VZCZCXYZ0019
OO RUEHWEB

DE RUEHSO #0384/01 1271238
ZNR UUUUU ZZH
O 071238Z MAY 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6887
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 8021
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 8043
RUCPDOC/USDOC WASHDC 2776

UNCLAS SAO PAULO 000384 
 
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: BRAZILIAN FOREIGN 
POLICY: BANK OF SOUTH, COMPULSORY LICENSING OF AIDS TREATMENT DRUG; 
EUROPE: FRANCE PRESIDENTIAL ELECTION; SAO PAULO 
 
 
¶1. "What Kind Of Leadership Is This?" 
 
The lead editorial in center-right national circulation daily O 
Estado de S. Paulo (5/5) maintained: "The GOB continues to support 
the creation of the Bank of the South, a financial adventure with a 
deadline to begin.... The idea is to constitute a development bank 
and a stabilization fund - the latter aimed at performing the role 
of a pet, and probably irresponsible, IMF. The GOB has insisted on 
participating in the project. The demand would be simply redundant 
if it did not a show a siege imposed on Brazilian officials by the 
most active supporters of the proposal - Presidents Nestor Kirchner, 
of Argentina, Hugo Chvez, of Venezuela, and Rafael Correa, of 
Ecuador.... Without access to international banks after the 
Argentine public debt default, Kirchner has more than obvious 
reasons to join Chvez in his search for alternative sources of 
credit.... The idea of a common currency for Mercosul involves the 
creation of a central bank for the bloc or, more ambitiously, for 
the region.... But this long term goal does not necessarily involve 
the creation of a regional development bank or the installation of a 
stabilization bank to serve as a generous alternative to the IMF.... 
Either the GOB is being pushed into the adventure because it is 
unable to resist pressures from Chvez, Kirchner and Correa, or 
President Lula's diplomatic advisors like the idea and convinced him 
to adopt it as essential to his supposed regional leadership. The 
GOB is wrong in both hypotheses." 
 
¶2. "Broken Patent" 
 
Liberal, largest national circulation daily Folha de S. Paulo 
editorialized (5/5): "There is no doubt that public health must 
prevail over commercial interests. Therefore, the GOB's decision to 
determine the compulsory licensing of Merck Sharp & Dohme AIDS 
treatment drug Efavirenz is right. The GOB opted for the compulsory 
licensing - technical name of patent break - because it considered 
the price reduction offered by the pharmaceutical company 
insufficient.... Brazil had already threatened to break patents of 
anti-AIDS drugs in 2001 and 2003. As it never adopted such a 
measure, the pharmaceutical sector became increasingly reticent in 
lowering its prices. The compulsory licensing is supported by 
Brazilian legislation in the case of sanitary emergency or public 
interest. That provision is supported by international agreements 
such as the TRIPPS, which regulates intellectual property rights. 
Even the US, the nation that most complains about compulsory 
licensing, recently thought about breaking the patent of Bayer-made 
ciprofloxacin antibiotic, fearing terrorist attacks with anthrax. 
But the fact that Brazil has the right and some good reasons to do 
that does not automatically mean that this will be a no-cost 
decision. In the short run, we may suffer legitimate retaliations 
from pharmaceutical companies." 
 
¶3. "The Difficult Decision Of Breaking Drug Patents" 
 
Business-oriented Valor Econtmico (5/7) remarked: "The GOB's 
decision to break the patent of Merck Sharp & Dohme AIDS treatment 
drug Efavirenz was made following six months of negotiations that 
failed to reach an understanding, and within the limits of 
international rules regarding IPR in accordance with the WTO 
norms.... The Brazilian AIDS treatment program has become a victim 
of its own success. The number of infected people benefited by the 
treatment continues to grow.... As a threat, the strategy of 
compulsory licensing of drugs had already forced price reductions. 
In practice, it has the potential of generating undesirable trade 
conflicts. However, international consensus that national 
governments must have some room of maneuver to carry out public 
health policies is increasing.... The pharmaceutical reasoning is 
not less relevant: compulsory licensing measures make investments in 
drug research and production unattractive." 
 
¶4. "Without Chirac, The Farewell To The Gaullist Style" 
 
Center-right O Estado de S. Paulo's Paris correspondent Giles 
Lapouge wrote (5/6): "French politics will be freed from the 
Gaullist style. Most foreigners are pleased, especially the US.... 
Chirac's anti-Americanism is real, but it is not explained by the 
Cold War. It descends directly from De Gaulle, whose visceral 
anti-Americanism was born during WW II.... Roosevelt detested him 
and wanted to make France a secondary nation under tutelage after 
the liberation. [But] it was mainly in the war in Iraq that Chirac's 
hostility with the US emerged.... The US has placed its hopes on 
Sarkozy.... He will certainly not align with Bush in Iraq, but is 
expected to adhere more to US diplomacy in the world, particularly 
in the Middle East. Sarkozy opposes military action against Iran, 
but he wants tougher sanctions against Tehran and Sudan (because of 
 
 
Darfur), rejects the suspension of the arms embargo against 
China and wants the US anti-missile shield to be debated with the 
Europeans." 
McMullen