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Cablegate: Argentina: Highlights of July 1-2 Mercosur Summit

VZCZCXYZ0000
PP RUEHWEB

DE RUEHBU #0931/01 1852129
ZNR UUUUU ZZH
P 032129Z JUL 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC PRIORITY 1487
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHBS/USEU BRUSSELS

UNCLAS BUENOS AIRES 000931

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV ECON PHUM AR
SUBJECT: ARGENTINA: HIGHLIGHTS OF JULY 1-2 MERCOSUR SUMMIT

REF: BUENOS AIRES 0894

1. (SBU) Summary and Introduction: Mercosur and associated member
country presidents meeting at the July 1-2 Mercosur summit in
Tucuman, Argentina, strongly condemned the EU's toughened
immigration policies and declared their intention to fight their
enforcement. President Cristina Fernandez de Kirchner (CFK)
defended her export tax policy on soybeans and blamed the increase
in commodity prices on financial speculators. As a group, the
Mercosur leaders expressed concerns over "speculation," with some
urging the formation of a common policy in the face of rising food
prices globally. Finally, the presidents spoke of the "strategic
need" for broader integration within the bloc. Hugo Chavez was,
ultimately, a no-show at a rally organized on the margins of the
summit by pro-GOA leftist organizations, reportedly at the behest of
CFK concern over the likelihood that comments from Chavez and local
firebrands such as Hebe de Bonafini and Luis D'Elia would not
facilitate the delicate, ongoing debate in the legislature over the
agricultural export tax issue. End Summary.

EU Immigration Policy Unites Mercosur
-------------------------------------

2. (SBU) The European Union's toughened immigration policies served
to unite the Mercosur and associate member presidents at the
regional organization's 35th summit in San Miguel de Tucuman,
Argentina on June 30 and July 1. They were unanimous in their
vigorous denunciation, even altering the language in the final
summit declaration from "deep concern" to "reject." Host and
Mercosur president pro tempore Cristina Fernandez de Kirchner (CFK)
called the EU's Return Policy "unacceptable" and said it "sends [the
world] back to other xenophobic times." Evo Morales stated the EU
policy damaged the dignity of human beings and wondered "where is
the European soul?" President Lula said it was hateful persecution
and that "there is a cold wind of xenophobia blowing again with
false responses to economic and social challenges." President
Bachelet noted that "we (Latin America) were very generous with the
Europeans who came in the last century. It is not fair that our
people receive such denigrating treatment." President Lula, who
assumed the Mercosur presidency pro tempore at the summit, promised
to press the EU not to apply the stricter new measures scheduled to
be implemented in 2010.

3. (U) Mercosur leaders announced their intention to allow their
citizens to cross their borders with just national identity
documents, no longer requiring passports for South American travel.
The press noted that, although there was no implementation date,
this was the summit announcement that had the greatest practical
impact for Argentine citizens, who are able to travel to neighboring
countries with identification cards but would now be able to arrive
in non-bordering countries such as Ecuador or Peru as well.
(Comment: So far as we can tell there was little discussion of the
potential public security effects of this decision or of a timeline
for implementation.)

Financial Speculators Responsible for Rising Food Prices
-------------------------------------------

4. (SBU) CFK used the occasion of her opening remarks to mount a
strong defense of the GOA's increased taxes on soy exports (reftel
and previous reporting). Only president Chavez specifically
supported CFK's policy, relating the farm sector demonstrations with
the coup attempt against him. President Tabare Vazquez was
implicitly critical, however, of GOA actions, calling for a common
policy in the face of mounting food prices. President Lula also
implied disagreement with GOA policy, noting the historically large
swings in commodity prices, "for which we have to take advantage of
the moments of equilibrium."

