VZCZCXRO8076
PP RUEHRG
DE RUEHBR #1368 2010941
ZNR UUUUU ZZH
P 200941Z JUL 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 9544
INFO RUEHBR/AMEMBASSY BRASILIA
RUEHRI/AMCONSUL RIO DE JANEIRO 4789
RUEHSO/AMCONSUL SAO PAULO 0408
RUEHRG/AMCONSUL RECIFE 6957
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHAC/AMEMBASSY ASUNCION 6220
RUEHBU/AMEMBASSY BUENOS AIRES 4919
RUEHSG/AMEMBASSY SANTIAGO 6362

UNCLAS BRASILIA 001368 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR FOR KATE DUCKWORTH 
STATE PASS FEDERAL RESERVE BOARD FOR P.ROBITAILLE 
TREASURY FOR OASIA - J.HOEK 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/SHUPKA 
STATE PASS USAID FOR LAC 
 
E.0. 12958: N/A 
TAGS: ECON ETRD EFIN PGOV BR
SUBJECT:  BRAZIL: U.S. TREASURY SECRETARY PAULSON MEETING WITH 
FOREIGN MINISTER AMORIM 
 
 
SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY 
 
¶1. (SBU) Summary: Foreign Minister Amorim emphasized to Secretary 
Paulson in their July 11 Brasilia meeting the significance Brazil 
places on regional infrastructure integration.  Paulson noted the 
importance of bringing in the World Bank to this discussion.  On 
trade, Amorim stated that even though FTAA "didn't work" and 
Mercosul is still working to "digest" Venezuela, Mercosul remained 
interested in a market-access only free trade agreement with the 
U.S.  The Secretary responded that his highest priority on trade was 
Doha.  End Summary. 
 
¶2. (SBU) After an initial one-on-one session, Minister Amorim and 
Secretary Paulson continued their discussion of infrastructure, 
 
SIPDIS 
trade and financial issues in a broader session.  Amorim noted in 
the general meeting that they had discussed trade and a possible 
debt swap under the Tropical Forest Conservation Act (TFCA). 
 
¶3. (SBU) Amorim noted the GoB's keen interest in implementing the 
vision of infrastructure investment and integration voiced at the 
Camp David summit between presidents Bush and Lula.  Amorim said 
Brazil and South America are trying to do what the United States did 
in the 19th century:  unite the two oceans with trans-continental 
transportation links.  We know, Amorim said, of the interest of U.S. 
companies in participating in what may be a new railway boom in 
South America.  Perhaps we can find ways to associate U.S. and 
Brazilian companies to qualify for U.S. financing as well, he 
added. 
 
¶4. (SBU) Paulson noted that the Ambassador has been a strong 
advocate for Brazil on the question of infrastructure.  I believe 
that access to infrastructure is key to many development issues, 
Paulson said.  He related that the President of the Brazilian 
Development Bank BNDES, Luciano Coutinho, had discussed with him the 
idea of strategic infrastructure finance over dinner the previous 
night.  In his former job in private business, Paulson said, he had 
seen a lot of time wasted on project finance deals that failed 
because the conditions were not right.  Paulson said he would like 
to do more at Treasury on these issues as well as find ways to bring 
into the dialogue institutions such as the World Bank.  There were 
also environmental issues to be considered, Paulson noted, as 
Coutinho had mentioned that the cost of a railroad from the Atlantic 
to the Pacific would probably be US$3 billion more than of a road 
linking the two, but there was little doubt a railroad would be 
environmentally less harmful. 
 
¶5. (SBU) Turning to trade issues, Amorim stated that even though 
FTAA "didn't work" and Mercosul is working to "digest" Venezuela, 
Mercosul remains very interested in a market-access only agreement 
with the United States.  This approach would leave the more 
difficult issues of "rules-making" to the WTO but still advance the 
cause of freer trade, he argued.  Amorim stated that EU-Mercosul 
negotiations may be re-started in the near future.  Paulson 
responded that on trade, his highest priority is successful 
conclusion of the Doha Round. 
 
SOBEL