AMBASSADOR’S MEETING WITH PRESIDENTIAL CHIEF OF STAFF JOSE DIRCEU, 12 APRIL 2005

Código Fecha Clasificación Origen
05BRASILIA1017 13 April 2005 Confidencial Embassy Brasilia

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This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 001017

SIPDIS

DEPARTMENT FOR A/S NOREIGA, PDAS DERHAM AND WHA/BSC AND
PLEASE PASS TO USTR; NSC FOR TOM SHANNON

E.O. 12958: DECL: 04/13/2015
TAGS: PREL, PGOV, ETRD, BR, FTAA
SUBJECT: AMBASSADOR’S MEETING WITH PRESIDENTIAL CHIEF OF
STAFF JOSE DIRCEU, 12 APRIL 2005

REF: A. (A) STATE 1149
B. (B) LA PAZ 1149

Classified By: AMBASSADOR JOHN DANILOVICH. REASONS: 1.4 (B)(D)

1. (C) Summary/Action Request. On 12 April Ambassador and
PolCouns met for a private lunch at the COM Residence with
the Presidency’s Civil Household Minister and Presidential
Chief of Staff Jose Dirceu, who was accompanied by his
international affairs advisor, Ambassador Americo
Fontanelles. Dirceu, who is President Lula da Silva’s
closest advisor, indicated he will travel to Caracas this
week to meet President Chavez, carrying a strong message
(cleared by Lula) that Chavez should stand down from his
provocative rhetoric and focus on his country’s internal
problems. Dirceu also enthusiastically supported the idea of
a meeting at the earliest opportunity between Presidents Bush
and Lula to "clear the air" on Venezuela and seek a formula
for breaking FTAA discussions out of the current "state of
paralysis." Ambassador and Dirceu discussed the possibility
of a meeting on the margins of the G-8 in Scotland in July,
and both said they would stay in touch on this or other
options as they coordinated with their governments. Action
request: Mission requests Department and NSC assess
desirability and feasibility of a presidential bilateral on
the margins of the G-8, or other options for a meeting
between President Bush and Lula in the next two to three
months. End summary/request.

VENEZUELA: CARRYING A MESSAGE TO CHAVEZ

2. (C) Ambassador said that in his meetings in recent days in
Washington, it had been explained that the USG’s approach to
Chavez henceforth would be lower key, with Washington
lowering its rhetorical signature so Chavez would have fewer
targets or excuses for anti-U.S. rants. Left in a vacuum,
Chavez’s own words and actions would reveal his true nature
to others, and the USG is disposed to "let him hang himself"
in the forum of world opinion, Ambassador added.

3. (C) Dirceu said that he is traveling to Caracas in the
next few days to meet Chavez, and is carrying a blunt message
vetted by President Lula. The key points of the message are:

— "Stop playing with fire..." Chavez’s provocations against
the U.S. do not serve Venezuela’s national interests and are
an issue of concern to Brazil and his other neighbors.
Drawing on his conversations and experiences during recent
travel in the U.S., Dirceu will tell Chavez that not only the
USG and U.S. elites are hostile toward him — American
business executives and even the "man in the street" now view
Venezuela as a problem for the U.S. Dirceu will stress to
Chavez that such a tense situation with American society
cannot possibly benefit him or his country;

— Focus on Venezuela’s internal problems: Dirceu will tell
Chavez that in the GOB’s estimation he should have his hands
full dealing with his economic problems, social restiveness
and development issues. Those are Venezuela’s internal
concerns but they affect Brazilian assessments of commercial
and integration prospects and Chavez should do his homework,
Dirceu said.

4. (C) Continuing on Venezuela, Dirceu said the GOB does not
believe Chavez’s arms purchase plans indicate external
military designs. A Colombia-Venezuela conflict would be
catastrophic for both countries, Dirceu said. Chavez’s
possible purchase of thousands of AK-47 assault rifles
appears directed toward his arming of the local militias he
is forming, Dirceu said, but he did not elaborate on why
Chavez is forming militias except to observe that Chavez
"feels threatened." Dirceu seemed dismissive of the value
of conventional arms in South America, asking Ambassador and
PolCouns how long they thought Venezuelan F-16s or MIGs (if
the GOV purchases them) could stay in the air against a
modern foe (read USAF). Unless a country chooses to have
long-range missiles or nuclear devices it has no significant
deterrent against a powerful national enemy, Dirceu opined,
and hence most conventional weapons — however flashy or
costly — are largely toys for appeasing the "artifacts of
national militaries" in developing countries, and not a
serious threat to any other state.

