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TO RUEHC/SECSTATE WASHDC PRIORITY 5293
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
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C O N F I D E N T I A L BRASILIA 000875 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/CCA, WHA/EPSC AND WHA/BSC 
 
E.O. 12958: DECL: 05/01/2016 
TAGS: ETTC PREL ECON ETRD BR CU
SUBJECT: BRAZIL - SUSPENSION OF TITLE III OF THE LIBERTAD ACT 
 
REF: A) SECSTATE 57782 
 
      B) 05 BRASILIA 3130 
 C) BRASILIA 786 
 
Classified by Charge d'Affaires Phillip T. Chicola, Reasons 1.4 
(b) and (d) 
 
¶1. (C) Brazil has a close relationship with Cuba and the GoB 
does not publicly criticize the Castro regime's human rights 
policies.  President Lula implied criticism of the state of 
democracy in Cuba during an April 2005 interview in which he 
told the press that "Brazil can help build a democratic process 
in Cuba" and that "we have much to do for democracy in Cuba." 
Neither Lula nor other senior figures in the GoB, however, have 
repeated such criticisms during the last six months.  The Lula 
Administration argues that engagement, rather than isolation, is 
more likely to change Cuba's behavior; it further states it has 
been critical of the Castro regime's actions behind the scenes. 
The GoB, however, has a general aversion to meddling in the 
internal affairs of other countries and routinely opposes 
"single country" resolutions at the United Nations, including 
those aimed at Cuba.  Brazilian media and NGOs are much less 
hesitant to criticize the Castro regime pointedly and some have 
taken the Lula administration to task for its close relationship 
with Cuba. 
 
¶2. (C) In 2005 Brazilian media published allegations that Lula's 
Workers' Party (PT), some key members of which sought refuge in 
Cuba from persecution during Brazil's military dictatorship, 
allegedly received from the Cuban government a campaign 
contribution during the 2002 presidential elections.  The Cuban 
cash contribution was variously reported to have ranged from 
US$1.4 to US$3 million, depending on the source.  At that time 
the media interviewed several self-described witnesses to parts 
of the transaction, but although the case has received 
occasional media mention since then, no evidence substantiating 
the claims emerged during the last six months. 
 
¶3. (SBU) We know of no high level GoB diplomatic visits to Cuba 
during the last six months.  Cuban Vice Minister for Higher 
Education Eduardo Cruz Gonzales reportedly visited Brasilia on 
April 28 and met with the Brazilian education minister.  Cruz's 
visit reportedly included promotion of a scientific exchange 
program with Brazilian academic institutions. 
 
¶4. (SBU) On the trade front, Brazil supports a trade agreement 
between Cuba and the Mercosul customs union, of which Brazil is 
the largest member.  The GoB does not expect Cuba to become a 
full member of Mercosul.  According to Foreign Ministry 
contacts, the conclusion of the Cuba agreement is a priority for 
¶2006.  Work to consolidate existing trade agreements between 
Cuba and the individual Mercosul members is already complete, 
paving the way for discussions on how to expand them into a 
full-fledged, goods-only, free-trade agreement with the bloc. 
 
¶5. (SBU) Bilateral Brazilian trade with Cuba grew to US$ 284 
million in 2005, up from US$177.2 million in 2004.  Brazilian 
2005 exports of US$245.5 million to Cuba were led by exports of 
auto parts, soybean oil, soybeans, chicken parts, powdered milk, 
ethyl alcohol and coffee.  2005 imports from Cuba of US$38.9 
million were dominated by nickel, medical products, Portland 
cement, aluminum scrap for recycling, insecticides, cigars and 
vaccines.  Brazil's National Development Bank (BNDES) provides 
trade finance lines to Brazilian companies, including those 
trading with Cuba.  Over the period 2001-2003, the most recent 
data available, BNDES provided US$52.3 million in export credits 
to finance the export of automobiles and buses to Cuba.  Local 
accounts suggest that potential BNDES export credits for Cuba 
are under-utilized. 
 
¶6. (SBU) Post is unaware of significant new Brazilian 
investments in Cuba over the last six months.  The most recent 
data Central Bank data available, for 2004, shows that Brazilian 
companies held investments valued at US$19 million in Cuba. 
 
CHICOLA