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

UNCLAS SECTION 01 OF 02 BRASILIA 000727 

SIPDIS 

SENSITIVE 

E.O. 12958: N/A 
TAGS: ECON PGOV PINR PREL BR UNSC
SUBJECT: BRAZIL: EXPANDING TIES WITH CENTRAL AMERICA 

¶1. (SBU) Summary. The directors of Brazil's foreign policy have traditionally placed Central America on their periphery. Brazil has a history of peacekeeping in that region and runs a trade surplus, but the GoB has generally not expended a great deal of resources to expand its influence there. As part of his hemispheric outreach, however, President Lula da Silva is attempting to improve Brazil's ties to the region, building on initiatives undertaken in the latter stages of the previous Cardoso administration. End Summary. 

View From Brasilia ------------------- 

¶2. (SBU) Julio Espirito Santo and Antonio Carlos Atunes of the Brazilian Foreign Ministry's Mexico, Central America, and Caribbean Division (DCC) told Poloff on March 23 that the Ministry places Central American countries outside of Brazil's normal "sphere of influence" because of Mexico's proximity and the long-standing U.S. role. President Lula has certainly boosted Brasilia's focus on South American integration, but less so with the rest of Latin America, according to the two Brazilian diplomats. Brazilian academics have argued that Lula's Workers' Party (PT) has not cultivated close relations with many of the Central American leftist parties because of differing formative experiences and base constituencies. 

¶3. (SBU) Brazil nonetheless has a history with Central America that provides a foundation for closer ties. Brazil contributed limited numbers of peacekeepers, monitors, and demining experts in the aftermath of Central America's sundry Cold War insurgencies. Brazil participated in the UN Inspection Mission in Guatemala (MINGUA) and provided training to public security forces in the region. In addition, Brasilia donated significant quantities of assistance and forgave El Salvador's debt after Hurricane Mitch, the DCC officials pointed out. Besides working with the Central American countries in OAS fora, Brazil has interacted with these nations in the Rio Group setting, where Central American countries comprise almost a third of the membership, Espirito Santo said. 

Getting Past the G-20 --------------------- 

¶4. (SBU) Former President Fernando Henrique Cardoso became the first Brazilian head of state to travel to the isthmus when he attended a trade conference in San Jose in 2000. That conference sought to increase ties between Mercosul and the Central American Free Trade Area (CAFTA). Brazil's trade with the region is relatively small, but it involves a significant trade surplus with all the countries. For example, Brazil's exports to Honduras in 2000 were valued at more than 31 million dollars, while it imported less than 700,000 dollars worth of Honduran products. 

¶5. (SBU) The seminal event for Brazil's future relations with the isthmus was the formation of the G-20 for the WTO Cancun meeting, Espirito Santo noted. He told Poloff that El Salvador, Guatemala, and Costa Rica were charter members along with Brazil of the G-20, but Washington's "natural leverage" soon spliced off the Central Americans. The DCC officials underscored that Brazil has not written off Central America as a potential partner in trade negotiations after the G-20 experience, but will likely focus on the formal multilateral (Mercosul-CAFTA) exchanges. Brazil will also continue to work with individual countries, as occurred with Honduras on coffee pricing issues, the MFA officials added. 

Next Steps ---------- 

¶6. (SBU) Atunes concurred with press reports that Panama is likely to be of the greatest interest to Brazilian investors and business in the foreseeable future. Brazilian/Panamanian trade reportedly increased 43 percent from 2002 to 2003 and Brazilian construction companies are anxious to participate in Canal maintenance contracts. Espirito Santo noted that Brazil has yet to actively engage the Central American countries on the GoB's bid for a permanent seat on the UNSC, but that Brazil's past peacekeeping-related activities in the region and planned PKO contribution in Haiti will be used as selling points. While Brazil's approach to foreign policy makes Costa Rica its most natural partner in multilateral fora, the DCC officials assessed that President Lula appears to be developing a good relationship with conservative Guatemalan President Oscar Berger. 

HRINAK