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### Viewing cable 07SAOPAULO384, MEDIA REACTION: WESTERN HEMISPHERE: BRAZILIAN FOREIGN

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07SAOPAULO384 | 2007-05-07 12:38 | 2011-07-11 00:00 | UNCLASSIFIED | Consulate Sao Paulo

`

    VZCZCXYZ0019
    OO RUEHWEB

    DE RUEHSO #0384/01 1271238
    ZNR UUUUU ZZH
    O 071238Z MAY 07
    FM AMCONSUL SAO PAULO
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 6887
    INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
    RUEHBR/AMEMBASSY BRASILIA PRIORITY 8021
    RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 8043
    RUCPDOC/USDOC WASHDC 2776

` `

    UNCLAS SAO PAULO 000384

    SIPDIS

    SIPDIS

    STATE INR/R/MR; IIP/R/MR; WHA/PD

    DEPT PASS USTR

    USDOC 4322/MAC/OLAC/JAFEE
    E.O. 12958: N/A
    TAGS: KMDR OPRC OIIP ETRD BR
    SUBJECT: MEDIA REACTION: WESTERN HEMISPHERE: BRAZILIAN FOREIGN
    POLICY: BANK OF SOUTH, COMPULSORY LICENSING OF AIDS TREATMENT DRUG;
    EUROPE: FRANCE PRESIDENTIAL ELECTION; SAO PAULO

    ¶1. "What Kind Of Leadership Is This?"

    The lead editorial in center-right national circulation daily O
    Estado de S. Paulo (5/5) maintained: "The GOB continues to support
    the creation of the Bank of the South, a financial adventure with a
    deadline to begin.... The idea is to constitute a development bank
    and a stabilization fund - the latter aimed at performing the role
    of a pet, and probably irresponsible, IMF. The GOB has insisted on
    participating in the project. The demand would be simply redundant
    if it did not a show a siege imposed on Brazilian officials by the
    most active supporters of the proposal - Presidents Nestor Kirchner,
    of Argentina, Hugo Chvez, of Venezuela, and Rafael Correa, of
    Ecuador.... Without access to international banks after the
    Argentine public debt default, Kirchner has more than obvious
    reasons to join Chvez in his search for alternative sources of
    credit.... The idea of a common currency for Mercosul involves the
    creation of a central bank for the bloc or, more ambitiously, for
    the region.... But this long term goal does not necessarily involve
    the creation of a regional development bank or the installation of a
    stabilization bank to serve as a generous alternative to the IMF....
    Either the GOB is being pushed into the adventure because it is
    unable to resist pressures from Chvez, Kirchner and Correa, or
    President Lula's diplomatic advisors like the idea and convinced him
    to adopt it as essential to his supposed regional leadership. The
    GOB is wrong in both hypotheses."

    ¶2. "Broken Patent"

    Liberal, largest national circulation daily Folha de S. Paulo
    editorialized (5/5): "There is no doubt that public health must
    prevail over commercial interests. Therefore, the GOB's decision to
    determine the compulsory licensing of Merck Sharp & Dohme AIDS
    treatment drug Efavirenz is right. The GOB opted for the compulsory
    licensing - technical name of patent break - because it considered
    the price reduction offered by the pharmaceutical company
    insufficient.... Brazil had already threatened to break patents of
    anti-AIDS drugs in 2001 and 2003. As it never adopted such a
    measure, the pharmaceutical sector became increasingly reticent in
    lowering its prices. The compulsory licensing is supported by
    Brazilian legislation in the case of sanitary emergency or public
    interest. That provision is supported by international agreements
    such as the TRIPPS, which regulates intellectual property rights.
    Even the US, the nation that most complains about compulsory
    licensing, recently thought about breaking the patent of Bayer-made
    ciprofloxacin antibiotic, fearing terrorist attacks with anthrax.
    But the fact that Brazil has the right and some good reasons to do
    that does not automatically mean that this will be a no-cost
    decision. In the short run, we may suffer legitimate retaliations
    from pharmaceutical companies."

    ¶3. "The Difficult Decision Of Breaking Drug Patents"

    Business-oriented Valor Econtmico (5/7) remarked: "The GOB's
    decision to break the patent of Merck Sharp & Dohme AIDS treatment
    drug Efavirenz was made following six months of negotiations that
    failed to reach an understanding, and within the limits of
    international rules regarding IPR in accordance with the WTO
    norms.... The Brazilian AIDS treatment program has become a victim
    of its own success. The number of infected people benefited by the
    treatment continues to grow.... As a threat, the strategy of
    compulsory licensing of drugs had already forced price reductions.
    In practice, it has the potential of generating undesirable trade
    conflicts. However, international consensus that national
    governments must have some room of maneuver to carry out public
    health policies is increasing.... The pharmaceutical reasoning is
    not less relevant: compulsory licensing measures make investments in
    drug research and production unattractive."

    ¶4. "Without Chirac, The Farewell To The Gaullist Style"

    Center-right O Estado de S. Paulo's Paris correspondent Giles
    Lapouge wrote (5/6): "French politics will be freed from the
    Gaullist style. Most foreigners are pleased, especially the US....
    Chirac's anti-Americanism is real, but it is not explained by the
    Cold War. It descends directly from De Gaulle, whose visceral
    anti-Americanism was born during WW II.... Roosevelt detested him
    and wanted to make France a secondary nation under tutelage after
    the liberation. [But] it was mainly in the war in Iraq that Chirac's
    hostility with the US emerged.... The US has placed its hopes on
    Sarkozy.... He will certainly not align with Bush in Iraq, but is
    expected to adhere more to US diplomacy in the world, particularly
    in the Middle East. Sarkozy opposes military action against Iran,
    but he wants tougher sanctions against Tehran and Sudan (because of

    Darfur), rejects the suspension of the arms embargo against
    China and wants the US anti-missile shield to be debated with the
    Europeans."
    McMullen

`