VZCZCXYZ0015
OO RUEHWEB

DE RUEHSO #0172 0641624
ZNR UUUUU ZZH
O 051624Z MAR 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6513
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 7621
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 7869
RUCPDOC/USDOC WASHDC 2736

UNCLAS SAO PAULO 000172 
 
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: WESTERN HEMISPHERE: PRESIDENT BUSH'S IN 
BRAZIL; SAO PAULO 
 
 
¶1. "Ethanol And Diplomacy" 
 
The lead editorial in liberal, largest national circulation daily 
Folha de S. Paulo maintained (3/5): "Agriculture and trade will be 
the prevailing issues during President George W. Bush's visit this 
week in Brazil. Biofuel will be the preferential topic of Presidents 
Lula and Bush talks because it will allow them to show an apparent 
concern with the global warming question. Also in the agenda will be 
trade disputes that disturb this ethanol-propelled diplomacy.... 
Bush and Lula are expected to announce memoranda of intentions and 
perhaps some concrete step towards research on ethanol produced from 
cellulose, which is even more promising.... Uniting research efforts 
paves the way so that the two nations maintain their dominance in 
the sector. Moreover, measures aimed at standardizing ethanol to 
make it a true international commodity may also be agreed upon. More 
than production, it is in both Brazil and the U.S.'s interest to 
lead the sale of technology and investment in order to produce 
ethanol in other nations in Central America and Africa. Such future 
common interests, however, collide with present differences. 
Brazilian ethanol is more competitive than that produced in the 
U.S..... Even paying a 14 cent import tariff per liter, Brazilian 
ethanol producers exported in 2006 1.8 billion liters to the U.S., 
where additional 13 cents are subsidized per every ethanol liter 
produced from corn.  Bush prefers that protectionist measures not be 
discussed during his meetings with Lula. Not only because they 
contradict his free trade discourse, but also because they result 
from a U.S. Congressional decision that will be effective until 
2009." 
 
¶2. "The Lame Duck's Visit" 
 
Liberal, largest national circulation daily Folha de S. Paulo's 
Washington correspondent Sergio Davila opined (3/5): "Identifying 
his next international destination is not an easy task for the staff 
of a lame duck president.... Despite the fact that he will remain 
almost two years in the White House, negative popularity levels, two 
failed wars in the resume, and the lack of political support to 
influence the 2008 presidential elections have made Bush a premature 
lame duck president. This is the leader who will arrive in Sao Paulo 
this Thursday to launch the Lula-Bush bilateral biofuel memorandum. 
Then, he will depart to establish the carefully chosen 'positive 
agenda' in a Latin America that he ignored.  This is why Argentina 
and obviously the 'little evil axis' formed by Venezuela, Bolivia 
and Ecuador have been excluded from the trip. In Brazil, the 
'ethanol diplomacy' will be the highlight. But, pay attention: even 
in this topic less optimism and more skepticism should be adopted. 
Bush will offer what he does not have while Lula will ask for what 
Bush cannot give." 
 
¶3. "Bush and Lula or Lula and Bush" 
 
Liberal, largest national circulation daily Folha de 
¶S. Paulo's political columnist Eliane Cantanhede commented (3/4): 
"Bush will visit Brazil on Thursday, and Lula will visit Washington 
on March 31.  While Hugo Chvez involves Argentine Nestor Kirchner, 
Bolivian Evo Morales and Ecuadorian Rafael Correa with oil, Lula and 
Bush embrace biofuel. Brazil and the U.S. will discuss the 
standardization of their ethanol to transform the product into a 
commodity.... Chvez talks with his partners from an upper 
opposition provided by his oil. Lula will try to talk with Bush on 
an equal basis on Brazilian ethanol and total flex fuel cars 
technology, by proposing a partnership that goes beyond the two 
nations' borders and extends throughout the continent and Africa. It 
may seem megalomania, but it is not. It is a feasible plan from an 
economic and commercial point of view, in addition to making 
complete geopolitical sense. For Brazil, because it is a way for it 
to perform a leadership role.  For the U.S., because it is a way of 
escaping the oil trap, since both the Arabs and Venezuela, its main 
suppliers, do not seem trustworthy." 
McMullen