US embassy cable - 05BRASILIA3035

UNCLAS SECTION 01 OF 07 BRASILIA 003035 
 
SIPDIS 
 
DEPT FOR EB/TPP/MTA NISSEN, WHA/BSC AND WHA/EPSC 
DEPT PLEASE PASS TO USTR AHORAN, CBLISS AND MSULLIVAN 
USDOC FOR 3134/USFCS/OIO/WH/EOLSON 
USDOC FOR 4332/ITA/MAC/WH/OLAC/MWARD 
NSC FOR SCRONIN 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, BR, WTO 
SUBJECT: WTO: BRAZIL LIKELY TO REMAIN CAUTIOUS ON SERVICES 
 
REFS:  A) SECSTATE 176381, B) Fair-Horan email Oct 17, 2005 
 
1. SENSITIVE BUT UNCLASSIFIED 
 
2. (SBU) Summary.  Brazil's willingness, or not, to be 
forthcoming in WTO services is directly linked to its 
assessment of concessions being made by major developed 
country partners (US and EU) in the agricultural 
negotiations.  However, even if the GoB should at some point 
deem as adequate the progress being made in agriculture 
discussions, the lack of high quality statistics and 
analysis of service industries as well as coordination 
between services sectors may hamper the GoB's ability to 
move off of its defensive position.  Foreign Ministry 
officials highlight Brazil's interest in working 
constructively within the "core group" of members for 
services negotiations, while officials within the Ministry 
of Development, Industry and Trade argue that Brazil should 
not support any "benchmarks" or "complementary approaches" 
within the services negotiations, until issues concerning 
rules are adequately dealt with.  End Summary. 
 
3. (SBU) In response to ref A, Econoff met on October 14 
with Ronaldo Costa Filho, Chief of the Foreign Ministry's 
Division of Services, Investment and Financial Issues (ref 
B).  Costa had been only 3 weeks in his new post; while he 
has substantial trade experience, most recently heading the 
division in charge of negotiations between Mercosul and 
countries outside Latin America, it has primarily focused on 
trade in goods. 
 
4. (SBU) Costa emphasized that Brazil does not view the 
services negotiations as "behind" the agriculture or non- 
agriculture (NAMA) negotiations, but said the GoB also 
recognizes that once agreement is reached on modalities in 
these other two areas, a similar level of definition within 
services will be needed.  He added that Brazil hopes that it 
is seen as working constructively within the "core group" of 
services members.  Nonetheless, the GoB does not support 
suggestions that countries take on mandatory levels of 
openness in certain sectors, citing concerns that such an 
obligation would be inconsistent with GATS guidelines 
established in 2001.  Costa offered, however, that the GoB 
considers more favorably an idea discussed with US 
interlocutors in Geneva, and expanded on in a recent Indian 
paper in which countries would commit to an overall level of 
increased openness, but would retain individual flexibility 
on how to achieve it.  Offering his personal opinion, Costa 
said some numerical marker would be helpful for pressuring 
countries to be more forthcoming. 
 
5. (SBU) Turning specifically to Brazil's services offers, 
Costa acknowledged that the country's initial offer was 
weak; he characterized it as communicating only that Brazil 
was at the table, keeping everything "in pocket."  He 
described Brazil's revised offer as adding substance, but 
noted that Brazil could go deeper in commitments, depending 
on whether substantial commitments in agriculture were 
forthcoming. (Note. While attending a G-20 meeting of 
Finance Ministers in China October 16, Finance Minister 
Palocci told press that Brazil could contemplate greater 
opening in financial services citing the possibility of 
revoking the requirement of Presidential authorization for 
establishment of foreign banks.  Palocci also said he and 
Argentina Economic Minister Lavagna had agreed to look at 
opening the reinsurance sector and to evaluate other 
changes.)  In the area of reinsurance, Costa noted that 
legislation to open the sector is pending in congress; while 
the WTO negotiations might help with gaining its passage, he 
cautioned that negotiators must also be careful not to get 
out in front of Congress. 
 
6. (SBU) The audiovisual sector was the only group 
identified by Costa as adamantly opposed to any market 
opening.  He noted that the computer services sector 
actually has some offensive interests and included 
construction services and distribution as sectors which 
traditionally have been less defensive than others. 
Nonetheless, he stressed that almost all Brazilian service 
sectors were afraid of liberalization and wanted to maintain 
the status quo.  A lack of good information about the likely 
outcome of liberalization had created misperceptions, 
according to Costa, with sectors often assuming that 
domestic providers would be eliminated.  He cited telecom as 
a case in point, and praised a recent telecommunications 
seminar in Geneva as the type of educational outreach that 
can help domestic providers more realistically assess the 
implications of liberalization.  Costa also thought a dialog 
between Brazilian service providers and those in other 
countries could be beneficial.  There is no counterpart to 
the Coalition of Services Industries in Brazil, so contacts 
would have to be sector by sector. 
 
