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### Viewing cable 06BRASILIA2245, BRAZIL PRESIDENTIAL ELECTION: A FEW OBSERVATIONS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06BRASILIA2245 | 2006-10-27 11:40 | 2011-07-11 00:00 | CONFIDENTIAL | Embassy Brasilia

`

    VZCZCXRO2657
    OO RUEHRG
    DE RUEHBR #2245/01 3001140
    ZNY CCCCC ZZH
    O 271140Z OCT 06
    FM AMEMBASSY BRASILIA
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 7102
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    RUEHQT/AMEMBASSY QUITO PRIORITY 2009
    RUEHSG/AMEMBASSY SANTIAGO PRIORITY 5886
    RUEHRG/AMCONSUL RECIFE PRIORITY 5727
    RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 3175
    RUEHSO/AMCONSUL SAO PAULO PRIORITY 8438
    RUEKJCS/SECDEF WASHDC PRIORITY
    RHEHNSC/NSC WASHDC PRIORITY
    RUMIAAA/USCINCSO MIAMI FL PRIORITY
    RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
    RUEAIIA/CIA WASHDC PRIORITY

` `

    C O N F I D E N T I A L SECTION 01 OF 04 BRASILIA 002245

    SIPDIS

    SIPDIS

    C O R R E C T E D COPY - CHANGED PARA 13 TEXT.

    E.O. 12958: DECL: 05/25/2016
    TAGS: PREL BR
    SUBJECT: BRAZIL PRESIDENTIAL ELECTION: A FEW OBSERVATIONS
    ON FOREIGN POLICY AS A LONG CAMPAIGN WINDS DOWN

    BRASILIA 00002245  001.2 OF 004

    Classified By: POLITICAL COUNSELOR DENNIS HEARNE. REASONS: 1.4 (B)(D).

    ¶1. (C) Summary.  Brazilian voters go to the polls on 29
    October to select either incumbent Lula da Silva (Workers
    Party - PT) or challenger Geraldo Alckmin (Social Democratic
    Party - PSDB) for their president, with current polls
    indicating a wide lead for Lula.  As in past national
    campaigns, foreign affairs have not been a major issue, but
    as this year's presidential campaign winds down, we offer
    herewith some observations on comparative foreign policy
    perspectives of the candidates, based on the televised
    debates, media articles, and conversations with knowledgeable
    insiders, especially in the opposition Social Democratic
    Party (PSDB).  Throughout the campaign, Lula da Silva has
    clearly reiterated his government's commitment to a foreign
    policy that stresses regional integration and south-south
    ties, even as PSDB challenger Geraldo Alckmin has repeatedly
    criticized Lula for sacrificing Brazilian interests in the
    name of ideological priorities, and emphasized the importance
    of relations with the developed world, especially the United
    States.  It clearly appears an Alckmin foreign policy would
    be distinctly more traditional and U.S.-oriented.  While we
    may be able to develop specific areas of enhanced bilateral
    cooperation in a second Lula mandate -- e.g., on bio-fuels
    policy, business and investment, and programs for Brazil's
    poor northeast -- we can see no compelling current indication
    that Lula,s policy would shift dramatically in a different
    direction in a second term.  End summary.

    ¶2. (SBU) In all three televised campaign debates this month,
    PSDB challenger Geraldo Alckmin has aggressively criticized
    Lula's foreign policy, citing its failures in producing a
    permanent seat for Brazil in the UNSC or leadership spots in
    other international organizations, its weak response to
    Bolivia's nationalization of Petrobras assets, the decision
    to declare China a market economy and the subsequent flooding
    of Brazil's market with finished Chinese goods that compete
    with Brazilian products, and the south-south orientation that
    has placed priority on partnering with developing nations at
    the expense of traditional relations with the U.S. and EU.
    In that sense, Alckmin and the PSDB echo the critical views
    that have taken hold throughout much of Brazil's educated
    classes and are reflected widely in the media. Clearly, an
    Alckmin government would immediately seek to distance itself
    from Lula's foreign policy, in substance and in form.

