US embassy cable - 05BRASILIA2658

UNCLAS SECTION 01 OF 02 BRASILIA 002658 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PREL, PGOV, ECON, EINV, PHUM, BR, External Relations 
SUBJECT: SOUTH AMERICAN SUMMIT:  NOT MUCH ADO ABOUT NOT MUCH 
 
REF: A) BRASILIA 2602 B) RECIFE 130 
 
 1.  (SBU) Summary:  The first summit meeting of the 
Community of South American Nations (CASA) provided a forum 
for Venezuelan President Chavez to blast the United States 
and call into question CASA's very nature, as well as for 
Brazilian President Lula to criticize his Argentine 
counterpart, but yielded little in the way of concrete steps 
forward for South American integration.  The only substantive 
progress on integration occurred on the eve of the summit, 
with the signing of two petroleum cooperation agreements -- 
one between Venezuela and Brazil and the other between 
Venezuela and Argentina.  The lack of a concrete timetable 
for progress, or for interim benchmarks, caused Chavez to 
initially refuse to sign the (over-long and under-focused) 
summit declaration and plan of action, and he relented only 
when President Lula promised to directly address Chavez's 
concerns within the next 90 days.  While the summit 
formalized the structure of CASA and called for the gradual 
development of a free-trade zone in South America, the 
absence of five heads of state -- (Colombia, Uruguay, 
Suriname, Guyana and Argentina) -- including two of Brazil's 
Mercosul partners, indicated a less than enthusiastic embrace 
of yet another Brazilian effort to exercise leadership of the 
continent.  Brazilian press coverage reflected a comparable 
lack of domestic enthusiasm, largely miring the story deep in 
their editions.  End Summary. 
 
2.  (SBU)  The September 29-30 Summit of the Community of 
South American Nations (CASA) succeeded in formalizing the 
institution and adopted a declaration and plan of action 
urging an acceleration of the physical, economic, energy, 
transportation, financial and social integration of the 
continent, including the call for states to contemplate the 
gradual establishment of a free trade zone.  But the only 
concrete steps toward integration occurred on the margins of 
the conference, specifically the agreement between Brazil's 
Petrobras and Venezuela's PDVSA to build a $2.5 billion oil 
refinery in northeast Brazil (Ref B), and PDVSA's agreement 
to purchase an existing refinery in Argentina with an eye 
toward amplifying the refinery's production to supply gas 
stations that PDVSA intends to buy in Argentina and Uruguay. 
3.  (U)  The Venezuelan/Brazilian refinery, expected to 
process 200 million barrels of oil per day when it is 
completed in 2011, will process both Brazilian and Venezuelan 
heavy crude, producing both diesel fuel and liquefied 
petroleum gas, and would decrease PDVSA's dependence on U.S. 
refineries that specialize in heavy crude. Brazil and 
Venezuela are also considering the construction of a natural 
gas pipeline that would stretch from Venezuela to Argentina. 
 
 
4.  (U)  By virtue of the above agreements, Venezuelan 
President Chavez grabbed most of the press attention in the 
lead-up to the Summit (Ref A), including the encomiums heaped 
upon him during the signing ceremony by President Lula, who 
called Chavez the first head of state to use Venezuelan oil 
revenues to help the people of Venezuela, and said, "I don't 
know if Latin America has ever had a president who has put 
the democratic experience into practice like in Venezuela.  A 
president who wins elections, drafts a Constitution and 
proposes a referendum in relation to his own person, holds 
the referendum and wins again.  Nobody can accuse that 
country of not having democracy.  You could even say that it 
has it in excess." 
 
5.  (U)  For his part, Chavez called the accord between the 
two oil companies a gesture against the "seven-league giant" 
-- a new appellation that Chavez has borrowed from the texts 
of Jose Marti to apply to the United States.  He also labeled 
a major Brazilian daily a lackey of the U.S. for citing UN 
figures showing poverty has expanded in Venezuela during 
Chavez's time in power. 
 
