US embassy cable - 04BRASILIA581

UNCLAS SECTION 01 OF 02 BRASILIA 000581 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EB/MST NISSEN 
GENEVA FOR KEHOE 
DEPT PLEASE PASS TO USTR FOR BOHLING 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, BR, UNCTAD, WTO, Trade 
SUBJECT: BRAZIL ON TRADE ELEMENTS OF UNCTAD DECLARATION 
 
REF: SECSTATE 51412 
 
SENSITIVE BUT UNCLASSIFIED, PLEASE TREAT ACCORDINGLY 
 
 
1.  (U) Econoff delivered reftel talking points on March 10 
to Piragibe Tarrago, Chief of the Economics Department within 
Brazil's Foreign Ministry, Itamaraty.  Tarrago's Department 
has the lead on trade-related aspects of the UNCTAD 
declaration; he also reports directly to Ambassador Hugueney, 
Brazil's lead WTO negotiator.  After explaining USG concerns, 
Econoff left a copy of the March 4 non-paper with Tarrago. 
Also accompanying Tarrago was George Marques, an official 
identified as the contact for issues relating to the trade 
text.  Marques works in the Economics Department division 
dealing with economic organizations and can be contacted at 
gmarques@mre.gov; or 55-61-411-6912/6913; he speaks English. 
 
2.  (U) Tarrago claimed that Brazil appreciates the sensitive 
nature of the WTO Doha Development Agenda (DDA) negotiations 
at this time and shares USG interest in ensuring that 
preparation for the XI UNCTAD conference does not create an 
environment that inflames that trade debate.  Tarrago 
admitted that the timing was "unfortunate," noting that the 
UNCTAD conference is in June and the current target for 
completing DDA frameworks is July.  He said that when the 
UNCTAD conference was scheduled, the expectation was that the 
DDA negotiations would have progressed much further by now. 
 
3.  (U) Although Brazil shares USG interest in ensuring that 
the UNCTAD conference does not interfere with the DDA 
negotiations, the GOB does not think the current text should 
present major problems in this way.  Tarrago characterized 
UNCTAD as a think-tank organization whose role is to reflect 
in a more academic way on how trade impacts development, and 
to provide countries with useful information to help them 
gain the most from this connection.  Included in this debate 
would naturally be discussion of national policies, as well 
as a discussion of how international trade rules impact 
countries' abilities to obtain trade benefits. He noted that 
WTO rules are necessarily an essential element of this 
discussion. 
 
4.  (U) Tarrago suggested that problems in the declaration 
text could be resolved through redrafting; Econoff explained 
the USG approach of organizing the text around three themes, 
eliminating certain proposed paragraphs, and the USG view 
that an exercise of redrafting the problematic paragraphs 
would be counterproductive because it would likely lead to a 
protracted and acrimonious debate.  Econoff noted that the 
USG does think it appropriate to include a general statement 
in support of the DDA negotiations. 
 
5.  (U) Tarrago pointed out that institutionally UNCTAD has 
no power over the WTO so it cannot "renegotiate" or 
"reinterpret" the Doha mandate.  However, he also seemed to 
acknowledge the point that institutional aspects aside, an 
UNCTAD ministerial declaration with text that can be 
interpreted as calling for a change in the Doha mandate would 
complicate the DDA negotiating environment. 
 
6.  (U) Tarrago concluded by emphasizing that the GOB does 
not want the UNCTAD conference and/or declaration to 
undermine the DDA negotiations.  He assured Econoff that the 
GOB will consider USG concerns in deciding how to approach 
the UNCTAD declaration text. 
 
SOUTH-SOUTH FREE TRADE NEGOTIATIONS 
 
7.  (U) In responding to Econoff's inquiry, Tarrago clarified 
reports concerning the launch of South-South free trade 
negotiations during the UNCTAD conference.  He said that 
discussions are on-going in Geneva with the aim of being able 
to officially announce at the UNCTAD conference the launching 
of trade preference (not free trade) negotiations, within the 
Generalized System of Preferences framework, for interested 
countries.  (Note, the GOB expects to finalize the 
India-Mercosul Preferential Trade Agreement by June 30 and 
may well take advantage of the UNCTAD conference to showcase 
the agreement as a model.) 
 
DDA MINI-MINISTERIAL 
 
8.  (SBU) Tarrago reported that the GOB is considering trying 
to organize a DDA mini-Ministerial to take place in Sao 
Paulo, Brazil, coinciding with the XI UNCTAD conference.  He 
noted that a decision will depend on progress in DDA talks in 
Geneva, and that USTR Zoellick would be invited to attend 
should the GOB decide to convene such a meeting. 
9.  (SBU) Comment.  Since UNCTAD's Secretary General is 
Brazilian Ambassador Rubens Ricupero the GOB has a special 
relationship with the organization at this time, which may 
constrain GOB flexibility on the declaration text. 
Nonetheless, while Brazil is keen to demonstrate leadership 
on developing country issues in both the WTO (G-20) and 
UNCTAD fora, post believes that the GOB's main interest lies 
in achieving gains within the WTO.  If progress in the WTO 
DDA negotiations clearly appears to be threatened by the 
preparatory discussions for the XI UNCTAD conference, we 
would expect the GOB to adopt a pragmatic approach toward the 
UNCTAD declaration. End Comment. 
VIRDEN