VZCZCXRO7091
RR RUEHRG
DE RUEHRI #0089/01 1051443
ZNR UUUUU ZZH
R 141443Z APR 08
FM AMCONSUL RIO DE JANEIRO
TO RUEHC/SECSTATE WASHDC 4434
INFO RUEHBR/AMEMBASSY BRASILIA 0777
RUEHSO/AMCONSUL SAO PAULO 5141
RUEHRG/AMCONSUL RECIFE 3419
RUEHAC/AMEMBASSY ASUNCION 0339

UNCLAS SECTION 01 OF 02 RIO DE JANEIRO 000089 
 
SIPDIS 
 
USDOC WASHDC 
SIPDIS 
 
SENSITIVE 
 
STATE PASS NSC FOR MICHAEL SMART/GARY TOMASULO 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSON/ADRISCOLL/MWAR D 
 
E.O. 12958: N/A 
TAGS: ETRD ECIN EINV EAIR CMGT CVIS PGOV PREL BR
SUBJECT:  Minister of Industry and Commerce Discusses Possible 
Deliverables for U.S.-Brazil CEO Forum 
 
This cable is sensitive but unclassified, please protect 
accordingly. 
 
¶1. (SBU) Summary: On April 8, 2008, Brazilian Minister of Industry 
and Commerce Miguel Jorge and Ambassador Sobel discussed Minister 
Jorge's upcoming visit to Washington DC for the CEO Forum Meeting at 
the end of April.  Ambassador Sobel stressed the importance of 
showing concrete results from these meetings and suggested 
deliverables in the areas of extending visa reciprocity to 10 years, 
combining tourist and business visas, progress on Bilateral Tax and 
Investment Treaties, and tourism and aviation agreements. 
Ambassador also raised U.S. industry concerns over the proposed "Lei 
de Sacoleiros" (small importers law). End Summary. 
 
 
 
 
Next Steps on Possible Investment and Tax Treaties 
--------------------------------------------- ----- 
 
¶2. (SBU) With the White House participating in the upcoming meeting 
in April, Amb. Sobel argued the importance of having deliverables to 
show the concrete results of the CEO Forum.  He pushed for progress 
on the Bilateral Tax Treaty (BTT) and international arbitration 
under a Bilateral Investment Treaty (BIT), two specific 
recommendations from the CEO Forum in Brasilia of October 2007.  But 
Minister Jorge expressed doubts about the ability to move forward on 
either initiative. 
 
¶3.  (SBU) Min. Jorge noted concerns about a BIT being 
unconstitutional based on an argument that no State can be governed 
by private sector (i.e., outside the court system) dispute rulings 
in Brazil.  The Ambassador suggested that, as a first step, the U.S. 
would need to review a draft BIT proposal from Brazil, and urged 
Min. Jorge to weigh in with the Foreign Ministry to produce a draft 
sooner rather than later.  If the U.S. can get an initial working 
draft to review, the Ambassador feels that the Bush Administration 
can convince the U.S. Congress to support a BIT between our two 
countries.  For example, he noted, U.S. House Speaker Pelosi 
believes that the time is right for a U.S.-Brazil BIT. 
 
¶4.  (SBU) Regarding a Bilateral Tax Treaty, Min. Jorge noted that 
U.S. requirements for tax and banking information would make a BTT 
very difficult, if not impossible.  Brazil has issues with 
collecting tax information since a judicial process is required, 
according to Jorge.  He conceded, however, that an amnesty bill was 
pending which could resolve some of the challenges currently 
associated with realizing a BTT. 
 
Visa and Aviation Agreements Key to More Tourism 
--------------------------------------------- --- 
 
¶5.  (SBU) Ambassador said that the U.S. would be willing to extend 
the validity of B1 (work) and B2 (tourist) visas to ten years if 
Brazil was willing to reciprocate.  Citing that agreement on this 
issue could be reached within the next two weeks, the Ambassador 
also advocated for consolidation of the B1 and B2 visas.  Minister 
Jorge seemed amenable to the idea. 
 
¶6.  (SBU) On proposed changes to the aviation agreement, which would 
allow more direct routes for U.S. carriers to northeastern Brazil, 
Ambassador Sobel informed Minister Jorge that he had received State 
Department approval to move forward.  Ambassador Sobel pushed 
Minister Jorge to continue the work of outgoing Minister of Tourism 
Marta Suplicy, who is expected to resign soon, to promote more 
tourism between the U.S. and Brazil. 
 
Proposed "Lei de Sacoleiros" Could Lead to More Piracy 
--------------------------------------------- --------- 
 
¶7. (SBU) Ambassador Sobel raised U.S. information technology 
industry concerns over a potential rise in piracy that could result 
from proposed Brazilian legislation to place a flat tax on goods 
coming to Brazil by land from Paraguay up to $250,000, allowing 
exporters to self-declare what goods are being shipped.  Minister 
Jorge did not see any problems with the law, and seemed surprised 
that U.S. companies would have a problem with it.  While admitting 
that there are political reasons behind supporting the law, Minister 
Jorge asserted that it was meant to stop the flow of arms coming in 
through Rio's ports.  He did not agree with the argument that it 
would result in increased piracy, and invited the U.S. government or 
U.S. industry to present any compelling evidence to support its 
claim. 
 
RIO DE JAN 00000089  002 OF 002 
 
 
 
¶8. This message was cleared/coordinated with Embassy Brasilia. 
 
MARTINEZ