7. (SBU) According to Costa, interaction between the 
government and private sector on the services negotiations 
is minimal; he noted that the industrial sector had not been 
engaged in the debate over services liberalization at all. 
Without the benefit of much private sector input, the 
Foreign Ministry works closely with the Ministry of 
Development, Industry and Trade and relies on specific input 
from each of the ministries/agencies with specialized 
responsibilities to develop the GoB position on services. 
The breakdown of responsibilities for key sectors of U.S. 
interest is as follows: financial services - Finance 
Ministry; telecommunications - Agencia Nacional de 
Telecomunicacoes (Anatel), audiovisual - Ministry of 
Culture; energy - Ministry of Energy; environment - Ministry 
of Environment; express delivery - Ministry of 
Communication; distribution - Ministry of Development, 
Industry and Trade (MDIC); computer services - MDIC and the 
Ministry of Science and Technology.  These ministries in 
turn, and to varying degrees, seek input from relevant 
private sector groups/associations. 
 
8. (SBU) In part the need for more intensive outreach to the 
private sector recently prompted MDIC to create a new 
Department of Trade and Services Policies, according to Jane 
Pinho, an experienced services negotiator who is the new 
Department's General Coordinator for Services.  In a meeting 
with Econoff October 21, Pinho said her section, which was 
formed at the beginning of October, sought to establish a 
dialog with companies providing distribution, construction 
and computer services.  She lamented the lack of 
coordination between services sectors.  Andre Marcos Favero, 
an analyst within the Services Section, said a lack of 
response from the Brazilian delegation on a point concerning 
services is more likely due to the information being 
unavailable or unknown rather than to a desire to avoid 
divulging it - for instance, they really do not have a good 
grasp of their offensive interests. 
 
9. (SBU) Nonetheless, Pinho took a hard-line on any efforts 
to introduce "benchmarks" or "complementary approaches" 
within the services negotiations arguing that progress 
should be made on rules before any consideration is given to 
assessing market access offers.  She railed against 
developed countries, in particular the EU, which she said 
claim to make substantial commitments on a sectoral basis, 
but then under horizontal commitments roll it all back. 
 
Comment 
------- 
 
10. (SBU) The lack of information and coordination within 
domestic services industries certainly complicates 
formulation of a GoB position based on economic criteria, 
lending to Brazil's defensive posture in services, and 
potentially hinders our ability to have a productive dialog 
with the Brazilian private sector.  Nonetheless, it might 
also provide the Foreign Ministry with a certain amount of 
leeway should the GoB need to press domestic service 
providers for greater flexibility in reaction to progress in 
the agriculture talks.  That being said, MDIC would likely 
act as a check should the Foreign Ministry advocate a 
position seen as too forthcoming. 
 
Private Sector Associations 
--------------------------- 
 
11. (U) With regard to future outreach efforts, the 
associations below correspond to the service sectors 
identified as key U.S. interests; the extent to which each 
of these associations is active in discussions on the WTO 
services negotiations is not known. 
 
ENERGY 
------ 
 
Associacao Brasileira dos Produtores Independentes de 
Energia Eletrica (APINE) 
SCN Qd. 02 
Ed. Centro Empresarial Encol - Torre "A" Salas 626/8 
70.712-903  Brasilia - DF 
Tel.: 55-61-3315-9182/84 or 3328-5707 
Fax: 55-61-3327-2069 
 
ABINEE 
Av. Paulista, 1313, 7th floor conj. 703 
Sao Paulo, SP  01311-923 
Tel: 55-11-2175-0000  Fax: 55-11-2175-0090 
Contact:  Roberto Barbiere - Advisor, Power Generation, 
Transmission and Distribution 
roberto@abinee.org.br 
Homepage: www.abinee.org.br 
 
Camara Brasileira dos Investidores de Energia Eletrica 
(CBIEE) 
Rua Joaquim Floriano 466 Edificio Corporate Conjunto 501 
Itaim Bibi 
Sao Paulo, SP 04534-004 
Contact:  Claudio Sales, President 
cbiee@cbiee.com.br 
Tel: 55-11-3167-7773  fax: 55-11-3167-7769 
Claudio.sales@cbiee.com.br 
www.cbiee.com.br 
 
To a lesser extent: 
 
