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C O N F I D E N T I A L BUENOS AIRES 000109 
 
CODEL 
SIPDIS 
 
E.O. 12958: DECL: 2035/02/24 
TAGS: OREP ECON ELAB PGOV PREL AR
SUBJECT: Argentina: Codel Engel Addresses Bilateral Relations 
 
CLASSIFIED BY: Alex Featherstone, Political Counselor; REASON: 
1.4(B), (D) 
 
¶1.  (SBU) Summary: Codel Engel enjoyed a very productive visit to 
Buenos Aires, January 5-7.  The Codel was led by Eliot Engel (D-NY) 
and included Shelly Berkley (D-NV), Pedro Pierluisi (D-PR) and Lynn 
Woolsey (D-CA).  President Cristina Fernandez de Kirchner (CFK) met 
with the Codel for two hours and shared her views on bilateral and 
hemispheric relations, the Middle East, and Iran among other 
matters.  Foreign Minister Jorge Taiana stressed the GoA's desire 
to work with the USG on a broad range of global and regional 
issues.  Buenos Aires Mayor and Presidential contender Mauricio 
Macri offered the Codel his views on the Argentine economy, 
strengthening bilateral ties and the rule of law.  The Codel paid a 
historic visit to the headquarters of Argentina's powerful trade 
union confederation, the CGT.  End Summary 
 
Meeting with President CFK 
---------------------------------- 
 
¶2.  (C) Chairman Engel opened the meeting saying he was here to see 
his good friend, the President, and to continue strengthening the 
bilateral relationship, adding that, upon his return to Washington, 
he will urge that Secretary Clinton and President Obama meet with 
CFK.   CFK thanked Engel and agreed that such meetings would do 
much to strengthen U.S.-Argentine relations.  She noted that 
Argentina and she personally had looked forward to an Obama 
Presidency that, for the moment, has not met expectations, citing 
differences between Argentina and the U.S. over Honduras, U.S. 
military presence in Colombia, and the Israeli-Arab conflict 
(noting her recent meetings with Israeli President Peres and 
Palestinian President Abbas).  CFK said that, despite policy 
differences with former President Bush, her husband and then 
President Nestor Kirchner had met with Bush a month after 
Kirchner's election and that she and her husband had enjoyed an 
excellent relationship with former WHA A/S Shannon.  In contrast, 
she said that Obama has met with many other South American leaders 
but not her and that the new WHA A/S Valenzuela expressed criticism 
toward the government during his first visit to Argentina last 
month.  ""I can't ignore this,"" she added. 
 
 
 
¶3.  (C) Engel responded that he mentioned his support for a POTUS 
meeting because it is important for the bilateral relationship and 
the need to put everything out on the table for review.  As 
Americans and Democrats he and the other members here also have 
high hopes for the Obama Presidency.  At the moment, the health 
care legislation has been dominating the national agenda, delaying 
greater focus on employment creation, climate change, and foreign 
policy priorities.  Engel added that President Obama will be in ""a 
good place soon"" to refocus.  He said that he had spoken to 
Valenzuela before coming to Argentina regarding the flap over his 
comments, and it is clear that the comments were taken out of 
context by press reports. Engel added that Valenzuela shares our 
goal of good relations, and ""I will work hard to get us there."" 
Engel said that he is stressing in all of his private and public 
interactions here that U.S. and Argentina share many common 
interests - much more than what divides us, and we need to put 
aside our minor differences and misunderstandings to work together 
on our broad common agenda. 
 
 
 
¶4.  (C) Engel thanked CFK for Argentina's vote in the IAEA 
vis-a-vis Iran, noting Brazil's disappointing abstention on the 
latest vote.  On Honduras, he said that the U.S. also shares 
Argentina's concern about the dangerous precedent set by the coup. 
Engel said that Zelaya should have been reinstated before 
elections, but, failing that, we now have an opportunity to use the 
elections as a way out of the crisis and for he benefit of the 
Honduran people.  Regarding the Arab-Israeli conflict, Engel said 
that we all want the same thing, i.e., an Israeli-Jewish state and 
a Palestinian-Arab state living side-by-side, but the history of 
negotiations has thus far been Israel offering concessions that 
would achieve this result that are then ultimately rejected by the 
Palestinians, first Arafat and now Abbas.  Congresswoman Berkley 
thanked CFK for her strong stand against anti-semitism in Venezuela 
and elsewhere, but expressed disappointment that Argentina voted 
for rather than abstaining on the Goldstone Report, which was 
terribly biased against Israel.  She added that all four members of 
the delegation would encourage a POTUS meeting with CFK. 
 