    ¶3. (C) The PSDB has a deep bench of foreign policy experts --
    former Foreign Minister Celso Laffer, former ambassadors
    Rubens Barbosa and Sergio Amaral; even the PSDB's Senate
    Leader, Arthur Virgilio, is a diplomat.  They have advised
    Alckmin and published op-ed columns throughout the campaign.
    All view Lula's foreign policy as a fiasco, an
    ideologically-driven, strategically unsound and incompetently
    managed enterprise that has damaged national interests and
    yielded few successes.  In recent conversations with the
    Ambassador, Amaral offered a concise critique of Lula,s
    policy, while Barbosa outlined likely Alckmin positions in
    both a recent op-ed column and a private meeting with the
    Ambassador earlier in the month.

    SERGIO AMARAL

    ¶4. (C) Retired diplomat Sergio Amaral, who held senior
    positions in the Fernando Henrique Cardoso (FHC) government
    and is the odds-on favorite to be Foreign Minister if Alckmin
    is elected, discussed foreign affairs with Ambassador on 16
    October in Sao Paulo.  Amaral noted the stark difference
    between the foreign policy visions of Alckmin and Lula.
    Brazil,s foreign policy has historically been bipartisan,
    but the Lula administration has been implementing a Workers
    Party (PT) foreign policy.  Brazil under FHC played a

    BRASILIA 00002245  002.2 OF 004

    moderating role in South America, said Amaral, but Lula,s
    active, militant foreign policy is choosing sides between two
    currents.  It is supporting Chavez, Morales, and Kirchner.
    The foreign policy also has a third-world flavor, as
    evidenced by the opening of so many embassies in Africa.

    ¶5. (C) Amaral noted that he didn,t know whether Celso Amorim
    would continue as Foreign Minister if Lula is re-elected.
    Foreign policy advisor Marco Aurelio Garcia would like the
    job, but his name would probably not be well received.
    Regardless, he will retain a strong position in defining
    foreign policy.  The ideological, leftist foreign policy is
    designed to counter-balance the government's more orthodox
    economic policy and appease the left wing of the PT.  It has
    led to bad policies, such as Brazil,s agreeing to
    Venezuela's entry into Mercosul.  It is behind the GOB,s
    unwillingness to move forward on FTAA.  Foreign Ministry
    (MRE) Secretary-General Samuel Pinheiro Guimaraes has always
    opposed FTAA, and Lula himself has complained that the
    negotiation is one-sided and dominated by the U.S.  The
    GoB,s unwillingness to accept FTAA has the symbolic value of
    placing it in opposition to the United States and standing up
    for the less powerful.

    ¶6. C) However, Amaral said, despite a great deal of rhetoric,
    Lula and his foreign policy team have achieved no results.
    Brazil does not have a single meaningful bilateral trade
    agreement, largely because Amorim has little or no experience
    in bilateral negotiations.  As a result, Brazil is losing its
    influence in South America, which is increasingly fragmented.
     Amaral had originally expected Lula to move towards a more
    centrist foreign policy in a second term, but there had been
    so much polarization in the campaign that this now appears
    unlikely.  Lula will be looking to protect his legacy as a
    defender of the poor, and a leftist foreign policy will be
    part of that effort.

    ¶7. (C) Unlike his foreign policy team, however, Lula himself
    is more pragmatic than ideological because of his years as a
    union leader negotiating deals.  Amaral urged the Ambassador
    to continue to engage him, using trade and investment as a
    building block.  Instead of pushing or pressuring him, which
    would likely be counter-productive, the U.S. should put Lula
    and his foreign policy team on the spot, asking what they
    want, and see what the response is and what kind of dialogue
    it provokes.

    RUBENS BARBOSA

    ¶8. (U) In a widely-published op-ed column on 10 October,
    former Brazilian Ambassador to the U.S. and PSDB advisor
    Rubens Barbosa outlined some basic tendencies of foreign
    policy in an Alckmin presidency:

    ¶9. (U) Foreign policy would return to its natural role,
    seeking to be consensual and non-partisan, Barbosa wrote.  In
    Alckmin government, foreign policy would be treated as a
    policy of the state, within both medium and long term
    perspectives, in which the national interest is above visions
    that are ideological or passing governments.

    ¶10. (U) Barbosa wrote that an Alckmin foreign policy would
    continue a strong regional  focus, based on reciprocal
    interests, and integration, but with an emphasis on national
    interests, without ideology.  Alckmin would also seek to
    again intensify relations with the most dynamic centers of
    the global economy and re-establish as a priority relations
    with developed nations.

