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Cablegate: A/S Shannon Engages with Goa Officials at U.S.-Argentine

VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #1051/01 2131222
ZNR UUUUU ZZH
R 311222Z JUL 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1651
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1828
RUEHBO/AMEMBASSY BOGOTA 1782

UNCLAS BUENOS AIRES 001051

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PREL ECON ETRD PTER BO CO PY MX IR UY AR
SUBJECT: A/S SHANNON ENGAGES WITH GOA OFFICIALS AT U.S.-ARGENTINE
BILATERAL CONSULTATIONS

REF: (A) BUENOS AIRES 0984 (B) BUENOS AIRES 0976 (C) BUENOS AIRE
0975 (D) BUENOS AIRES 0974

1. (SBU) Summary: In connection with the July 10-11 bilateral
consultations with the GOA, A/S Shannon used a lunch, dinner and an
unscheduled meeting with FM Taiana to raise regional and global
issues with GOA officials. At lunch, the GOA expressed frustration
with the Doha Development Round but great satisfaction at the
progress made in the U.S.-Argentina bilateral relationship. In the
office call on FM Taiana, A/S Shannon reviewed just-concluded
consultations and the agreements signed on cooperation in
alternative energy, nanotechnology, national parks and cultural
exchanges. Shannon addressed GOA concerns about the re-launching of
the U.S. Fourth Fleet, noting it had no offensive capability nor
intent. Shannon and Taiana discussed the situation in Bolivia, and
Shannon raised concerns about lack of cooperation on alternative
development efforts in Bolivia. At dinner, Taiana was upbeat on
relations with Paraguay, Mexico and Uruguay. He was sharply
critical of Iran. Shannon and USOAS Ambassador urged GOA support
for a positive 2009 Summit of the Americas in Trinidad. End
summary.

----------------------------
Lunch hosted by DFM Taccetti
----------------------------

2. (U) Following the first round of plenary bilateral discussions
July 10, Deputy Foreign Minister Vittorio Taccetti hosted a lunch
for Assistant Secretary Shannon, Treasury Deputy Assistant Secretary
O'Neill and Ambassador Wayne. Also attending were Argentine
Ambassador to the U.S. Hector Timerman, U/S for Multilateral Affairs
Raul Ricardes, U/S for Bilateral Affairs Vicente Espeche-Gil, Chief
of Staff Alberto D'Alotto, North America Director Antonio Trombetta,
and Foreign Ministry Director of International Economic Negotiations
Nestor Stancanelli.

3. (SBU) GoA Frustration at WTO DDR Stalemate (ref Buenos Aires
0962): Ambassador Stancanelli repeated standard GoA DDR points:
Developed countries are asking far too much of developing countries
in relaxing industrial tariff protection and offering far too little
in compensating reductions in distortive agricultural subsidies. A
number of DDR "personalities" including Brazilian FM Celso Amorim
and EU Trade Commissioner Peter Mandelson are playing outsized roles
in debate and negotiation and significant changes in both tone and
developed nation offers on the table will be needed to re-energize
the process. As things stand now, Stancanelli concluded, "we are in
a Catch-22 situation that serves none of our common interests in
successfully concluding this round. DFM Taccetti added that "the
GoA has no plan B," and its valid concerns must be addressed.

4. (SBU) A Toast to Moving Forward Bilaterally: In his closing
toast, Vice Minister Taccetti spoke of "moving beyond errors of the
past" (a clear allusion to bilateral frictions generated by the
December 2007 Antonini-Wilson scandal) and Argentina's intention to
"move forward" in its bilateral relations with the U.S. A/S Shannon
called the two days of bilateral consultations a vehicle for
deepening bilateral ties and a means to ensure that Argentina's
interests are fully and clearly presented to the incoming USG
administration. He called Argentina and the U.S. "on the cutting
edge of diplomatic engagement" given our shared values and common
perspectives.

------------------------------------
Meeting with Foreign Minister Taiana
------------------------------------

5. (SBU) Europe: Following the lunch, Assistant Secretary Shannon,
Treasury DAS O'Neill and Ambassador met with Foreign Minster Taiana,
who had just returned from Spain. Taiana noted that European
leaders were preoccupied with recession fears, with Spanish
President Rodriguez Zapatero using the "crisis" word to describe an
economy beset with slow growth stalled construction and labor
strife. Low Eurozone growth favors Argentina in the near term,
Taiana said, with European investors bound to look for new
opportunities in third countries like Argentina whose natural
resource base and continued strong economic growth offer them
opportunities not available closer to home.

