VZCZCXYZ0000
OO RUEHWEB

DE RUEHSO #0447 2091238
ZNR UUUUU ZZH
O 281238Z JUL 09
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9444
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 0583
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 9211

UNCLAS SAO PAULO 000447 
 
SIPDIS 
 
STATE INR/R/MR; IIP/R/MR; WHA/PD 
 
DEPT PASS USTR 
 
USDOC 4322/MAC/OLAC/JAFEE 
E.O. 12958: N/A 
TAGS: KMDR OPRC OIIP XM XR XF BR
SUBJECT: MEDIA REACTION - WESTERN HEMISPHERE: HONDURAS, COUP; 
CHAVEZ'S POLICIES; GLOBAL ECONOMY:  FINANCIAL MARKET CRISIS; CLIMATE 
CHANGE AND ENVIRONMENT; SAO PAULO 
 
July 27, 2009 
 
"Chavez is the problem" 
 
Op-ed in liberal Folha de S.Paulo (7-27) by Folha journalist Igor 
Gielow states: "The Honduran crisis.....rewards an era of mistaken 
regional diplomacy in Brazil...the unanimity as regards to Zelaya's 
legitimacy seems not to include the majority of Honduran 
society.....  Zelaya's cooptation by Chavez and the consequent 
campaign for the destruction of the Constitution were rejected by an 
expressive part of Honduras.  That's the reason for the current 
impasse.  Brazil has opted to not enter into direct confrontation 
with Chavism over the past years.  Under Lula, [Brazil] has 
supported it ideologically...and saw [the Brazilian] interests being 
hit and its regional influence questioned." 
 
"Climate change and trade with the U.S." 
 
Op-Ed in business oriented Valor Econtmico (7-27) by Diego Bonomo, 
Executive Director of the Brazil Industries Coalition (BIC) 
comments: "Two aspects [of the American Clean Energy and Security 
Act (Aces)] deserve immediate attention from Brazilian businessmen: 
the subsidies for U.S. industries with intensive use of energy and 
exposed to trade; and the requirements placed on imported 
products....This system....to grant subsidies and to potentially 
create barriers to imports presents two risks to the Brazilian 
private sector.  The first and more immediate is on exports to the 
U.S. market and third countries....the second risk is.....the 
potential conflict in the relationship between multilateral rules in 
the areas of trade and environment.....The Brazilian private sector 
should engage in the U.S. legislative process to try to avoid risk 
[included in the Act]....." 
 
"Brazil's Central Bank alters the management of its reserves without 
leaving Treasuries aside" 
 
Editorial in business oriented Valor Econtmico (7-27) states: 
"....The changes in the composition of [Brazil's] international 
reserves [Brazil sold last week US$24.3 billion in 
Treasuries]....reflect only normal decisions of portfolio management 
[and] therefore do not have relationship with an eventual flight 
away from the dollar....The indications given by Brazil's Central 
Bank (BCB) are that it does not intend to stop financing the U.S. 
government.  Brazil is the fourth largest holder of U.S. Treasuries, 
behind China, Japan and the United Kingdom.....As far as one can 
see, the dollar will remain the main international reserve. 
Nonetheless, from now on, the BCB must manage more carefully its 
reserve investment portfolio to face a much more volatile 
international environment." 
POPP