 
 
¶5.  (C) CFK said it is hard to understand why Brazilian President 
Lula was given a meeting with President Obama - despite Brazil's 
negative IAEA vote and Lula's meeting with Ahmadinejad, while she 
 
is refused after Argentina's strong stand against Iran in the IAEA 
and counter-terrorism.  On Honduras, CFK said that, not all, but 
most UNISUR members see recognition of the new government as 
impossible as long as no one involved in the coup is punished, 
adding that ""for many of us"" a military coup ""is too close to 
home.""  On Arab-Israeli peace, CFK said that the U.S, with its 
great weight in the region, must convince Israel to tone down its 
response to provocations and to work for a comprehensive settlement 
that includes a border on the Golan Heights.  The same is true with 
counter-terrorism, she added.  Violent retaliation only fuels 
terrorist recruits and more terrorism.  Greater efforts must be 
made to solve the Arab-Israeli and other underlying conflicts, as 
well as establishing greater intelligence and logistics 
capabilities.    On Goldstone, CFK said that, while not perfect and 
Argentina does not support all of the recommendations, the Report's 
thrust that there must be an improvement in living conditions in 
Gaza is right.  She noted that Hamas's violent activities, although 
wrong, cannot be equated to state-sponsored violence, which 
Argentines suffered during the Dirty War.  She added that no state 
has prosecuted terror activity more aggressively than Argentina. 
 
 
 
¶6.  (C) Engel said that the U.S. was also concerned about growing 
Iranian activity in South America, especially growing evidence that 
Chavez is providing Iran with logistical and political support to 
conduct terrorist activities.  Engel added that the U.S. is puzzled 
by Argentina's and others' concerns over the latest U.S.-Colombian 
agreement that merely codifies long-standing cooperation on 
combating narco-terrorism. 
 
 
 
¶7.  (C) CFK responded that Argentina's counter-terrorism concerns 
do not involve Venezuela, but the tri-border area where 
US-Argentine cooperation is strong.  She said that, as you are 
aware, Chavez is a friend, and ""I can assure you he is neither 
anti-semitic nor a supporter of terrorism.  She added that his ties 
with Iran are related to ""international politics.""  With respect to 
the U.S.-Colombian agreement, CFK said that a clear UNASUR 
understanding and agreement is key to regional peace.  In 
Bariloche, the terms of the agreement were never clear, and to many 
of us it still appears that aspects of the agreement (such as a 
landing strip suitable only for large aircraft) are still more 
suitable for a conventional war than counter-narcotics.  CKF added 
that there has been a great deal of criticism against Chavez for 
thwarting democracy by overstaying in power but none against Uribe 
for doing the same - there must be equal treatment of all. 
 
 
 
¶8.  (C) CFK concluded by saying that, as President and a Peronist, 
she wanted to thank the U.S. delegation for being the first 
official U.S. visitors to meet and lunch with the Argentine Labor 
Confederation.  It was an important gesture and precedent.  Engel 
said he agreed and promised to return to Argentina as soon as he 
can. 
 
At the MFA 
------------- 
 
¶9.  (C) Prior to their meeting with CFK Codel Engel called on 
Foreign Minister Jorge Taiana, who warmly welcomed the Codel and 
Ambassador Martinez and opened the meeting by highlighting the 
deeply positive aspects of the bilateral relationship, emphasizing 
common values and principles, citing democracy, freedom, human 
rights and security as areas of cooperation.  Chairman Engel noted 
that he viewed the United States and Argentina as natural friends 
and allies and that he hoped to enhance the relationship. 
 
