VZCZCXRO0483
PP RUEHRG
DE RUEHBR #1048/01 2131520
ZNR UUUUU ZZH
P 311520Z JUL 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 2201
INFO RUEHBR/AMEMBASSY BRASILIA
RUEHRI/AMCONSUL RIO DE JANEIRO 6464
RUEHSO/AMCONSUL SAO PAULO 2553
RUEHRG/AMCONSUL RECIFE 8330
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 02 BRASILIA 001048 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR FOR DUCKWORTH 
TREASURY FOR OASIA HOEK AND TRAN 
USDOC FOR 4332/ITA/MAC/WH/OLAC/ADRISCOLL 
 
E.0. 12958: N/A 
TAGS: ETRD ECON BR
SUBJECT: Brazil: Post-Doha - early public reaction 
 
(SBU)1. SUMMARY:  In the wake of the Round's mini-Minsterial's 
collapse, Brazilian analysts and industry generally praise GOB for 
the approach it took in the Round trying to ensure a result in 
Brazil's national interest, rather than maintaining consensus with 
its Mercosul partner Argentina or other members of the G-20 
developing country group.  Brazil's constructive work to find 
workable compromises in the group of seven countries is a good sign 
that Brazil is truly engaging as a leader, which potentially has 
important implications for Brazil's role on the world stage in trade 
as well as broader items on the international agenda.   Publicly, FM 
Celso Amorim said, "President Lula told me, 'Celso, it was worth the 
effort we made.'"  Amorim was gloomy regarding near-term prospects 
for reviving the Round:  "Taking this up again will be for the next 
generation," he said.  "I would be the one who would have bet most 
an agreement was possible.  We failed, but if I were the expert, I 
would substitute the players to see if we could achieve an 
agreement...  Change the team and try again" (Valor and Estado). 
Public statements by FM Celso Amorim and MRE Economics U/S Roberto 
Azevedo avoid direct criticism of the United States, though the 
press believes negotiators "insinuated" criticism of both the US and 
India.  Septel will provide further analysis of implications 
post-Doha for economic engagement with Brazil.  END SUMMARY 
 
(U) 2.  Public statements by FM Celso Amorim and MRE Economic 
Affairs U/S Roberto Azevedo avoid direct criticism of the United 
States, though the press believes negotiators "insinuated" criticism 
of both the US and India with comments such as Amorim: ""Taking this 
up again will be for the next generation," he said.  "I would be the 
one who would have bet most an agreement was possible.  We failed, 
but if I were the expert, I would substitute the players to see if 
we could achieve an agreement...  Change the team and try again." 
(quoted in both Valor and Estudo).  Amorim characterized the 
collapse of talks as "lamentable" and "unbelievable" (most press 
sources).  Regarding future prospects for closure, Amorim said, "who 
knows, as long as 2013" before a round would be concluded (Valor). 
He noted, "it is not going to be resolved in six months.  If the 
political situation today is difficult for negotiating, later there 
will be elections in India, in Brazil..." (Valor).  U/S Azevedo (who 
will be the new Brazilian WTO Ambassador) said, "A decision to take 
up negotiations again is not in our hands, it is in others' who need 
a mandate to come back to the table." (Valor).  Amorim added, "Let 
us hope to God it does not take another 9/11" to unlock progress on 
the Round (Globo, Jornal do Brasil). 
 
(U). 3. Asked about Brazil's interest in putting more effort into 
bilateral trade negotiations (such as the EU-Mercosul FTA or the 
FTAA), Amorim said, "We always said Doha was the priority.  But we 
can not get hung up in something that does not give results...if 
there is nothing else, we'll go forward" with other negotiations, 
noting bilateral agreements are less advantageous for Brazil than a 
multilateral agreement (Valor).  He stated, "It's clear we are 
interested in proceeding with negotiations with the EU" but that 
FTAA negotiations would be more difficult because Washington 
"demands things we can not accept" while EU negotiations are "more 
malleable" (Gazetta).  Amorim reportedly stated the Doha collapse 
had negative implications for other global negotiations such as 
climate change. 
 
