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Cablegate: Argentina Welcomes Ambassador Schulte's

VZCZCXYZ0000
PP RUEHWEB

DE RUEHBU #1449/01 2962011
ZNR UUUUU ZZH
P 222011Z OCT 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC PRIORITY 2295
INFO RUCNMER/MERCOSUR COLLECTIVE
RUCNNSG/NUCLEAR SUPPLIERS GROUP COLLECTIVE
RUEHDM/AMEMBASSY DAMASCUS 0028
RUEHTV/AMEMBASSY TEL AVIV 0091
RUCNDT/USMISSION USUN NEW YORK 0252

UNCLAS BUENOS AIRES 001449

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: AORC KNNP IAEA ENRG TRGY PREL AR
SUBJECT: ARGENTINA WELCOMES AMBASSADOR SCHULTE'S
CONSULTATIONS ON IRAN AND SYRIA; WILL WAIT FOR BRAZIL ON
ADDITIONAL PROTOCOL QUESTIONS

1. (SBU) Summary: Argentine Vice Foreign Minister Victorio
Taccetti welcomed Ambassador Schulte's October 16
consultations in Argentina, confirming Argentina's
predisposition to cooperate with the U.S. internationally and
at the IAEA. In the meeting with VFM Taccetti and at a lunch
hosted by the Director for Nuclear Issues Ambassador Elsa
Kelly, Schulte thanked the Government of Argentina (GOA) for
its support on Iran, for voting at the Nuclear Suppliers
Group (NSG) to facilitate the U.S.-India civilian nuclear
agreement, and for its responsible management of nuclear
technology. He described U.S. and IAEA concerns about
Syria's clandestine program, requested Argentine support for
inclusion of the NPT Additional Protocol (AP) as part of a
criteria-based approach to restricting the export of nuclear
technology, and described U.S. support for a nuclear fuel
bank arrangement to ease nuclear fuel supply concerns among
countries not possessing enrichment capabilities. Ambassador
Kelly was generally receptive to the U.S. views. She noted
Argentina's general readiness to conclude the NPT Additional
Protocol but repeated that the GOA would go forward on the
issue only with Brazil due to bilateral arrangements between
the countries. Although she raised concerns about use of a
country's AP status as a criterion for restricting its import
of nuclear technologies, she intimated that Argentina
probably would be able to support some NSG agreement
establishing criteria-based restrictions on the transfer of
these technologies. She noted upcoming consultations with
Brazil and thought that the two sides would discuss the NSG
initiative. Ambassador Kelly was supportive of the fuel bank
concept, following up with specific questions about different
international proposals and the costs. Both Kelly and VFM
Taccetti restated their concerns about the India civilian
nuclear arrangement, which they had supported only with
reservations and at ours and India's request; she thought the
deal would ultimately weaken the NPT. Ambassador Schulte
gave newspaper and television interviews during the visit.
He also led a positive and detailed discussion of
non-proliferation issues at an Argentine think tank. End
Summary.

2. (U) U.S. Ambassador to International Organizations in
Vienna Greg Schulte engaged a range of public officials and
non-government interlocutors during a one-day visit to Buenos
Aires October 16. He was received at the Foreign Ministry by
Vice Foreign Minister Victorio Taccetti and hosted at lunch
by Ambassador Elsa Kelly, the MFA Director for International
Security, Nuclear and Space Affairs (DIGAN). Ambassador
Wayne participated in the meeting with VFM Taccetti. DCM,
EST Counselor and Pol-Mil Officer joined the lunch given by
Ambassador Kelly; she included a number of MFA officials
along with officials from the Argentine Nuclear Regulatory
Authority and the National Commission on Atomic Energy
(CNEA); two officials had experience in international
inspections. Amb. Schulte gave interviews with leading daily
newspapers La Nacion (published) and Clarin (pending) as well
as a taped interview with a national network, America TV. He
concluded the visit with a roundtable discussion of
non-proliferation issues at the leading international affairs
think tank in Argentina, the Argentine Council on
International Relations (CARI).

