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INFO RUEHSO/AMCONSUL SAO PAULO 1409
RUEHRI/AMCONSUL RIO DE JANEIRO 5638
RUEHRG/AMCONSUL RECIFE 7557
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RUEHPU/AMEMBASSY PORT AU PRINCE 0206
RUCNDT/USMISSION USUN NEW YORK 0244

UNCLAS SECTION 01 OF 03 BRASILIA 000013 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR OES/EGC, WHA/BSC, H 
 
E.O. 12958: N/A 
TAGS: OVIP SENV KGHG KPKO EAGR TRGY PREL HA VE BR
SUBJECT: BRAZIL: SEN. BILL NELSON'S MEETING WITH MINISTRY OF 
EXTERIOR RELATIONS U/S EVERTON VARGAS 
 
¶1.  (U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR 
INTERNET DISTRIBUTION. 
 
¶2.  (SBU) SUMMARY.  During a November 27 conversation with Senator 
Bill Nelson (Florida), the Ministry of Exterior Relations' (MRE) 
Under Secretary for Policy, Ambassador Everton Vieira Vargas, 
discussed relations with the United States, regional security and 
defense issues, and the environment.  He described relations with 
the United States as very good and expected this to continue during 
the next U.S. administration.  Still, Vargas complained about the 
U.S. excessive focus on Cuba and its agriculture subsidies.  He 
noted also that Brazil considers it critical to have democratic 
neighbors that are stable and that it believed that dialogue, not 
confrontation nor isolation, is the best way to deal with President 
Hugo Chavez of Venezuela. 
 
¶3.  (SBU) SUMMARY CONTINUED.  Brazil is proud to lead the UN 
peacekeeping operations in Haiti.  There, the key challenge is how 
to create jobs.  On the environment, Brazil has domestic programs to 
monitor and control deforestation, which are already showing 
results.  The rate of deforestation has declined by over 50 percent 
in the last two years, and he expected another 30 percent decline in 
¶2007.  Brazil wants to take measures regarding climate change - such 
as reducing the deforestation rate and promoting the use of biofuels 
- because Brazil will be affected first and foremost by climate 
change.  He stated that climate change threatens to turn the Amazon 
forest into a savannah-like environment over the next 50 years.  END 
SUMMARY. 
 
¶4.  (SBU) On November 27, Senator Bill Nelson (Florida) and the 
Ministry of Exterior Relations' (MRE) Under Secretary for Policy, 
Ambassador Everton Vieira Vargas, discussed a wide range of issues, 
from national security to climate change.  Vargas is responsible 
for, among other things, multilateral issues, including the United 
Nations Stabilization Mission in Haiti (MINUSTAH), and the 
environment.  Vargas was joined by the MRE's Director for North 
American Affairs, Counselor Joao Tabajara de Oliveira Junior. 
Senator Nelson was accompanied by his staff; the Embassy 
Environment, Science and Technology Counselor and the Deputy 
Political Counselor. 
 
GENERLLY VERY GOOD RELATIONSHIP WITH UNITED STATES 
 
¶5.  (SBU) In response to Senator Nelson's question, Vargas 
characterized Brazil's relationship with the United States as very 
good.  There is very good dialogue between both sides and in those 
cases were we may differ, he said, we can do it sitting down without 
rancor.  Vargas stated that of the 500 largest U.S. companies, 400 
are in Brazil.  Further, many Brazilian firms are investing in the 
United States.  We can and we should have a closer relationship, he 
declared.  We have new opportunities to work together.  He said, "we 
can continue working closely with the next administration in 
Washington, whether Republican or Democrat." 
 
¶6.  (SBU) One area Vargas stressed was technical cooperation.  He 
said, our two countries are unique, two large countries in the 
Western Hemisphere.  He added, we should try to stimulate technical 
cooperation between our two countries in order to generate goods and 
services that can contribute to economic growth.  When asked about 
U.S. policy in the region, Vargas stated that any new U.S. policy 
toward Latin America shouldn't be based on assistance, though 
clearly it will be necessary in some special cases.  It would be a 
major breakthrough if there were more cooperation between private 
firms on technical cooperation. 
 
¶7.  (SBU) Vargas highlighted the ongoing technical cooperation on 
biofuels pursuant to a Memorandum of Understanding (MOU), which was 
signed in March 2007.  In that area, he opined, we can do a lot.  He 
saw progress with all three aspects of the MOU:  helping third 
countries develop biofuels; establishing international standards; 
and research and development cooperation. 
 
