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C O N F I D E N T I A L BRASILIA 001411 
 
SIPDIS 
FOR ASSISTANT SECRETARY ARTURO VALENZUELA 
FROM CHARGE D'AFFAIRES LISA KUBISKE 
 
E.O. 12958: DECL: 2019/12/10 
TAGS: PREL OVIP BR
SUBJECT: BRAZIL: SCENESETTER FOR THE DECEMBER 13-14 VISIT OF WHA 
ASSISTANT SECRETARY ARTURO VALENZUELA 
 
REF: BRASILIA 1412 (EPD SCENESETTER) 
 
CLASSIFIED BY: Lisa Kubiske, Charge d'Affaires, a.i.; REASON: 1.4(D) 
 
Introduction:  New Impetus to a Growing Relationship 
 
¶1.  (C)  Mission Brazil warmly welcomes your visit to Brasilia.  It 
is more than a courtesy to say that your trip comes at a 
significant time for U.S.-Brazil relations.  A promising start with 
the new U.S. Administration is beginning to ebb as high-level 
initiatives have been delayed and Brazil has staked out positions 
at odds with USG views on such issues as Honduras, 
Colombia/Venezuela, Iran, non-proliferation, and the Middle East 
peace process.  At the same time, as Brazil continues its rapid 
transformation from a regional to a global power, USG engagement 
with Brazil has continued to expand on a growing range of issues of 
importance to the United States, including global trade and 
finance, climate change, alternative fuels, regional energy 
integration, food security, UN Security Council matters, and 
trilateral cooperation in Haiti, Africa and elsewhere.  The GOB 
remains eager to deepen bilateral engagement, and the possibilities 
to expand our productive economic engagement into other areas 
remain ample.  As the Lula Government heads into its final year, 
your visit provides the opportunity to provide new impetus to the 
still-considerable positive momentum in our relationship, and to 
lay the groundwork for a more strategic partnership with a new 
Brazilian government. 
 
A Rapidly Emerging Global Power... 
 
¶2. (SBU)  Brazil's status as one of the world's top-ten economies 
has received a boost over the past year from the continuation of 
solid economic management and better-than-expected performance 
through the global financial crisis and economic downturn. 
Brazil's growing economic clout and potential for an estimated 5% 
annual GDP growth during the next several years, combined with an 
aggressive effort by the Lula government to increase the country's 
international reach and the new prominence on the multilateral 
agenda of issues such as climate change on which Brazil is a 
necessary player, is encouraging this former global wallflower to 
make its presence felt on the world stage in ways that would have 
seemed unlikely only a decade ago. 
 
¶3. (SBU) Brazil's ascendancy is being driven by a strong and still 
strengthening democracy, a more open and stable economy, a 
competitive inward- and outward-looking private sector, a deepening 
S&T capability, and an ample natural resource base.  Brazil is now 
the world's third largest agricultural exporter after the United 
States and the European Union and the second-largest issuer of ADRs 
on the New York Stock Exchange.  Already a global leader in 
alternative fuels and self-sufficient in oil, recent discoveries of 
offshore (so-called "pre-salt") oil, while difficult to exploit, 
give Brazil the potential to become a major global oil producer and 
exporter over the next decade.  Over the past two years, Brazil has 
played a critical role in shaping the international economic system 
through its participation in the Doha Round and its leadership in 
the G20.  Brazil is making a transition from a recipient to a 
provider of assistance, mostly through technical cooperation. 
Brazil officially became an IMF "creditor" country this year and 
has pledged to increase its contribution to the IMF.  (For 
additional background on Brazil's economy and economic positions, 
see the scenesetter for the bilateral Economic Policy Dialogue, 
reftel.) 
 
¶4. (C) Under Lula, the GOB has dramatically increased its contacts 
with and presence in Africa, Asia (including North Korea), and the 
Middle East (especially Iran), opening some 48 posts abroad over 
the last seven years and increasing its diplomatic corps by 50%. 
While maintaining its focus on South American integration through 
MERCOSUL and UNASUL-institutions largely of its making--and 
preserving its longstanding multilateral encounters with the United 
States through the Summit of the Americas, with the EU through both 
regional and bilateral dialogues, and with Spain and Portugal 
through the Ibero-American Summit, Brazil has been the driving 
force behind a series of new multilateral gatherings, including the 
BRIC (Brazil, Russia, India, China), IBSA (India, Brazil, South 
Africa), ASSA (Southern Africa-South America), ASPA (South 
 
America-Arab Countries), and CALC (Summit of Latin America and the 
Caribbean).  Brazil's top foreign policy priority remains obtaining 
a seat on the UN Security Council and, as it takes its place in 
January as a non-permanent UNSC member for the tenth time, it is 
aware that its actions will be closely watched. 
 
