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UNCLAS SECTION 01 OF 05 BRASILIA 000282 
 
SIPDIS 
 
DEPARTMENT FOR WHA/BSC 
 
E.O. 12958: N/A 
TAGS: PAO ETRD PREL ECON BR
SUBJECT: BRAZIL: OFFICIALS DISCUSS CUBA, BOLIVIA, ENERGY 
COOPERATION WITH STAFFDEL LEWIS 
 
REF: A. 09 BRASILIA 000262 
     ¶B. 08 BRASILIA 1638 
     ¶C. 08 BRASILIA 1637 
     ¶D. 08 BRASILIA 1636 
     ¶E. 09 BRASILIA 00158 
 
¶1. (SBU) Summary: On February 19, Jessica Lewis, Senior 
Foreign Policy Adviser to Senate Majority Leader Harry Reid 
and Caroline Tess, Professional Staff Member and Senator Bill 
Nelson,s designee to the Senate Select Committee on 
Intelligence met with Brazilian government officials from the 
office of the presidency, Ministry of Exterior Relations, 
Ministry of Finance (ref a), Ministry of Environment, and the 
Brazilian Senate to discuss Brazil,s role in the global 
financial crisis, regional politics, hemispheric energy 
initiative, and climate change.  Brazilian interlocutors 
expressed support for increased bilateral cooperation on 
energy, but sent mixed signals on hemispheric cooperation in 
that area.  Brazilian officials also expressed hope that the 
United States would begin showing signs of a shift in its 
policy on Cuba, and greater understanding of the fundamental 
changes taking place in Bolivia, Ecuador and Venezuela which 
require a more nuanced U.S. approach to the region. End 
summary. 
 
--------------------------------------- 
Planalto: Cuba Should Be U.S. Priority 
--------------------------------------- 
 
¶2. (SBU) During the visit, Staffdel Lewis met with Ambassador 
Marcel Biato, Assistant to Marco Aurelio Garcia, President 
Lula,s foreign policy adviser.  Biato was pleased to note 
the frequent opportunities the two governments will have over 
the coming weeks to move the bilateral relationship forward, 
including Foreign Minister Amorim,s meeting with Secretary 
Clinton, the upcoming Lula visit to Washington in March and 
the Summit of the Americas.  Biato also noted that in a 
conversation with Chilean President Bachelet, President Obama 
had pledged to send a high-level representative to the 
Progressive Governance Conference that will take place in 
Chile from 27-28 March and will count on the participation of 
President Lula as well as dozen other world leaders. 
 
¶3. (SBU) Asked about Brazil,s impressive hosting of four 
simultaneous summits in Salvador late last year (see refs 
b-d), Biato noted that it was part of Brazil,s effort to 
form an institutional basis for a formal and more intensive 
regional agenda that reflects a region that is capable of 
taking responsibility for its own problems and a re-alignment 
in terms of the power structure of the region.  As part of 
that more intensive agenda, Biato added, Brazil has made it a 
priority to include Cuba in these fora.  Without Cuba, Biato 
observed, "you would have a black hole and not a truly 
regional approach".  Commenting the expectations of the 
Brazilian government had for the new U.S. Administration, 
Biato noted that Brazil hoped that President Obama would 
signal a greater openness on the Cuba question.  Any change 
in approach to Latin America, Biato added, must include Cuba 
as a priority.  He emphasized that Cuba is not a monolithic 
society, even in among the ruling class, and noted that 
during a visit to Cuba by President Bachelet to meet with 
Raul Castro, Fidel Castro made critical comments about 
Chile,s relations with Bolivia, to which Raul Castro had 
dismiss to Bachelet.   Biato noted, however, that while the 
Brazilian government understood that it would be difficult to 
expect a major shift in policy before the Summit of the 
Americas, what it was looking for was a gesture or a "sense 
of momentum" towards an overall change of approach. 
 
¶4. (SBU) Discussing Brazilian expectations heading into the 
Summit of the Americas, Biato noted that more than specific 
laundry list of policies, which would imply that the United 
States had decided on its own the course its Latin American 
policies would follow without first consulting with the 
region,s leaders, Brazil hoped for an overall sense of 
direction.  For example, on the issue of hemispheric energy 
cooperation, Biato noted that Brazil would be open to such a 
concept, but that it would be surprising if President Obama 
offered a structured approach, rather than broad themes and 
goals.  (Note: Biato,s openness on hemispheric energy 
 
BRASILIA 00000282  002 OF 005 
 
 
cooperation stands in contrast with the more negative 
reception the idea has received in Itamaraty as reported in 
ref e and below.  End note.) 
 