Seeking Sustained Argentine Support on Iran, Syria and North
Korea
--------------------------------------------- ----------

3. (SBU) In the meeting with Taccetti and the working lunch,
Ambassador Schulte thanked Argentina for its consistent
support on issues including Iran. He noted the excellent
collegial support he had received first from Ambassador
Kelly, when posted to Vienna, and from her successor
Ambassador Curia. On Iran, Schulte described U.S. support
for the P5 plus one dual-track approach, with the offer of
negotiations, predicated on Iran's abandonment of enrichment,
coupled with ongoing sanctions. He conceded our frustration
that international efforts had not yet persuaded Iran to
change course but said that the increasing unanimity in the
international community against Iran's enrichment program had
generated evident debate in Iran about the costs of these
efforts. Iran's enrichment effort had become more effective,
with an estimate of 4000 centrifuges in operation and
increasing levels of enrichment. Our concern over Iran was
profound given the conclusive evidence of a weaponization
program (probably shelved in 2003, Schulte noted, but never
disavowed) and the major effort at enrichment. We estimated
that Iran would have sufficient quantities of enriched
Uranium to pursue weaponization between 2010 and 2015,


Schulte said. He described the Iranian justification of
processing for civilian nuclear fuel as patently bogus, given
that Iran's one power generating reactor at Bushehr would be
supplied by Russia.

4. (SBU) Schulte underscored the importance of a firm
international line on Iran, emphasizing that strong
statements from a country like Argentina were probably more
important than U.S. declarations on Iran. He noted that he
and his Russian colleague had worked closely to coordinate
substantively identical statements on Iran even after the
Georgia crisis so as to convince Iran that there was no
opening to exploit between Moscow and Washington. In
response to Taccetti's question about Russian and Chinese
motivations, Schulte explained his convictions that both were
sincere in wanting to avoid a nuclear armed Iran, with each
having real interests at stake in the Gulf that would be
compromised by a regional nuclear arms race and by other
dangers that would attend Iranian acquisition of nuclear
weapons capability.

5. (SBU) Ambassador Schulte provided detailed information to
Taccetti and at the working lunch on IAEA findings regarding
the destroyed nuclear facility in Syria. He praised the good
work of IAEA inspectors even without Syrian cooperation.
Syria, Schulte said, could now follow one of two paths: the
path of Libya in coming clean and working its way back into
the international system, or the course taken by Iran of
denial and obfuscation. It was a great concern that Syria
appeared to be leaning in the wrong direction. Syria too
needed to hear consistent messages from countries around the
world, and we counted on Argentina to sustain its principled
approach to such issues as Syria was brought before the IAEA.

6. (SBU) Schulte also briefly described the to-and-fro of
North Korean positions with the six-party talks, speculating
that, whatever the leadership situation there, the Government
appeared bent on extracting the maximum amount of concessions
possible with the deal. He described the goal of having
North Korea eventually reenter the NPT as a non-nuclear
weapons state and said we might call on Argentina for support
in this process.

Argentina and the Additional Protocol
-------------------------------------

7. (SBU) Schulte described the U.S. objectives at the late
November NSG meeting in developing effective, criteria-based
restrictions on the spread of nuclear enrichment technology
to states not currently possessing the capability (he noted
that Argentina and Brazil were recognized by the United
States as enrichment capable). We had initially pushed for a
complete prohibition on the export of this technology,
Schulte noted, but the U.S. had listened to objections and
developed an alternative. Among the criteria we hoped to
utilize was whether the intended recipient country had signed
the NPT Additional Protocol (AP). Ambassador Schulte was
careful to describe our efforts to recognize in doing so that
neither Brazil nor Argentina had signed the AP. While our
goal was that both countries would sign, in the interim we
were content to draft an export restriction regime that
required the recipient countries to have the AP but not
Argentina or Brazil, given their special status.

