joint ventures and exchanges on 
software and banking automation.  In addition, both countries 
resolved to push forward on projects in such diverse areas as steel 
production, aluminum, gas pipeline construction, electricity 
generation, container scanning, petroleum and regional aviation. 
Specifically, in the report the parties pledge to support the 
establishment of direct flights between Brazil and China (Varig and 
AirChina already code-share, with flights stopping in Frankfurt) and 
to conclude as soon as possible negotiations on a bilateral customs 
agreement.  Finally, the countries inked six bilateral pacts:  three 
on phyto and zoo-sanitary issues and one each on cultural and 
educational cooperation, information technology and 
telecommunications, and government-to-government dialogue on 
financial issues. 
 
Comment 
------- 
¶4.  (SBU)  As reftel C ("Chinese Economic Involvement in Brazil -- 
Largely Trade Driven") makes clear, when looking at 
Brazilian-Chinese engagement it is always difficult to tell how much 
of the tremendous diplomatic energy devoted to this endeavor ends up 
generating light and how much is dissipated as heat.  According to 
the press, Brazil and China have signed nearly 100 bilateral trade 
agreements, the majority of them within the past 15 years.  However, 
projects announced with great fanfare to the press often fizzle out 
later when the public spotlight has turned elsewhere.  For instance, 
the Brazilian government is currently selecting a digital TV 
standard and three consortia, one European, one Japanese, and one 
American, have been competing for several years.  With a decision 
only weeks away, Beijing jumped into the fray during Alencar's trip 
when Chinese Ministry of Culture officials presented the Brazilians 
 
BRASILIA 00000603  002 OF 002 
 
 
with a proposal to develop a joint Chinese, Indian and Russian 
standard.  Brazilian policymakers do not appear to be taking this 
last-minute offer seriously. 
 
¶5.  (SBU)  Moreover, even in the trade area, which is the bulk of 
the Brazil-China relationship so far, Brazilian business is having 
increasing concerns about competing with low-cost Chinese textiles, 
shoes and toys.  As Ref B notes, the Government of Brazil has had to 
put in place a framework for imposing safeguards to protect its 
vulnerable domestic industries from the flood of Chinese imports -- 
even as minerals exporters like CVRD grow even richer off the 
Chinese iron ore market. 
 
¶6.  (SBU)  Nevertheless, what is remarkable is the effort that 
Brazil is putting into making this "South-South" relationship work. 
Alencar brought with him on his trip key figures from the Ministries 
of Agriculture, Finance, External Relations, Education, Mines and 
Energy, Culture, Tourism, Science and Technology, and Development, 
Industry, and Commerce, as well as the head of the Brazilian Space 
Agency and telecom regulatory officials.  Alencar's trip follows a 
series of high-level exchanges, including an exchange of 
head-of-state visits between Lula and Chinese President Hu Jintao in 
2004 and a trip to China by then Brazilian Vice-President Marco 
Maciel in 1999.  Indeed, while Alencar was in China, Lula received 
outgoing Chinese Ambassador Jiang Yuande and declared to the press 
that Brazil would maintain its current policy of giving priority to 
developing its ties to China.  If the Brazilian government were to 
place such emphasis on intensifying its ties to the U.S., relations 
between the U.S. and Brazil would certainly be much closer. 
 
Linehan