Economic Outlook 
---------------------- 
 
¶10.  (C) Taiana said that 2009 had been a test of the strength of 
world economies and observed that, all things considered, Argentina 
had weathered the storm relatively well.  He also noted that, for 
Argentina, the economic downturn had followed an unprecedented six 
years of robust growth, a period, Taiana observed, unprecedented in 
Argentina's last 40 years of history.  He confidently predicted 
that 2010 will be a good year for Argentina economically and the 
country is now well positioned to enjoy a sustained period of 
expansion.  He observed that Argentina finds itself now in the same 
position it enjoyed 100 years ago, i.e., commodity prices are high 
and industrial imports are relatively cheap.  The country has vast 
natural resources, superior human capital in its well-educated work 
 
force and enjoys excellent productivity. 
 
Hemispheric Agenda 
------------------------ 
 
¶11.  (C) Taiana also addressed what he believes to be the 
appropriate roles for Argentina and the United States to play in 
the hemisphere.  He stated that the U.S. should generally refrain 
from interfering in purely regional matters and should address its 
neighbors with a positive agenda. Alleviation of poverty is one 
area, in addition to those already noted, where the U.S. could play 
an enhanced positive role. 
 
¶12.  (C) He specifically objected to the Defense Cooperation 
Agreement with Colombia to formalize the status of the U.S. 
military forces assisting in counter-narcotics operations.  Taiana 
understands why a country such as Brazil feels threatened having 
outside troops based so close to a sensitive region, the Amazon, 
where local stewardship of natural resources is routinely a point 
of international criticism.  Engel pointed out that the agreement 
is not changing the relationship that the U.S. Military has with 
Colombia, it is only codifying the facts on the ground.  The 
agreement does not add a single American soldier to the forces 
already present in the country.  Taiana responded that it is fair 
to draw a distinction between operations and permanent bases. 
 
¶13.  (C) Taiana stated that the defense of the region should be 
conducted without the interference of outside forces.  He noted 
that relations within South America are now very positive; Mercosur 
is expanding, and relations between Argentina and Chile have 
improved to the point that they are jointly fielding a battalion of 
UN peacekeepers. 
 
¶14.  (C) The issue of actions that countries in the hemisphere took 
in response to the coup in Honduras ousting President Manuel Zelaya 
was a second point of disagreement.  While Taiana noted that this 
matter is now in the past, it has not been forgotten, and he 
criticized U.S. actions in accepting the results of a tainted 
election rather than backing Argentina's call for a restoration of 
Zelaya.  Chairman Engel responded by noting that he had 
participated in the Organization of American States meeting in 
Honduras and the last picture taken with his camera was of him 
standing alongside Zelaya.  He indicated that the Arias decision to 
proceed with the previously scheduled election was sound since it 
offered the only practical way out of the crisis. The bottom line 
for the Chairman, is that this is an issue that should be put 
behind us and kept in perspective. 
 
Iran Vote 
----------- 
 
¶15.  (C) As a coda to the friendly and largely positive meeting, 
Chairman Engel thanked Taiana for Argentina's vote against Iran at 
the International Atomic Energy Agency.  He noted that in contrast 
to Brazil, Argentina had taken an unequivocal stand against the 
development of nuclear weapons by the world's leading state sponsor 
of international terrorism. 
 
Mayor and Presidential Candidate 
---------------------------------------- 
 
¶16.  (SBU) Ambassador Martinez and Codel Engel met with Buenos 
Aires City Mayor Mauricio Macri, who was accompanied by Buenos 
Aires City Minister of Justice and Security Guillermo Montenegro, 
the Chief of the City's newly-formed Metropolitan Police, former 
national deputy Eugenio Burzaco, and the Director General of 
International Relations Fulvio Pompeo. Macri and City officials 
were welcoming and expressed interest in closer collaboration with 
the USG, particularly in the area of legal training. 
 
On the Argentine Economy 
-------------------------------- 
 
¶17.  (C) Congressman Engel solicited Mayor Macri's views on the 
economy, Argentina's debt, and the breaking reports indicating CFK 
had asked for Central Bank Governor Martin Redrado's resignation. 
Macri said he agreed with the Central Bank's position, describing 
the situation as ""completely unnecessary"" and ""not good"" because it 
creates new problems while shifting global attention again to 
weakness in Argentina's economic management.  He said Redrado's 
resignation or replacement should be handled by Congress, not by 
the executive branch.  Macri concluded that the situation further 
weakens Argentina's ability to attract foreign investment, which is 
already undermined by weak institutions and a lack of clear ground 
rules. Security Minister Montenegro added that another deterrent to 
 
foreign investment is the perception of a growing drug trafficking 
problem in Argentina. 
 