¶5. (C) Brazil has begun to take more visible and assertive 
positions on a broader range of issues of interest to the United 
States-sometimes helpfully, often not.  Brazil's participation in 
the Doha Round, G20 talks, and, more recently, the preparations for 
the UNFCCC COP-15, has been serious and generally constructive. 
Unlike the other two giant emerging economies, China and India, 
Brazil is bringing to Copenhagen a goal to reduce its greenhouse 
gas emissions:  a reduction of between 36-39% by 2020 compared with 
"business as usual," which translates to about a 25% decline 
compared with 2005.  (The USG is proposing a 17% decline for 2020 
compared with 2005.)  Brazil's own military and civilian nuclear 
programs have made it more difficult to work with on 
non-proliferation, and have led to the GOB's refusal to sign an 
Additional Protocol and lop-sided advocacy of Iran's rights to 
civilian nuclear technology.  Even further from Brazil's historical 
interests, high-level exchanges of visits with Iran and 
increasingly intense engagement in the Middle East peace process 
are among recent high-profile forays into new areas of global 
import.  Statements on North Korean missile tests, China's 
crackdown in Tibet, and elections in Zimbabwe are other instances 
where Brazil has stepped into new territory. 
 
...With the Emphasis on "Emerging" 
 
¶6. (C) If Brazil's rapid emergence on the global stage is 
unquestionable, it is also true that it is very much still 
emerging.  Brazil's clear sense of purpose in South America, where 
the overriding importance of maintaining stability on its poorly 
protected borders has led to an emphasis on dialogue and 
integration with its ten neighbors, is not in evidence on most 
extra-regional issues.  Brazil's objective in achieving a seat at 
the table on many global issues seems to stop at the seat itself. 
In part, this stems from a general Brazilian disposition to prefer 
dialogue with other countries to confrontation or isolation.  It is 
also driven by Lula's determination to develop and maintain 
friendly relations with all global players as Brazil seeks a 
permanent seat on the UN Security Council.  The end result is that 
Brazil often remains reticent to take firm positions on key global 
issues and generally seeks ways to avoid them.  More often than 
not, the GOB eschews positions of leadership that might require 
overtly choosing sides.  Its discomfort with the spotlight has been 
on full display in the aftermath of the Honduras coup:  thrust into 
the center of the crisis when President Zelaya appeared on its 
embassy doorstep, Brazil did very little to extricate itself or to 
actively pursue a resolution, instead handing responsibility to the 
United States. 
 
¶7. (C) Less obviously, Brazil remains uncomfortable in its 
leadership on MINUSTAH.  To the constant refrain of "we cannot 
continue this indefinitely," Brazil has been increasingly insistent 
that international efforts to promote security must go hand in hand 
with commitments to economic and social development-a theme it will 
take to the UNSC in January.  Brazil maintains a frustrating 
double-standard on democracy and human rights.  Although a founding 
member of the Community of Democracies and Partnership for 
Democratic Governance, Brazil rarely stands firm on these issues; 
even its stubbornly rigid support of Zelaya (more so than 
democracy) in Honduras stands in stark contrast to Lula's 
unquestioning acceptance of Iranian President Ahmadinejad's 
re-election.  And in the wake of what it considered a 
near-disastrous brush with election observation in Zimbabwe last 
year, the GOB has opted to focus on technical cooperation related 
to running elections, in lieu of observing them.  In the UN, Brazil 
generally chooses to abstain even on resolutions regarding the most 
egregious human rights abuses-such as those in Iran, North Korea, 
and Sudan-unless it considers evidence of non-cooperation with 
international human rights bodies to be clear-cut (as in Burma, for 
example). 
 
 
¶8. (C) Where Brazil's policy is not hesitant, it is often 
ill-informed or straight-jacketed by the policies of the past.  As 
it steps out on Middle East issues, the GOB does so with a lack of 
expertise on the region.  Inclined to take assertions from the 
Syrians, Iranians, and Hizbullah at face value, it insists that 
peace can be achieved only if all players are at the table, and 
seeks to position itself as a neutral party, "the country who can 
talk to everyone," over against what it perceives as the biased 
U.S. and European efforts.  This penchant for dialogue stands 
together with respect for sovereignty and non-intervention in 
internal affairs as the hallmarks of Brazilian foreign policy.  But 
as Brazil plays in a growing number of international arenas, it is 
finding it more difficult to remain true to these principles, and 
more difficult to hide its inconsistencies. 
 