8. (SBU) Kelly, although ultimately quite pragmatic in her
approach to this issue, pushed back initially, arguing that
the IAEA and not the NSG was the appropriate mechanism
through which to add restrictions on the export of nuclear
technology. This was so particularly given the NPT's
affirmative statement regarding the diffusion of nuclear
technology for peaceful uses to developing countries in
Article 4, she argued. Moreover, many developing countries
would find the provisions of the AP quite onerous,
particularly those that were in the early stages of exploring
and developing nuclear power. The chief for Nuclear Affairs
and Institutional Communication at Argentina's Nuclear
Regulatory Authority, Elena Maceiras, asked whether some
developing countries might be asked to implement appropriate
elements rather than the full scope of the AP, or,
alternatively, utilize other safeguards. Raual Racana,
President of the Regulatory Authority, said that Argentina
itself would be hardpressed to implement in the AP even
though it had no political objections of its own the concept
(he noted in particular the challenges of locating archived
documents regarding the country's nuclear programs). Kelly
pushed further, saying that some suspected U.S. motives in


trying to restrict nuclear capable countries from engaging in
legitimate trade with developing nations interested in
nuclear power. She suggested that perhaps the criteria would
apply only to non-NSG members (Ambassador Schulte responded
that we envisioned the criteria based standards applying to
transfers to any countries other than the recognized current
technology holders). Kelly also noted that Argentina had no
political objection to signing the AP itself (though the
question had not been put to the President), but underscored
Argentina's position that its bilateral mechanism, the
Argentine-Brazilian Agency for Accounting and Control of
Nuclear Materials (ABACC), made it impossible for Argentina
to move forward without Brazil.

9. (SBU) Ambassador Schulte acknowledged Kelly's concerns and
pressed for a criteria-based regime to address our countries'
shared concerns about proliferation. He emphasized again our
readiness to work with Brazil and Argentina to reach an
agreement at the NSG that would acknowledge and not restrict
Argentina and Brazil as non-signatories of the AP. Told that
Brazil seemed to be taking a pragmatic approach toward
resolving this question, Kelly moved away from her strong
position, speculating that an upcoming consultative visit to
Argentina by Brazilian Counselor Santiago Mourao might
facilitate efforts by the two countries to identify a
suitable way forward to support the U.S. objectives, at least
in terms of some NSG criteria for technology transfers (the
AP being the harder piece for both). When Ambassador Schulte
later raised with VFM Taccetti the criteria-based export
control approach at the NSG, Kelly spoke positively about the
prospects for finding some mechanisms.

10. (SBU) Kelly added in the working lunch that she had
lobbied the Brazilians to sign the AP and did not understand
their objections. A member of her team speculated that it
might have something to do with the Brazilian military's
involvement in the program, or speculation that Brazil wanted
to hide the original source of its enrichment technology.

Fuel Banks
----------

11. (SBU) Schulte took the opportunity to describe USG
support for the concept of a nuclear fuel bank as a mechanism
to give assurances to countries seeking to utilize nuclear
power that the market would provide the necessary low
enriched uranium. He noted both Russian and IAEA proposals
as viable, with the objective of creating at least two
reactor loads available to countries in good standing with
the IAEA. He described ongoing efforts to raise funds for an
effort spearheaded by the private Nuclear Threat Initiative
(NTI) to finance an effort, noting the USG contribution of
USD 50 million to the effort (one-half of the required
total). If it worked, Schulte said, the fuel bank would
never have to be utilized, providing only an additional layer
of assurance to the market. Schulte also noted that Iran was
particularly vehement in objecting to this idea because it
undermined its case for developing its enrichment capability
- proving already its utility. Kelly was receptive to the
idea, noting that she had been briefed on the ideas
previously and found them compelling.

