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RR RUEHDT RUEHRG
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R 181342Z DEC 08
FM AMEMBASSY BRASILIA
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INFO RUEHAC/AMEMBASSY ASUNCION 7273
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UNCLAS SECTION 01 OF 02 BRASILIA 001622 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL ETRD EINV ENRG EAGR BR ID
SUBJECT: BRAZIL AND INDONESIA: A RELATIONSHIP FOR THE FUTURE 
 
¶1. (SBU) Summary:  During a November 18-19 visit to Brazil by 
Indonesian President Susilo Yudhoyono, Indonesia and Brazil 
agreed to cooperate in agriculture, including biofuels; 
mining; and poverty eradication.  They formalized a strategic 
partnership for ongoing dialogue and cooperation.  Brazilian 
diplomats characterized the budding ties as "a relationship 
for the future" that will take time to develop.  The top 
priority is to increase bilateral trade, now at only about 
two billion dollars a year.  End summary. 
 
Taking Their Rightful Places 
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¶2.  (SBU)  First Secretary Ricardo Portugal, the Indonesia 
desk officer at the Brazilian Ministry of External Relations, 
told poloff it is "a relationship for the future" that is 
just getting started. Brazil and Indonesia signed a Strategic 
Partnership Declaration under which they will "intensify 
politico-strategic, economic-commercial, socio-cultural, 
scientific-technical, and environmental cooperation."  In 
public remarks, Lula emphasized Brazil's interest in working 
with Indonesia "to mold a more humane and equitable 
globalization," and described the strategic partnership as 
one between "two countries determined to assume the place 
that corresponds to them in a world of profound 
transformation."  Lula also said UN reform, especially UNSC 
reform, is the "first step toward building true 
multilateralism."  Both First Secretary Purnawan Adi Sujasa, 
political officer at the Indonesian Embassy in Brasilia, and 
Ricardo Portugal said the two countries agreed the UNSC 
should be enlarged to give developing countries more 
representation. 
 
Trade, Above All 
- - - - - - - - - 
 
¶3.   (U)  The primary goal of both countries is to increase 
bilateral trade, now at about two billion dollars a year, and 
Lula said bilateral trade could reach three billion dollars 
in 2009 if the current trend continues.  At present, Brazil 
has a slight trade surplus with Indonesia, but the surplus 
has flipped back and forth: it was in Brazil's favor in five 
of the last eight years.  The trading profiles are similar, 
with extractive and unprocessed agricultural products high on 
both countries' export lists, although Brazil's top export is 
semi-finished iron or steel products.  Brazil's other main 
exports to Indonesia are bagasse, iron ore, cotton, and 
tobacco.  Indonesia's top exports to Brazil are rubber, palm 
oil, cacao, and polyester fibers, followed by manufactured 
goods such as automotive gearboxes, artificial fibers, and 
fiber optic cables.  Sujawa said that, in spite of strong 
interest in increasing trade on both sides, the prospects of 
a free trade agreement between Indonesia and Mercosul are 
remote in the near term.  (Note: Mercosul members may not 
individually enter into bilateral FTAs, but the bloc may. 
End note.) 
 
Second Priority: Cooperation 
- - - - - - - - - - - - - - - 
 
¶4. (SBU)  Portugal said Brazil's goal with Indonesia is to 
establish a "strategic partnership" focusing on energy, 
trade, and agriculture.  The MOU on agriculture includes 
biofuels development and builds on previous bilateral 
biofuels agreements signed in 2007 and July 2008 to 
strengthen cooperation, exchanges, and technology sharing. 
Brazil and Indonesia also signed MOUs on mining and energy 
and poverty eradication, where Indonesia would like to learn 
from Brazil's experience with the "family stipend" (bolsa 
familia) program, Sujasa said. 
 
Previous Summits 
- - - - - - - - - 
 
¶5.  (U)  Presidents Lula and Yudhoyono last met at the G-20 
summit just days before the Brasilia summit, and in Jakarta 
in July 2008 during Lula's multi-country Asia and G-8 trip. 
Earlier summits were in 2001, when Fernando Henrique Cardoso 
visited Abdurrahman Wahid in Jakarta, which was the first 
visit of a Brazilian president to Indonesia, and in 2000, 
when Wahid visited Brazil. 
 
BRASILIA 00001622  002 OF 002 
 
 
 
Comment: Indonesia as Part of Lula's Larger Plan 
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¶6.  (SBU)   Brazil's interest in strengthening its 
relationship with Indonesia should be viewed within the 
larger context of President Lula's foreign policy goals of 
actively diversifying trade partners, fortifying south-south 
ties, and raising Brazil's global profile.  Brazil's outreach 
to new partners is also intended to garner support for its 
aspiration for a permanent UN Security Council seat and its 
positions in various international fora such as the WTO. 
SOBEL