US embassy cable - 05BRASILIA2672

UNCLAS SECTION 01 OF 04 BRASILIA 002672 
 
SIPDIS 
 
STATE FOR WHA/BSC 
STATE FOR EB/TRA MILLER AND HAYWOOD 
NSC FOR CRONIN 
TRANSPORTATION FOR DAVID DECARME 
USCG FOR MARIO MERCADO 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/DDEVITO/DANDERSON/EOL SON 
BUENOS AIRES FOR TSA 
 
E.O. 12958: N/A 
TAGS: EWWT, ETRD, PHSA, PREL, ASEC, Transportation Issues 
SUBJECT: BRAZIL AND USG SIGN MARITIME TRANSPORT AGREEMENT 
 
REF: BRASILIA 2452 
 
1. Summary.  On September 30, after several years of 
negotiation, Brazil and the USG signed a Maritime Transport 
Agreement in Washington, DC.  The agreement still must be 
ratified by the Brazilian Congress, which we do not 
anticipate will happen in the near-term.  The signing was, 
nevertheless, one more positive area of cooperation on 
maritime issues.  The English text of the agreement is 
included below.  End Summary. 
 
2. A Maritime Transport Agreement was signed by Secretary 
Norman Mineta of the U.S. Department of Transportation and 
Brazilian Ambassador Roberto Abdenur on September 30 in 
Washington, D.C.  Others present at the signing included 
Flavio Marega, Transportation Counselor, Embassy of Brazil; 
John J. Danilovich, U.S. Ambassador to Brazil; Jeffrey 
Shane, DOT Under Secretary of Transportation for Policy; and 
Karan K. Bhatia, DOT Assistant Secretary for Aviation and 
International Affairs. 
 
3. The agreement culminates a four year effort to renew the 
previous accord, and will facilitate maritime transportation 
between the U.S. and Brazil.  It represents a positive step 
in continuing to provide market access for U.S. carriers to 
Brazilian commercial cargoes that Brazilian authorities have 
designated as government controlled.  Specifically, the 
agreement ensures equal access for each country's carriers 
to the other country's government-controlled cargo.  (Brazil 
reserves a significant portion of what are in fact 
commercial international cargoes to its own carriers, 
claiming these cargoes are "government-controlled.")  In 
addition, the agreement includes a new provision that 
confirms each country's ability to protect its security 
interests.  Finally, the agreement encourages liberalization 
of the maritime sector and provides for non-discriminatory 
treatment of each side's carriers with respect to maritime- 
related services and facilities and other issues such as 
shipping taxes.  This agreement will particularly benefit 
U.S. carriers moving Export-Import Bank financed project 
cargoes to Brazil. 
 
4. While the revised agreement is along the lines of the 
previous (expired) one, the Brazilian Congress still must 
ratify the new accord.  Because the current political crisis 
in Brazil has stalled much of the government's legislative 
agenda, we do not expect ratification to happen in the near- 
term.  Indeed, the provisions calling for non-discriminatory 
treatment for U.S. carriers in both countries' cross trades 
(i.e., trade with third countries) may raise concerns in the 
Brazilian Chamber of Deputies and Senate regarding granting 
market access to exclusionary trade arrangements within 
MERCOSUL.  From the U.S. side, as an executive agreement, 
there is no need for Senate ratification. 
 
5. Other areas of positive maritime cooperation with Brazil 
include the Department of Homeland Security Container 
Security Initiative (CSI), which was inaugurated at the Port 
of Santos on September 22.  In addition, there are on-going 
discussions regarding the Department of Energy's Megaports 
Initiative, which seeks to detect radioactive and/or nuclear 
materials at foreign ports in conjunction with CSI. 
Finally, the U.S. Coast Guard successfully concluded its two- 
week visit to several ports in Brazil on September 23 under 
a reciprocal agreement negotiated earlier in September 
(Reftel). 
 
6. The English language version of the agreement is below. 
 
Begin text. 
 
AGREEMENT ON MARITIME TRANSPORT BETWEEN THE GOVERNMENT OF 
THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE 
FEDERATIVE REPUBLIC OF BRAZIL 
 
The Government of the United States of America 
and 
The Government of the Federative Republic of Brazil 
(hereinafter the "Parties"), 
 
Reaffirming their interest in the free flow of maritime 
trade and improved competitive access to such trade for 
national-flag carriers of both Parties, taking into 
consideration the interests of third-flag carriers; 
 
Noting the continued interest of the Parties in the 
liberalization of their maritime trades; 
 
Taking into account the increasing use of intermodal 
transport of cargoes in the bilateral trade; 
 
Recognizing that free and fair competition is the effective 
way to encourage efficient shipping services at favorable 
costs and that such shipping conditions enhance the growth 
of the economies of both countries and their foreign trade; 
and 
 
Recognizing the desirability of limiting, insofar as 
possible, restrictions on the access of carriers to 
government-controlled cargo and other cargoes; 
 
Have agreed as follows: 
 
