VZCZCXRO2359
OO RUEHRG
DE RUEHBR #0371/01 0601955
ZNY CCCCC ZZH
O 011955Z MAR 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8264
INFO RUEHAC/AMEMBASSY ASUNCION PRIORITY 5970
RUEHBO/AMEMBASSY BOGOTA PRIORITY 4136
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RUEHQT/AMEMBASSY QUITO PRIORITY 2159
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C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 000371 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 01/11/2017 
TAGS: PREL BR
SUBJECT: BRAZIL: U/S BURNS MEETING WITH PRESIDENTIAL CHIEF 
OF STAFF DILMA ROUSSEFF 
 
Classified By: POLITICAL COUNSELOR DENNIS HEARNE. REASONS: 1.4 (B)(D). 
 
¶1. (C) Summary.  U/S Burns met on 7 February with Dilma 
Rousseff, President Lula's Chief of Staff for Policy and, 
effectively, his senior cabinet official.  The discussion 
focused on rapidly moving progress in the development of 
U.S.-Brazil cooperation in biofuels, and established the 
political context for successful technical negotiations on a 
Memorandum of Understanding that potentially could be signed 
by Presidents Bush and Lula in one of two scheduled 
Presidential meetings in March. Rousseff and U/S Burns also 
briefly discussed Brazilian proposals for cooperation on 
deforestation.  End summary. 
 
ENERGY AND BIOFUELS 
------------------- 
 
¶2. (C) U/S Burns outlined for Rousseff the emerging consensus 
in the United States on the urgent need to change energy 
consumption away from oil dependence and toward new fuels, 
including nuclear energy and biofuels.  This is a matter of 
importance because of scarce oil resources, environmental 
concerns, and importantly, geo-politics.  The political and 
security distortions that can be caused by excessive reliance 
on certain regimes that command oil resources must come to an 
end.  This priority meshes with a shifting of the U.S. 
strategic focus away from the Euro-centric model of the 
post-World War II period and toward enhanced cooperation with 
key regional powers, including Brazil, U/S Burns said. 
 
¶3. (C) Rousseff concurred with this assessment and reviewed 
the three-prong approach that the USG and GOB are currently 
pursuing in biofuels: bilateral cooperation in accelerating 
research and development, cooperative projects in third 
countries, and creation of a large global market through 
demand and establishment of uniform standards and codes.  She 
agreed with U/S Burns on the transformational potential of 
U.S.-Brazilian cooperation in biofuels.  Noting President 
Bush's stated goal of 20 percent utilization of biofuels in 
U.S. vehicles, Rousseff opined that only creation of a true 
world market can produce a supply sufficient for such a 
demand.  The United States and Brazil, as the technological 
leaders and the current prime consumers, must work together 
to build such a global market.  Biofuels represent the 
crucial "bridge" between the current oil economy and the 
hydrogen and nuclear energy economies of the future, she 
added. 
 
¶4. (C) The GOB's preoccupation with the formulation of a new 
cabinet for Lula's second term and its elaboration of a new 
economic growth stimulation package (PAC) has slowed 
bureaucratic progress, but the GOB is now moving toward 
establishing a unified interagency program for biofuels that 
will be as important as the economic PAC for Lula's second 
term, Rousseff said.  Formalizing an agreement on biofuels 
cooperation with the USG early this year is a key element in 
that program, Rousseff said, and the March meetings of 
Presidents Lula and Bush will provide a unique opportunity to 
realize that goal. U/S Burns indicated that the Secretary's 
Special Advisor on Energy, Greg Manuel, would remain in close 
contact with his Brazilian counterpart in an ongoing effort 
to produce a draft Memorandum of Understanding based on the 
Brazilian proposed text, with a view to trying to produce a 
document for the presidents to sign. (Note: See comment 
below. End note.) 
 
¶5. (C) Manuel reviewed the state of play in negotiating the 
text, and noted that the salient difference to close between 
Brazilian and USG positions is the question of cooperation in 
third countries.  The USG would prefer to develop a 
"platform" approach for development and assistance that could 
 
BRASILIA 00000371  002 OF 003 
 
 
be applied in a number of countries and regions, including 
South America.  The GOB continues to prefer a pilot program 
in Central America or the Caribbean. Rousseff reiterated the 
GOB view, saying that Central America or the Caribbean 
appeared to Brazil to offer the best immediate prospects for 
success in an initial joint effort and the GOB does not want 
to start projects in South American nations at this point. 
Moreover, in Rousseff's Estimation, African nations could be 
more logical second-stage candidates for U.S.-Brazil biofuels 
projects than countries in South America. (Note: See comment. 
End note.)  Ambassador Sobel said the USG may be willing to 
start elsewhere, but does not want to put South America off 
limits. 
 
¶6. (C) Responding to a criticism of U.S. surcharges that are 
hindering cooperation on biofuels, Ambassador Sobel said that 
Rousseff should consider making a presentation to key U.S. 
congressmen on the GOB's view of the potential for biofuels 
development, including plans for U.S.-Brazil cooperation in 
third countries and in global market development.  Context of 
that kind could prove valuable for U.S. legislators as the 
biofuels issue takes center stage in the evolving U.S. debate 
on energy, he added.  Rousseff, who is planning a visit to 
the United States early this year, indicated her receptivity. 
 
¶7. (C) U/S Burns and Rousseff agreed to have Manuel and his 
GOB counterparts continue technical negotiations on the draft 
MOU text for the balance of the week following her meeting 
with U/S Burns.  Rousseff indicated the GOB representatives 
would be empowered to negotiate authoritatively and had a 
political "green light" from her to do so. 
 
DEFORESTATION 
------------- 
 
¶8. (SBU) Noting the key nexus between biofuels, nuclear and 
other alternative energy sources and environmental concerns, 
U/S Burns indicated USG interest in further discussion of 
Brazilian proposals for international cooperation on 
deforestation.  Rousseff said the GOB is making headway in 
community-based programs in the Amazon region, through a 
combination of education, incentives and sanctions.  She 
claimed that deforested area in Amazonas state had fallen 
incrementally by 60 percent in recent years as a result of 
these programs, and the GOB has now focused on Para for a 
similar effort. 
 
¶9. (C) Comment.  Manuel and GOB representatives subsequently 
successfully negotiated a draft MOU text that agrees to the 
GOB preference to initiate third country cooperation 
initially in Central America and the Caribbean (leaving 
future options open, to include South America).  The text is 
now in interagency clearance processes in both the USG and 
GOB.  The emerging importance of U.S.-Brazil cooperation in 
biofuels has figured prominently and positively in media 
coverage of U/S Burns' visit and the upcoming visit to Brazil 
of President Bush, and is generating evident and increasing 
energy and good will for the bilateral relationship at senior 
levels of the GOB. 
 
¶10.  (U)  U.S.: 
Under Secretary R. Nicholas Burns 
Ambassador Clifford Sobel 
Assistant Secretary Thomas A. Shannon 
Political Counselor Dennis Hearne 
Policy Planning Staff Officer William W. McIlhenny 
Secretary's Special Advisor on Bio-fuels Greg Manuel 
 
SIPDIS 
Heide Bronke, Assistant to Under Secretary Burns 
 
Brazil: 
Advisor for International Affairs Ambassador Raimundo Magno 
 
BRASILIA 00000371  003 OF 003 
 
 
Advisor from "Casa Civil" Jurema Valenca 
Advisor from Governmental Matters Section Rodrigo Rodrigues 
President of Brazilian Agency for Industrial Development 
(ABDI) Alessandro Teixeira 
 
 
 
SOBEL