--------------------------------------- 
Brazil will help on Bolivia, Venezuela 
--------------------------------------- 
 
¶5. (SBU) Turning to the three most problematic countries from 
the U.S. perspective, Bolivia, Ecuador, and Venezuela, Biato 
noted that the United States will have to accept a certain 
level of discomfort as these countries were undergoing 
fundamental changes that both the United States and Brazil 
will have to learn to accommodate.  He added that both Brazil 
and the United States are in similar situation, in that there 
is anti-Americanism and a growing anti-Brazilianism in these 
countries, and that Brazil, despite suffering graver 
consequences than the United States, when these countries 
undergo periods of instability, has learned to live with it 
for the sake of stability in the region.  He noted, as an 
example, that despite a healthy rainy season providing 
sufficient hydroelectric power to obviate the necessity to 
import Brazilian gas, Brazil has decided to keep the gas 
imports going for the sake of providing support and revenue 
for Bolivia. 
 
¶6. (SBU) Staffdel members raised the issue of Bolivia, 
expressing concern about the Bolivian Government,s actions 
on regarding the presence of the U.S. Ambassador and the DEA. 
 Biato noted that it was a concern for Brazil as well, and 
that President Lula will raise these concerns with President 
Morales and ask for a gesture from the Bolivian president, 
adding that it was not in Brazil,s interest to have DEA out 
of Bolivia, since Brazil lacked the capability to pick up the 
slack in that area.  In a similar vein, Biato added that 
President Chavez had asked President Lula for help in 
re-establishing dialogue with the United States. 
--------------------------------------------- --------- 
Itamaraty: Bilateral, Not Hemispheric, Energy Cooperation 
--------------------------------------------- --------- 
 
¶7. (SBU) The Ministry of Exterior Relations, (MRE) Director 
of the Department of Energy, Andre do Lago, discussed both 
international energy policy and climate change.  With respect 
to biofuels, he thought that the United States and Brazil 
were natural partners, since they are the two largest 
producers and consumers.  He said that while some had tried 
to drive a wedge between the two countries based on the 
differences between corn and sugarcane based ethanol, the 
Brazilians realized that this would be counterproductive. 
Also, he said that both countries had overcome internal 
concerns over biofuels.  He would like to see increased 
efforts on turning biofuels into a global commodity.  Brazil 
had developed a good bilateral energy relationship with the 
United States during the Bush Administration, and do Lago 
sought to build and expand that relationship. 
 
¶8. (SBU) Brazil was in its early days in developing its oil 
and gas policy, do Lago commented.  Until the recent off 
shore discoveries, the GOB had not thought of itself in terms 
of a major oil producer.  There is concern about the oil 
"curse" and Brazil hopes to pursue a "balanced" course, close 
to what Norway has done, he added.  One element is 
determining what sort of national entity will be responsible 
for developing the new offshore oil finds.  Referring to the 
ongoing deliberations of the intergovernmental ministerial 
committee, Do Lago predicted that this should be sorted out 
by the time President Lula goes to the United States in 
mid-March.  (Note: There have been predicted timelines for 
announcement for a final decision on the oil sector regime, 
all of which have come and gone as the committee continues to 
consider alternatives.  According to sources taking part in 
the negotiations, there is no clear date for decision making 
on the horizon.  End note.)  Moreover, he added, the energy 
relationship with the United States is maturing, as shown by 
the state-dominated oil company Petrobras making major 
investments in the United States.  Still, he commented, 
Brazil has not yet decided what to do with its new found oil 
riches.  There is disagreement over whether to partner with 
the United States or Europe, or possibly with China or Japan. 
 
BRASILIA 00000282  003 OF 005 
 
 
 (Note.  Do Lago reported that earlier in the day Brazil had 
signed four agreement with China on energy, including one 
calling for China to  invest US$10 billion in developing the 
offshore finds in return for agreeing to sell a portion of 
the oil produced to China.  Regardless of what type of 
governmental cooperation may be developed, the GOB has 
expressed its continued interest in U.S. private sector 
involvement in exploiting its oil reserves, where several 
U.S. firms are currently active with Exxon in a partnership 
role with Petrobras in some of the new deep sea blocks. End 
note.) 
 