ARTICLE 1 
 
The Parties shall conduct their bilateral maritime 
transportation relations in accordance with the following 
provisions relating to international ocean-borne cargo 
trade, excluding bulk cargoes and cargoes transported 
between ports or points in the territory of either Party: 
 
a)  The Parties recommit themselves to the pursuit of free 
and open maritime trade through administrative and 
legislative measures; 
 
b)  The Parties shall afford fair and nondiscriminatory 
opportunity to national-flag carriers of both Parties and to 
third-flag carriers to compete for the carriage of 
commercial cargo in the bilateral trade.  Each Party shall 
further afford fair and nondiscriminatory opportunity for 
national-flag carriers of the other Party to compete for the 
carriage of commercial cargo in third-country trades; 
 
c)  National-flag carriers of each Party shall have equal 
and nondiscriminatory access to the government-controlled 
cargo of the other Party, excepting defense cargoes and 
agricultural assistance cargoes, for carriage in vessels 
owned or chartered by those carriers.  If any unintended 
imbalance develops in the carriage of the government- 
controlled cargoes, the Parties shall hold consultations 
expeditiously pursuant to Article 2 of this Agreement, in 
order to find a solution; 
 
d  Waivers for the carriage of government-controlled cargo 
by foreign-flag vessels shall be issued expeditiously.  The 
availability period used by each Party to determine whether 
waivers for the carriage of government-controlled cargo in 
vessels operated by foreign-flag carriers may be granted 
shall consist of no more than three days before and seven 
days after the shipper's requested sailing date. Each 
Party's competent authority will respond to waiver requests 
within three working days of receipt; 
 
e)  The Parties, upon request by a shipper, carrier or other 
interested party, shall make every effort to advise within 
three working days if a specific cargo falls under the laws 
of controlled cargo and the basis for such characterization; 
 
f)  The Parties shall afford fair and nondiscriminatory 
treatment with respect to commercial operations of each 
Party's carriers, including the establishment of business 
offices, the ownership and operation of maritime facilities, 
the intermodal movement of cargo, and the establishment of 
such other facilities as may be necessary to the efficient 
conduct of maritime services; 
 
g)  In order to facilitate efficient operation of maritime 
transport, the Parties shall not impose any restrictions on 
the transshipment or relay shipment of cargoes in the 
bilateral trade, subject to cabotage laws of each Party; 
 
h)  On a reciprocal basis, each Party shall afford vessels 
of the other Party the same treatment as its own vessels 
with respect to taxes assessed on tonnage or freight value 
and other taxes and levies; 
 
i)  The tariffs of and shipping documents issued by 
multimodal transport operators or ocean transportation 
intermediaries organized under the laws of either Party 
shall be recognized and accepted by the Parties in their 
bilateral trade; 
 
j)  The Parties shall regularly exchange updated information 
on the value and tonnage, by flag and type of vessel, of 
their respective government-controlled cargo in the 
bilateral trade; and 
 
k)  For the purposes of the present Agreement, "government- 
controlled cargo" means cargo, all or some portion of which 
under the law of the Party is reserved for transportation by 
its national-flag carriers. 
 
ARTICLE 2 
 
The Parties shall consult on changes in internal legislation 
deemed likely to affect the application of the Agreement, as 
well as on further matters affecting the bilateral maritime 
trades, or on any matter involving the application or 
interpretation of this Agreement. 
 
ARTICLE 3 
 
The provisions of this Agreement shall not limit the right 
of either Party to take any legitimate action under 
international law for the protection of its security 
interests. 
 
ARTICLE 4 
 
For purposes of implementation of this Agreement, the 
competent authorities shall be, for the United States of 
America, the Maritime Administration (MARAD) of the U.S. 
Department of Transportation, or such body as the United 
States Government may designate, and, for the Federative 
Republic of Brazil, the National Agency for Waterways 
Transportation (ANTAQ), following the guidelines issued by 
the Ministry of Transportation.  Each Party shall notify the 
other through diplomatic channels of any change in the 
identity of its competent authority. 
 
ARTICLE 5 
 
The Agreement shall enter into force upon completion of an 
exchange of notifications that internal procedures necessary 
for its entry into force have been completed.  It shall 
remain in force for a period of five (5) years, its validity 
being automatically renewed thereafter for successive one- 
year periods, unless a contrary notification is presented by 
any one of the two Parties.  Either Party may, at any 
moment, terminate the present Agreement.  The termination 
shall be effective sixty (60) days after the receipt of the 
written notification by the other Party, through diplomatic 
channels. 
 
DONE at Washington, this thirtieth day of September, 2005, 
in duplicate in the English and Portuguese languages, both 
texts being equally authentic. 
 
FOR THE GOVERNMENT 
OF THE UNITED STATES 
OF AMERICA: 
 
FOR THE GOVERNMENT 
OF THE FEDERATIVE REPUBLIC 
OF BRAZIL: 
 
End text. 
 
7. This cable was coordinated with the Department of 
Transportation. 
 
DANILOVICH