6. (SBU) Consultation Process: A/S Shannon reviewed the gist of
bilateral consultations, noting the signing of agreements and
declarations on cooperation in alternative energy, nanotechnology,
national parks and cultural exchanges. A second round of bilateral

discussions planned for the coming fall in Washington are to be
preceded by working group meetings and a third round of bilateral
discussions in the spring of 2009 will offer the GoA an opportunity
to build relations with the incoming USG administration. Shannon
also noted his earlier discussions with CFK on the U.S. Fourth Fleet
and concerns about current developments in Bolivia (reftel).
Shannon clarified that standing up the Southern Command's Fourth
Fleet was largely an administrative exercise with neither offensive
capability nor intent, and that the USG continues to respect the
principle of territorial integrity.

7. (SBU) Bolivia: On current developments in Bolivia, Shannon
reviewed U.S. concerns including the recent poorly controlled
demonstration in front of the U.S. Embassy in La Paz, harassment of
USAID projects and officials, and GoB accusations that the Peace
Corps is in fact a USG intelligence agency. Shannon said he plans
to visit La Paz July 21 with INL A/S David Johnson to try to improve
dialogue with President Morales and his government. The GoB's
designation of USAID as an "agency non grata" is hurting U.S.
alternative development efforts that are closely linked to our drug
interdiction efforts. President Morales' priority is not improving
bilateral relations with the U.S., Shannon concluded, but rather
maintaining domestic political control following his political
rejection by five of nine Bolivian provinces.

8. (SBU) Bolivia EOM: Taiana noted that Argentina would be offering
financial support for an OAS observer mission to the August 10
recall referendum that could helplower temperatures. Shannon noted
that he had spoken with OAS Secretary General Insulza and with OAS
Under Secretary for Political Affairs (and Argentine former foreign
minister) Dante Caputo on OAS plans for this observer mission. "We
saw in Venezuela the kinds of problems that arise when observers are
not perceived as neutral," he said. Taiana noted that former
Bolivian President (2003-05) and current journalist Carlos Mesa, who
is annoyed with Morales, has maintained a good relationship with
ex-president Nestor Kirchner. Its worth reviewing his recent
writings on Bolivia, Taiana suggested.

Dinner with Taiana
------------------

9. (U) Taiana hosted A/S Shannon, Ambassador Wayne, U.S. Permrep to
the OAS Ambassador Hector Morales, DCM Tom Kelly and Polcouns Alex
Featherstone for dinner July 11. Taiana was joined by DFM Taccetti,
Ambassador Timerman, Chief of Staff Alberto D'Alotto and U/S for
Latin America Agustin Colombo.

10. (SBU) Paraguay: Taiana said he believed President-elect Lugo
was seeking out potential allies in the Colorado Party, which struck
him as a good idea boding well for governability, since the
Colorados had been in power for the last 60 years and knew the ins
and outs of public administration. Taiana said he had heard that
Lugo would pick Alejandro Hamed, currently Paraguayan Ambassador to
Lebanon, to be his Foreign Minister. Taiana indicated he thought
the Paraguayan Senate should accept President Duarte's resignation
and allow him to take a seat as senator. In a tone of weary
exasperation, Taiana also anticipated the new Lugo administration
would resume requests to renegotiate Paraguay's share of revenues
from Yacyreta dam. He noted that Paraguayan soy had been key during
Argentina's ongoing agricultural crisis in keeping Argentine soy
mills and shippers busy, so much so that Argentina's soy export
numbers had not fallen despite the virtual lockout by Argentine soy
producers.

11. (SBU) Energy: Shannon noted media coverage of that day's
opening of the Petrocaribe summit in Guatemala. Shannon pointed out
the growing need for Latin America to develop its production
capacity, particularly in the energy sector. Ambassador Wayne
described the impact of rapidly rising energy prices and food prices
on poor countries, including those of Central America, and related
anxieties about using foodstuffs for biofuels. He noted President
Bush's request for an additional $1 billion in food aid for lower
income countries. Ambassador Morales recalled from his experience
at the IDB that the bank was seeking to help countries explore
alternatives to oil consumption to help sustain economic growth.