¶9. (SBU) Do Lago would like to see closer and stronger ties 
with the United States in the energy sector.  He pointed to 
the 2003 energy Memorandum of Understanding (MOU) as the 
vehicle for enhanced cooperation.  At the same time, do Lago 
voiced skepticism about a hemisphere wide approach, as 
envisioned in legislation proposed by Senator Lugar last 
year.  He explained that with Venezuela,s Hugo Chavez and 
his friends there did not seem much chance for proceeding; 
though he did not say that Brazil itself would be obstructing 
(nor helping) such hemisphere-wide efforts.  Do Lago noted 
that the South American regional organization UNASUL was 
working on energy, and it expected to launch negotiations of 
a regional treaty in March.  He opined that if the USG 
pursued a Western Hemisphere energy agreement that it would 
fail just as did the Free Trade Agreement of the Americas 
(FTAA), which was not a happy experience.  (Note:  These 
comments echo a conversation Ambassador Sobel had with Do 
Lago,s immediate superior, Andre Amado reported ref d.  End 
note.) 
 
--------------------------------------------- --------- 
Climate Change and Copenhagen: The United States is being set 
up 
--------------------------------------------- --------- 
 
¶10. (SBU) Turning to climate change, Do Lago explained that 
he was very familiar with the subject, though no longer had 
direct responsibility within MRE.  He stated that Brazil 
firmly felt that negotiations should be just under the UN 
Framework Convention on Climate Change (UNFCCC) and that 
discussions elsewhere -- such as at the G-8 and the Major 
Economies Meeting -- were distractions and counterproductive. 
 He was gloomy about the UNFCCC conference in December in 
Copenhagen, lamenting the overly high expectations.   There 
are two things going on he explained:  (1) the members of the 
Kyoto Protocol with obligations (which excludes the United 
States and Brazil) are working out the next round of their 
commitments; and (2) the members of the UNFCCC will negotiate 
a set of national targets.  In the latter case, the United 
States, China, India and Brazil should present "interesting 
national climate change plans" and the Europeans and other 
Kyoto Protocol members will have to take on new targets.  He 
warned that the Europeans really want to get out of Kyoto 
Protocol obligations and are setting up the United States for 
the blame.  He said, the Europeans, Canada and Japan are 
"preparing something very nasty for you in Copenhagen."  They 
want to see an agreement come out that is unpalatable to the 
United States, which would lead to a failure in Copenhagen 
and so would excuse them from taking on new obligations under 
the Kyoto Protocol.  Thus, the United States and Brazil need 
to work together, he said, to avoid letting the Kyoto 
Protocol members off the hook. 
 
--------------------------------- 
Brazil,s New Climate Change Plan 
--------------------------------- 
 
¶11. (SBU)  Vice Minister of Environment Izabella Teixeira 
described the efforts of the GOB in addressing climate change 
in Brazil.  She highlighted the new National Plan on Climate 
Change, which was promulgated in December, and which covers 
the full gamut of issues.  The Environment Ministry leads the 
GOB,s efforts to coordinate efforts that involve not just 
environmental concerns, but also economic and social ones. 
Implementation of the plan means working with the economic 
and political actors, such as the Ministry of Mines and 
Energy and the Finance Ministry.  In fact, the National 
Climate Change Plan involves 17 ministries coordinated by the 
 
BRASILIA 00000282  004 OF 005 
 
 
President,s office.  This plan constitutes a first draft of 
a roadmap for Brazil and the focus is not just on 
deforestation, but also energy generation, energy efficiency, 
and industrial activity. 
With respect to deforestation, she stressed the importance 
placed on straightening out the lack of land titles in the 
Amazon.  Further, President Luis Inacio Lula da Silva 
intended to meet in March or April with the mayors of the 36 
municipalities with the highest rates of deforestation to 
seek a political pact on how to address this problem.  The 
GOB intends to link access to government support, including 
that from the national Amazonia Fund, to the municipalities 
efforts to control deforestation.  Teixeira stated that today 
the Environment Ministry looks at more than just the "Green 
Agenda" of biodiversity and conservation, they also deal with 
"complex economic and political issues surrounding climate 
change." 
 