¶8.  (SBU) The relationship was not without some contentious areas, 
Vargas admitted.  Specifically, he complained about U.S. agriculture 
subsidies.  Until resolved, he said, cooperation won't be as bright 
as it could be.  He clarified that he wasn't speaking just on the 
tax on imported ethanol, he was referring to agriculture subsidies 
in general  He described U.S. subsidies as a major obstacle in 
dealing with the United States on trade issues. 
 
¶9.  (SBU) Another troubling issue for Brazil was the way the U.S. 
relationship with Cuba overshadowed everything else in the region, 
 
BRASILIA 00000013  002 OF 003 
 
 
he stated.  It appeared that all U.S. policy in the region goes 
through the filter of Cuba.  This might have been understandable 
during the Cold War, but not anymore.  Now, Latin America is 
different.  Cuba isn't all of Latin America and the United States 
should deal with the various countries in the region accordingly. 
 
LATIN AMERICA AND NATIONAL SECURITY 
 
¶10.  (SBU) Turning to Latin America, Vargas said, it is critical to 
have democracy in the region and also stability.  Brazil prefers the 
path of dialogue over confrontation, he added, because confrontation 
will push countries like Venezuela down undemocratic paths.  He 
recalled how Brazilian President Luiz Ignacio Lula da Silva and the 
MRE were criticized over how they had dealt with Bolivian President 
Evo Morales when he nationalized the gas operations of the Brazilian 
national oil and gas company Petrobras.  "We said then that dialogue 
is the only way, and now we can see the positive results of this 
approach with Bolivia inviting Petrobras back in to the country to 
invest in oil and gas," he stated.  He also noted that U.S. 
investors hold 40 percent of the equity in Petrobras.  Through 
dialogue, Brazil was letting Bolivia know it needed to protect and 
respect foreign investment.  Vargas added that Brazil's longest 
border is with Bolivia, over 11,000 kilometers, and so "we want 
stability in Bolivia, as well as in Venezuela and Ecuador."  It is 
critical, he said, "this is why we are trying to include Venezuela 
in Mercosul and to build a Union of South American countries." 
 
¶11.  (SBU) Senator Nelson highlighted concerns in the United States 
regarding Venezuelan President Hugo Chavez, especially with regards 
to his wave of arms purchases.  Vargas replied that the MRE doesn't 
see this as putting Brazil's security at risk.  He stated, "we don't 
comment on internal policies of others, such as the decision to buy 
arms.  Brazil enjoys a very close and hospitable relationship with 
Venezuela.  Our companies are active there," noting that a Brazilian 
company is building the subway in Caracas and Petrobras is working 
together with the Venezuelan national oil company PDVSA.  Moreover, 
President Lula can talk with President Chavez.  He said, "we think 
the best way to deal with Chavez is through dialogue.  It isn't good 
to confront or isolate him. We need to talk with Chavez, the same 
way we talk with others.  We are strongly convinced that Chavez is 
trying to do his best for his country," Vargas concluded. 
 
¶12.  (SBU) With regard to Haiti, Vargas attributed great importance 
to MINUSTAH, which Brazil leads.  He described the challenge there 
as more than a security matter, it was at heart an economic one.  He 
noted that President Lula had said that it is vital that Haiti 
receive social, economic and humanitarian assistance.  Most 
important, he stressed, was the need to create jobs in Haiti.  Also, 
he added, the international community should help establish a strong 
police force and conduct "robust institution" building. 
 
¶13.  (SBU) Vargas explained that Brazil was developing a National 
Defense Strategy, and that Minister Robert Mangabeira Unger, the 
cabinet-level Secretary for Long Term Planning, was leading the 
effort in coordination with the Minister of Defense, Nelson Jobim. 
He said the subject of national security was vital; mentioning that 
his father had fought in World War II with the Brazilian contingent 
that went to Italy.  When asked about the recent discovery offshore 
of the Tupi oil field, Vargas replied that "our concerns aren't just 
limited to oil, they are with the Amazon.  The Amazon is a very 
sensitive matter.  The GoB is always concerned with the presence of 
other armed forces on its borders.  That is why it tries to have 
close cooperation with our neighbors on borders."  He noted that the 
GoB was concerned about FARC entry into Brazil.  More than once we 
had to expel them when they entered the Amazon, he noted, but said 
this had not occurred recently.  Accordingly, the Brazilian military 
is deployed along the Amazon border.  There it needs different types 
of military equipment, such as river boats, rather than blue water 
naval vessels. 
 
