Cablegate: Scenesetter for the Visit of Adm. Stavridis To

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DE RUEHBR #1345/01 2841358
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P 101358Z OCT 08
FM AMEMBASSY BRASILIA
TO RHMFISS/CDR USSOUTHCOM MIAMI FL PRIORITY
INFO RUEHRG/AMCONSUL RECIFE 8574
RUEHRI/AMCONSUL RIO DE JANEIRO 6738
RUEHSO/AMCONSUL SAO PAULO 2896
RUEKJCS/SECDEF WASHDC
RUEHC/SECSTATE WASHDC 2637
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C O N F I D E N T I A L SECTION 01 OF 04 BRASILIA 001345

SIPDIS

E.O. 12958: DECL: 10/08/2018
TAGS: PREL MARR MOPS ETTC BR
SUBJECT: SCENESETTER FOR THE VISIT OF ADM. STAVRIDIS TO
BRAZIL

Classified By: DCM Lisa Kubiske. Reason: 1.5 (d)

1. SUMMARY. Your visit comes at an important time for our
strategic partnership with Brazil. Overall, the U.S.-Brazil
relationship is as productive as it has ever been, driven by
strong cooperation between Presidents Bush and Lula,
particularly in the area of biofuels. As Brazil completes
its new defense strategy, it will be making key decisions,
notably on the purchase of new fighter aircraft, that will
affect the nature of our relationship for years to come.
While some Brazilian leaders still find it politically
convenient to portray the U.S. as a potential adversary, most
of the Brazilian military is well apprised of the potential
benefits of partnership. Your visit provides an opportunity
to advance our partnership in key areas by highlighting the
importance of our common interests and the opportunities to
advance cooperation in mutually beneficial areas. END
SUMMARY.

2. The relationship between the United States and Brazil is
as productive and broad-based as it has ever been, the result
of the excellent relationship between President Bush and
President Luiz Inacio Lula da Silva, new cooperation
mechanisms on biofuels, business issues, and economic
matters, and our shared goals of fostering hemispheric
stability, promoting democracy, developing a consensus on
next steps regarding climate change, and achieving a mutually
satisfactory conclusion to the Doha round of WTO
negotiations. U.S.-Brazil cooperation on foreign policy
issues is often limited by the GOB's unwillingness to speak
out against anti-democratic actions in the hemisphere
(Venezuela and Cuba), take key steps to address key issues
such as nuclear proliferation and counterterrorist concerns,
and expand its international leadership in meaningful ways.
Operational cooperation on law enforcement issues, such as
counternarcotics, container
security, and intelligence sharing, are highlights of the
bilateral relationship. Brazil's ethanol program has made it
a global model for alternative energy and offers potential
for bilateral cooperation on an important strategic issue.

3. (SBU) With approval ratings hovering near 80 percent,
President Lula is more popular than at any other point since
he took office in 2003. Continuity and legacy are the
guiding lights of Lula's second term. Lula continues to
shape his legacy as a friend of the poor and builder of a
foundation for prosperity for the lower and middle classes
through broad social welfare programs and a vast, new
economic growth program of public works and growth
incentives. At the same time, Lula has failed to promote
needed reforms to abolish a political culture of corruption,
clientelism, and spoils.

4. (U) Despite a healthy economy and a slight drop in
homicides registered over the past several years, public
opinion polls consistently show that the top concerns for
Brazilians continue to remain public security and lack of
jobs. These are normally followed by quality of health care
and education, corruption, low wages, and lack of
opportunities for youth. These will likely remain issues
heading into the 2010 presidential elections. Although Lula
has gotten high marks for economic management, particularly
as other countries in the region struggle, economic fears are
growing among Brazilians, and the effects of the global
financial crisis may eventually have a negative impact on
Brazil that affects Lula's popularity and the chances of his
party's candidate for 2010.

