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Cablegate: Doha Update -- Argentina Will Hang Tough

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RUEHPA RUEHPB RUEHRN
DE RUEHBU #0962 1961920
ZNR UUUUU ZZH
R 141920Z JUL 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1525
INFO RUCNMER/MERCOSUR COLLECTIVE
RUCNWTO/WORLD TRADE ORGANIZATION COLLECTIVE
RUEHBO/AMEMBASSY BOGOTA 1781
RUEHCV/AMEMBASSY CARACAS 1824
RUEHPE/AMEMBASSY LIMA 2324
RUEHNE/AMEMBASSY NEW DELHI 0097
RUEHRG/AMCONSUL RECIFE 0171
RUEHRI/AMCONSUL RIO DE JANEIRO 2462
RUEHSO/AMCONSUL SAO PAULO 3730
RUEHGV/USMISSION GENEVA 0728
RUEAIIA/CIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL

UNCLAS BUENOS AIRES 000962

SIPDIS
SENSITIVE

PASS USTR FOR KATHERINE DUCKWORTH AND MARY SULLIVAN
TREASURY FOR LTRAN AND MMALLOY
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER

E.O. 12958: N/A
TAGS: ETRD EAGR ECON MARR PREL AR
SUBJECT: Doha update -- Argentina will hang tough

1. (SBU) Summary: Argentina is not ready to show much flexibility on
the WTO texts this week in meetings with Mercosur and at the
upcoming July 21-26 Geneva Ministerial, according to Argentina's
Foreign Minister and a senior Foreign Ministry trade official. End
Summary

------------------------------
Current NAMA Text Unacceptable
------------------------------

2. (SBU) During July 11 conversations on the margins of A/S
Shannon's visit to Buenos Aires (septels), Argentine MFA Director of
International Economic Negotiations, Nestor Stancanelli, told the
Ambassador and other members of the U.S. delegation that in his view
the only way to save the talks was to scrap the existing texts and
to go for a "50-50 cuts" plan. In this plan, agriculture and NAMA
would be cut by 50% across the board, with a couple of percent break
for developing countries. He argued that this plan would be easy to
explain as a step forward and could get all countries on board. He
also admitted that he did not see the U.S. and the EU accepting this
approach. Stancanelli said Argentina could not accept the currently
amended NAMA text and would so tell Brazil in Mercosur talks in the
next few days. He said Argentina would maintain the same position
in the subsequent Geneva Ministerial, and predicted that they would
not be alone.

3. (SBU) In open remarks during a lunch for A/S Shannon hosted by
Vice Foreign Minister Taccetti, 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 EU representative 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." Vice Minister Taccetti added
that "the GoA has no plan B" and Argentina's valid concerns must be
addressed.

--------------------------------------
Foreign Minister Offers No Flexibility
--------------------------------------

4. (SBU) When Ambassador tried to find more flexibility from Foreign
Minister Taiana during a diner Taiana hosted July 11 (septel),
Taiana said he knew that Brazil was being more forward leaning but
he was going to have to be the "bad guy" with Brazil and in Geneva.
Taiana said he had just a few hours earlier discussed the issue with
President Cristina Fernandez de Kirchner and she had confirmed his
instructions.

-------
Comment
-------

5. (SBU) With the government way down in the polls and still
battling the agricultural sector over export taxes, it is more
politically reliant than ever on the blue collar workers and unions.
It is thus even more wedded to its position of limited cuts in
industrial tariffs in order to protect domestic industry. END
COMMENT.

WAYNE

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