    ¶11. (C) Barbosa,s published views on the general principles
    of an Alckmin foreign policy track closely with his comments

    BRASILIA 00002245  003.2 OF 004

    to Ambassador Sobel in their meeting in Sao Paulo earlier in
    October.  On more specific points, Barbosa made these
    additional observations to Ambassador:

    --South-South relations: Alckmin would not repudiate this
    outright, but would return central focus to relations with
    the U.S., EU, Japan and other developed partners.

    --U.S.-Brazil relations:  These would return to the forefront
    of foreign policy, and Alckmin would look at intensified
    cooperation in bio-fuels, defense, and other areas identified
    already by the two governments for working group activities.

    --Free Trade:  Alckmin could re-engage on this, but in an
    approach that resembles the "FTAA-light" model, not a more
    comprehensive NAFTA-type accord.  On Doha, Alckmin would not
    be constrained by the G-20 and will look first and foremost
    to defending Brazilian national interests.

    --Chavez:  There would be no relationship beyond formalities
    and necessity, as Alckmin has no interest in doing anything
    with Chavez.  Alckmin takes a dim view of Chavez,s
    participation in Mercosul, and Barbosa noted, with no further
    comments,  that Venezuelan full membership is still pending
    formal approval in Brazil,s congress.  Similarly, Alckmin
    has no interest in close relations with Castro, and would
    take only a correct diplomatic approach to Cuba.

    --Bolivia:  Alckmin would take a harder line with Morales on
    Petrobras and Brazilian equities in Bolivia, but Barbosa did
    not elaborate.

    ADDITIONAL VIEWS

    ¶12. (C) In a 19 October private meeting with Ambassador and
    PolCouns, Senator Tasso Jereissati, PSDB national president,
    and Senator Arthur Virgilio, PSDB leader in the Senate, both
    expressed concern that Lula's rhetoric may turn toward
    populism in a second term, and this will be true in foreign
    relations as well.  Jereissati said the likely state of
    legislative gridlock in domestic politics in a Lula second
    term and continued trouble with corruption allegations will
    lead Lula down a populist track.  In foreign affairs, that
    could mean rhetorical distancing from the U.S. in trade
    issues and other foreign policy questions, though Jereissati
    opined Lula will try to retain amiable contact with the USG
    "behind closed doors."  In the context of a weak political
    situation overall, Lula could use leftist-populist rhetoric
    on foreign affairs, Jereissati said, as a means to shore up
    his fragile support on the far left.

    ¶13. (C) Comment:  In recent days, as polls have indicated a
    widening lead for Lula over Alckmin, a tantalizing article in
    respected daily newspaper "Valor Economico" reported that
    Lula government insiders were promising a tilt back toward
    stronger relations with the U.S., and away from south-south
    priorities, in a Lula second term.  On the evidence we see,
    that appears to be a planted canard intended to ameliorate
    Alckmin's incisive attacks on Lula's foreign policy, not a
    harbinger of a real change.  During the television debates,
    Lula defended his foreign policy vision, with no hint of a
    shift in direction.  At the top of the powerful Foreign
    Ministry, Foreign Minister Celso Amorim -- Lula's obedient
    servant -- and Secretary General Samuel Pinheiro Guimaraes --
    a leftist ideologue viewed widely as an anti-American quack
    even by many in his institution -- are both intent on staying
    in their positions in a second term, according to our
    high-level sources in their personal staffs.  And we see no
    evidence of a waning in the influence over Lula of Marco
    Aurelio Garcia, Lula's foreign policy advisor and
    decidedly a leftist in his orientation.  We do think the GOB

    BRASILIA 00002245  004.2 OF 004

    will focus on some specific and promising areas for increased
    cooperation with us -- notably in bio-fuels policy, as Amorim
    has stated to the Ambassador, and as we have reported in
    septels.  Working with the GOB on enhancing business and
    investment, and on development programs for Brazil's
    impoverished northeast also offer some potential for
    enhancing bilateral cooperation.  We also are not persuaded
    at present that Lula's rhetoric on international issues will
    head down the negative populist path that Jereissati foresees
    -- we believe Lula prizes his self-image as influential
    regional moderate, and we should encourage him in that role.
    But, overall, we have to anticipate more of the same in
    Lula's foreign policy in terms of its essentially south-south
    orientation, come the second term that looks likely now,
    three days away from the election.  A real sea change, with
    the tide flowing in our direction, would require an Alckmin
    victory --  a long shot, at this point.

    ¶14. (U) AmConGen Sao Paulo contributed to this cable.

    SOBEL

    Sobel

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