(U). 4. Globo and Estado ran articles pinning the blame, in their 
view, on the United States (both papers) and India (Globo) for not 
making an "extra effort" to conclude the Round.  Globo printed a 
sidebar analysis identifying the "losers" of the collapse as 
(Globo's editorial comments noted in paratheses) Brazil (lost the 
chance for more agricultural market access; runs the risk of losing 
more than it gets in potential regional agreements like EU-Mercosul- 
particularly on industrial products, services, investment, 
government procurement and social/labor/environment issues), the EU 
(it is well integrated within Europe and needs new markets, has 
internal fissures on domestic supports and agricultural barriers), 
and African countries (with high world food prices, poor countries 
will continue to be unable to produce and export more).  Globo's 
perceived "winners" in the collapse are India (is still free to 
adopt safeguards and protect agriculture sector and will look for 
more advantages, especially on services, in bilateral negotiations), 
Argentina (does not speak the same language as Brazil when it comes 
to industrial tariffs), the United States (while they need market 
opening, they have nothing to offer.  They presented the minimum on 
domestic subsidies and have the advantage in getting everything they 
want in bilateral agreements), and China (paid a very high price to 
join WTO and knew they would have to give more in the round.  Like 
India, they have an important role in the G20, but will try for 
advantages in bilateral agreements.  The Chinese were negotiating an 
 
BRASILIA 00001048  002 OF 002 
 
 
agreement with the US before the round was unleashed). 
 
5.(U)   In general, while lamenting the collapse of the Round, 
industry and think-tank sources publicly praised the Brazilian 
government's efforts and approach in the negotiations.  The 
Federation of Agricultural Producers (CNA) commented "the agreement 
was fragile, little ambitious, full of exceptions, had significant 
gains" for Brazil.  "After all the effort, it has substance.  It's 
frustrating," commented Andre Nassar, the ex-head of the influential 
think tank Trade and International Negotiations Studies Institute 
(Icone) financed by agricultural interests.  "We lost an important 
platform for the future," commented columnist and ex-Agriculture 
Minister Roberto Rodrigues.  Nassar said "I can not fault the 
Americans for being offensive" and praised the Brasilian strategy as 
on the side of emerging exporting countries and distancing itself 
from India and Argentina: "All Itamaraty's choices were for an 
agreement."  On the NAMA side, Marco Marconini, the director for 
international relations at FIESP (the largest member industry 
federation with the umbrella industry federation CNI) , noted that 
intense collaboration between the government and the private sector 
had yielded an "equilibrium" between Brazil's agricultural and 
industrial interests that will be hard to repeat and that "there is 
always a cost to lowering tariffs, but the controlled opening is 
good for our country, because it strengthens the economy." 
Marconini acknowledged that FM Amorim "did everything possible" to 
save the Round.  Soraya Rosar, the international negotiations 
manager at CNI confirmed that, while the compromise was not 
ambitious, it "still was an advance in relation to what we have 
today in the WTO."  The President of the National Association of 
Auto Manufacturers (Anfavea), Jackson Schneider, expressed 
satisfaction with the government: "The whole time, it had a position 
that solidly respected industry's limits."  Industry analysts 
overall agree that there is no likelihood of any agreement now in 
the near term. 
 
(SBU) 6. COMMENT:  This report provides a broad overview of early 
reaction in the press to the trade negotiations collapse.  Post 
believes that Brazil's willingness to step beyond messages of 
solidarity with Mercosul and G20 partners to focus on its own 
national economic interests represents an important step forward for 
the country as it moves to takes its place as an engaged regional 
and international player.  At the same time, the GOB will be 
thinking now about how to pursue its trade objectives in the coming 
months.  In the coming days, mission Brazil will be engaging 
government and private sector interlocutors further on their views. 
Septel will provide further analysis of implications and potential 
for deeper engagement on economic and other issues for Brazil.  END 
COMMENT 
 
SOBEL