¶14.  (SBU) Concerning arms and equipment, Vargas lamented the sorry 
state of affairs.  He said, "we are concerned with our own 
equipment, much of which is obsolete."  As an example, he cited that 
the Chief of Staff of the Navy had told him directly of a very 
critical shortage of naval equipment.  He noted, however, that 
President Lula is determined to modernize the Brazilian armed forces 
and that the administration seeks to revive the Brazilian military 
industrial base with more production taking place in-country. 
Brazil was open to joint ventures on the production of military 
equipment and, if need be, to buying abroad. 
 
THE AMAZON FOREST, CLIMATE CHANGE, AND BIOPIRACY 
 
BRASILIA 00000013  003 OF 003 
 
 
 
¶15.  (SBU) Senator Nelson explained that he had long been interested 
in the issue of deforestation, especially with regard to the Amazon. 
 He inquired about the GoB's views on managing the Amazon forest. 
Vargas responded that the GoB needed to keep an eye on the Amazon. 
He said Brazil viewed it as its main national asset, a strategic 
area not only for its forest, but also for water management, 
biodiversity and as the home for some 25 million people.  The GoB 
has ambitious plans to fight deforestation through the use of 
enhanced command and control procedures, he added.  By so doing, it 
seeks to prevent illegal logging and expansion of agriculture into 
the Amazon.  He explained that Brazil has a sophisticated monitoring 
system, which uses remote satellite sensing through a partnership 
with the Chinese called CBERS.  Similarly, using the SIVAM 
ground-based radar network, for which Raytheon is the prime 
contractor, the GoB is monitoring the Amazon airspace for illicit 
aircraft incursions, he noted. 
 
¶16.  (SBU) Vargas continued, pointing out that Brazil has 
sophisticated environmental legislation and an environmental 
criminal code.  Moreover, it has established protected areas that 
now encompass an area larger than half of Western Europe.  He 
announced that Brazil was already seeing good results from its 
efforts.  There had been a 50% reduction in the rate of 
deforestation over the last two years, from 2.75 million hectares 
deforested in 2003-2004 to 1.4 million hectares in 2005-2006,and 
expected a further reduction in the rate of about 30% this year. 
 
¶17.  (SBU) Managing the Amazon isn't just about protecting trees, 
Vargas commented.  Brazil needs sustainable development and so the 
fundamental challenge is an economic one:  How can Brazil produce 
goods from the Amazon in a sustainable manner?  How can it better 
use the rich biodiversity in the Amazon?  Part of the solution is to 
obtain more market access for Brazilian goods, he said, as well as 
establishing a strong research and development policy.  Also, he 
added, Brazil needs investment in the region. 
 
¶18.  (SBU) On climate change, Vargas said, if there is no change in 
patterns of production - especially in developed countries - in 
fifty years we will have the "savannahization" of the Amazon. 
Brazil isn't trying to protect the Amazon because of global 
concerns, but it is doing so because climate change will affect 
Brazilians first and foremost, he asserted, adding that "we are 
committed to strong deforestation efforts."  Deforestation accounts 
for only nine percent of the greenhouse gas emissions and the 
majority of emissions are caused by using fossil fuels.  "That is 
why we are promoting biofuels," he explained.  At the same time, 
President Lula has already decided to stop sugar cane production in 
the Amazon.  We are looking at certification for biofuels.  In sum, 
Vargas declared, "I am convinced that the government has done a lot 
to combat deforestation." 
 
¶19.  (SBU) Vargas identified another major issue for Brazil: 
biopiracy, or the unauthorized taking of plant or animals or 
tradition knowledge.  We need to have a major clampdown, he said. 
The police are working on this, and Brazil is doing a lot and trying 
to do more. 
 
¶20.  (U) Noting his long-time interest in environmental issues, and 
his leadership of efforts to save the Everglades, Senator Nelson 
informed Ambassador Vargas that he would attend the environmental 
summit the following week in Bali, where many issues of concern to 
the U.S. and Brazil would be discussed.  Vargas noted that he would 
be part of the GOB delegation in Bali and that he looked forward to 
seeing the Senator there. 
 
CHICOLA