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C O N F I D E N T I A L SECTION 01 OF 02 BRASILIA 001373 
 
SIPDIS 
 
STATE FOR WHA/BSC AND PM/RSAT, COMMERCE FOR ADVOCACY CENTER 
AND MAC/ANN DRISCOLL 
 
E.O. 12958: DECL: 10/10/2018 
TAGS: BR PREL MARR ETTC
SUBJECT: BRAZIL'S FIGHTER COMPETITION - THE IMPORTANCE OF 
TECH TRANSFER 
 
REF: A. BRASILIA 1061 
     ¶B. BRASILIA 847 
     ¶C. BRASILIA 175 
 
Classified By: AMBASADOR CLIFFROD SOBEL.  REASON: 1.5(d) 
 
¶1. (U) This is an action request -- see paragraph 8. 
 
¶2.  (C)  SUMMARY.  On September 29th, the Brazilian Air Force 
(FAB) announced its three finalists for Brazil's next 
generation fighter aircraft (FX2): the Boeing F18 Super 
Hornet, the Dassault Rafale and the Saab Gripen.  The winner 
of the competition will become the backbone of Brazil's Air 
Force for the next thirty years. Should Boeing get the sale, 
it would provide us a key building block for a U.S.-Brazil 
strategic partnership on defense issues.  While the French 
plane is widely viewed as the front runner, the relevant FAB 
personnel maintain that the competition remains open.  The 
F18 has significant advantages of cost, technology and 
partnership with the United States, but suffers from a 
perception that U.S. technology transfer policies will 
inhibit the sale.  Rather than focus discussion with Brazil 
on the bureaucratic procedures we must follow and what may or 
may not be possible, our message should highlight that we are 
fully behind the Super Hornet sale and that the USG's record 
of tech transfer to friendly countries such as Brazil is 
extensive.  By addressing the tech transfer concern both 
privately and in the public and by providing confidence that 
planes will be delivered should the FAB decide in Boeing's 
favor, the USG can clear the major perceived obstacle to a 
Boeing purchase and allow the Super Hornet's natural 
advantages to speak for themselves.  END SUMMARY. 
 
¶3.  (C)  As noted in ref c, Brazil is undertaking a major 
modernization of its armed forces, creating a critical 
opportunity for the U.S. to enhance its partnership with 
Brazil into one where Brazil can play a real role as a 
regional power in promoting stability and democracy.  The 
purchase of a new primary fighter aircraft may be the most 
important component of this process, both because of the 
practical cooperation that a sharing of billions of dollars 
of equipment and technology will bring and for the symbolic 
value of treating Brazil as a valued U.S. partner by sharing 
one of our most capable and advanced combat systems. 
Purchase of U.S. planes would be a mutually beneficial 
outcome.  The United States gains a more capable, 
interoperable partner.  By selecting a U.S. aircraft, Brazil 
would also be gaining access to support training both in the 
use of advanced aircraft and in employment of high tech 
fighters as part of integrated, net centric operations. 
 
¶4.  (C)  Thus far, most public discussion in Brazil of the 
possible Super Hornet purchase has not gone beyond a 
repetition of the mantra that Washington does not transfer 
technology.  Most of the blame for the perceived anti-Brazil 
policy is placed with the State Department (coincidentally, 
State is also being depicted in the media as single-handedly 
responsible for forcing Brazil to drop the Russian fighter 
bid).  The assumption that the U.S. will withhold export 
approval is based upon Cold War era reluctance to introduce 
new military technology into Latin America, and enhanced by 
the denial of re-exportof U.S. components of Brazilian-made 
Super Tucan aircraft to Venezuela.  This case was not, in 
fct, a question of technology transfer, but was pereived in 
Brazil as evidence of U.S. policy aimed at keeping Brazil 
from becoming a major regional ilitary power. 
 
¶5.  (SBU)  Local media on the prspects for the F18 has been 
generally negative. One Brazilian newspaper, however, 
asserted that ere it not for U.S. tech transfer policies, 
the Super Hornet would have advantages of economies of sale. 
 Another claimed that Boeing was included oly as a courtesy 
to Washington.  Strangely, althugh both of the Super 
Hornet's competitors have SML content and will require U.S. 
retransfer approval, no one in Brazil seems to have noticed 
thatthe purchase of the French plane will also require 
clearance by the State Department's much maligne export 
control system.  Without a clear messagefrom the U.S. 
 
BRASILIA 00001373  002 OF 002 
 
 
government, both through public statements and to the GOB, 
perception that we are unwilling to transfer technology will 
become the political reality.  Failure to correct the 
misperception risks losing a key facilitator of military 
cooperation for the next thirty years and closes an important 
avenue for commercial relations as well. 
 
¶6.  (C)  It is critical to the sale for the USG to overcome 
as soon as possible the presumption that our technology 
transfer policies are grounds for rejecting the F18.  On 
August 18 FAB chief Saito told Ambassador Sobel clearly that 
technology transfer will be the most important determining 
factor in Brazil's final decision.  While post understands 
that U.S. regulations do not permit "pre-approval" of 
decisions to transfer F18 technology, we need to find ways to 
assure the GOB, publicly at the highest possible levels, that 
the USG fully supports Boeing's sales effort and that we do 
so with the understanding that sale of advanced fighters will 
necessarily involve transfer of technology.  Post understands 
that there are decisions to be made as to precisely what 
levels of technology any Super Hornets eventually transferred 
to Brazil would carry.  Rather than focus discussion with 
Brazil on the bureaucratic procedures we must follow and 
what may or may not be possible, our message should highlight 
that we are fully behind the Super Hornet sale and that the 
USG's record of tech transfer to friendly countries such as 
Brazil is extensive. 
 
¶7.  (C)  By putting the tech transfer question behind us, we 
open the door for Boeing to use its strengths and experience 
in marketing its products effectively.  As noted in refs a 
and b, The F18 on offer has significant advantages over it 
competitors in performance and life cycle cost.  In addition, 
it will confer upon Brazil the prestige of operating one of 
the world's top multi-role aircraft, while putting Brazilian 
aerospace in partnership with the world's leader in that 
field. 
 
¶8. (C) Action Request: Embassy Brasilia would like to 
participate as appropriate as soon as possible in discussions 
with Washington agencies and Boeing to develop a strategy for 
addressing the GOB's technology transfer concerns and taking 
other steps necessary to put Super Hornets into Brazil's 
skies. 
SOBEL