¶12. (SBU) On energy, Teixeira stated that Brazil wanted to 
have a cleaner energy matrix, which mean generating more 
renewable energy, using biofuels, and replacing older, 
dirtier fossil fuel plants with ones that use cleaner natural 
gas.  She said that Brazil would need to modify its licensing 
regime for infrastructure projects.  Also, she wanted to use 
the U.S. Minerals Management Service (MMS) as a model for 
auctioning off oil and gas blocks.  (Note: The revision of 
the Brazilian system for the auctioning or contracting of oil 
and gas blocks is currently under examination by an 
inter-governmental ministerial committee.  While Teixeira,s 
expressed preference is interesting, it does not necessarily 
represent the view of the deciding committee.  End note.) 
Teixeira expressed interest in increasing collaborative 
research with the United States in the areas of biofuels, 
other energy sources, and climate change.  In general, she 
looked forward to developing a more robust bilateral 
relationship with the United States.  Teixeira was optimistic 
about the upcoming Lula-Obama meeting in March.  She intended 
to reach out to Brazilian Senators and Deputies planning to 
accompany Lula to the United States on possibilities of 
greater collaboration. 
 
--------------------------------------------- - 
Congress: Pleased with Cooperation on Biofuels 
--------------------------------------------- - 
 
¶13. (SBU) In a meeting with Thalis Murrieta, senior staffer 
to Senator Joao Tenorio primarily to discuss energy issues, 
Murrieta shared his interest in seeing both congresses more 
involved in the bilateral biofuels MOU.  He noted that while 
there was strong interest in Brazil in seeing the United 
States eliminate the ethanol tariff, his senator,s 
particular view was that it helped ensure a continued U.S. 
ethanol demand in the long run by developing a domestic U.S. 
market for ethanol.  He noted his pleasure with the expansion 
of third country ethanol development assistance.  In 
Murrieta,s assessment, this expansion is a positive step 
towards biofuels becoming a viable worldwide commodity, 
recognizing that the United States and other potential large 
markets were unlikely to trade dependence on foreign oil for 
dependence on foreign ethanol.  Lewis suggested that once 
administration officials were in place and better able to 
indicate priorities for energy and the region that Congress 
would be in a better position to determine its agenda on 
these issues.  She pointed to the Senate Foreign Relations 
Committee where Chairman John Kerry has made global climate 
change a signature issue, as one committee that may have 
receptivity to working on energy issues with Brazil. 
 
--------------------------------------------- ------ 
Opposition: Foreign Policy is Government,s Weakness 
--------------------------------------------- ------ 
 
¶14. (SBU) In a meeting with Senator Arthur Virgilio, 
Brazilian Social Democracy Party (PSDB) leader in the Senate, 
the senator emphasized the need for Obama Administration to 
reverse what he saw as a trend of policy toward the region 
that has been too distant in recent years, while noting that 
it would be natural for the economic crisis and pressing 
matters in the Middle East to remain top priorities.  Asked 
about his views on the current government and what 
 
BRASILIA 00000282  005 OF 005 
 
 
differences would characterize a future PSDB presidency, 
Senator Virgilio offered blistering criticism of the 
direction of the current government,s foreign policy, 
particularly its overly acquiescent approach to Bolivia, 
Ecuador, and Venezuela, and what he thought was an 
overemphasis on the current South-South approach to foreign 
relations, to the detriment of Brazil,s relationships with 
its traditional partners in the United States and Europe. 
Regarding Venezuela,s chances of geting into Mercosul, 
Virgilio noted that he woulddo everything in his power to 
keep Venezuela out but it was only a matter of time before 
the Senae accepted its entry. 
 
¶15. (SBU) Turning to dometic politics, Senator Virgilio 
noted that he peronally wished that Sao Paulo  Governor Jose 
Serr would be the PSDB,s standard bearer in the 2010presidential elections, but that he hoped that the SDB would 
hold some kind of primary in order to etermine the 
candidate, rather than the party eltes picking him. 
Ultimately, he added, a primary would force both Serra and 
Minas Gerais governor Aecio Neves to travel the country and 
be forced to visit states like his own, Amazonas, to truly 
learn of the concerns of the different states, and would 
ultimately make for a stronger candidacy.  He added, in 
reference to possible Workers Party candidate Dilma Rouseff, 
that she was a leftist ideologue who would have made a "great 
minister for Peron", but lacked the charisma, personal charm, 
and pragmatism to govern effectively. 
 
¶16. (U) Staffdel Lewis reviewed this message. 
 
 
KUBISKE