Cablegate: Brazil On Iraq Reconstruction Through Export

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS BRASILIA 002698

SIPDIS

SENSITIVE

STATE FOR EB/IFD/OMA
STATE PASS EXIM

E.O. 12958: N/A
TAGS: EFIN ECON PGOV BR IZ
SUBJECT: BRAZIL ON IRAQ RECONSTRUCTION THROUGH EXPORT
CREDIT AGENCY AGREEMENTS

REF: STATE 228304

1. (U) Econoffs delivered reftel points on reopening export
agency credits to support Iraqi reconstruction to Piragibe
Tarrago, Chief of the Foreign Ministry's Economic Department,
in an October 27 meeting. Tarrago said that Brazil would
like to reestablish normal trade relations with Iraq,
including reestablishing export credit lines, as soon as the
political situation has stabilized. While Brazil never broke
diplomatic relations with Iraq, Tarrago noted, it does not
envision reopening its Baghdad embassy until the security
situation has improved. The Brazilian Embassy in Amman will
continue covering Iraq until then.

2. (U) Brazil, Tarrago said, has been participating in Paris
Club discussions of Iraqi debt. He estimated Iraq's debt to
Brazilian entities at $3 billion, about three quarters of
which is owed to private creditors. Much of this debt was
trade finance or infrastructure project finance involving
Brazilian firms. Brazil's principal concern is that there be
an "equitable" settlement, Tarrago affirmed. It also was
keeping an eye on the implications of any Paris Club
treatment of Iraqi debt on the interests of private Brazilian
holders of Iraqi debt.

3. (SBU) Comment: Tarrago did not link the reopening of
export credit lines to Iraq to Paris Club treatment of
outstanding Iraqi debt. It was nevertheless clear that the
GoB does not expect that the political situation in Iraq will
be conducive to normalizing trade relations any time soon.
End Comment.
MINIMIZED CONSIDERED

DANILOVICH

© Scoop Media