6.  (SBU)  Chavez then dominated the summit as well, both via 
a 50-minute tirade in which he railed against the United 
States, the lack of formal structure within CASA itself, the 
lack of inherent worth of summit meetings, and then by 
refusing to sign the summit's declaration.  He cited the 
absence of a concrete Program of Action, with specific goals 
and timetables, as his reason for declining to join consensus 
on the issue, saying that at this rate CASA wouldn't 
accomplish anything before the year 2200. 
 
7.  (SBU)  Lula, who had been so effusive in his praise of 
his neighbor the day before, reportedly expressed extreme 
frustration with him during the summit, insisting that the 
declaration had never been intended as a detailed roadmap, 
but rather as a general statement of principles that would 
lay the groundwork for more concrete steps later on. 
Nevertheless, President Lula obtained Chavez's endorsement of 
the declaration only by promising to use his status as 
President Pro Tem of CASA to press for the adoption of a 
concrete plan of action within 90 days.  The plan would then 
be presented at the coming Mercosul summit, to which members 
of the Community of Andean Nations have been invited. 
 
8.  (SBU)  The other headlines were garnered by Argentine 
President Kirchner, who attended only the dinner on the 
evening of the 29th, after concluding the refinery agreement 
with Chavez (which some local dailies said was the only 
reason Kirchner showed up at all), and then left the next 
morning, one-half hour before the opening ceremony. 
President Lula took the opportunity to chastise his 
counterpart, complaining that the early departures of 
heads-of-state from such gatherings prevented the full 
consideration of important issues.  Other Brazilian 
officials, however, noted that Kirchner had important 
electoral business to attend to and said his absence from the 
forum was not a serious matter. 
 
9.  (U)  It was left to the Argentine ambassador to deny 
reports that Kirchner left so as not to have to engage his 
political rival, Argentine ex-president and current Argentine 
Mercosur representative Eduardo Dulhade, whose wife is 
running against Kirchner's for a senate seat.  For his part, 
Lula made a special effort to praise Dulhade's work in 
Mercosur as well as praising his contributions to Argentina, 
while saying leaders should not let electoral schedules keep 
them from fully participating in important international 
efforts at integration. 
 
10.  (SBU)  Comment:  Whatever his ultimate motives for 
resisting the documents, Chavez's evaluation of the 
declaration and associated Plan of Action and Priority Agenda 
was on the mark.  Aside from formulating the organizational 
framework of CASA, nearly all of the items were hortatory in 
nature and general to the point of vagueness.  The absence of 
not only Kirchner, but of Uruguayan President Vasquez, 
currently the President Pro Tem of Mercosul, and the heads of 
state of Suriname, Colombia and Guyana, revealed a distinct 
lack of enthusiasm for yet another Brazilian attempt to 
exercise leadership of South America.  Brazilian press 
coverage of the summit revealed a similar lack of enthusiasm. 
 There was almost no reporting of the summit beforehand, and 
what little there was focused on the question of whether 
Kirchner and others would actually attend.  Most of the 
resulting articles focused on Chavez's domination of the 
stage and on Kirchner's early departure.  The "Jornal do 
Brasil" applauded the summit as one more step along the road 
to integration, but most coverage dealt almost exclusively 
with the sideshows.  Even that coverage was overshadowed by 
the continuing domestic maneuverings associated with the 
ongoing political scandals, jockeying for next year's 
elections, and an incipient scandal concerning football 
referees.  As with May's South America-Middle East summit, it 
appears that Brazil and President Lula gained less than they 
had hoped from this confab. 
 
11.  (SBU)  Foreign Ministry officials have not yet responded 
to Embassy requests for a readout of the summit.  The summit 
declarations, plan of action and priority agenda can be found 
on the ministry's website: 
www.mre.gov.br/portugues/imprensa/nota detalhe.asp?ID_ 
RELEASE=3278. 
 
 
 
DANILOVICH