5. (U) Brazil is the tenth largest economy in the world.
Annual GDP growth was 5.4% for 2007, and inflation
approximately 4%. The currency, the real, has appreciated
strongly over the past two years, although it has seen an
erosion of its strength in recent months as the global
financial crisis unfolds. While the export sector has been
dampened, the strong currency (Strong until the current
global financial crisis) permitted Brazilian companies to
ramp up investment in capital equipment. High tax rates and
over regulation continue to retard economic growth, but the
economy remains generally strong.

6. (SBU) The United States and Brazil share the basic goals
of fostering hemispheric stability, promoting democracy,
preventing terrorist and drug transit activity, supporting
international non-proliferation regimes, and have been
working together to try to achieve a mutually satisfactory

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conclusion to the Doha round of WTO negotiations. U.S.-Brazil
cooperation is often limited by the GOB's unwillingness to
take action regarding threats to democracy in specific
countries and to support aggressive action in multilateral
forums on such issues as non-proliferation, human rights, and
democracy. Many Brazilian leaders also take a cautious
approach to relations with the United States, sometimes
falling back on shopworn Latin American leftist rhetoric
about excessive U.S. influence. Brazil maintains an active
dialogue with Venezuela and Cuba, has worked hard to restore
relations with Bolivia, and has stood firmly on the principle
of respect for sovereignty in responding to the dispute
between Colombia and Ecuador, preferring to work through the
Organization of American States. The attainment of a
permanent seat on the UN Security Council has been a central
goal of Brazil's foreign policy.

7. (SBU) The Brazilian public has a mixed view of the
United States. Seventy-five percent say relations between
Brazil and the United States are very good or fairly good,
and Brazilians by a wide margin consider the United States
the most important country in the region for Brazil. Those
who follow the news know that U.S.-Brazil cooperation on
trade issues has global importance and new areas of
cooperation such as biofuels are potentially significant.
There has been a much more positive view of U.S.-Brazil
cooperation since the signing of the biofuels MOU last year.
On the other hand, there is a good deal of skepticism about
U.S. foreign policy, particularly on issues such as Iraq and
Cuba. U.S.-Brazil cooperation in law enforcement has been
productive and is a highlight of the bilateral relationship.

8. (U) Brazilians have a high degree of interest in events
in the U.S. The Presidential election has generated almost
as much press coverage here as Brazil,s local elections.
When asked for your views on the election and its outcome,
you can emphasize the similarity in approach to key foreign
policy issues and the continuity of the fundamental interests
-- regional stability, promotion of democracy -- that Brazil
shares with the United States.

SECURITY ISSUES
-------------------------

9. (C) At President Lula,s direction, Brazil is now
completing a new defense strategy document to set an overall
course on security issues. While not yet published (due to
interagency disagreements on several points), it is widely
reported that the strategy will have three main elements:
modernization of the armed forces, revitalization of defense
industries and implementation of a new regime of national
service. We expect that an important result of the new
strategy will be an increase in funding devoted to national
defense, which has been under-resourced since the end of the
military government over twenty years ago. The resurgence of
importance of the Brazilian military presents a unique
opportunity to increase our bilateral cooperation and defense
partnership. Several issues will be key in determining the
degree to which we will succeed in enhancing our partnership.

10. (C) The first potential watershed in achieving a more
robust defense relationship with Brazil will be the decision
on a next generation fighter aircraft. Boeing,s F18 Super
Hornet is a finalist along with the French Rafale and Swedish
Gripen. A decision will be made in March 2009, with a final
contract award in October of next year. It would be
difficult to overstate the significance of Brazil,s Air
Force committing to a U.S. aircraft as its primary fighter
for the next generation. Boeing,s proposal combines cutting
edge technology with a strong package of industrial
cooperation. While the Super Hornet is clearly Brazil,s
best option both because of its capabilities and the
advantages that interoperability with the U.S. military will
bring, it is currently perceived as an underdog in the
competition. This is because of an effective disinformation
campaign from a few members of the Brazilian press with an
anti-U.S. agenda that has led most Brazilian decision makers
to believe that the United States will not transfer superior
military technology to Brazil. Several Cold War era denials
of military items (e.g. Harpoon missiles) and recent
headaches with commercial exporters of military items
(Honeywell gyros) seem to reinforce this perception. We want
to use the opportunity of your visit to drive home the point
that the United States is offering the best product, the best
prospects for long term cooperation and support and is

BRASILIA 00001345 003 OF 004

committed to transfer of the applicable technologies.