ABINEE 
Av. Paulista, 1313, 7th floor conj. 703 
Sao Paulo, SP 01311-923 
Tel: 55-11-2175-0000  Fax: 55-11-2175-0090 
Contact: Roberto Barbiere - Advisor, Power Generation, 
Transmission and Distribution 
roberto@abinee.org.br 
Homepage:  www.abinee.org.br 
 
Associacao Brasileira dos Grandes Consumidores de Energia 
Eltrica (ABRACE) 
Av. Paulista, 1439 - conj. 112 - 11th floor 
Sao Paulo, SP 01311-926 
Tel: 55-11-3284-3570/ 3284-4065  Fax:55-11-3288-3882 
Contact:  Paulo Ludmer, Executive Director 
E-mail: info@abrace.org.br 
Pludmer@abrace.org.br 
Homepage: www.abrace.org.br 
 
Associacao Brasileira de Geradores Termicos (Abraget) 
Xisto Vieira, President 
Av. Rio Branco, 26, sala 802 
Rio de Janeiro, RJ 20090-001 
Tel/fax: 55-21-2296-9739 
abraget@abraget.com.br 
xisto.vieira@elpaso.com 
Tatiana Lagun, Executive Secretary 
tlagun@abraget.com.br 
 
Associacao Brasileira de Distribuidores de Energia Eletrica 
(ABRADEE) 
Rua da Assembleia, 10, room 3201, Ed.Candido Mendes 
Rio de Janeiro, RJ 20011-901 
Tel:  55-21-2531-2053  Fax:  55-21-2531-2595 
Contact: Luiz Carlos Guimaraes, President 
E-mail: abradee@abradee.org.br 
Homepage: www.abradee.org.br 
 
Associacao Brasileira de Geracao Flexivel (ex- Assoc. dos 
Produtores de Energia Emergencial) (ABGF) 
SCN Quadra 05 - Bl. A - Sala 1310 
Torre Sul - Ed. Brasilia Shopping and Towers 
Brasilia, DF 70715-900 
Mr. Marco Antonio Veloso, Diretor Executivo 
Phone:55-61-3326-4907 cell:55-61-9974-4377 Fax:55-61-3326- 
4907 
Email: marcoveloso@abpee.org.br  marcoveloso@abragef.org.br 
Homepage: www.abpee.org.br 
 
FINANCIAL SERVICES 
------------------ 
 
Federacao Brasileira de Bancos (FEBRABAN) (banking umbrella 
group) 
Rua Lbero Badaro, 425-17th andar 
Sao Paulo, SP  01009-905 
Tel: 55-11- 3244-9800 
Fax: 55-11- 3107-8486 
 
Also interact with: 
 
Sao Paulo Stock Exchange (BOVESPA) 
Headquarters 
Rua XV de Novembro, 275 
Sao Paulo,SP 01013-001 
P.O. Box: 3456 
Phone: 55-11-3233-2000 
Fax: 55-11-3242-3550 
E-mail: bovespa@bovespa.com.br 
 
Commodities/Futures Exchanges: 
 
Bolsa de Mercadorias & Futuros (BM&F) 
Sao Paulo - Edifcio-sede 
Praca Antonio Prado, 48 
8 
Sao Paulo,SP 01010-901 
Tel.: 55-11-3119-2000 Fax: 55-11-3242-7565 
 
BM&F Braslia - Sede Administrativa 
SCN QD 04 Bloco "B" - Sala 404 
 
Centro Empresarial Varig 
Braslia, DF 70714-900 
Tel.: 55-61- 3328-6301/02/03 
 
BM&F (USA) Inc. 
61 Broadway, Suite 2605 
New York, NY 10006 
Phone: +1-212-750-4197 Fax: +1-212-750-4198 
 
INSURANCE 
--------- 
 
Federacao Nacional das Empresas de Seguros Privados e de 
Capitalizacao (FENASEG) 
Rua Senador Dantas 
74/12th andar, Centro 
Rio de Janeiro, RJ 
Tel: 21-2510-7777 
 
ENVIRONMENTAL 
------------- 
 
Brazilian Association of Hazardous Waste Treatment Companies 
(ABETRE) 
Rua Estela 515 Bl. F cj. 101 
Sao Paulo, SP 04011-904 
Phone: 55-11-5081-5351 
e-mail: abetre@abetre.com.br 
www.abetre.com.br 
Contact: Diogenes Del Bel, Executive Secretary 
 
Associacao Brasileira de Engenharia Sanitaria e Ambiental 
(ABES) 
(Brazilian Association of Sanitary and Environmental 
Engineering) 
Av. Beira Mar, 216- 13th andar, Castelo 
Rio de Janeiro, RJ  20021-060 
Tel: 55-21-2210-3221 
Fax: 55-21-2262-6838 
8 
www.abes-dn.org.br 
 