¶18.  (C) Congressman Pierluisi asked Macri for his views on 
resolving the Paris Club debt.  Macri responded that it is ""very 
important"" for Argentina to pay back its debt, but that the key 
issue is how Argentina will finance it. He said that while he is an 
engineer and not an economist, ""economics 101"" dictates that a 
country should pay its debt with its surplus not its reserves. 
 
Strengthening U.S.-Argentine Relations 
--------------------------------------------- -- 
 
¶19.  (C) In responding to Chairman Engel's question on 
U.S.-Argentine relations, Macri said he understands that the U.S. 
has other foreign priorities and, given Argentina's lackluster 
performance in recent years, he does not expect the relationship to 
be one of equal partners.  The Mayor underscored the importance of 
bilateral cooperation in narcotrafficking and terrorism.  He added 
that Argentina is in a weaker state than in 1994 when the Argentine 
Jewish Mutual Association (AMIA) was bombed.  Noting that President 
Obama is looking for partnerships based on equal participation, the 
Ambassador asked Macri for suggestions of other areas where the two 
countries could work together toward achieving common goals.  The 
Mayor said that continued cooperation on narcotrafficking and 
terrorism would help bring the two countries closer together. 
Metropolitan Police Chief Burzaco said human trafficking should 
also be top on the bilateral agenda. 
 
Cooperation on Rule of Law 
--------------------------------- 
 
¶20.  (C) Security Minister Montenegro praised U.S. legal training 
and judicial exchanges for having aided Argentina in strengthening 
its judicial system, and expressed interest in increasing such 
programs. Montenegro said the training of judges is critical, 
noting that ""politics and economics"" are controlling the judicial 
branch and undermining its independence.  Metropolitan Police Chief 
Burzaco said that City officials are working to portray a City that 
abides by the rule of law, and that they want to show the world 
""another face of Argentina,"" but that it will take some time for 
this new Argentina to rise to the national level. 
 
On Hugo Chavez's Regional Activity 
-------------------------------------------- 
 
¶21.  (C)   Noting USG concern over terrorism, Congressman Engel 
asked the Mayor if he agreed with U.S. perceptions that the 
Venezuelans are giving the Iranians a foothold in the region. 
Macri said he agreed and added that nothing surprises him when it 
comes to Venezuelan President Hugo Chavez. He claimed that the 
Kirchners had given free rein to Chavez to operate in Argentina as 
if he were in Venezuela. 
 
Building Bridges with Argentine Labor 
--------------------------------------------- ---- 
 
¶22.  (SBU) The Codel paid an unprecedented visit on the General 
Confederation of Labor (CGT) Argentina's largest national labor 
organization at the invitation of powerful CGT Secretary General 
Hugo Moyano. In his welcoming remarks, Moyano sharply criticized 
neoliberal economics, claiming that they led to Argentina's 2001 
peso crisis and the degradation of labor standards. Moyano also 
characterized Assistant Secretary Valenzuela's comments reflecting 
business concerns with rule of law and the investment climate 
(reftel -BuenosAires1311) as mis-informed, stating that the true 
period of social instability was the 1990s when the Menem 
Adminsitration's privatization and exchange rate policies 
undermined, he claimed, workers' rights. He also attacked the 
Argentine Central Bank leadership's delay on transferring US $ 6.6 
billion in reserves to meet debt payments coming due in 2010 while 
the Obama Administration, he claimed, had recently used reserves to 
prevent an economic meltdown in the United States. 
 
¶23.  (SBU) Congressman Engel disarmed Moyano by referring to 
childhood memories of walking picket lines with his father - a 
metalworker union member at the time. Engel expressed his support 
for labor movements worldwide in their efforts to ensure social 
justice, and quipped that statistics of his voting record in favor 
of pro-labor legislation 98% of the time must be incorrect - that 
he believes his record to be 100% in favor of labor. The Chairman 
expressed his desire to improve already strong U.S.-Argentine 
relations, building on an already solid foundation of friendship, 
and in the process help build a bridge for future Embassy-CGT 
interaction. 
 
