US embassy cable - 04BRASILIA1831

UNCLAS SECTION 01 OF 02 BRASILIA 001831 
 
SIPDIS 
 
NSC FOR SHANNON, DEMPSEY 
USTR FOR LEZNY, CRONIN 
TREASURY FOR OASIA/SEGAL 
FED BOARD OF GOVERNORS FOR ROBATAILLE 
USDA FOR U/S PENN, FAS/FAA/TERPSTRA 
USDOC FOR 4322/ITA/IEP/WH/OLAC-SC 
SOUTHCOM FOR POLAD 
 
E.O. 12958: N/A 
TAGS: ETRD, EFIN, ECON, EINV, PREL, PGOV, BR, Trade 
SUBJECT: EDITORIAL DECRIES LULA'S TRADE-NEGOTIATOR 
CHANGES 
 
 
1. In the wake of the GoB's surprise walk-out from 
Mercosul-EU trade talks in Brussels July 21 (Septel), 
Brazilian media focused heavily on the fact that Brazil's 
negotiating team had abruptly changed chiefs just the 
preceding week, with Brasilia-based Regis Arslanian 
displacing long-time Ambassador to Brussels and ace trade 
expert Jose Alfredo Graca Lima.  From the start of Lula's 
GoB, Arslanian (who is considerably junior to Graca Lima) 
has been identified with the trade-policy ideology of 
Foreign Minister Amorim and Deputy Samuel Guimaraes, 
commonly seen as distinct from that of the senior trade 
diplomats under Lula's predecessor.  Itamaraty (Foreign 
Ministry) officials including Amorim himself have 
unconvincingly asserted that protocol rules caused Graca 
Lima to be dropped from the GoB delegation and that the 
switch has no import for policy.  The broad informed local 
sense is that the truth lies elsewhere, as charged in an 
editorial of the July 22, 2004 'O Estado de Sao Paulo.' 
Following is Embassy's unofficial translation of the 
editorial in question. 
 
2. (Begin Text of Unofficial Embassy Translation) 
 
(HEADLINE) Tarnishing Itamaraty's Image 
 
Over the past two decades, the Foreign Ministry has been 
putting forth a generation of diplomats highly specialized 
in trade negotiations.  This team's competence is 
recognized in all international fora and constitutes a 
valuable asset to Brazilian diplomacy. 
 
Since we are at a critical moment in negotiations on three 
fronts - ALCA, Mercosul-European Union and World Trade 
Organization - it would be natural that these diplomats 
would be at the front of missions that defend Brazilian 
interests.  But this is not what happens. 
 
One by one, these highly qualified diplomats, experienced 
in the tough game of trade negotiations, are being removed 
from their areas of specialization and replaced by 
professionals of lesser intellectual brilliance, experience 
and capacity for initiative, better able to follow to the 
letter the minute (exact) instructions coming from the 
Chancery.  The diplomats who have been removed have in 
common the fact of having served in prominent positions 
during the government of Fernando Henrique Cardoso and are 
committed, in some way, to the process of trade integration 
and economic opening inherent to globalization.  And that 
is not, decidedly, the objective of President Luiz Inacio 
Lula da Silva's foreign policy, formulated primarily by his 
international adviser, Marco Aurelio Garcia, and by the 
secretary-general of Itamaraty, Ambassador Samuel Pinheiro 
 
SIPDIS 
Guimaraes.  Underlying this political shortsightedness is 
the fear - motivated by an inferiority complex, we would 
say, that a commercial association with the great economic 
powers of the world leaves Brazilian producers and 
consumers vulnerable to greater foreign competitive 
capacity, forgetting that Brazil is among the 15 largest 
economies of the world and is capable of competing, on at 
least equal terms and conditions, in agricultural and 
industrial markets worldwide.  Proof of this are the 
repeated records achieved by the trade balance and that are 
not due - contrary to what the defenders of national- 
statism would wish - to a policy of import-substitution, 
but rather to the dynamism of the export sector. 
 
The result of the change in negotiators is a new policy 
turned towards the attempt to conclude South-South trade 
agreements on a priority basis, that is, with countries 
with few trade opportunities to offer Brazil.  To make 
matters worse, this is ruining the image that Brazilian 
diplomacy always had in international fora, caused by the 
inexperienced performance of some novice negotiators.  One 
example has entered the annals of international jokes - the 
intervention of an ambassador having received tasks beyond 
his capabilities who, during an Alca ministerial meeting 
held in Puebla, said to his foreign colleagues that he 
would very much like to see documents elaborated during the 
Uruguay Round of GATT, but didn't know how to do it - 
getting the stinging retort - "look on the internet". 
 
The cycle of exchanging trade negotiators - for the worse - 
was completed recently with the removal of Ambassador Jose 
Alfredo Graca Lima from the delegation that represented 
Brazil in the highest technical instance of negotiations 
between Mercosul and the European Union.  Ambassador Graca 
Lima, currently head of the Brazilian mission to the 
European Union, had accumulated 30 years experience in 
trade issues.  He was head of the Itamaraty's Economic 
Department.  He accompanied the entire Uruguay Round and 
afterwards specialized in OMC issues, remaining in Geneva. 
He participated in launching the project that culminated 
with the Mercosul-European Union negotiations, which he 
never stopped following.  With all this experience, he was 
removed from the Brazilian delegation, now headed by 
Ambassador Regis Arslanian, who was promoted to the highest 
career post only a month ago. 
 
It is by removing Brazil from the principal trade currents 
- those that make economic growth and technological 
development possible - and relegating the best trade 
diplomats to simple protocol functions, that the Lula 
government intends to change world economic geography. 
 
There's ideological prejudice, and there's pettiness! 
 
(End Text of Embassy Translation) 
 
DUDDY