¶9. (C) Brazil's uneven foreign policy is mirrored by continued 
growing pains at home.  Impressive strides over the last twenty 
years in establishing stable democratic institutions are tarnished 
by a dysfunctional judicial system, lack of enforcement capability, 
and persistent and widespread corruption.  Even as Brazil's middle 
class continues to grow, the income gap remains significant and the 
country is still home to the largest number of poor in the 
hemisphere, with some 50 million concentrated in the northeast. 
Brazil's successful multinationals and vibrant entrepreneurial 
class are constrained by an inhospitable business climate, a costly 
and intrusive but inefficient government bureaucracy, R&D spending 
that focuses on producing articles for publications rather than 
innovation, and inadequate national transportation, communications, 
and energy infrastructure networks.  Although it is heading to 
Copenhagen with an ambitious proposal to reduce greenhouse gas 
emissions and the lowest rates of deforestation on record, the GOB 
has made very little headway in straightening out the land 
ownership issues in the Amazon (where only about four percent of 
the land is clearly titled) or in providing sustainable economic 
activities for the more than 25 million people living in the 
region.  Without resolving those issues, the pressure to clear the 
Amazon to support one's family will remain as great as ever. 
Though proud of its status as a "melting pot" in which different 
cultures and races exist side-by-side, racism remains a real and 
largely unacknowledged problem, and Brazil's indigenous population 
of some 700,000 individuals, scattered across the country in 225 
different societies, continues to suffer from prejudice, violence, 
and marginalization. 
 
¶10. (C) Nonetheless, Brazil continues to make progress across the 
board.  Although the average Brazilian remains inward-looking and 
often ignorant of world developments, a burgeoning public interest 
in the United States has made Brazil one of the four largest 
visa-issuing and -adjudicating U.S. missions worldwide.  Brazil 
continues to struggle with unresolved military dictatorship-era 
human rights violations, but is nonetheless moving successfully to 
reintegrate the military into the mainstream of national policy. 
Organized crime, urban murder rates often ten times those in the 
most violent U.S. cities, and the second largest consumption of 
cocaine in the world are in need of urgent attention, but Brazil's 
professional, well-trained Federal Police works as an effective 
partner with USG law enforcement agencies.  Public education 
remains sub-standard, the Landless Movement (MST) continues to 
attract the rural disenfranchised, and the government is largely 
absent from the favelas of Sao Paulo, Rio de Janeiro, and other 
major cities, whose millions of residents are often caught between 
criminal gangs and corrupt civil and military (uniformed) police. 
But Brazil has developed innovative social programs, and its Bolsa 
Familia conditional-transfer program is considered an international 
example. 
 
Relations with the United States: Can Brazil Overcome Its 
Inferiority Complex? 
 
¶11. (SBU) This Mission has been saying in its scenesetters that 
bilateral relations are as good as they have ever been-certainly in 
decades.  This is true, and the evidence is ample: a burgeoning set 
of government-to-government dialogues covering economic, 
commercial, scientific, defense, and foreign policy has led to 
rapidly expanding cooperation: an MOU on biofuels cooperation, 
 
increased numbers of joint exercises between our militaries, 
trilateral cooperation in Africa and Haiti on such issues as 
health, food security, and institutional strengthening, and an 
innovative agreement to fight racial and ethnic discrimination. 
 
¶12. (C) At the same time, we face significant historical baggage in 
the way Brazil's foreign policy establishment views the United 
States, which slows our ability to build a fully cooperative 
relationship with Brazil.  Much of Brazil's foreign policy 
establishment remains cautious and mistrustful toward the United 
States.  Bilaterally, a growing and pragmatic interest in 
cooperating with the United States on a range of technical and 
practical issues is often caught up in fears that Brazil will lose 
sovereign control or will find itself a junior partner on its own 
soil to better funded, staffed, and organized USG partners.  This 
has led to persistent problems with visas for U.S. law enforcement 
agencies (particularly, but not exclusively, on counterterrorism 
issues), refusal to accept USG assistance, and seemingly 
unreasonable demands and strictures on various types of 
cooperation.  More concerted Mission efforts to reach out to 
non-traditional executive branch agencies and non-executive branch 
partners-state and municipal governments, the judiciary, 
prosecutors, legislators, the private sector, and civil 
society-have sometimes been greeted with concern, suspicion, and 
occasional opposition by a Foreign Ministry  jealous of its 
historical lead on all international issues and self-designated 
role as both definer and protector of Brazil's national interests 
vis-C -vis the world. 
 