12. (SBU) Mexico: Taiana claimed the GOA enjoyed excellent
relations with Mexico and was preparing for a visit in November by
Mexican President Calderon. President CFK had a great, warm rapport
with Calderon. The GOA had pressed mercosur to invite the GOM to
Mercosur meetings. He said Argentina had mounted a special exhibit
pavilion at the prestigious Sinaloa Fair. Taiana confessed a

personal motive for building stronger relations with Mexico. He
said two of his grandchildren lived in Tulum south of Cancun (and
his only other grandchild lives in Brazil).

13. (SBU) Iran: Taiana said he was deeply worried by Iran, which
appeared to put it on a collision course with the international
community. Shannon agreed that Iran's nuclear ambitions and its
support for terrorism made it deeply troubling, particularly as it
was sitting astride a political fault line in a deeply troubled
region. Taiana repeated several times that the Iranian regime had
done nothing to help clear up the 1994 bombing that killed 85
Argentines at the AMIA Jewish community center. The Iranian
government insisted it was not involved yet its refusal to cooperate
with the AMIA investigation in any way was highly suspicious, said
Taiana. Ambassador Timerman noted the U.S. House of Representatives
was expected to pass a resolution July 17 expressing congressional
support for the investigation.

14. (SBU) Uruguay: Ambassador Wayne noted that Argentina's
relations with Uruguay seemed to have improved. Taiana agreed,
indicating that the agreed strategy over the Botnia dispute was to
wait for the International Court of Justice to issue a finding, but
noted that Argentine protesters were still blocking the bridge to
Uruguay at Gualeyguachu. He pointed out that the original
explanation for blocking the bridge 20 months earlier had been to
obstruct any truckloads or construction machinery going from
Argentina to help in the construction of the Botnia paper mill in
Uruguay. Construction was completed, but the protesters continued
to block the bridge with the pretext of hurting Uruguay's tourism --
but Uruguay's tourism grew 25%. Then the protesters said they would
remain on the bridge to garner international attention to their
cause, but, Taiana noted, the international community was siding
with Uruguay. Timerman pointed out that Alfredo De Angeli, a highly
popular leader of the farmer strike, got his start as a leader of
the anti-Botnia protesters in Gualeyguachu. Timerman wryly
lamented, "We created De Angeli and his Maoist uprising!"

15. (SBU) Summit of the Americas: Shannon noted that the next
Summit of the Americas in April 2009, would be early in the next
administration. Taiana agreed it was important that the Summit turn
out well for the new president and said it was a "shared
responsibility" for Latin American leaders to ensure that the U.S.
could engage productively with the region. "Let's see how we can
contribute," he said. Taiana thought it was interesting that
Trinidad & Tobago would be the host for the Summit, because of its
leadership role in the Caribbean and its role as energy producer.
(As an aside, he mentioned that all of the liquified natural gas
being shipped to Bahia Blanca for re-gasification was Trinidadian.)
Ambassador Morales gave a briefing on U.S. ideas for the Summit
agenda.

16. (SBU) Colombia: Shannon praised Uribe's successful July 2
rescue of 15 FARC hostages and noted the deteriorating situation of
the FARC due to the series of setbacks since the March 1 killing of
Raul Reyes. He said the GOC would dispense with international
facilitation and pursue direct talks with the FARC. Qana asked if
anyone else had heard a rumor that the father of Clara Rojas's son
Emmanuel was FARC Secretariat member "Timochenko." (No one else
had.) Taiana welcomed the previous day's announcement that Uribe
had asked Colombian Ambassador to Argentina Jaime Bermudez to serve
as his foreign minister. Taiana described Bermudez as "very capable
and very close to Uribe," and said he had ably defended Colombia's
position during its recent dispute with Ecuador. Ambassador Colombo
noted that Colombia had been playing a very positive role in Bolivia
as a member of the Group of Friends, and that Camilo Reyes in
particular had been very supportive. Shannon reiterated his earlier
plea for Argentina to continue working closely with Brazil and
Colombia in that effort.

17. (U) WHA A/S Shannon cleared this cable.

WAYNE

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