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C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 001636 
 
SIPDIS 
 
E.O. 12958: DECL: 12/19/2018 
TAGS: PREL PGOV PHUM KSUM ECON OAS XL XM BR
SUBJECT: BAHIA SUMMITS, PART 1: BRAZIL HOSTS FOUR REGIONAL 
SUMMITS 
 
REF: A. BRASILIA 1301 
     ¶B. BRASILIA SEPTEL: BRINGING LATIN AMERICA AND THE 
        CARIBBEAN TOGETHER...AROUND CUBA 
     ¶C. BRASILIA SEPTEL: THE SURPRISE OF BAHIA: MEXICO 
        COZIES UP TO BRAZIL 
 
BRASILIA 00001636  001.2 OF 003 
 
 
Classified By: Ambassador Clifford M. Sobel.  Reasons: 1.4 (b) & (d) 
 
¶1. (SBU)  SUMMARY:  Over a two-day period, December 16-17, 
Brazil hosted a series of four summit meetings at the seaside 
resort of Costa do Sauipe, Bahia, involving the heads of 
state or high-level government officials of 33 Latin American 
and Caribbean countries:  The Common Market of the South 
(MERCOSUL), the Union of South American Nations (UNASUL), the 
Rio Group, and the first-ever summit of all Latin America and 
Caribbean leaders (CALC).  The results of the MERCOSUL 
meeting were notably thin, while UNASUL approved Brazil's 
proposed South American Defense Council (SADC).  Rio Group 
leaders' endorsement of Cuba's membership provided the 
unexpected unifying theme from Bahia:  a message to the 
United States that it is time to reintegrate Cuba into the 
hemispheric community, and that the success of the April 
Summit of the Americas (SOA) depends on it (ref B).  Although 
the press highlighted the exclusion of the United States and 
Canada and the anti-American rhetoric on the part of some 
leaders, the Bahia events, which were the largest regional 
gathering held without extra-regional participation, prompted 
observers to comment on Brazil's growing influence and 
ability to convene its neighbors to a meeting of hemispheric 
proportions.  Mexico provided the final surprise when, during 
the closing of the CALC December 17, Mexican President Felipe 
Calderon called for the formation of a permanent Latin 
America and Caribbean Union to serve as either an alternative 
or complement to the Organization of American States (OAS) 
(ref C).  Observers agree that Brazil's calling and hosting 
of this two-day multi-summit event demonstrated that the GOB 
is able and willing to exercise increasingly visible regional 
leadership, with an eye toward gaining legitimacy as the 
principal regional representative on the global stage.  END 
SUMMARY. 
 
MERCOSUL 
-------- 
 
¶2. (SBU) Brazilian President Luiz Inacio Lula da Silva was 
joined by his MERCOSUL counterparts from Argentina 
(Kirchner), Uruguay (Vazquez), Paraguay (Lugo), and Venezuela 
(Chavez), at meetings on December 16.  Bolivia (Morales) and 
Chile (Bachelet) attended as observers.  The group agreed to 
absorb Bolivian textile exports without tariff, to offset 
Bolivia's loss of preferential access to the U.S. market. 
Otherwise, results were remarkably thin.  The group was 
unable to come to consensus agreement on eliminating double 
tariff collection or on how tariff-revenue would be allocated 
among MERCOSUL members.  At the end of the meeting Brazil 
passed the rotating six-month presidency to Paraguay.  On 
December 17, Brazil's lower house approved admission of 
Venezuela into Mercosul.  It now faces a tough battle in the 
Brazilian senate, and is still under consideration by 
Paraguay's legislature, as well, before Venezuela can be 
officially admitted. 
 
UNASUL 
------ 
 
¶3. (C) Chilean President Michele Bachelet, chaired a quick 
meeting of the Union of South American Nations (UNASUL) on 
December 16, in which the group of 12 nations approved the 
formation of the South American Defense Council (SADC) -- a 
key Brazilian objective since the founding of UNASUL.  The 
SADC will hold its first formal meeting in March 2009. 
UNASUL leaders reaffirmed that deepening regional integration 
and strengthening trade ties and investment flows are 
important to growth and pledged to increase commercial flows 
between themselves and with the world.  Fears that Argentina 
might press for a majority vote on the candidacy of former 
Argentine president Nestor Kirchner to be UNASUL Secretary 
General did not materialize.  While not resolved, Uruguayan 
diplomats told poloff that the group had come to an agreement 
that the decision should be made by consensus which, in light 
of Uruguay's explicit objection and the lukewarm support of 
other members, will effectively block Kirchner's candidacy. 
Members agreed that Chile, which stepped into the breach 
earlier this year after Colombia withdrew during its dispute 
 
BRASILIA 00001636  002.2 OF 003 
 
 
with Ecuador, should remain as UNASUL president at least 
until April 2009 when leaders are due to meet again. 
 