¶13. (C)  Within South America, Brazil sees the United States as a 
competitor and remains deeply suspicious of our motives and 
intentions.  Although the notion that the United States harbors 
plans to invade or internationalize the Amazon or to seize Brazil's 
offshore oil may seem preposterous to Americans, concerns about 
such plans surface regularly among senior Brazilian officials, 
academics, and journalists, and are only the most outlandish 
manifestation of generalized mistrust and insecurity with regard to 
the United States presence in the region.  Brazil's reaction to the 
U.S. base agreement with Colombia reflected, in large measure, just 
such concerns, as have its veiled efforts to scuttle the 3+1 
Security Dialogue with Paraguay and Argentina.  The United States 
is not the only one subject to the Brazilian mistrust; The GOB now 
requires all NGOs operating in the Amazon region to be registered 
and has tightened controls related to land ownership by foreigners 
in the area. 
 
¶14. (C) Outside South America, Brazil's discomfort with the United 
States is less in evidence, but it is careful to avoid any 
suggestion that it is toeing a U.S. line, is intent on avoiding 
situations in which it might be perceived as a junior partner, and 
tends to see an "independent" position-i.e., independent of the 
United States in the first instance, and wealthy countries more 
generally-as the preferred default.  Nor does Brazil want to be 
lumped in with the mass of developing countries.  In multilateral 
settings, Brazil prefers to position itself as a "bridge" between 
the wealthy and developing nations.  In cooperating with us in 
Africa, it has been careful to limit cooperation to those areas 
where it can act plausibly as an equal partner.   Across the board, 
engagement with the United States has been pragmatic, rather than 
strategic.  As it looks for strategic partners, Brazil is showing a 
clear preference for other "independent" emerging powers-South 
Africa, Turkey, Ukraine, Iran, China, India-and for one 
"independent" world power: France.  This (long-standing) affinity 
for the French, which has been amply reciprocated by President 
Sarkozy and his government, has been most evident in the FX-2 
fighter competition, in which both Lula and Defense Minister Nelson 
Jobim have expressed a clear preference for the French aircraft 
despite Brazilian Air Force evaluations that show the clear 
superiority and cheaper price of the U.S. fighter. 
 
An Eager Brazil Gives Us the Opportunity to Invest for the 
Long-Term 
 
¶15. (SBU) In spite of their reticence, Brazilians continue to show 
a genuine interest in deepening relations with the United States. 
 
Economic issues are proving to be the easiest pathway to more 
productive engagement with the GOB, both because, as a large 
emerging economy, Brazil is beginning to have a natural seat at the 
table and because the GOB sees most easily how global economic 
issues directly impact its own well-being and national security. 
The GOB has shown itself a willing partner in efforts on bilateral 
investment and trade issues that will increase business 
opportunities, job growth, and economic development.  At the same 
time, we are cooperating with Brazil to address the regulatory, 
legal and infrastructure challenges that constrain Brazil's growth 
and social inclusion goals and hurt U.S. exporters and investors. 
 
¶16. (C)  We are also building these partnerships with the goal of 
promote regional and global economic and social inclusion 
goals--among them, addressing the global financial crisis, opening 
trade, and stimulating cooperation on economic development. 
Brazil's interest in taking on a mantle of global economic 
leadership offers numerous opportunities for engagement, as we 
encourage Brazil to take on increasingly responsible roles 
globally. As always, it is important to frame approaches to the GOB 
as a partner, and not a junior partner.  However, constructive 
engagement in the G20 has given Brazil increased confidence that it 
can and should engage in issues outside its own borders, and the 
GOB takes deserved pride in having overcome many experiences 
(previous financial crises, addressing GINI inequalities, 
infrastructure impact on growth, etc) common to developing country, 
and sees itself as uniquely placed to use its "lessons learned" to 
help other developing countries tackle their own challenges.  The 
GOB has been receptive to partnering with us on development 
cooperation, including a newly developing initiative in Mozambique 
and Haiti on agriculture, health and infrastructure development. 
We continue to work with Brazil to build consensus for WTO trade 
liberalization; to promote enhanced cooperation in fora such as 
OECD, WHO, and ICAO; and to create the conditions for global 
development and prosperity. 
 
