Summary Record of the Negotiations on Development Cooperation between the Government of the Federative Republic of Brazil and the Government of the Federal Republic of Germany held in Brasília on 21 to 23 November 2007



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Summary Record

of the Negotiations on Development Cooperation between the Government of the Federative Republic of Brazil and the Government of the Federal Republic of Germany held in Brasília on 21 to 23 November 2007

1.Introduction


Negotiations on development cooperation between the Government of the Federative Republic of Brazil and the Government of the Federal Republic of Germany were held in Brasília on 21-23 November 2007. The delegation of the Federative Republic of Brazil was headed by Ambassador Luiz Henrique Pereira da Fonseca, Director of the Brazilian Agency for Cooperation of the Ministry of External Relations. The delegation of the Federal Republic of Germany was headed by Dorothea Groth, Head of the South America Division in the Federal Ministry for Economic Cooperation and Development (BMZ).

On 22 November, a joint session was held in conjunction with the 26th Mixed Commission on cooperation in the area of scientific research and technological development. This session was opened by the State Secretary of the Federal Ministry of Education and Research, Professor Meyer-Krahmer.

Lists of the two delegations are attached as Annexes 1 and 2.

The Ambassador of the Federal Republic of Germany Prot von Kunow, Dorothea Groth (BMZ) and Ambassador Luiz Henrique Pereira da Fonseca opened the negotiations with statements.

The negotiations took place in an open atmosphere of constructive cooperation. Based on the results of the preparatory consultations held in Brasília on 29 June 2007, the delegations reached agreement on the allocation of the funds available. They discussed ongoing and future cooperation and other relevant issues.

The results of the negotiations are recorded below:


2.General context for development cooperation and policy dialogue

2.1.Opening statements


The opening statement of the Brazilian delegation is attached as Annex 3.

The opening statement of the German delegation is attached as Annex 4.


2.2.General context and prerequisites for development coop­eration


Both sides recognized the need for accelerated administrative procedures within the framework of development cooperation. Both sides expressed their shared commitment to conclude the pending agreements as swiftly as possible and to launch the multi-project exchanges of notes (Technical Cooperation) and the Financial Cooperation agreements required after the present negotiations.

In the working group on the acceleration of Financial Cooperation government agreements, which was set up at the 2006 government consultations, the Brazilian side has drawn up a preliminary proposal for a Financial Cooperation (FC) framework agreement, its purpose being to avoid the individual approval of each FC agreement. The German side welcomed the idea of combining an FC framework agreement with specifications for each loan or grant. Interministerial consultation about this idea has been launched in Germany. Both sides agreed to continue discussing the substantive aspects and the formal and procedural requirements to be fulfilled for specific activities.

Notwithstanding the desired general improvement of procedures through an FC framework agreement, both sides confirmed their intention to swiftly conclude and/or ratify the FC agreements that are currently pending.

The following FC government agreements or exchanges of notes are currently pending and being processed by the Brazilian side:



  • Renewable Energies Investment Program (Eletrobrás) (Installment I, €13.29 million)

  • Tropical Forest Sector Reform Program

  • Basic Sanitation Program Piauí II

  • Basic Sanitation Program Ceará II/III

On the German side, the following FC government agreements or exchanges of notes are currently pending:

  • Renewable Energies Investment Program (Eletrobrás) (Installment II, €23.94 million)

  • Renewable Energies Credit Program (BNDES)

  • 2003/2005/2006 multi-project agreement on the following projects: Sustainable Forest Management in the Amazon Region, Fund for Protected Areas (FAP/ARPA), Support for the International AIDS control Cooperation Programme, and Amazon Region Protected Areas Project (ARPA II).

From Germany's point of view, the Technical Cooperation (TC) umbrella subsidiary arrangement for 2003 can be concluded. The Brazilian side expressed its willingness to finalize the referred arrangement by upcoming January. Both sides agreed, that this is a model for the formulations of the 2005 and 2007 umbrella subsidiary arrangement. The timely conclusion of these arrangements should facilitate the continuation of TC support for the projects that had been agreed.

The exchange of notes relating to the GTZ/KfW office is currently being examined in light of the final proposals for amendments submitted by the Brazilian side and will be concluded as swiftly as possible as well, so as to give GTZ and KfW autonomous status in Brazil.

As the Double Taxation Agreement (DTA) was terminated on 31 December 2005, there has no longer been a basis for the avoidance of double taxation of CIM grants for Integrated Experts. The Brazilian side confirmed that no alternative arrangement for guaranteeing the avoidance of double taxation of CIM grants could be found unless a new agreement be reached. The German side regretted the fact that this meant that no new Integrated Experts could be sent to Brazilian organizations under this program. However, current Integrated Expert assignments are to be completed, and it is still possible to place new Experts at regional or international institutions if these institutions are able to guarantee that their employees will be exempted from taxation. Once a new DTA has been concluded, there will be talks about relaunching the program in Brazil.

2.3.Priority areas for cooperation


Since 2000, cooperation has focused on two priority areas: “Environmental protection and management of Natural Resources/Energy” and “Integrated Regional Development in Disadvantaged Regions”. Based on a portfolio analysis drawn up by the German Development Institute (GDI), a discussion process was launched at the 2006 consultations on how to adjust the cooperation program in view of Brazil's advanced status of development and its prominent global and regional role. Both sides agreed that future cooperation will focus on the fields of “Environmental protection and management of Natural Resources” and “Energy” (with focus on Renewable Energy and Energy Efficiency). In addition, it is envisaged to continue to engage in trilateral cooperation and to increase cooperation in the area of science and technology. The program in Northeastern Brazil will be completed with a final TC phase.

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