 
TELECOMMUNICATIONS 
------------------ 
 
Brazilian Association of Pay TV - Associacao Brasileira das 
TVs por Assinatura (ABTA) 
Rua Paes de Araujo, 29 - cj. 181 
Sao Paulo, SP 04531-090 
Phone:  55-11-3078-9307 
Contact : Alexandre Annemberg , Executive Director 
abta@abta.com.br http://www.abta.com.br 
 
Brazilian Association of Telecommunications Engineering 
Services Companies - Associacao Brasileira Das Empresas De 
Servicos De Engenharia De Telecomunicacoes (ABECORTEL) 
Rua Domingos de Moraes, 2243, 1st andar - cj. 16 
Sao Paulo, SP 04035-000 
Phone: 55-11-5082-2902 
Phone: 55-11-5579-8078 
Contact: Gilberto Justen, President 
abecortel@abecortel.org.br 
http://www.abecortel.org.br 
 
Brazilian Society of Broadcast Engineering  -  Sociedade 
Brasileira de Engenharia de TV e Telecomunicacoes  (SET) 
Rua Jardim Botanico 700 sala 306 
Rio de Janeiro, RJ 22461-000 
Phone: 55-21-2512-8747 
Contact: Roberto Franco, President 
http://www.set.com.br 
set@set.com.br 
 
INTERNET/E-COMMERCE 
------------------- 
 
Brazilian Association of Internet Service Providers 
Associacao Brasileira de Provedores ABRANET(SP) 
Internet Rua Tabapua, 627 - 3 and - sl 34 - Sao Paulo 
Phone 55-11-3078-3866 
Contact: Antonio Alberto Valente Tavares, President 
gerente@abranet.org.br http://www.abranet.org.br 
 
Brazilian Chamber of Electronic Commerce Camara Brasileira 
de Comercio Eletronico 
CAMARA E-NET 
Rua Novo Horizonte, no. 271 - Higienopolis 
Sao Paulo,SP  01244-020 
Phone: 55-11-3237-1102 
Contact: Cid Torquato, Executive Director http://www.camara- 
e.net info@camara-e.net 
 
COMPUTER SERVICES 
----------------- 
 
Associacao Brasileira de Empresas de Software (ABES) 
Av. Ibirapuera 2907 8th Andar Cj 811 
Moema Sao Paulo, SP 04029-200 
Phone: 55-11-5044-7900 
Contact: Jorge Sukarie, Executive President abes@abes.org.br 
http://www.abes.org.br 
 
Brazilian Association of Data Processing Companies 
(ASSESPRO) 
Rua Buenos Aires, no. 68 - 14th andar / Centro 
Rio de Janeiro, RJ 20070-022 
Tel.: 55-11-2507-7181 
Contact: John Foreman, President 
contato@assespro.org.br 
http://www.assespro.org.br 
 
 
DISTRIBUTION/EXPRESS DELIVERY 
----------------------------- 
 
Associacao Brasileira de Atacadistas e Distribuidores de 
Produtos Industrializados (ABAD) 
Mr. Guilherme Tiezzi, Consultor para Atacado 
Phone: (11) 3056-7500 
Fax: (11) 3885-6840/(85) 254-1742 
Email: guilherme.tiezzi@abgroup.com.br 
Av. Nove de Julho, 3147-11 andar 
Sao Paulo, SP 01407-000 
 
Associacao Brasileira de Movimentacao e Logstica 
Mr. Marcio Frugiuelle, Presidente (ABML) 
Phone: 55-11-5082-3972, 3371-0344 (Chep do Brasil) 
Email: congresso@abml.org.br 
Av. Cons. Rodrigues Alves, 848 
Sao Paulo, SP 04014-002 
Web Site: www.abml.org.br 
 
AUDIOVISUAL 
----------- 
 
Associacao Brasileira da Producao de Obras Audiovisuais 
(APRO) 
Rua dos Pinheiros 870, 16th andar - cj 161 
Sao Paulo, SP   05422-001 
Tel: 55-61-11-3089-9606 
apro@apro.org.br 
 
Associacao Brasileira de Realizadores de Audiovisuais 
(ASCINE) 
Rua Lima e Silva, 280 
Bairro Cidade Baixa 
Porto Alegre, RS  90050-100 
Website: www.ascine.com.br 
 
Associacao Brasileira de Emissoras de Radio e Televisao 
(ABERT) 
SCN Qd. 4 Bloco B Sala 501 
Centro Empresarial Varig 
Brasilia, DF 70714-900 
Tel: 55-61-2104-4600 
 
CHICOLA