¶17. (C) Our economic engagement provides a bridge to building our 
relationship with the GOB on other issues.  Although they generally 
require more careful groundwork and legwork to ensure success, the 
possibilities to do so remain ample.  In a country that seeks 
nothing so much as recognition of its "rightful" place on the 
international stage, there is widespread understanding that no 
other country can legitimize Brazil's aspirations in so meaningful 
a way as the United States.  More immediately, the prospect for 
advancing beyond a pragmatic partnership received a significant 
boost with the election of President Obama.  Although Brazilians 
generally admire the United States and maintain a strong interest 
in our culture and politics, from President Lula to the man on the 
street they see in the President a kindred spirit whom they are 
eager to engage.  The Administration's early statements and actions 
with regard to Latin America-the President's meeting with UNASUL 
and efforts to reach out at the Summit of the Americas, the spirit 
of negotiation at the OAS General Assembly, efforts to reinitiate 
dialogue with Cuba, Venezuela, and Bolivia-were all well received 
in Brazil, and heightened expectations of an even closer 
relationship.  Brazilian officials were impressed by what they 
heard from General Jones, Under Secretary Tauscher, and other 
senior officials during their visit in August. 
 
¶18. (C) In the intervening months, both official and non-official 
Brazilians have become increasingly disappointed with what they 
perceive as a lack of attention from the United States.  While 
acknowledging that the United States has pressing domestic and 
international priorities, Brazilians feel more than ever that their 
successes-their performance through the financial crisis, 
constructive engagement in the WTO and Copenhagen, creative social 
programs, and even their successful bids for the 2014 World Cup and 
the 2016 Summer Olympics-have earned them a more prominent place on 
the U.S. agenda.  With regard to the GOB in particular, the 
Colombia bases problem seemed to be evidence of a lack on the part 
of the USG both of transparency in our dealings in the region and 
of consideration regarding matters that have a direct impact on 
Brazil's security.  Although initially pleased with the USG 
response to the coup in Honduras, and despite having publicly 
insisted the problem was ours to resolve, the GOB saw our position 
 
in support of Honduran democratic process (rather than a firm 
insistence on Zelaya's restoration) as a step away from 
consensus-building in the region. 
 
¶19. (C) Despite this frustration, the GOB remains eager to engage, 
and holds out continued hope that Brazil will receive a visit from 
President Obama in the coming months.  The Foreign Ministry is in 
the process of creating and increasing staffing for a higher level 
department (equivalent to a Department of State bureau) to handle 
United States, Canada, and Inter-American Affairs. 
Uncharacteristically, the Foreign Ministry has extended a series of 
new offers and taken up others it has long delayed: it is eager to 
launch the proposed high-level dialogue, has sought to replicate 
the success of the Joint Action Plan to Fight Racial Discrimination 
by proposing an MOU on gender issues, is moving forward on a 
Defense Cooperation Agreement, Pol-Mil talks, trilateral 
cooperation in Haiti and Africa, and a Tropical Forest Conservation 
Act agreement, has offered an MOU on climate change, and has 
expressed repeated interest in establishing joint counternarcotics 
cooperation with Bolivia.  While getting to yes on these 
initiatives will undoubtedly require the same patience and care to 
avoid Brazilian sensitivities that mark almost all of our daily 
interactions with the GOB, the evident interest at senior levels of 
the presidency and foreign ministry in building up the relationship 
should help smooth the way over the next months. 
 
¶20. (C) As keen as they are to cultivate the Obama Administration, 
GOB officials are also driven by the knowledge that their timeframe 
for making meaningful progress is short.  There is little more than 
a year left of the Lula government; only ten months until elections 
for president, all 27 governors, two-thirds of the senate, and all 
federal and state deputies; just over six months before official 
campaigning begins; and less than four months until ministers who 
intend to run for office-perhaps as many as half of Lula's 
cabinet-must resign.  This election-year calendar will be further 
complicated by the traditional slowdown during Brazil's extended 
summer/Christmas/Carnival break.  Nonetheless, the continuity 
provided by Brazil's influential diplomatic corps and the 
likelihood of broad continuity on both foreign and domestic policy 
under either of the two strongest contenders to succeed Lula on 
January 1, 2011 means that initiatives put into place now will lay 
the groundwork for the new Brazilian government. 
 
¶21. (C) The GOB will be looking for signs in your visit that USG 
interest in engaging Brazil as a global partner has not waned. 
While GOB officials are unlikely to give on the issues that have 
proved contentious over the last months, they will value the 
opportunity to explain their views, will want to hear the 
Administration's perspective and aspirations with regard to Brazil, 
and will seriously entertain suggestions for additional engagement. 
Your visit provides the opportunity to forge a durable working 
relationship over the next year and to lay the foundation for a 
strategic bilateral relationship with the next Brazilian government 
that will also be essential to influencing the direction of 
Brazil's development as a maturing global actor. 
KUBISKE