VZCZCXRO6844
PP RUEHRG
DE RUEHSO #0251/01 0861626
ZNR UUUUU ZZH
P 271626Z MAR 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC PRIORITY 6662
INFO RUEHBR/AMEMBASSY BRASILIA 7787
RUEHBS/USEU BRUSSELS
RUEHGV/USMISSION GENEVA 0190
RUEHRI/AMCONSUL RIO DE JANEIRO 7941
RUEHRG/AMCONSUL RECIFE 3484
RUEHRC/USDA FAS WASHDC 0675
RUCPDOC/USDOC WASHDC 2757
RUEHFR/AMEMBASSY PARIS 0245

UNCLAS SECTION 01 OF 02 SAO PAULO 000251 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EEB/TPP/MTA/MST FOR AARON SCHEIBE 
DEPT PASS USTR FOR SUE CRONIN 
USDOC FOR 4332/ITA/MAC/WH/OLAC/ADRISCOLL/MCAMPOS 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/DRAMBO 
USDA FOR DUS TERPSTRA, RIEMENSCHNEIDER AND CALEXANDER 
PARIS FOR ECON - TOM WHITE 
 
E.O. 12958: N/A 
TAGS: ECON ETRD WTO BR
SUBJECT:  BRAZIL: INDUSTRIAL AND TRADE ASSOCIATIONS PUSH FOR GREATER 
USG-GOB COLLABORATION 
 
 
¶1.  Summary:  At a March 10 meeting held at the Sao Paulo 
headquarters of the Federation of Industries of the State of Sao 
Paulo (FIESP), Brazilian industrialists presented USTR Ambassador 
Susan Schwab with a joint statement issued by eight Brazilian 
industrial and trade associations that calls for closer USG-GOB 
collaboration in trade negotiations, double taxation issues, and 
biofuels cooperation.  The eight associations sent copies of the 
statement to Brazilian Foreign Minister Amorim and Ambassador 
Schwab, and asked that it be forwarded to POTUS.  It remains to be 
seen what effect the joint statement will have on GOB trade policy, 
although clearly it focuses even greater attention on industry's 
desire for increased engagement with the U.S. End Summary. 
 
¶2.  The statement, issued collectively by FIESP, the National 
Confederation of Industry (CNI), the Federation of Industries of the 
State of Rio de Janeiro (FIRJAN), the Brazil - United States 
Business Council, the American Chamber of Commerce in Brazil (AMCHAM 
Brazil), the Brazilian Center of International Relations (CEBRI), 
the Brazil Competitive Movement (MBC), and the Institute for 
International Trade Negotiations (ICONE), underlined the inefficacy 
of existing bilateral cooperative mechanisms in strategically 
enhancing economic relations between Brazil and the U.S. 
 
¶3.  Instead, the communique called for aligning U.S. - Brazil 
bilateral economic interaction along the same strategic lines the 
USG currently has with India and China, and recommended that both 
governments concentrate their efforts on areas where both the U.S. 
and Brazil have the possibility to obtain a "win-win" outcome. 
 
¶4.  These industrial and trade organizations stressed the importance 
of USG and GOB cooperation to a successful Doha Round outcome and 
said both governments should look to complementary bilateral or 
hemispheric trade negotiations.  The communication also emphasized 
the need for both countries to negotiate an agreement on double 
taxation to enhance investment flows and to cooperate closely on 
biofuel programs, which, in their eyes, would include a reduction in 
biofuel tariffs. 
 
¶5.  Full text of the English translation of the statement provided 
by the group to Ambassador Schwab follows: 
 
Begin text of Joint Statement: 
 
- Federation of Industries of the State of Sao Paulo (FIESP) 
- National Confederation of Industry (CNI) 
- Federation of Industries of the State of Rio de Janeiro (FIRJAN) 
- Brazil - United States Business Council 
- American Chamber of Commerce in Brazil (AMCHAM Brazil) 
- Brazilian Center of International Relations (CEBRI) 
- Brazil Competitive Movement (MBC) 
- Institute for International Trade Negotiations (ICONE) 
 
Joint Statement 
 
Brazil-United States economic relations have become varied and 
complex.  This is due to the growth in trade and investment between 
the two countries, to technological innovation in several areas of 
knowledge and to the evolution of the political and economic context 
at hemispheric and global levels. 
 
However, mechanisms for bilateral cooperation have not kept up with 
these developments and have been insufficient to serve and enhance, 
from a strategic perspective, the relations between Brazil and the 
United States. 
 
In recent years, many initiatives have been launched at the 
bilateral level.  Despite their relevance, they were not able to 
promote an upgrade in the bilateral relations and to foster 
significant actions in the public and the private sectors. 
 
We advocate the importance of adopting, in the Brazil-US relations, 
a strategic view comparable to those established between the United 
States and other important emerging countries, such as China and 
India. 
 
We believe that both governments must adopt a more ambitious agenda, 
concentrating their cooperative efforts in selected strategic issues 
 
SAO PAULO 00000251  002 OF 002 
 
 
where Brazil and the United States are relevant players and where it 
is possible to reach win-win solutions. Such an agenda must 
necessarily include the following issues: 
 
- Trade negotiations:  Brazil and the United States play a 
leadership role at the WTO and should join efforts for the success 
of a balanced and ambitious agreement at the Doha Round. 
Cooperation in the WTO must be complemented by bilateral or 
hemispheric preferential trade negotiations with the aim of granting 
market access in goods and services, promoting investments, 
competitiveness, innovation and property rights. 
 
- Agreement to avoid double taxation:  the negotiation and 
ratification of an agreement to avoid double taxation is justified 
by the intensity and quality of the bilateral relations and, mainly, 
by the growth of Brazilian investments in the United States.  The 
legal security derived from an agreement on this issue is critical 
to promote new and increased investment flows between the two 
countries. 
 
- Biofuels:   Brazil and the United States are aware of the 
importance of biofuels to their hemispheric and bilateral agendas as 
well as to multilateral trade, energy and environmental agendas. 
The memorandum of understanding to be signed by both countries is a 
first step towards the establishment of a cooperation program that 
must include:  research and development in the agricultural and 
industrial production phases, establishment of global standards and 
regulations for the products, bilateral investments in third 
countries, infrastructure and market access through the reduction of 
tariff barriers to the biofuels trade flows. 
 
The presidential meetings provides (sic) the opportunity to stress 
the importance of developing a strategic relation that contributes 
not only to an expressive increase in bilateral trade and investment 
flows, but also to joint hemispheric and global initiatives, taking 
into consideration the particularities of each nation. 
 
The Brazilian private sector intends to play a pro-active role in 
this process, formulating proposals and participating in the 
existing public-private mechanisms as well as in those to be created 
to support the accomplishment of these complex and important 
objectives. 
 
End Text of Joint Statement. 
 
¶6.  Embassy Brasilia contributed to this cable, which was cleared by 
Embassy Brasilia prior to transmission. 
 
McMullen