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R 301355Z OCT 07
FM AMEMBASSY BRASILIA
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INFO RUEHRG/AMCONSUL RECIFE 7264
RUEHSO/AMCONSUL SAO PAULO 1046
RUEHRI/AMCONSUL RIO DE JANEIRO 5311
RUEHBU/AMEMBASSY BUENOS AIRES 5069
RUEHMN/AMEMBASSY MONTEVIDEO 7048
RUEHAC/AMEMBASSY ASUNCION 6350
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UNCLAS SECTION 01 OF 02 BRASILIA 002062 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ETRD BR
SUBJECT:  Ambassador Sobel's meeting with the Senate Foreign 
Relations and National Defense Committee 
 
¶1.  (SBU) Summary.  Members of the Senate Foreign Relations and 
National Defense Committee told Ambassador Sobel in a closed, 
informal meeting on October 16 of concerns about a possible 
U.S.-Brazil tax treaty, fears of Venezuelan aggression, support for 
the Doha Round, and hopes for sustainable development in the Amazon 
region.  The Ambassador was warmly received with praise for his 
outreach to Congress and efforts to improve the bilateral political 
and commercial relationship.  Mission will follow up on senators' 
concerns on a tax treaty, and Ambassador Sobel plans to meet with 
the committee for another informal discussion in a few months.  End 
summary. 
 
Tax Treaty 
---------- 
 
¶2.  (SBU) Senator Francisco Dornelles, a former finance minister, 
industry, commerce and trade minister, and labor minister, stated 
Brazil's tax treaty with the European Union allows EU firms' profits 
to be taxed only in Brazil, unlike the U.S. proposal for bilateral 
tax treaty, and for that reason opposes our proposal.  In his view, 
a Brazil-U.S. tax treaty would harm Brazil's north and northeast 
states and upset Brazil's regional policies.  He agreed to meet with 
embassy officers and Ambassador Sobel to discuss the matter further. 
 Senator Sergio Guerra said it was important to continue the 
discussion and pledged his full support for a bilateral tax treaty 
if the Ambassador engages in a dialogue on the Dornelles's points. 
(Note: Dornelles does not represent of a majority of the Senate, 
according to Economics Committee Chairman Aloizio Mercadante. 
Septel forthcoming.) 
 
Trade 
----- 
 
¶3.  (SBU) The Doha Round is important for a new leap forward and 
there are great expectations for its advancement, Senator Joao 
Tenorio said, and the Ambassador has fostered more bilateral 
contacts in agriculture and agribusiness, which are especially 
important to Brazil, particularly biofuels.  Senator Tenorio also 
congratulated Ambassador Sobel for his work to improve the 
commercial relationship.  Senator Arthur Virgilio declared his 
support for the Free Trade Area of the Americas, noting that Brazil 
has not helped Mercosul become a consolidated body, and dismissed 
charges that FTAA would be bad for Latin America.  Referring to "the 
close relationship between Brazil and the U.S.," Virgilio urged the 
U.S. to be "more proactive," and urged Brazil to be "more 
pragmatic," especially so as "not to let Doha die." 
 
Amazonia 
-------- 
 
¶4.  (SBU) Senator Flexa Ribeiro noted that the U.S. once had a 
consulate in Para, but now has only a consular agency, and he would 
like to see relations improve, presumably including a U.S. consulate 
in Belem.  He further suggested the USG and Brazil exchange views on 
the Amazon more often so as to promote its development while 
protecting it from environmental harm.  He said the region has ten 
percent of Brazil's population but sixty percent of its territory. 
Ambassador Sobel noted that he would be speaking soon with 
Environment Minister Marina Silva about the upcoming visit of the 
U.S. Forest Service director, and that the USG is interested in 
helping Brazil preserve its forests. 
 
Venezuela 
--------- 
 
¶5.  (SBU) Senator Virgilio expressed a concern that Venezuela could 
attack Guyana, Brazil, or Colombia because President Hugo Chavez 
"first smashes things up, creates an arms race, and then attacks a 
neighbor."  (Note: We have heard similar views from other Brazilian 
leaders in recent months.  End note.)  Senator Fortes said the U.S. 
should concern itself with all of South American, not only 
Venezuela. 
 
¶6.  (SBU) Comment:  Senators clearly were appreciative of the 
Ambassador's effort to reach out, and took seriously the opportunity 
to engage.  Ambassador Sobel plans to return to the committee soon 
for another informal conversation. 
 
Participants 
------------ 
 
 
BRASILIA 00002062  002 OF 002 
 
 
¶7.  U.S. 
 
Ambassador Sobel 
Stephen Liston, political counselor 
Peter Tinsley, deputy political counselor 
Dale Prince, political officer (notetaker 
 
Brazil 
 
Heraclito Fortes, chairman (DEM, Democrats, opposition, Piaui) 
 
Rosalba Ciarlini (DEM, Democrats, opposition, Rio Grande do Norte) 
 
Gerson Camata (PMDB, Brazilian Democratic Movement Party, government 
coalition, Espirito Santo) 
 
Francisco Dornelles (PP, Progressive Party, governing coalition, Rio 
de Janeiro 
 
Sergio Guerra (PSDB, Brazilian Social Democracy Party, opposition, 
Pernambuco) 
 
Arthur Virgilio, leader of the PSDB in the Senate (PSDB, Brazilian 
Social Democracy Party, opposition, Amazonas) 
 
Joao Tenorio (PSDB, Brazilian Social Democracy Party, opposition, 
Alagoas) 
 
Flexa Ribeiro (PSDB, Brazilian Social Democracy Party, opposition, 
Para) 
 
Cicero Lucena  (PSDB, Brazilian Social Democracy Party, opposition, 
Paraiba) 
 
Marconi Perillo (PSDB, Brazilian Social Democracy Party, opposition, 
Goias) 
 
Romeu Tuma (PTB, Brazilian Labor Party, governing coalition, Sao 
Paulo) 
 
Serys Shlessarenko (PT, Workers Party, governing coalition, Mato 
Grosso) 
 
Inacio Arruda (PCdoB, Communist Party of Brazil, governing 
coalition, Ceara) 
 
SOBEL