VZCZCXYZ0010
OO RUEHWEB

DE RUEHSO #0045 0191200
ZNR UUUUU ZZH
O 191200Z JAN 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6290
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 7369
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 7714
RUCPDOC/USDOC WASHDC 2686

UNCLAS SAO PAULO 000045 
 
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: WESTERN HEMISPHERE: MERCOSUL SUMMIT IN RIO DE JANEIRO; 
CHAVEZ'S REGIONAL AND INTERNATIONAL INFLUENCE; SAO PAULO 
 
 
¶1. "Lost Mercosul" 
 
Center-right national circulation daily O Estado de S. Paulo (1/19) 
maintained: "In 2006, Brazil, Argentina, Uruguay and Paraguay 
imprudently accepted Colonel Hugo Chvez's Venezuela as a member of 
Mercosul.... With five partners, Mercosul is weaker than it was with 
four. With six [if Bolivia is admitted in the bloc] the bloc will be 
even more fragile or more disjointed.... Speaking about 
strengthening the bloc nears insanity: with partners like Chvez's 
Venezuela and Morales' Bolivia, Mercosul only becomes weaker and 
more distant from its original goal. Among its members, only 
Paraguay and Uruguay seem to have realistically evaluated the 
opportunities lost over the recent years.... Hugo Chvez's Venezuela 
does not add anything but problems to Mercosul.  The caudillo has 
already shown his opposition to the liberation of agricultural trade 
in the Doha Round as supported in rare unanimity by the other 
Mercosul partners. The entry of Evo Morales' Bolivia in the bloc 
will make even more difficult a consensus on international matters 
of concrete interest for Brazil, Argentina, Paraguay and Uruguay." 
 
 
¶2. "Bloc Of "Blah Blah Blah"" 
 
Liberal, largest national circulation daily Folha de S. Paulo 
editorialized (1/19): "There is in South America an exhausting 
repetition of boring summit meetings in which leaders swear 
reciprocal friendship and discourse on the virtues of cooperation. 
Despite this friendly climate, governments foster irreconcilable 
policies, interregional institutions do not work and economic 
interactions become damaged.... What kind of advantage does the 
presence of a Chavist Venezuela bring to Mercosul?.... It is obvious 
that private companies will hesitate to invest in the region when 
Bolivia and Venezuela nationalize entire sectors of the economy.... 
Chvez harasses the oppositionist media and will now rule by 
decree.... Mercosul's most profound fissure, however, is in the 
bloc's core.... This would be the moment to abandon the customs 
union chimerical project - through which Brazil, Argentina, Uruguay 
and Paraguay would work as a single nation in trade relations with 
other blocs or nations.  It would be more feasible to work as free 
trade association (zero tariff among partners) with respected 
institutions to solve conflicts." 
 
¶3. "Chvez And Brazil" 
 
Former Foreign Minister Luiz Felipe Lampreia commented in 
center-right O Estado de S. Paulo (1/19): "Brazil has a clear South 
American agenda based on energetic integration, expansion of our 
companies' competitiveness and an increase of trade. Obviously, 
Venezuela is a priority in such an agenda and therefore it is in 
Brazil's interest to maintain good relations with that nation, an 
excellent partner in the three mentioned levels. What is not right 
or advisable is to allow Chvez to dictate the course of such 
relations.... There are enormous differences of commitment and 
conviction between Chvez and Lula. Much more than an ally and 
partner, Chvez is Lula's rival who sees in the Brazilian president 
a former leftist who 'accommodated to bourgeois interests' and 
became pragmatic, the only one able to dim his Latin American 
popularity and who represents, contrary to Venezuela, a reliable 
interlocutor of the great powers in the world." 
 
¶4. "Lula Running Behind Chvez" 
 
Liberal Folha de S. Paulo's political columnist Eliane Cantanhede 
opined (1/19): "President Lula, Foreign Minister Celso Amorim, 
Workers Party members in the government and diplomats in general do 
not admit that there is a competition between Brazil and Venezuela, 
i.e., between Lula and Chvez, for South American leadership. But it 
is clear that it exists. It is a competition that can be seen in 
Chvez's personality and petrodollars.... Disputes between Brazil 
and Argentina are today part of history.... The dispute of power 
today is concentrated in Venezuela. The Mercosul Summit is a kind of 
marketplace where smaller partners (Paraguay, Uruguay and probably 
Bolivia) offer their conditions, Brazil and Argentina discuss 
whether they buy or not and Chvez has fun. Because he advances, 
while Lula runs behind, even in their speeches." 
McMullen