US embassy cable - 04BRASILIA2890

UNCLAS SECTION 01 OF 02 BRASILIA 002890 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PREL, MARR, TSPL, ETRD, EAGR, BR, UNSC, RU, External Relations 
SUBJECT: BRAZIL: PUTIN PAYS A CALL 
 
 
1.  (SBU) Summary and Introduction:  During his November 22 
visit to Brazil, Russian President Vladimir Putin endorsed 
Brazil's bid for a permanent UNSC seat and received from 
Brazilian President Lula reciprocal support for Russia's 
accession to the WTO.  However, neither side achieved its 
principal objective from the talks: for Brazil, an end to the 
Russian embargo on Brazilian beef, and for Russia, Brazilian 
agreement to select from among five competitors the Sukhoi 
Su-35 for its next generation fighter aircraft (F-X). In an 
agreement that had been prepared months earlier, the two 
countries signed an umbrella MOU for cooperation in 
developing Brazil's space program.  A successful visit, 
perhaps, but far less intense -- and arguably less important 
-- than the visit to Brazil of Chinese President Hu Jintao a 
week earlier.  End Summary 
 
Two Backs Lightly Scratched 
--------------------------- 
 
2.  (SBU) The first visit of a Russian leader to Brazil 
contained much upbeat rhetoric, good photo ops (such as a 
Putin appearance at soccer's holy ground, Rio's Maracana 
Stadium), but offered little substance.  With Putin's 
blessing, Brazil received Russian endorsement for a permanent 
seat on the UNSC. Lula reciprocated with Brazilian support 
for Russia's WTO accession. Neither action was unexpected, 
and neither was much of a concession.  During earlier high 
level visits to Moscow, Brazil had already received quiet 
assurances of Russian support for its UNSC bid. Brazil, also, 
sacrificed little by offering support to Russia for 
membership in the WTO. In backing Russia, Lula presented a 
vision of a "truly advanced development policy," while Putin 
boosted Brazil as "the largest country in Latin America and a 
strategic partner."  The two countries, Putin noted, have 
almost no "contradictions" in foreign policy and hold similar 
approaches to key international issues, which makes the two 
"almost allies." 
 
Lula Asks "Where's the Beef?" 
"Come Fly with Me" Putin Responds 
--------------------------------- 
 
3.  (SBU) Almost allies, perhaps, but not totally bosom 
buddies. Citing sanitary concerns over foot-and-mouth disease 
(FMD), the GOR banned imports of all types of Brazilian beef 
in September (which, depending on the complaining source, 
costs Brazil anywhere from between $1 and $4 million/day in 
lost sales).  In a "sign of good will," Russia agreed to lift 
the ban on beef from the disease-free state of Santa 
Catarina; beef imports from the rest of the country, however, 
remain embargoed. Defending its cattle industry, Brazil 
argued that the infected cattle were only from the northern 
state of Amazonas; all other regions are disease-free with 
vaccination, except for Santa Catarina, which is free without 
vaccination. The two leaders issued a joint statement that 
both parties are working to sort the issue out. 
 
4.  (SBU) Meanwhile, regarding the selection of Brazil's next 
generation jet fighter (F-X), the GOB decided at the present 
time not to take the Russian offer for purchase of 12 Sukhoi 
SU-35 "Super Flanker" jet fighters, even with the Russian 
sweetener -- purchase of 50 Embraer passenger aircraft. 
(Note: Based on press reports, this deal appeared to have 
been supported by Vice President -- now also Defense Minister 
-- Jose Alencar during his October visit to Russia. End note) 
 Instead, Presidential Foreign Policy Advisor Marco Aurelio 
Garcia told the press that a decision on the long-running F-X 
competition will not come before 2005. 
 
5.  (U) In an expected deliverable, Russia and Brazil signed 
a MOU on cooperation on Brazil's nascent space program, 
centered at the Brazilian launch facility at Alcantara. The 
MOU discusses joint development of a newer version of 
Brazil's satellite launch rocket and geostationary satellites 
to be used for communications and navigation. The Russians 
will also help Brazil improve the infrastructure at 
Alcantara. Agreement on a broad umbrella accord had been 
reached months earlier. Unlike Brazil's recent accord with 
Ukraine, the MOU is not a technical safeguards agreement. 
 
6.  (SBU) Comment:  The Putin visit provided Brazil as good 
an excuse as any to close an F-X deal with the Russians, if 
it so desired.  Evidently, it did not. The GOB decision not 
to announce selection of the Sukhoi, or any other aircraft -- 
to kick the F-X can down the road yet again -- reinforces our 
belief that the Lula administration still suffers from 
sticker shock for the fighters (roughly $700 million for 12 
aircraft.) 
 
7.  (SBU) Comment cont.: Coming on the heels of Chinese 
President Hu Jintao's vaunted five-day visit, and in the 
midst of other presidential-level delegations from Canada, 
Vietnam, South Korea and Morocco, the visit of President 
Putin appears to have met with far less concentrated 
attention than it would otherwise have received.  Certainly, 
it cannot compare with the intense negotiations that took 
place a week earlier with the Chinese.  From a trade 
perspective, perhaps, the visit received the attention it 
deserved. While bilateral trade in 2003 between Brazil and 
Russia reached over $2 billion, it is still well less than 
one-third the level with China -- and only an eighth of trade 
with the U.S. 
Chicola