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S E C R E T SECTION 01 OF 02 BRASILIA 002293 

SIPDIS 

NOFORN 
SIPDIS 

E.O. 12958: DECL: 05/25/2016 
TAGS: PREL BR
SUBJECT: BRAZIL: MORE OBSERVATIONS ON FOREIGN POLICY IN 
LULA'S SECOND TERM 

REF: BRASILIA 2245 

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

¶1. (C) Introduction. Reftel discussed Mission,s views that, 
despite interesting media reports that President Lula da 
Silva,s foreign policy in a second term could shift toward 
closer ties with the U.S., we could not see yet concrete 
evidence of such a trend. We remain circumspect on this 
question. At the same time, candid and encouraging 
conversations with top GOB officials on the day after Lula,s 
strong victory at the polls left Ambassador and emboffs 
wondering about the possibility that some change may be 
brewing. We report what we heard below, with the caveat that 
we remain in a cautious "wait and see mode" for the time 
being. End introduction. 

¶2. (C) Ambassador and PolCouns visited the Planalto Palace on 
30 October, and found a Presidency in an open mood of 
jubilant celebration. A steady column of VIPs streamed 
through for audiences with re-elected President Lula. A 
relieved and buoyant Gilberto Carvalho, Chief of Lula,s 
Personal Staff, received Ambassador and poloff for a courtesy 
call, which turned into a compelling conversation about the 
direction of policy in Lula,s second term. Carvalho, who is 
perhaps Lula,s closest long-time advisor, made the following 
comments: 

--On foreign policy, Carvalho said that Lula,s first term 
had seen a broad opening of Brazil to new alliances and 
diplomatic arrangements worldwide. Now, with this base 
established, the second Lula government will re-focus 
priority on "quality relationships with traditional 
partners." Specifically, for Brazil to grow with new 
investment, the GOB will need to engage more intensively with 
the United States, Carvalho stressed. 

--Ambassador welcomed this observation, but said he remained 
concerned when he heard certain Brazilian officials speak of 
the need to "counterbalance" against the U.S., and opined 
that two democracies should be able to debate and work 
together directly, without such contrivances. Carvalho was 
emphatic in agreeing, said there will be no further 
discussion of counterbalances, and asked for the 
Ambassador,s understanding if rhetoric during the election 
campaign had occasionally seemed critical of the U.S. He 
again assured Ambassador that the second Lula government 
wants investment and growth, and sees relations with the U.S. 
as central to this. 

--At the conclusion of the meeting, Carvalho provided his 
private telephone numbers to Ambassador and PolCouns and 
encouraged them to contact him directly at any time if there 
was problematic development in relations between the two 
governments, of if they wished to present an issue directly 
to President Lula. Carvalho said he would welcome this 
direct channel with the Ambassador. 

¶3. (S/NF) In a separate meeting at Planalto with General 
Jorge Armando Felix, Lula,s Minister for Institutional 
Security, Ambassador, PolCouns and Regional Affairs Chief 
raised the subject of intensified U.S.-Brazil exchanges and 
cooperation in intelligence and security. Ambassador noted 
that President Lula, in a brief aside at the UNGA in New 
York, had encouraged continued engagement with General Felix, 
presumably on such issues. General Felix then announced that 
he had, subsequent to an earlier meeting with Ambassador, 
commissioned a formal paper outlining specific areas for 
consultation and collaboration at the policy level with the 
USG in the intelligence field. Ambassador and Felix agreed 

BRASILIA 00002293 002 OF 002 


that the GOB could also specify in the paper specific 
equipment or training they might require, and decided to plan 
together for a high-level bilateral intelligence meeting 
early in 2007 in Brasilia. 

¶4. (C) In an earlier conversation on the same day, 
Development and Industry Minister Luiz Furlan told Ambassador 
that Lula was pressing him to stay on in a second government, 
and Furlan appeared to be considering this option. Furlan, a 
moderate with a business background who has long pressed 
within Lula,s cabinet for closer cooperation with the United 
States, seemed to be of the view that Lula,s second term 
priorities would be shifting in the direction of closer 
engagement with the U.S. and other developed nations. 

¶5. (C) Comment. Our senior interlocutors were in high 
spirits yesterday, with a kind word for the world, including 
the U.S. But without major changes in the foreign 
ministry's senior staffing and orientation, we wonder about 
the viability of a tilt toward the U.S. and developing world, 
and away from the south-south priorities of the first Lula 
term. Nonetheless, it is intriguing that we have received 
such a steady stream of strong signals from senior Lula 
advisors on the day after his victory. Watch this space. 

Sobel