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P 191930Z JUN 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC PRIORITY 1095
INFO RUEHBO/AMEMBASSY BOGOTA 3587
RUEHBR/AMEMBASSY BRASILIA 6855
RUEHCV/AMEMBASSY CARACAS 9620
RUEHLP/AMEMBASSY LA PAZ JUN QUITO 0480
RUEHSG/AMEMBASSY SANTIAGO 0668
RUMIAAA/CDR USCINCSO MIAMI FL

C O N F I D E N T I A L LIMA 002445 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 06/15/2026 
TAGS: PGOV PREL ETRD EINV PE BR
SUBJECT: LULA-GARCIA MEETING A "LOVE-FEST" ACCORDING TO TOP 
MFA OFFICIAL 
 
 
Classified By: Polcouns Alex Margulies for Reasons 1.4 (b,d) 
 
¶1.  (C)  SUMMARY:  The Peruvian Foreign Ministry's 
Undersecretary for Political Affairs, Pablo Portugal, 
described the 6/13 meeting in Brasilia between 
President-elect Alan Garcia and Brazilian President Lula da 
Silva as a "love-fest," during a 6/14 coffee with the 
Ambassador.  According to Portugal, Garcia and Lula are old 
friends who see eye-to-eye on economic, social and regional 
integration policies.  In addition, he said, the GOB, with 
Itamaraty in the lead, sees Garcia's victory as a needed 
reverse for Venezuelan President Hugo Chavez, which "restores 
regional equilibrium."  END SUMMARY. 
 
¶2.  (C)  The Ambassador, accompanied by DCM and Poloffs, 
hosted U/S Portugal and the Foreign Ministry's U/S for the 
Americas Luis Sandoval for coffee on 6/14.  Portugal 
described the Foreign Ministry's efforts to reach out to 
Garcia's foreign policy team to prepare for the presidential 
transition, then spent most of the remainder of the 90-minute 
meeting recounting the atmospherics and substance of Garcia's 
meeting with Lula, based on written and verbal accounts and 
analysis provided by Peru's Ambassador to Brazil Hernan 
Couturier Mariategui. 
 
¶3.  (C) According to Portugal, Lula and Garcia resumed their 
warm friendship dating back two decades in what he described 
as a "love fest," adding that if the Toledo-Lula relationship 
has been a "partnership," the Garcia-Lula relationship will 
be a "marriage."  He added that this "marriage" should be 
cemented further during Garcia's post-inauguration State 
visit to Brazil, which has been set for 8/23-24. 
 
¶4.  (C)  Lula led off the meeting, Portugal recounted, by 
listing what he saw as key points/initiatives for the future 
of the Brazil-Peru relationship: 
 
-- Physical integration between Brazil and Peru, and toward 
this end, the completion of the interoceanic highways linking 
the two countries. 
 
-- Cooperation between Brazil and Peru in poverty assistance 
programs.  Lula noted that Brazil's program "De Bolsa 
Familia" resembled the GOP program "Juntos," which he 
enjoined Garcia to continue. 
 
-- A public meeting between Brazilian and Peruvian private 
sector representatives to discuss possible shared initiatives. 
 
-- Notice that the Brazilian Grupo Grau business consortium 
is interested in purchasing the Peruvian steel manufacturer, 
Siderperu. 
 
-- A regional military, economic and political alliance 
between the two countries.  Lula emphasized that Brazil did 
not seek "hegemony" through an alliance with Peru, but saw 
this as a vehicle to bring together South America so that the 
entire region could become a global actor on a par with China 
and India. 
 
¶5.  (C) Garcia, Portugal related, welcomed Lula's interest in 
a closer relationship.  He praised Lula's responsible fiscal 
policies.  He also reassured Lula with regard to Brazil's 
ambitions for regional leadership, saying that he preferred 
the hegemony of Brazil to that of the United States.  Garcia 
then ticked off his own ideas about future areas of 
cooperation, including his desire to see the following: 
 
-- More joint ventures between Brazilian and Peruvian 
companies. 
 
-- Help from Brazil in developing new energy technologies, 
including ethanol and biodiesel. 
 
-- More investment from the Brazilian state hydrocarbons 
company, Petrobras, in Peru. 
 
-- Brazilian participation in the construction of side roads 
and access roadways from the interoceanic highways that will 
link the two countries, as well as provide an outlet to the 
Brazilian river port of Manaus for agricultural products from 
Peru's Amazonian regions. 
 
-- Brazilian assistance in helping Peru to develop policies 
friendly to small and medium-sized businesses. 
 
 
-- Technical assistance from Brazil's "De Bolsa Familia" 
program for its Peruvian counterpart, "Juntos" so that 
Brazil's success in this area could be replicated in Peru. 
 
-- A visit from soccer superstar Pele to Peru to promote 
youth sports activities. 
 
¶6.  (C) Portugal stressed the outstanding atmospherics of the 
meeting, noting that Garcia and Lula have been friends for 
decades.  He also emphasized the value of a strong 
Brazilian-Peruvian relationship in countering Chavez.  In 
this respect, he said, the Brazilian Government, and 
Itamaraty in particular, were delighted to see Garcia triumph 
over Ollanta Humala, viewing this as a much-needed reverse 
for Chavez and a "restoration of regional equilibrium." 
 
¶7.  (C)  Portugal noted that the Brazilians have thus far 
tried to manage Chavez by ignoring his more outragous 
outbursts and actions.  The Ambassador replied that, while he 
understood Brazil's logic in trying to contain its unruly 
neighbor, such policies had showed their limits recently with 
Chavez inciting Evo Morales to nationalize Petrobras' 
interests in Bolivia's hydrocarbon sector.  Portugal agreed 
with this assessment and observed that Peru, perhaps alone in 
South America, has virtually no significant economic 
interests that could be affected by Venezuela, and thus is 
not subject to constraints in confronting the Venezuelan 
leader when he oversteps the mark. 
 
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COMMENT: 
-------- 
 
¶8.  (C) While we defer to Embassy Brasilia regarding the 
GOB's views on the Lula-Garcia meeting and on the effect 
Garcia's election has had on regional politics, we offer 
Portugal's assessment as representative of how the Peruvian 
Government, and presumably President-elect Garcia, view their 
country's future relations with Brazil. 
 
¶9.  (C) We believe that Garcia will seek to have a very good 
relationship with the U.S., but will put most of his energy 
into relations with Brazil, Chile, and Colombia.  Garcia is 
clearly interested not just in coordination with fellow 
socialists in Brazil and Chile, with whom he feels an 
affinity, but in projecting leadership viz-a-viz Venezuela, 
greater infrastructure integration, and increasing 
presently-anemic levels of regional trade. 
 
¶10.  (C) Garcia's likely approach represents a slight but not 
radical shift from the Toledo government, which considered 
the formation of a "strategic relationship" with Brazil to be 
its most important foreign policy achievement.  It has only 
been in the past year that the Toledo government has spoken 
publicly of a "strategic relationship with autonomy" in 
regard to the U.S.  This happened only after we braced 
then-Foreign Mininster Rodriguez Cuadros for acting as though 
the relationship with the United States -- Peru's largest aid 
donor, investor, commercial partner, and strongest supporter 
when Toledo's democratic legitimacy was questioned -- was 
only important for its commercial dimension. 
STRUBLE