¶24.  (SBU) Chairman Engel then turned to Representative Woolsey, as 
Co-Chair of the Congressional Progressive Caucus and Chairwoman of 
the Subcommittee on Workforce Protections of the House Committee on 
Education and Labor, who stressed the mutually-strong dedication of 
both countries to labor protections and standards. Woolsey 
encouraged future cooperation in improving labor welfare standards 
and protecting the workers that are the backbone of infrastructure 
and the engine of economic growth. Woolsey expressed her 
appreciation for the CGT's invitation, and in recognizing the 
importance of the ""historic"" moment, asked ""What took us so long?"" 
 
¶25.  (SBU) Following the remarks, several interesting 
side-conversations ensued. Representatives Woolsey and Pierluisi 
discussed with CGT leaders societal concerns ranging from 
healthcare to drug use. In Argentina, unions run provide healthcare 
to members, often running some of the largest hospitals in the 
country. Medical coverage costs roughly 8% of union members' 
salaries, but as a result, all costs are covered without co-payment 
requirements. The Congressmembers were also surprised to learn 
that, according to CGT leaders, narcotics concerns have shifted 
from being a transshipment point to one of production and 
consumption - with increasing consumption of ""paco"" ( low-quality 
residual substance resulting from the manufacture of cocaine) which 
can be found on the streets for as little as 1 peso (roughly 30 
cents). After the delegation departed from the CGT headquarters, 
union leadership expressed gratitude to Embassy's labor officer for 
the historic visit as well as a desire to strengthen and deepen 
their collective and individual unions' relationship with the 
Embassy. 
 
Ceremony of Remembrance at AMIA 
------------------------------------------ 
 
¶26.  (SBU) The Codel also visited the Argentine Jewish Mutual 
Association (AMIA) to pay its respects to the victims of the 1992 
Israeli Embassy bombing and 1994 AMIA community center bombing.  In 
addition to laying a wreath at the memorials to the victims of the 
two events, the Codel met with the president of AMIA and DAIA 
(another Argentine Jewish organization) and the parents of the one 
of the victims of the AMIA bombing.  The visit garnered strong 
positive press coverage. 
 
Press Coverage 
------------------ 
 
¶27.  (SBU) While Codel Engel's visit was overshadowed by two other 
big Argentine stories - the death of popular music idol Sandro (the 
""Argentine Elvis"") and the President's attempt to both transfer 
Central Bank funds to the Argentine national treasury and fire the 
Central Bank President (reftel: Buenos Aires 13)  - media coverage 
of the visit was uniformly positive. All major print media covered 
the visit, giving special emphasis to the ""historic"" meeting at the 
CGT headquarters. The delegation's visit to AMIA and meeting with 
CFK also received prominent coverage. The more pro-GoA news 
outlets, such as daily Pagina 12, called the visit in part an 
attempt to ""minimize"" the remarks of Assistant Secretary Arturo 
Valenzuela during a trip two weeks earlier, when he noted in a 
press conference that U.S. business representatives had expressed 
concern about ""judicial insecurity"" in the country. Other news 
outlets, such as daily-of-record La Nacion and state-run news 
agency TELAM, noted that the visit was meant to ""deepen"" already 
""excellent"" bilateral ties. In a media environment in which the 
smallest phrase can be taken as a signal from the USG and blown out 
of proportion, Chairman Engel's ability to stay on message and, 
regardless of the question, continuously repeat the purpose of the 
visit ( to strengthen strong bilateral ties) was critical to the 
positive media coverage the Codel received. 
 
¶28.  (C) Comment: This was a highly successful visit with valuable 
positive engagement between U.S. Representatives and the GoA and 
Argentine people at a number of levels.  The President's two-hour 
meeting with the Codel helped put to rest the media-fueled 
impression that U.S.-Argentine relations were on the rocks.  Taking 
two hours out of her schedule while in the middle of a showdown 
with the Central Bank, the President demonstrated that she was 
willing to spend time with us and committed to strengthening 
bilateral relations. 
MARTINEZ