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### Viewing cable 08BRASILIA664, BRAZIL: GREEN LIGHT TO NEGOTIATE A TROPICAL FOREST

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08BRASILIA664 | 2008-05-15 19:10 | 2011-07-11 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Brasilia

`

    VZCZCXRO5502
    RR RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD
    DE RUEHBR #0664/01 1361910
    ZNR UUUUU ZZH
    R 151910Z MAY 08
    FM AMEMBASSY BRASILIA
    TO RUEHC/SECSTATE WASHDC 1679
    RUEATRS/DEPT OF TREASURY WASHDC
    INFO RUEHSO/AMCONSUL SAO PAULO 2073
    RUEHRI/AMCONSUL RIO DE JANEIRO 6165
    RUEHRG/AMCONSUL RECIFE 8049
    RHEHNSC/NSC WASHDC
    RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE

` `

    UNCLAS SECTION 01 OF 02 BRASILIA 000664

    SENSITIVE

    SIPDIS

    DEPT FOR OES/ENRC - CHARITY DENNIS AND STEPHANIE CASWELL
    DEPT FOR L/OES - KATY YOUEL-PAGE
    DEPT PASS TO CEQ FOR DAVID BANKS
    TREASURY FOR KATIE BERG
    USAID FOR CONNIE CAMPBELL

    E.O. 12958: N/A
    TAGS: SENV KGHG EAID EFIN BR
    SUBJECT: BRAZIL:  GREEN LIGHT TO NEGOTIATE A TROPICAL FOREST
    CONSERVATION ACT PROGRAM - SEEK TO CONCLUDE BY JULY

    BRASILIA 00000664  001.2 OF 002

    ¶1.  (U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR
    INTERNET DISTRIBUTION.

    ¶2.  (SBU) SUMMARY.  On May 5, the Ministry of External Relations'
    (MRE) Director of the Environment Department, Min. Figueiredo
    Machado, informed Post that the Government of Brazil wants to begin
    negotiations to establish a debt-for-nature program under the
    Tropical Forest Conservation Act (TFCA).  Further, at a May 9
    meeting between Chairman of the Council for Environmental Quality
    Jim Connaughton and MRE's Under Secretary for Policy Everton Vargas,
    the two agreed that both sides should seek to conclude TFCA
    negotiations by the time of the July 9 Major Economies Summit in
    Hokkaido.  The aim would be for the two presidents to be able to
    announce the creation of a Brazil TFCA program there.  END SUMMARY.

    A GREEN LIGHT TO LAUNCH TFCA NEGOTIATIONS

    ¶3.  (SBU) On May 5, the Ministry of External Relations (MRE)
    Director of the Environment Department, Minister Luiz Alberto
    Figueiredo Machado, informed Post's Environment, Science and
    Technology (EST) Counselor that the MRE had discussed with the
    Ministry of Environment and the Finance Ministry the Government of
    Brazil (GOB) the creation of a debt-for-nature program under the
    Tropical Forest Conservation Act (TFCA).  He stated that the GOB
    wanted to establish a TFCA program and was ready to begin
    negotiations on the two related instruments: a Debt Reduction
    Agreement (DRA) and a Tropical Forest Agreement (TFA).  On April 22,
    EST Counselor had met with Figueiredo Machado once more to encourage
    the GOB to make a decision on the offer made in a letter dated
    February 29, 2008 by Treasury Department Assistant Secretary for
    International Affairs Clay Lowery to Finance Minister Guido Mantega.
     He explained that time was of the essence, and if the GOB did not
    give the green light to begin negotiations with a view toward
    concluding them before the end of Fiscal Year 2008 that it would be
    at risk of losing a significant portion of the $30 million currently
    being held for Brazil.

    ¶4.  (SBU) In the same May 5 call, Figueiredo Machado agreed to a
    proposal made earlier to hold a teleconference between the USG and
    GOB to begin negotiations of the two instruments.  The
    teleconference has been set for May 16 at 10 a.m. (EST time).  All
    three ministries involved in the TFCA negotiations have copies of
    drafts of the DRA and TRA.  None of the three ministries has yet
    opined whether or not the Brazilian congress would need to approve
    either or both of the instruments.

    CEQ CHAIRMAN CONNAUGHTON PRESSES FOR CONCLUSION BY JULY

    ¶5.  (SBU) The topic of TFCA arose in a May 9 meeting in Brasilia
    between the Chairman of the Council on Environmental Quality (CEQ)
    Jim Connaughton and MRE Undersecretary for Policy, Amb. Everton
    Vargas, and Figueiredo Machado.  Connaughton applauded the GOB for
    deciding to seek a TFCA program and urged them to conclude the
    negotiations by the July 9 summit of the leaders of the Major
    Economies in Hokkaido, Japan.  He reinforced the point that there is
    a risk that significant delay could mean that some of the funding
    being held for Brazil would go to others.  Vargas said, "I am
    confident that we can solve this."  He noted there was a strong
    interest from the Environment Ministry in this program and that the
    Environment Minister had spoken to him about it.  He went on to say
    there was good will on both sides and that Brazil wants to resolve
    the issues the sooner the better.  Vargas added, "Maybe both
    Presidents can announce it at Hokkaido."  As for the Brazilian
    congressional approval issue, he assured Connaughton that they would
    put their people on it.

    ¶6.  (SBU) Figueiredo Machado commented that while there was not much
    money in the program, it was politically important.  "We want to do
    it," he said.  He did identify a concern about the role of NGOs in
    the program, saying they would prefer the funding go to help
    government projects.  He added, "We would not like to see the money
    going to pay the salaries of NGO directors."  Connaughton agreed
    that the money should go to activities on the ground.  Figueiredo
    Machado said that they had talked to officials from Panama about
    their TFCA program, but stressed Brazil is different.  Still, he
    assured Connaugton that "we will sort this out."

    ¶7.  (SBU) COMMENT.  The MRE officials in the meeting with

    BRASILIA 00000664  002.2 OF 002

    Connaughton were the most positive they had ever been on the subject
    of creating a TFCA program.  It appears that the combination of a
    deadline and interventions in Brasilia and Washington have succeeded
    in convincing the MRE to come to the table.  The Finance Ministry
    and the Environment Ministry have been on board with a TFCA program
    going back to July of 2007, however, MRE had been a holdout until
    now.  This new buy-in from MRE officials will be important as both
    sides work against a clock to negotiate the two instruments.

    ¶8.  (SBU) COMMENT CONTINUED.  The recent developments are very
    positive, though much remains to be done.  MRE has demonstrated
    again and again a propensity, both for bureaucratic and political
    reasons, to move at a glacial pace when undertaking such
    negotiations, even on issues it considers important.  At the same
    time, MRE has signaled repeatedly its discomfort with handing
    control and money to NGOs--a view widely shared in the GOB--and we
    will need to be prepared to address these concerns in the
    negotiations.  Moreover, Vargas has in the past told Post that MRE's
    legal advisor has taken a position that almost every agreement with
    a foreign government needs to be approved by the congress.  If
    Brazilian congressional approval is required, it will be difficult
    to secure final approval of the agreement prior to the October 5,
    2008 municipal elections.  We anticipate that we will need to
    continue to press MRE in order to conclude the agreement in a timely
    fashion.  END COMMENT.

    CHICOLA

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