Brazil-U.S. arms talks break new ground?

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BRASILIA, Brazil, April 24 (UPI) -- Brazilian-U.S. talks on sharing defense technologies may prove central to the Obama administration's plans to reopen Latin America and the Caribbean region to exports by advanced aviation and defense manufacturers in search of new markets, industry analysts said.

Brazilian Defense Minister Celso Amorim scheduled talks with visiting U.S. Defense Secretary Leon Panetta on a possible review by Washington of restrictive terms governing aviation and defense sales, specifically advanced technology transfers as part of future sales.

The talks followed Brazilian President Dilma Rousseff's meetings in Washington with U.S. President Barack Obama.

Amorim and Panetta talked in the framework of a new Defense Cooperation Dialogue agreed to between Obama and Rousseff in Washington.

The U.S. administration is pushing for a less complicated approach in response to defense procurement requests from U.S. allies and friends, as well as countries that have a track record of even-handed relationship with Washington.

Obama's strategy is to use defense-orientated diplomacy to rebuild previously close relations with Latin America that were neglected during previous administrations' preoccupation with the Middle East, analysts said.

While the U.S. role in the Middle East continues, defense cutbacks after the end of U.S. operations in Iraq have prompted defense industries to look elsewhere for new markets.

So far, complicated procedures in Congress have discouraged defense industries from competing in countries that are likely to be on one government list or other as potentially controversial recipients of U.S. defense supplies.

There are at least three lists of defense recipients in existence, two at the Departments of Commerce and State and a third at the Pentagon. Analysts said sub-lists might also exist and complicate the administration's efforts to push for sales promotion campaigns in support of hard-pressed defense industries.

A timely boost in U.S. aviation and defense sales would save jobs and create new employment opportunities, analysts said. Panetta has already talked on similar deals in Colombia and will pursue new opportunities for closer defense collaboration with Chile.

Brazil is in the last stages of a high-profile government decision on the purchase of up to 36 multi-role combat aircraft. Boeing is in competition with France's Dassault Aviation and Sweden's Saab for the multibillion-dollar tender.

Boeing's F/A-18 Super Hornet is up against the French Rafale fighter Saab's Gripen-NG, but the talks have snagged on costs and the extent of technology transfers on offer. In the initial stages of the fighter upgrade program Brazil favored Rafale but later on postponed a decision for a closer scrutiny of competing offers.

In the meantime, Boeing has created several partnerships with Brazilian defense and technology firms in apparent preparation for the final stage of the FX-2 competition. Brazil so far has interpreted technology transfer to mean the winning party agrees to joint assembly or manufacture of the aircraft in the country.