11. (SBU) There are a number of areas with prospects for
immediate cooperation. Brazil is considering stationing
police and navy officers at JIATF South. The Brazilian
military has participated in several major exercises,
including UNITAS and PANAMEX with several more in prospect.
Brazil has invited U.S. personnel to train at its jungle
warfare school in Manaus, however, the high demands on U.S.
special forces have prevented acceptance. The Brazilian navy
has shown interest in vessels for coastal patrol and in
improving their maritime situational awareness capabilities.
Your visit provides an opening for exploring further
prospects for such activities.

12. (C) We are in the process of pursuing information
sharing agreements with Brazilian services -- potentially
leading to a GSOIA. Progress has been slow because of
bureaucratic concerns, but Brazil is interested in
continuing. We should take the opportunity of your visit to
underline the importance of information sharing and its
benefits for both sides.

13. (C) We have been stalled on our Defense Cooperation
Agreement (DCA) for almost a year because of the Ministry for
External Affairs, failure to take action and the MOD,s
unwillingness to burn political capital to push this. While
this situation is unlikely to change, we should remind the
Brazilians that the DCA is important for future partnership,
especially as it can shorten the process of approval for
various future cooperative activities. Brazil has signed a
large number of similar agreements this year, so ours will
not be a precedent and could be seen in the context of normal
friendly mil-mil relations.

14. (SBU) The April announcement of the reactivation of the
Fourth Fleet caught Brazil by surprise and provoked much
negative commentary. Even some normally rational Brazilians
believe that the announcement, coming as it did almost
simultaneously with the discovery of more oil off the
Brazilian coast, could not have been a coincidence but was
somehow mysteriously related to the security of Brazil,s
oil. While Brazilian military leaders have said they
understand the reasons for the Fourth Fleet,s standup,
President Lula has recently stated again that it poses some
threat to Brazil. While Lula,s statement was pure domestic
politics and his advisors have assured us that he understands
the true nature and purpose of the Fourth Fleet, we need to
continue to remind Brazilian leaders that spreading such
inaccuracies is counter productive in terms of the
cooperative relationship we are trying to build. While the
Fourth Fleet controversy seemed to have died down, senior
Brazilians have recently raised it again, expressing concern
that the reactivation could somehow threaten Brazil's
assertion of its Exclusive Economic Zone.

15. (SBU) In a similar vein, discoveries of oil off
Brazil,s coast have been cited as justifications for
increasing Brazil,s navy. While the oil finds will almost
certainly increase Brazil,s future prosperity, we should
seek to turn the strategic dialogue in Brazil away from
fantasies that another country--potentially the United
States--would try to seize the oil fields to a productive
discussion of energy security and the importance of
maintaining freedom of the seas.

16. (C) You will be visiting Manaus as the Brazilian Army
looks for a way to implement a recent Presidential Decree to
station troops in Brazil,s far flung indigenous regions as a
means to provide better control of Brazil,s vast borders.
The Army lacks the resources to do so effectively, and
Lula,s instruction is seen as a response to Army criticism
that local autonomy of indigenous areas is a threat to
Brazilian sovereignty. Behind this concern is a
long-standing fear among Brazilians that the sparsely
populated Amazon region could be seized by foreign forces.
Brazil,s more sensationalist press routinely covers
statements from environmentalists on preserving the
rainforest as though they were calls for invasion (presumably
by the United States). In any public statements, you will
need to be aware that Brazilians will evaluate your words in
the context of what they believe is a real concern that the
United States could be planning to take control of the
Amazon, or assist an internationalization. You should look
for opportunities to reaffirm that the U.S. supports

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Brazilian sovereignty unconditionally.
SOBEL

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