The Rio Group 
------------- 
 
¶4. (U) Cuban President Raul Castro was treated as an honored 
guest as heads of state and government of the 23 Latin 
American and Caribbean Rio group member-states endorsed the 
Zacatecas declaration that formally granted Cuba membership 
in the organization.  Overall, the two-day series of meetings 
served as a coming out for Raul Castro, who was making his 
first official trip outside of Cuba since taking over the 
presidency from his brother Fidel in 2006.  Castro, who 
visited Venezuela prior to the Bahia meetings, also was 
present at the MERCOSUL meeting and the CALC.  He met 
privately with the OAS Secretary General, reportedly to 
discuss Cuba,s interest in rejoining the Organization, and 
other leaders before being receive in Brasilia by Lula for a 
one-day official bilateral visit December 18.  As the only 
concrete outcome of hemispheric significance to emerge from 
Bahia, the Rio Group decision to admit Cuba set the stage for 
Cuban reintegration into the hemispheric community to become 
the dominant theme in the CALC, as well. 
 
The Latin America and Caribbean Summit (CALC) 
--------------------------------------------- 
 
¶5. (C) Although Brazil called the first CALC meeting with 
only the vaguest notion of an agenda (ref A), the December 17 
meeting picked up where the Rio Group left off on Cuba, 
issuing a declaration calling for an end to the U.S. trade 
embargo on Cuba, delivering a broader message to the United 
States that it is time to reintegrate Cuba into the 
hemispheric community, and implicitly hinting that the 
success of the April Summit of the Americas (SOA) depends on 
it (see ref B).  It also provided regional support for a 
number of singl-country gripes, via a communique urging the 
United States to renew the Andean Trade Promotion and Drug 
Eradication Act (ATPDEA) preferences for Bolivia; a separate 
communique on the "Malvinas Question," calling on Great 
Britain to resume negotiations with Argentina on the 
sovereignty issue in accordance with UN resolutions and 
guidelines; and a call for the European Union to continue 
granting Generalized System of Preferences (SGP-plus) 
benefits, meant to foster sustainable development and 
governance, to Panama.  Among a slew of comments on global 
topics from development to environment to energy to UN 
reform, the leaders urgently called for a "balanced and 
equitable" and "less than reciprocal" conclusion to the Doha 
WTO round.  They also called for dialogue among regional 
FinMins on financial architecture and regulatory mechanisms 
to address the financial crisis in language that conflicts 
with recent Brazil-chaired G-20 statements on the issue. 
 
¶6. (C) A surprising outcome of the CALC was Mexican President 
Felipe Calderon's call at the closing session for a regional 
union excluding the United States and Canada, which could act 
as an alternative or complement to the Organization of 
American States.  The proposal made headlines in Brazil, but 
did not appear in the final declaration.  The Mexican 
Ambassador to Brazil told Ambassador Sobel that neither the 
other leaders nor the Mexican foreign ministry were consulted 
before Calderon made the proposal (see ref C). 
 
¶7. (C)  Press coverage from Bahia highlighted the 
anti-American rhetoric.  Evo Morales made a call, ignored by 
most of the other leaders, for all U.S. Ambassadors to be 
expelled from the region if the embargo was not lifted.  Hugo 
Chavez hailed the CALC as Latin America's demand for 
independence and respect from the United States.  Lula and 
others tried to moderate some of the more radical 
pronouncements by expressing hopes that an Obama 
Administration would change U.S. policy towards Latin 
America.  Lula called on his colleagues to give Obama a 
chance to take office and allow him time to implement policy 
changes.  Yet he insisted the region should not continue to 
be subservient in its relationship with the United States. 
He also took the opportunity to denounce the U.S. trade 
embargo on Cuba, saying at the Rio Group meeting, "there is 
no more explanation for it, there is no longer an economic 
explanation, there is no longer a political explanation, that 
is to say, there exists no reason for it."  Lula also made 
harshly critical remarks about the U.S. and other developed 
 
BRASILIA 00001636  003.2 OF 003 
 
 
nations' responsibility for the global financial crisis. 
Initial editorials in major media have been highly critical 
of the "exclusionary" tone of the CALC, which has been 
derided as yet another misstep by Lula toward less valuable 
south-south relationships and away from the global leaders 
that are also Brazil's major trading partners. 
 
¶8. (C) COMMENT:  Media analysts, academia, and the local 
diplomatic corps are currently engaged in a Bahia post-mortem 
that may alter initial, mostly negative, assessments focused 
on the shrillness of anti-U.S. rhetoric at this 
Brazil-organized event.  For or against, observers agree that 
Brazil's calling and hosting of this two-day multi-summit 
event demonstrated that the GOB is able and willing to 
exercise increasingly visible regional leadership, with an 
eye toward gaining legitimacy as the principal regional 
representative on the global stage.  (See additional comment 
refs B and C.)  END COMMENT. 
SOBEL