VZCZCXRO6042
RR RUEHRG
DE RUEHBR #0420/01 0871055
ZNY CCCCC ZZH
R 271055Z MAR 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 1309
INFO RUEHAC/AMEMBASSY ASUNCION 6656
RUEHBU/AMEMBASSY BUENOS AIRES 5380
RUEHCV/AMEMBASSY CARACAS 4010
RUEHLP/AMEMBASSY LA PAZ 6043
RUEHMN/AMEMBASSY MONTEVIDEO 7275
RUEHSG/AMEMBASSY SANTIAGO 0209
RUEHRG/AMCONSUL RECIFE 7840
RUEHRI/AMCONSUL RIO DE JANEIRO 5950
RUEHSO/AMCONSUL SAO PAULO 1799
RUEKJCS/SECDEF WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 BRASILIA 000420 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR WHA AND WHA/BSC 
 
E.O. 12958: DECL: 03/18/2018 
TAGS: PREL IR BR
SUBJECT: BRAZIL: IRANIAN DIPLOMACY MOVES INTO HIGH GEAR 
 
REF: A. RIO DE JANEIRO 000044 
     ¶B. BRASILIA 00304 
 
Classified By: Ambassador Clifford M. Sobel. Reasons: 1.4 (B) & (D) 
 
¶1. (C) Summary:  An Iranian delegation headed by Vice-Foreign 
Minister Alireza Sheikh Attar held a series of high-level 
meetings with Brazilian officials from the Ministries of 
External Relations (MRE, aka Itamaraty), Mines and Energy, 
and Development, Industry and Commerce at the same time 
Secretary Rice was visiting Brazil the second week of March. 
 
SIPDIS 
The talks represent another in a series of Iranian moves that 
have the ostensible purpose of drumming up increased 
Brazilian investment in Iran, developing closer bilateral 
ties, and securing a long-delayed meeting between Iranian 
President Ahmadi-Nejad and President Lula.  From their 
perspective, Brazil pursues what Itamaraty contacts call a 
"correct" relationship with Iran, one cognizant of Iran's 
troubled status within the international community, but one 
that does not repudiate or create any problems for Tehran 
either.  End Summary. 
 
--------------------------------------------- ----- 
Meetings Part of Brazil-Iran Bilateral Mechanism 
--------------------------------------------- ----- 
 
¶2. (U) The meetings were the sixth to take place under the 
aegis of the bilateral political consultation mechanism 
established between the two countries in 1999.  The Brazilian 
delegation was headed by Ministry of External Relations Under 
Secretary for Political Affairs II Roberto Jaguaribe, who 
 
SIPDIS 
covers Africa, Asia, the Middle East, and Central Asia, and 
also included a meeting with Foreign Minister Celso Amorim. 
News reports indicated that Sheikh Atar also met with 
Minister of Mines and Energy Edson Lobao and Development, 
Industry, and Commerce Minister Miguel Jorge. 
 
¶3. (C) Secretario Carlos Goncalves de Oliveira, from 
Itamaraty's Middle East Division II, which handles the 
Persian Gulf states, told poloff the meetings focused 
primarily on expanding the bilateral relationship, 
strengthening diplomatic ties between the two countries, and 
spurring Brazilian investment in Iran, particularly by 
Petrobras.  Goncalves indicated that news reports were 
correct in noting that Iran was mounting an outreach effort 
in Brazil in order to defend its "peaceful" nuclear energy 
program, particularly to lobby for Brazilian support in 
international fora by drawing parallels between Iran and 
Brazil's nuclear program. 
 
¶4. (C) Asked whether other issues outside the bilateral 
relationship were brought up, Goncalves indicated that the 
Brazilian delegation asked their Iranian counterparts about 
reports that Tehran was supplying lethal support against 
coalition operations in Iraq and to Hizballah in Lebanon. 
The Iranians vehemently refuted the allegations, calling them 
lies advanced by "foreign powers." 
 
