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 BRASILIA 003130 

SIPDIS 

DEPT FOR WHA/CCA AND WHA/BSC 

E.O. 12958: DECL: 11/29/2015 
TAGS: ETRD ETTC PREL BR CU
SUBJECT: SUSPENSION OF TITLE III OF THE LIBERTAD ACT - 
BRAZIL 

REF: A. STATE 207359 
¶B. BRASILIA 1522 
Classified By: Charge d'Affaires Patrick Linehan, reasons 1.4 (b) and ( d). 

¶1. (C) Brazil enjoys a close relationship with Cuba and the GoB has refused to criticize directly the Castro regime's human rights policies. In a rare public statement on Cuba in April 2005, President Lula implied criticism of Castro when he told the press that "Brazil can help build a democratic process in Cuba" and that "we have much to do for democracy in Cuba." The Lula Administration argues that engagement, rather than isolation, is more likely to change Cuba's behavior; it states it has been critical of the Castro regime's actions behind the scenes. The GoB, however, has a general aversion to meddling in the internal affairs of other countries and routinely opposes "single country" resolutions at the United Nations, including those aimed at Cuba. Brazilian media and NGOs are much less hesitant to criticize the Castro regime pointedly. 

¶2. (C) In the past, the Lula Administration has pushed unsuccessfully to allow Cuba entry into the Rio Group. Lula's Workers' Party (PT), some key members of which sought refuge in Cuba from persecution during Brazil's military dictatorship, allegedly received from the Cuban government a campaign contribution (ranging from US$1.4 to US$3 million) during the 2002 presidential elections. Beyond allegations made in the media by various self-described witnesses to the transaction, thus far no concrete evidence of such payment has emerged. 

¶3. (SBU) On the economic front, the GoB has welcomed contacts between Cuba and the Mercosul common market, of which Brazil is the largest member. Brazil supports Mercosul's plans to conclude a trade pact with Cuba, although it appears the island's relationship with Mercosul would fall short of full membership. Bilateral Brazilian trade with Cuba grew to US$177.2 million in 2004, over $91.8 million in 2003. Brazilian exports of US$131.9 million in 2004 to Cuba consisted primarily of chicken, shoes, agricultural machinery and buses. 2004 imports from Cuba of US$22.3 million were dominated by medicines and vaccines. Over the period 2001-2003, Brazil's National Development Bank (BNDES) provided US$52.3 million in export credits to finance the export of automobiles and buses to Cuba. Local accounts suggest that potential BNDES export credits for Cuba are under-utilized. 

¶4. (SBU) There has been a trickle of Brazilian investment to Cuba. According to Central Bank data, Brazilian companies held investments valued at US$19 million in Cuba in 2004. Petrobras holds rights to an offshore oil exploration block, the potential of which it is evaluating. Petrobras formed in 2004 a lubricants joint venture in Cuba with Venezuela's PDVSA and a local partner. (Note: local media accounts suggest that differences over ownership and controlling interests have delayed this investment, as Cuban law reportedly limits foreign ownership to 49% of joint ventures.) 

LINEHAN