5. (C) Ambassador noted that the use of the term "strategic
alliance" by Chavez and Lula, and the apparent reluctance of
Lula and regional leaders to openly refute or criticize
Chavez’s most outrageous comments can lead some observers to
assume that Brazil and others tacitly agree with Chavez’s
views and that Chavez is the alliance’s de facto spokesman.
Dirceu did not respond directly, but assured Ambassador that
"there is not a single item of anti-American intent" in
Brazil’s regional policy matrix. He said that the GOB is
focused on integration and economic development, and wants to
draw Chavez into "a practical agenda" that will shift his
attention and energy in a more positive direction. Dirceu
said that Chavez exerts virtually no influence over national
leadership in any South American state, and even in the
places where his influence sometimes can be seen — i.e.,
Bolivia and Ecuador — Chavez’s words and deeds have often
backfired, as in the case of Bolivia’s harsh public reaction
to recent Chavez comments about Bolivian internal affairs
(NFI, but see ref b). Ambassador rejoined that Chavez’s
relative economic independence based on oil resources gives
Brazil and other neighboring states less leverage than they
might think in persuading Chavez to focus on positive and
practical regional integration issues.

PRESIDENTIAL MEETING

6. (C) Following up on comments made by the Ambassador about
the usefulness of a possible meeting between Presidents Bush
and Lula in the next few months if a suitable time and venue
could be found, Dirceu stressed that Lula believes it is
becoming important to have such a meeting before the November
Summit of the Americas. Dirceu said it is crucial that the
two Presidents talk candidly with each other, especially on
two issues: Venezuela and the direction of FTAA. Beyond
"clearing the air" on Venezuela, the USG and GOB need to
develop "a common approach" toward the whole Andean Ridge and
its various problems, as stability is strongly in the
interest of both countries, Dirceu said.

7. (C) On FTAA, Dirceu voiced strong concern about "the state
of paralysis" and said the presidents could discuss finding
a way to move ahead. Dirceu said the GOB cannot afford to
create the impression that it lacks interest in the FTAA. In
Dirceu’s view, Brazil needs to increase its commercial
activities with the U.S. "one hundred fold" and FTAA is an
invaluable vehicle. He opined that in five to ten years
South America will be "one market" led by Brazil, where
hundreds of U.S. firms based in Brazil will have the
opportunity to export goods and services across the
continent. This "partnership" is key and needs to be
strengthened; FTAA can help do this, and trade disputes
should be relegated to "routine handling" in the WTO and not
allowed to slow cooperation, Dirceu said.

8. (C) Ambassador and Dirceu discussed the possibility of a
bilateral meeting on the margins of the July G-8 summit in
Scotland (PM Blair has invited Lula) and both said they would
explore this and other options with their administrations,
staying in touch on the issue.

BILATERAL RELATIONS

9. (C) Early in the lunch meeting, Dirceu declared that
U.S.-Brazil relations are at their best level "since World
War II." Ambassador demurred on agreeing with this
completely, but said the two countries cooperate well on a
range of issue (e.g., counternarcotics), and that both
Secretary Rice and Deputy Secretary Zoellick have a strong

SIPDIS
interest in Brazil and enhancing bilateral relations.
Ambassador and PolCouns reviewed two pending bilateral issues
— i.e., conclusion of a bilateral safeguards agreement for
U.S. participation in commercial launches at Brazil’s
Alcantara spaceport and the possibility of negotiating a
defense cooperation agreement — but Ambassador said he would
like to see new initiatives for bilateral cooperation. He
asked Dirceu to provide a list of areas in which the GOB
would like to expand its cooperation with the U.S., with a
view to working on some of these questions prior to a
possible POTUS visit later in the year. Dirceu undertook to
provide suggestions.

10. (C) Ambassador also broached with Dirceu the ongoing
problem for the U.S. Mission in selling its excess properties
in Brazil, owing to past issues with Brazil’s social security
system. Dirceu expressed a willingness to help and directed
his international affairs advisor to work with the Embassy on
the question.

CUBA

11. (C) Turning briefly to Cuba, Dirceu said that, despite
the relationship between Castro and Chavez, it is not in
Cuba’s interest to "have the waters roiled" by Chavez’s
provocations. On the contrary, Cuba’s internal problems are
so profound and its economy so fragile that Castro’s regime
desperately needs a calm regional environment to attempt to
deal with these issues and to try to attract more foreign
investment. He reiterated statements he had made in his
Washington meetings, i.e., that if the USG allowed more
direct American commercial involvement and private sector
contacts with Cuba, the country would "be transformed beyond
recognition in five years."

12. (C) Comment and action request. Jose Dirceu remains
Lula’s most important advisor, despite some waning of his
influence. He retains Lula’s complete confidence, has a
broad policy coordination role, and we assume that most of
what he says closely reflects Lula’s own opinions and
priorities. In that regard, Dirceu’s upcoming mission to
Venezuela and his expressed support for the FTAA are
intriguing. We will follow up with Dirceu’s office for a
backbrief on the Chavez meeting, continue to probe for
daylight between the internal positions of Dirceu/Lula and
others in the GOB vice the foreign ministry on FTAA, and we
ask Washington to weigh seriously the option of a meeting
between President Lula and President Bush on the margins of
the G-8 — or some other option — in the next two to three
months. It appears that the top level of the GOB wants to
reach out to us — perhaps even reaching around their own
foreign ministry — and we should try to find ways to reach
back.

DANILOVICH