U.S.-India Civilian Nuclear Cooperation
---------------------------------------

12. (SBU) Vice Foreign Minister Taccetti received Ambassador
Schulte's presentations on Iran, Syria, and the NSG questions
with interest and support, intervening to underscore
Argentina's interest in cooperating with the United States on
these issues before complaining about U.S. and Indian
pressure to facilitate the U.S.-India Civilian Nuclear
agreement at the NSG. India, he said, had been much less
subtle, primarily emphasizing its imports from Argentina and
arguing that Argentina should give its support to an
important partner. Taccetti said that in accepting the NSG
proposal Argentina had recognized many practical and
political considerations, including India's status as a
partner to the U.S. in a dangerous region, its democracy, and
its rapidly growing energy needs. Schulte, who had opened by
thanking Taccetti for Argentina's support of the agreement,
acknowledged Taccetti's concern about the principles of NPT
adherence but shared his confidence that, in five to ten
years, we would look back on the agreement as a clear
positive. While we would have preferred to bring India in to
the NPT, Schulte said, that had clearly not been viable.
Instead, he said, the agreement had brought India as close as


possible to the safeguards and rules of the global
non-proliferation regime, a net positive for the principles
of non-proliferation.

Press and Public Outreach
--------------------------

13. (SBU) Ambassador Schulte conducted three press interviews
during his visit, with leading newspapers "La Nacion" and
"Clarin," and with broadly available television network
America TV. The "La Nacion" interview was published on
October 19 (translation to be faxed to USMISSION UNVIE).
Schulte effectively parried efforts in all three interviews
to paint the Iran issues as a conflict between Iran and the
United States, emphasizing Argentina's consistent support,
its agreement with U.S. concerns, and the unanimity
internationally that Iran stop enrichment activities. He
noted that only Venezuela and Syria had supported the Iranian
position. Pressed whether China and Russia had been
supportive, Schulte acknowledged that the two countries might
not have moved as quickly toward sanctions as we would have
liked but that both countries were firm on the issue and had
compelling and evident interests in preventing Iranian
development of a nuclear weapon. Schulte shared the
2010-2015 estimate of when Iran might have sufficient
enriched Uranium to deploy a weapon if it developed the
capacity.

14. (SBU) All three journalists asked about potential policy
change toward Iran under a new U.S. Administration.
Ambassador Schulte emphasized that he could only speak for
the policies of President Bush but shared that, based on his
careful observation of both leading candidates for the
Presidency, U.S. policy would remain at least as firm. Both
had addressed the importance of supporting the IAEA and of
insisting that Iran stop enrichment. Asked about the impact
of the global financial crisis, Schulte insisted it would
have no discernible effect on international unanimity on the
question of Iranian enrichment; he added that the
accompanying drop in the price of petroleum was magnifying
the effect of economic sanctions (and probably far outdoing
them), creating costs for Tehran that could severely limit
the Iranian governments effort to sustain support at home for
its policies.

15. (SBU) Ambassador Schulte concluded his Argentina program
with a useful roundtable discussion organized by the
Argentine Council on International Relations (CARI). The
event was attended by approximately 25 Argentines, many with
expertise in the non-proliferation area. Questions focused
on Iran and on the U.S.-India civilian nuclear deal. One
questioner asked a probing question about the future of the
IAEA given its purported resource needs and the challenges it
was facing as it moved away from its more purely technical
mandate of years past. Schulte agreed that the IAEA had
become more political, citing as an example the contentious
political debates sparked by the question of a Middle East
Nuclear Weapons Free Zone. The Ambassador's availability and
candor were clearly appreciated by the audience.

Comment: An Excellent Investment
--------------------------------

16. (SBU) The visit by Ambassador Schulte was highly useful
to our efforts to maintain and build Argentine support for
key non-proliferation objectives. His cordial and frank
explication of several key non-proliferation challenges and
the U.S. perspective will pay continuing dividends as an
investment with the GOA. Argentina is typically in a good
position on these issues, but some are difficult for
Argentina either on principle or in practice, and explaining
USG approaches in this fashion may be crucial to bringing
them around. Placing Ambassador Schulte in front of local
academics/diplomats and the press was also quite useful.
Most importantly, it both dispels some of the less charitable
views of U.S. policies on Iran, non-proliferation, and it
builds Argentine ownership as a partner in these efforts.


17. (U) Ambassador Schulte provided input to this cable but
did not review the text.
WAYNE

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