5. (U) CFK, in her remarks, linked rising global food prices to
speculation in the commodities markets. She noted that when banks
"started taking on water" (referring to the U.S. mortgage crisis),
financiers shifted their focus to agricultural commodity markets,
and speculation accelerated. Other leaders expressed their shared
concerns about the effects of speculation in the commodities
markets. Lula said his government was forming a team to analyze the
behavior of the futures markets. Tabare Vazquez said regional
integration processes were fundamental to counter current price
trends. Chavez proposed the creation of a high-level working group
to analyze the question of food security. He also said that, as
long as the price of oil remained above $100 a barrel, he would
contribute a dollar of every barrel to an emergency fund for food
security in Mercosur, calculating this could raise $920 million a
year.

Regional Integration
--------------------

6. (U) CFK linked the region's historically strong levels of growth
in recent years with the new generation of democratic leaders, who,
she said, focus more on social demands. She stressed that had
always been a "challenge/goal" in the past, but that it "was now a
strategic need" both for the growth of the countries and for the
defense of the region's natural resources.

7. (SBU) In other remarks, CFK stated her support for Bolivia's
request to have Mercosur observers during the country's upcoming
recall referendum. And, in her focus on the past, she praised the
Chilean "School of Journalists" for having apologized for some of
its members' covering-up of facts during the Chilean dictatorship
and for expelling those involved in the cover-up.

The Hugo Chavez Show
--------------------

8. (SBU) The Hugo Chavez show was relatively restrained compared to
previous visits to Argentina, probably at the behest of local
authorities. He was openly supportive of CFK's controversial soy
export tax policy and, in public remarks, compared the farm protests
against the GOA to the attempted coup against his government in
2002. "Recently, I watched on television the expressions against
the Argentine government, and it appeared very much like what
happened in Venezuela in 2001: an oligarchy that does not want
change and refuses to recognize the legitimacy of the government and
the laws provided in order to benefit everyone." Chavez did note,
however, that it was an internal problem and he had "no intention"
of interfering.

9. (SBU) Chavez also strongly echoed the regional integration
message, insisting that "until we break the mechanisms of foreign
dependence and internal exclusion in each country we will not be
truly independent."

10. (SBU) Of the Mercosur leaders, Chavez was one of the most
emphatic in condemning the EU's new immigration policies. "We too
will apply the law of return; the investments should go. They
[Europeans] have banks in Venezuela, petroleum investments, gas
investments. We would have to apply a law of return. Take all of
your capital, too."

11. (SBU) Chavez used his opening remarks at the summit to take a
jab at the USG. He criticized the U.S. Navy's reactivation of the
Fourth Fleet, identifying it as a "threat" to Latin America. Chavez
characterized it as a U.S. attempt to gain access to the region's
natural resources and control strategic Latin American waterways
such as the Amazon, Parana, and Orinoco Rivers. Evo Morales joined
Chavez in his disapproval of U.S. military presence in the region,
affirming his intention not to allow a U.S. military base in his
country.

12. (SBU) A public rally (at which Chavez was billed as the featured
speaker), organized by pro-GOA leftist groups and scheduled to take
place July 1 in Tucuman's main soccer stadium on the margins of the
official summit, was ultimately cancelled. The official reason
reported in the press was that Chavez's people backed out because of
concerns over security arrangements. The alternate explanation,
also reported in the press, was that Chavez backed out at the behest
of CFK, who was concerned over the likelihood that exhortations from
Chavez and the likes of such local firebrands such as Hebe de
Bonafini and Luis D'Elia would not facilitate the delicate, ongoing
debate in the legislature over the agricultural export tax issue.

Comment
-------

12. (SBU) The Mercosur summit was largely overshadowed in Argentine
media coverage by reporting on congressional efforts to resolve the
120-day old agricultural crisis. Mercosur diplomatic sources tell us
that the GOA, preoccupied with its domestic political situation, did
not even begin to communicate logistical details about the summit in
the remote provincial town of Tucuman until five calendar days
before it was to begin. Commentators noted that CFK took an
unusually small delegation with her to Tucuman, and that her husband
Nestor dropped off the manifest at the last minute. While in
Tucuman, CFK reportedly remained in close telephonic consultation
with her advisors back home regarding developments in congressional
negotiations. The summit proceeded largely as scripted (per
reftel), which for the GOA was a desirable outcome.

WAYNE

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