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C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 001094 

SIPDIS 

STATE FOR T, WHA AND PM. OSD FOR USD AT&L 

E.O. 12958: DECL: 08/15/2019 
TAGS: PREL MASS BR
SUBJECT: BRAZIL FIGHTER COMPETITION: UNDER SECRETARIES, 
VISIT BUILDS MOMENTUM FOR BOEING 

REF: A. BRASILIA 795 
¶B. BRASILIA 659 
¶C. BRASILIA 34 

Classified By: Charge d'Affaires Lisa Kubiske. Reason: 1.4(d) 

¶1. (C) SUMMARY. At the same time that National Security 
Advisor Jones highlighted the importance of U.S.-Brazil 
partnership (reported septel), Under Secretary of State for 
International Security and Arms Control Ellen Tauscher and 
Under Secretary of Defense for Acquisition, Technology and 
Logistics Ashton Carter held extensive meetings August 4-6 
with Brazilian leadership, including the ministers of Defense 
and External Relations, the President's Foreign Policy 
Advisor, and the Air Force commander, in support of the U.S. 
bid to provide Brazil,s next generation fighter aircraft. 
U/S Tauscher provided a letter from Secretary Clinton to her 
Brazilian counterparts assuring them of State Department 
support. As noted in ref a and other cables, Brazil has long 
been concerned about U.S. willingness to transfer technology. 
The visit of the two USG officials responsible for technology 
release came at an opportune time as the GOB prepares for a 
final decision. As a result, Brazilian Air Force Chief Saito 
announced that the decision would be delayed into 
mid-September, a key date as French President Sarkozy plans 
to visit Brazil September 7, when conventional wisdom 
expected a decision in favor of the French aircraft as a 
deliverable. While the Under Secretaries, visit has 
increased momentum in favor of the Boeing Super Hornet, there 
is still considerable political support for the French, and a 
major lobbying effort associated with the Sarkozy visit is 
expected. Getting the F18 across the finish line will 
require continued USG efforts. Post recommends additional 
high level approaches to key Brazilian decision makers -- 
including President Lula -- and preparing a public affairs 
strategy to counter possible misinformation as the decision 
approaches. END SUMMARY. 

¶2. (C) According to Brazilian contacts, the July 9 
discussion between Presidents Obama and Lula on Brazil,s 
fighter purchase energized the U.S. bid. While Brazil had 
previously been skeptical about U.S. support for transfer of 
technology, the President,s assurance opened the door for 
the USG to make its case. While NSA Jones provided much of 
the big picture vision of a U.S.-Brazil partnership, Under 
Secretaries Tauscher and Carter took on the task of making 
the case for Boeing,s bid. U/S Tauscher,s role was vital 
as it was the first time that Brazilian officials who will be 
making the decision of which plane to buy heard from a senior 
State Department official that the USG had approved the 
necessary transfer of technology (see ref b for discussion of 
Brazil doubts about State). 

¶3. (C) In their meetings with Brazilian leaders, Tauscher 
and Carter,s message was consistent: the U.S. is interested 
in a partnership with Brazil. The fighter sale is only one 
aspect of this, although greater interoperability resulting 
from the use of U.S. fighters will advance cooperation. 
Tauscher made the point that the United States prizes its 
relationship with Brazil, as evidenced by the unprecedented 
nature of some of the decisions in relation to the Super 
Hornet, in particular the authorization to integrate 
Brazilian manufactured weapons. As the official ultimately 
responsible for export controls, Tauscher said that future 
decisions regarding Brazil would receive careful 
consideration in terms of how to help a friendly government. 
Regarding the U.S. decision to deny retransfer of USML 
controlled parts of Brazilian Super Tucano aircraft to 
Venezuela, she pointed out that the decision had been made by 
the previous administration to deny aircraft to Venezuela, 
but without consideration of its effect on Brazil. She 
stated that future decisions regarding Brazil would take 
Brazil,s interests more into account and would include 
consultations with the GOB as appropriate. Tauscher noted 
that national security and economic security are inseparable 
and a deal between Boeing and Brazil would not only improve 
Brazil,s security but would entail important economic 
benefits. The Super Hornet, she said, is the best multi-role 
fighter in the world and meets or exceeds Brazil,s 
requirements while providing a sound basis for the key 
U.S.-Brazil partnership. 

¶4. (C) USD/ATL Carter highlighted the growing closeness of 

BRASILIA 00001094 002 OF 003 


the U.S. and Brazilian defense industries. As industry 
becomes more interdependent, such partnerships bring added 
benefits to all sides. Noting that Brazil,s defense 
strategy (ref c) linked defense modernization to national 
development, Carter said that partnership with the U.S. would 
help Brazil achieve its strategic goals. Carter told the 
Brazilians that he had chaired the committee making key tech 
release decisions. Because Brazil was a friendly country, 
with a well-developed aviation sector and a good record of 
technology security, there was no reason not to approve 
transfers to Brazil. Boeing was offering a large workshare 
in the project that would create an opportunity for Brazil to 
participate in ongoing F18 development, sustaining jobs for 
Brazilian industry over the life cycle of the aircraft. 
Finally, Carter noted that tech transfers to Brazil would 
grow easier with time and experience. 