--------------------------- 
Miffed with Petrobras 
--------------------------- 
 
¶5. (U) Trade made up an important component of the visit. 
Iran is looking for increased opportunities to balance its 
trade, which currently overwhelmingly favors Brazil.  Exports 
to Iran account for about 30% of total Brazilian exports to 
the Middle East, or about US$1.8 billion, which accounts for 
about 99% of trade volume between the two countries.   In 
particular, Iran was fishing for increased Petrobras 
investment, although the Iranians seem to be growing 
impatient with Petrobras' unresponsiveness. 
 
¶6. (C) In an interview in the daily newspaper Folha de Sao 
Paulo, Sheikh Atar discussed how Iran could facilitate entry 
of Petrobras into the Iraq market.  According to Sheikh Atar, 
Iran has supplied a US$1 billion line of credit to be used by 
the Iraqi government under the condition that it be used with 
Iranian companies.  Sheikh Atar hoped that this would entice 
Petrobras to consider joint ventures with Iranian companies 
 
BRASILIA 00000420  002 OF 002 
 
 
in Iraq.  Asked by poloff about Sheikh Atar's comments that 
Iran would not wait forever for Petrobras to decide, 
Secretario Leopoldo Goncalves de Oliveira told poloff that 
 
SIPDIS 
they have repeatedly stressed to Iranian officials that 
Petrobras makes its own decisions.  According to Goncalves, 
despite Iranian pressure to increase investment in Iran, it 
was his belief that Petrobras would not increase its stake in 
Iran in the near to mid-term.  A canceled meeting with the 
President of Petrobras during this visit, he stated, is an 
indication of Petrobras' disinterest.   (Comment: Per Ref A, 
Petrobras will wind down its operations in Iran as soon as 
its current contracts expire later this year. End comment.) 
 
-------------------------------------------- 
Brazil, Lula in Ahmadi-Nejad's Sights 
-------------------------------------------- 
 
¶7. (C) In public interviews, Atar made no secret of 
Ahmadi-Nejad's personal interest in strengthening bilateral 
ties to Brazil.  Underscoring this interest, Sheikh Atar 
reached out to Members of the Brazilian Congress, meeting 
Senate Foreign Affairs and National Defense Committee head 
Heraclito Fortes (septel).  Asked about these meetings, 
Goncalves stated that Brazil was aware that Tehran was taking 
a growing interest in Latin America, and Ahmadi-Nejad was 
concentrating his efforts on Brazil.  Still, he added, Iran's 
interest in Brazil does not begin to approach the level of 
Iranian links with Venezuela.  Asked what would follow the 
bilateral talks, Goncalves replied that nothing specific was 
agreed to during the talks but an understanding was reached 
that a presidential-level visit would be preceded by one at 
the ministerial level, which could take place in the second 
half of the year.   (Comment: Per Ref B, President Lula has 
expressed an interest in visiting Iran. End comment.) 
 
------------- 
Comment: 
------------- 
 
¶8. (C) Iran seems to be placing a significant number of eggs 
in the Brazil basket as part of its strategy for enhancing 
relations with Latin America, as indicated by the bilateral 
meetings, the outreach to congress, and the push for a 
presidential meeting.  Brazil, as usual, is playing it both 
ways.  Indications that Petrobras is winding down its 
operations in Iran is a positive sign.   On the other hand, 
Brazil makes only the mildest of statements calling on Iran 
to comply with the IAEA and UNSC resolutions, lapsing into 
occasional defenses of Iran's right to nuclear energy for 
peaceful purposes, declaring that Iran should have a role in 
Middle East peace talks, and refusing to vote for issuance of 
Interpol capture notices against Iranians suspected of 
involvement in the 1994 AMIA bombing in Argentina.  And while 
up to now there seems to have been some resistance within the 
GOB to arranging a presidential-level meeting, Itamaraty 
contacts candidly admit that a meeting is inevitable.  As is 
often the case with its Mideast diplomacy, Brazil's pursuit 
of a "correct" relationship likely will continue to produce 
decidedly mixed results which at times will not conform to US 
policy objectives.  End Comment. 
 
SOBEL 
 
SOBEL