VZCZCXRO8128
RR RUEHRG
DE RUEHBR #1128/01 2381645
ZNR UUUUU ZZH
R 251645Z AUG 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 2309
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 6520
RUEHSO/AMCONSUL SAO PAULO 2625
RUEHRG/AMCONSUL RECIFE 8377

UNCLAS SECTION 01 OF 02 BRASILIA 001128 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:N/A 
TAGS: ETRD ECON EFIN BR
SUBJECT: BRAZIL: Trade, Taxes and Investment - CAMEX Lytha Spindola 
and Ambassador meeting August 20 
 
REF: SAO PAULO 454 
 
¶1. (SBU) SUMMARY:  In a meeting August 20 between Ambassador Sobel 
and CAMEX (see para 7) Executive Secretary Lytha Spindola, Spindola 
hinted strongly that MRE is becoming extremely interested in 
pursuing 4 plus 1 conversations on trade with the United States. 
She expressed optimism that forward movement on both the TIEA and 
the tax treaty negotiations would be possible once the current 
political atmosphere on information exchange calms down in the 
press. Spindola will be in Washington September 3 and 4 to 
participate in an MRE-led delegation examining non-tariff measures 
in meetings with USG agencies.  END SUMMARY. 
¶2. (SBU) Making clear she was speaking informally, Spindola 
indicated that, after expected Doha Round meetings in September, GOB 
will resume thinking about trade agreements and the focus will turn 
to extra-regional agreements.  She signaled MRE is considering 
proposing taking up the 4 plus 1 process again.  She emphasized that 
Amorim will be very interested in the extra-regional agenda.  (NOTE: 
 See reftel.  In the Ambassador's meeting August 21 with Mario 
Marconini, International Negotiations Director for FIESP, Marconini 
commented that 4 plus 1 would be 5 plus 1 (Venezuela) and that GOB 
would be more likely to put more energy into EU negotiations.  END 
NOTE).  Spindola indicated she is assembling a recommendation list 
for which countries to engage.  She will propose to Ministers at the 
August 28 CAMEX meeting that they put this issue on a near-term 
CAMEX agenda.  Spindola strongly encouraged the Ambassador to reach 
out to FM Amorim to discuss further.  She reminded the Ambassador 
that MDIC, Finance and External Relations Ministers are the 
"triumvirate" needed to secure CAMEX agreement on important issues. 
¶3. (SBU) Spindola acknowledged the flurry of recent press 
highlighting opposition from Congress members, lawyers, and some in 
the private sector to information exchange under the Tax Informaiton 
Exchange Agreement (TIEA) with the United States.  She believed that 
once the negative press on both the TIEA and on the July 31 
appointment of Lina Vieira as head of the Receita Federal (Brazilian 
IRS) calms down, progress on achieving congressional ratification of 
the TIEA and substantive BTT negotiations will be possible.  (NOTE - 
the press has reported negatively on Vieira's appointment, casting 
aspersions on both her technical expertise and her close 
relationship with Finance Ministry policymakers, questioning both 
her independence and her ability to do her job.  Vieira has been a 
civil servant for thirty six years serving with state and federal 
tax authorities.  Post impression to date is she is deeply 
knowledgeable on tax issues and fully recognizant of political 
dynamics within her government.  Spindola and Vieira are reportedly 
close friends. END NOTE). 
¶4. (SBU) Spindola summarized that she is "very optimistic" about the 
future US-Brazil economic cooperation relationship.  She believes 
the 4 plus 1 process on trade could be re-launched, that progress on 
completing a bilateral tax treaty will be possible, and (reminding 
that CAMEX agreed to guidance to prioritize negotiating investment 
agreements with countries with which Brazil is negotiating "FTAs"), 
that progress toward an investment agreement could also be possible 
in the near future.  (COMMENT:  The "FTAs" Brazil is currently 
negotiating together with its Mercosul partners in general fall 
short of the US definition of a Free Trade Agreement.  Similarly, 
CAMEX agreed guidelines for negotiating investment agreements appear 
to fall short of US BIT standards.  END COMMENT). 
¶5. (U) Spindola will join a MRE-led delegation September 3 and 4 
that will meet with FDA and other USG agencies in Washington to 
discuss non-tariff measures.  She is particularly interested in the 
delegation's intention to explore USG risk assessment and risk 
management practices.  Her interest arises from her role supporting 
CAMEX's trade facilitation agenda. 
¶6. (SBU) COMMENT: The Ambassador found Spindola's signal that Brazil 
may soon be interested in resuming four plus one trade discussions 
very intriguing.  He intends to seek a meeting with FM Amorim as 
soon as possible to explore the Minister's thinking further.  The 
Ambassador was similarly encouraged by Spindola's optimism that the 
tax and investment agenda with the United States might soon be in a 
position to make progress.  He intends to follow up with Spindola 
after the August 28 CAMEX meeting.  Spindola reportedly enjoys a 
close relationship with MDIC Minister Miguel Jorge and with some 
within Fazenda and is now better positioned in her relationship with 
Receita Federal.  Her position permits her access to the internal 
deliberations of Ministers on trade-related issues, and as the 
person responsible for coordinating their meetings, she has some 
ability to help shape the agenda.  END COMMENT. 
¶7. (U) REMINDER NOTE: As previously reported, CAMEX (the External 
Trade Chamber) is in some ways comparable to the USG TPSC/TPRG/Econ 
Deputies/Econ Principals process. Membership is composed of MDIC 
(Commerce Ministry, the Chair), Casa Civil (President's staff), MRE 
(Foreign Relations Ministry), Finance, Agriculture, Planning, and 
Agriculture Development Ministries. CAMEX has an Executive 
Secretariat, and Lytha Spindola is the Executive Secretary.  CAMEX 
work is done in working groups progressively up through a Council of 
Ministers that takes decisions.  While the TPRG process is a good 
comparison, CAMEX has a broader mandate, with responsibility for 
decisions on:  trade defense measures; trade facilitation; common 
 
BRASILIA 00001128  002 OF 002 
 
 
external tariff changes decisions; export guarantees; international 
negotiations; and trade security.  That is, CAMEX does everything 
from approving anti-dumping cases to green-lighting MRE's proposed 
WTO negotiating positions to setting tariff rates.  Like our system, 
some issues are "easy" and never rise to political level for debate 
while others receive high-level engagement.  END NOTE 
KUBISKE