¶5. (C) Defense Minister Jobim said that the information 
provided by the Tauscher/Carter team was important and 
merited careful review while repeating his view (see ref a) 
that tech transfer would be the key for a Brazilian decision. 
Jobim told Tauscher privately that he believed Boeing should 
have &first refusal8 on the sale and that he viewed the 
U.S. as Brazil,s &main partner.8 He also cautioned that 
the final decision would be made by President Lula and that 
he did not know what Lula,s position would be, a point he 
underlined in an August 7 conversation with Ambassador Sobel. 

¶6. (C) Air Force Chief Saito called the high-level 
assurances on tech transfer &music to my ears.8 His 
objective in the competition is to position the Brazilian Air 
Force (and Brazil aviation industry) for a &technological 
leap.8 Saito praised President Obama,s efforts with 
President Lula to provide assurance of USG support. He also 
laid down a marker that Brazil expected that a significant 
amount of the work of integrating Brazilian weapons on the 
FX2 would be done in Brazil, a requirement that will create 
practical difficulties for any manufacturer. EMBASSY 
COMMENT: Saito is a former fighter pilot, and it is 
increasingly clear that he will favor the most capable 
aircraft -- the Super Hornet. END COMMENT. 

¶7. (C) During the meeting with Foreign Minister Celso 
Amorim, U/S Tauscher hand-delivered a letter from the 
Secretary assuring that State had approved all necessary 
technology transfer in furtherance of the propoased sale. In 
response to Amorim,s concern about the &ban8 on Brazilian 
re-sale of Super Tucanos, she assured him that there was no 
ban, that the previous administration had made a &gaffe8 in 
not considering Brazil,s interests when denying the sale to 
Venezuela, and that in the future such decisions would be 
made on a case-by-case basis with an eye toward its 
significance to our growing bilateral partnership. U/S 
Tauscher also met with Embraer President Frederico Currado 
and briefed him about the Secretary,s letter and the USG 
commitment to meeting all Brazilian tech transfer 
requirements. Currado was clear that he believed a 
partnership with Boeing was in Embraer,s interests and would 
carry significant long-term benefits for the company. 
Brazilian Senator Heraclito Fortes, a supporter of Boeing,s 
bid and the second in the Senate leadership, also believed 
that USG assurances of tech transfers would be important but 
refused to speculate on Boeing,s chances for the final 
decision, noting that there was little confidence in the 
United States among President Lula,s advisors. 

¶8. (SBU) U/S Tauscher,s visit received strongly positive 
coverage in the Brazilian media. A feature story in Estado 
Sao Paulo August 6 highlighted the importance of the 
U.S.-Brazil partnership and the Secretary,s assurances on 
tech transfer. These points were picked up by a number of 
other news outlets, although the coverage was somewhat 
eclipsed by reporting on the supposed U.S. bases in Columbia. 
There remains strong interest from the media in seeing the 
text of the Secretary,s letter. At the same time, we are 
seeing the beginnings of a counter attack from Boeing,s 
competitors in the press on two fronts: first that the Super 
Hornet, although highly capable, would be too expensive, and 
second that, because the F18 is currently operational, its 
technology is &frozen,8 not leaving Brazil an opportunity 
to participate in technological development. 


BRASILIA 00001094 003 OF 003 


COMMENT: 
-------- 
¶9. (C) The combination of the President,s intervention 
with Lula, the Secretary,s letter and the visit of Under 
Secretaries Tauscher and Carter has created a strong momentum 
in favor of the Super Hornet. As noted by MOD Jobim, 
however, the final decision will be political and will be 
made by President Lula, probably in September. With a 
Swedish lobbying team subsequently visiting and the early 
September Sarkozy visit on the horizon, further USG efforts 
will be needed for a successful conclusion. Post recommends 
continued high-level approaches to Saito, Jobim and Lula to 
underline the Tauscher/Carter message on the importance of 
our partnership and the mutual benefits of a fighter sale. 
This message could be reinforced from the White House as 
appropriate. We should also be prepared to see our 
commitment to tech transfer questioned. Folha de Sao Paulo 
has already printed an op-ed (probably inspired by the MRE) 
suggesting that despite the Secretary,s letter, the State 
Department may block technology transfer. On August 12, 
Valor Economico quoted the text of the Secretary,s letter 
and its categorical support for the transfer. Despite this 
helpful development, the USG will need to be able to respond 
to doubts as to the Secretary's sincerity. Post will also 
continue to brief Brazilian leaders as appropriate on the USG 
approval of technology transfer. Boeing leaders reinforced 
this message during their August 12-13 visit to Brasilia. 

¶10. (U) Under Secretaries Tauscher and Carter have cleared 
this message. 

KUBISKE