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C O N F I D E N T I A L SECTION 01 OF 02 BRASILIA 002608 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 12/05/2016 
TAGS: PGOV BR
SUBJECT: AMBASSADOR,S MEETING WITH MINISTER FOR 
INSTITUTIONAL RELATIONS TARSO GENRO 
 
Classified By: Political Counselor Dennis W. Hearne for reasons 1.4 b a 
nd d. 
 
¶1.  (C) Summary.  Ambassador Sobel met on November 27 with 
Tarso Genro, Minister for Institutional Relations, to discuss 
President Lula,s agenda in the second term, 
executive-congressional relations, and other issues.  Genro 
said the government is still processing its first term 
experience, which was "very difficult" because of a deluge of 
corruption scandals, and added that the government is focused 
on the economic challenges, which also proved to be difficult 
in the first term.  Genro said Lula has three plans in mind 
for his second term:  (1) work harder on the government,s 
coalition so as to give his administration greater stability; 
(2) open a dialogue with the opposition on political reform; 
and (3) broaden economic growth without destabilizing 
macroeconomic progress.  Genro commented that Brazil,s 
relations with the U.S. and Latin America are both important 
but in the government,s view, it must not favor either 
relationship because it would harm the other.  Genro avoided 
responding to the Ambassador,s queries about cabinet level 
appointments.  The Ambassador and Genro agreed to identify 
areas of mutual interest to work on in the future.  Genro 
asked for our assistance to learn more about the U.S. federal 
system, especially federal and state relations, and proposed 
that we jointly organize a working group to discuss this 
further.  End summary. 
 
¶2.  (C)  Ambassador, accompanied by Special Assistant, met 
with Tarso Genro on November 27 at the Presidential Palace. 
As Minister for Institutional Relations, Genro has chief 
responsibility for managing the relationship between the 
presidency and the Congress.  He also handles relations with 
the state governments.  Genro opened by saying the government 
is still processing its first term experience, which was 
"very difficult" because of the series of corruption 
scandals, and added that the government is focused on the 
economic challenges, which also proved to be difficult in the 
first term. 
 
¶3.  (C)  On corruption, Genro said two things had happened: 
first, Lula and his government worked with police to develop 
mechanisms to combat corruption, and second, the Workers, 
Party (PT) had become internally more "humble" owing to the 
corruption experience of the first term and the PT's previous 
reputation as a clean party.  With that background, Genro 
said, Lula was going into his second term with a greater 
sense of responsibility to deepen the fight against 
corruption, both in politics and as a systemic problem in 
Brazilian society. 
 
¶4.  (C)  On economics, Genro said Lula wants to take 
advantage of macroeconomic progress made in the first term 
and now broaden economic development in Brazil.  He mentioned 
the need for an increase in investment in infrastructure, 
including energy, and an improved  income distribution, in 
which education will play a key role. 
 
¶5.  (C)  Genro said Lula has three plans in mind for his 
second term:  1) work harder on the government,s coalition 
so as to give his administration greater stability; 2) open a 
dialogue with the opposition on political reform; and 3) 
broaden economic growth without destabilizing macroeconomic 
progress.  He did not elaborate on how these goals would be 
accomplished. 
 
¶6.  (C)  He added that Brazil's relationships with the U.S. 
and Latin America are both important, and in the government's 
view it must follow a middle path, since favoring one 
relationship would harm the other.  He stressed that the 
Brazilian government is not anti-American, that there is no 
"crisis" in U.S.-Brazilian relations, and Brazil wants to 
create a relationship of responsibility with the U.S. as a 
political and economic partner. 
 
¶7.  (C)  Ambassador Sobel replied that our relationship is 
not a question of priorities but one of creating the best 
possible relationship.  He noted that Presidents Bush and 
Lula enjoy good relations, and that in the U.S. politicians 
from the same political party do not always agree with each 
other.  He said we do note, though, how often the Brazilian 
media report on regional relations and south-south relations 
in comparison with U.S.-Brazilian relations. 
 
BRASILIA 00002608  002 OF 002 
 
 
 
¶8.  (C)  After the Ambassador discussed our interest in 
possible frameworks for better U.S.-Brazilian relations, 
including a possible tax and investment treaty to create a 
better business environment for U.S. companies, Genro 
explained that there is a "double tension" in Brazil,s 
relations with the U.S. and Latin America, since if Brazil 
privileges the U.S., it will disadvantage its neighbors and 
create "competition" in the region over which countries can 
have the best relations with the U.S.  When the Ambassador 
cited the positive example of Chile, Genro acknowledged the 
point but said Chile,s economy is primarily export-driven, 
while Brazil has a large industrial economy that includes a 
spectrum from environmentally protected areas in the Amazon 
to globally integrated agro-business.  Ambassador and Genro 
also discussed the balance between job growth and industrial 
development and environmental protection.  Brazil sees its 
role as mediating the different political and economic issues 
and needs to be friendly to both Bush and Chavez, Genro said. 
 
¶9.  (C)  Ambassador said we appreciate Brazil,s mediating 
role with Chavez, we hope Brazil could do more, and we hope 
Brazil can do the same with Cuba.  He added that if Brazil 
wants to grow it will best do so by working with the U.S. and 
other developed nations such as the European Union, as well 
as developing nations.  Genro and the Ambassador agreed to 
identify areas of mutual interest to work on in terms of 
trade and investment frameworks.  We both recognized, he 
said, that we must work through both the executive and the 
legislative branches. 
 
¶10.  (C)  Genro asked the Ambassador to help him learn more 
about the U.S. federal system, particularly relations between 
the federal and state governments, and state to state 
relations.  Under the federal-state rubric, Genro said he was 
especially interested in discussing taxes, the environment, 
and law enforcement.  He proposed establishing a joint 
working group to meet next April or May to discuss federalism 
further.  Ambassador agreed to help facilitate this project. 
 
¶11.  (C)  Ambassador asked Genro to discuss possible changes 
in the Workers Party leadership, but Genro was not 
forthcoming, merely offering to put the Ambassador in touch 
with leaders in relation to specific topics of interest.  He 
also noted that he is now in the government, hence his 
involvement in PT matters is unofficial.  Genro also would 
not be pinned down with regard to which areas he viewed as 
crucial in the bilateral relationship. 
 
SOBEL