VZCZCXYZ0018
OO RUEHWEB

DE RUEHSO #0033/01 0161310
ZNR UUUUU ZZH
O 161310Z JAN 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6277
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 7359
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 7707
RUCPDOC/USDOC WASHDC 2679

UNCLAS SAO PAULO 000033 
 
SIPDIS 
 
SIPDIS 
 
STATE INR/R/MR; IIP/R/MR; WHA/PD 
 
DEPT PASS USTR 
 
USDOC 4322/MAC/OLAC/JAFEE 
 
E.O. 12958: N/A 
TAGS: KMDR OPRC OIIP ETRD BR
SUBJECT: MEDIA REACTION: IRAQ: PRESIDENT BUSH'S IRAQ SECURITY PLAN; 
WESTERN HEMISPHERE: ZOELLICK'S PROPOSAL, VENEZUELA, BOLIVIA, 
ECUADOR; SAO PAULO 
 
 
¶1. "Is There Any Logic In Bush's 'Madness'?" 
 
The lead editorial in center-right national circulation daily O 
Estado de S. Paulo commented (1/13): "Bush has not only recognized 
that he made a mistake and publicly admitted it, but he is aware 
that not even with an additional 20,000 soldiers will he be able to 
change the disastrous situation resulting from his mistakes. With 
the plan he now proposes he would only reinforce the strategy for 
the total withdrawal of the US troops in Iraq. In other words, he 
does not want to admit publicly that he endorses the bipartisan plan 
of gradual withdrawal of the troops - the so-called Baker Plan.... 
But it is the gradual withdrawal of US troops in Iraq that his plan 
provides for." 
¶2. "FTAA Without Mercosul" 
National circulation center-right daily O Estado de S. Paulo 
editorialized (1/15): "The US may create an FTAA without Mercosul, 
thereby dividing the Americas into two blocs.  One of them will 
include nations with preferential access to the markets of the 
world's largest economy and all advantages resulting from that, such 
as the attraction of investments.  The other bloc will be formed by 
Brazil, Argentina, Paraguay, Uruguay, Venezuela and Bolivia, if the 
Uruguayans and Paraguayans do not try to escape the trap.  Those who 
do not escape will be subject to Hugo Chvez's political whims.... 
The proposal for the creation of the US-led Hemispheric bloc is in 
an article by USTR Robert Zoellick published a week ago by the Wall 
Street Journal.... According to Zoellick, by proposing the 
establishment of free-trade agreements, the USG would be responding 
to rising leftist leaders in Latin America.... It is not clear 
whether the article expresses just Zoellick's opinions and 
suggestions or if he is disseminating ideas of a group with 
political and business interests - maybe the very USG. It would not 
be the first time that a former high level government official would 
agree to perform such a job. But the former USTR would not invest 
his time, energy and prestige in preparing a political agenda 
without chances of receiving the support of most of the public 
opinion. If the Democratic majority is not too busy with its 
protectionist agenda, Zoellick's suggestions may result in political 
developments.... There is no reference in Zoellick's article to the 
South American nations that helped most to bury the FTAA project - 
Brazil and Argentina under the Lula and Kirchner administrations. 
These are simply out of the game proposed by Zoellick.  At the 
present time, he is only concerned about the populist rising 
leaders, and this is understandable.  They have proven to be more 
capable of influencing the regional agenda, neutralizing the weight 
of more economically developed nations, such as Brazil. Zoellick 
shows that he knows very well the south American reality." 
¶3. "American Union" 
Steel tycoon Benjamin Steinbruch opined in liberal, largest national 
circulation daily Folha de S. Paulo (1/16): "Political lighting 
strikes frightening Latin America have shown how far we are from a 
continental union in the Americas. Venezuela expels foreign 
companies and announces a nationalization program. Bolivia 
expropriates oil and gas companies. Ecuador signals that it may 
follow the same path. Argentina interferes in tariff prices of 
multinational companies installed in its territory and resorts to 
the WTO against Brazil, in addition to dueling with Uruguay and 
blocking access to its neighbor to prevent the installation of a 
pulp and paper mill on their common border. The bloc of American 
nations in a world where regional union is today increasingly more 
important does not exist even in the imagination of continental 
leaders.... Because of its leadership role, the US should pay more 
attention to the neighbors in its own backyard. If it looked with 
more attention and generosity to the South, Washington would see 
enormous latent synergies in the Americas and invest in the idea of 
building a true continental union. The synergies are many: ore, oil, 
gas, agribusiness, biofuel, manufactures, services and the Amazon's 
infinite biodiversity. Together, they would build a powerful and 
differentiated continent.... The construction of a true American 
Union demands imagination to achieve a level well beyond that 
thought by the extinct FTAA, which was a mere free-trade agreement 
engendered so that the US might buy cheap raw material and sell 
expensive technology." 
¶4. "Political Instability Worsens In The Neighborhood" 
Business-oriented Valor Economico (1/16) editorialized: "Signs of 
authoritarianism and political crises have spread through Venezuela, 
Bolivia and Ecuador. The common thread of this a triple alliance of 
disorder is the union between Rafael Correa, Evo Morales and Hugo 
Chvez around the convenient 'Bolivarian revolution' that will help 
them to adopt institutional changes of unpredictable 
consequences.... There is not the slightest doubt that democracy in 
those nations must be improved and that the separation of parties 
from the population allowed the emergence of non-traditional 
 
 
politicians with radical proposals, the most ruinous of which is the 
replacement of corroded institutional structures with others even 
more fragile, based on the charismatic authoritarianism of salvation 
leaders."                    McMullen