VZCZCXYZ0024
OO RUEHWEB

DE RUEHBU #1787/01 2211858
ZNR UUUUU ZZH
O 091858Z AUG 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5511
INFO RHMFISS/CDR USSOCOM MACDILL AFB FL//SCJ2//
RULGPUA/USCOMSOLANT

UNCLAS BUENOS AIRES 001787 
 
SIPDIS 
 
STATE FOR INR/R/MR, I/GWHA, WHA, WHA/PDA, WHA/BSC, 
WHA/EPSC 
CDR USSOCOM FOR J-2 IAD/LAMA 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KPAO OPRC KMDR PREL MEDIA REACTION
SUBJECT: GPS UNDER REVIEW; MIDDLE EAST; 08/08/06 
 
 
¶1. SUMMARY STATEMENT 
 
Today's most important international story include USTR Susan 
Schwab's announcement that the Bush administration will analyze 
whether it will limit, suspend or remove commercial advantages 
granted to the country under the GSP; and US President George W. 
Bush urging the UN to approve a cease fire for the war in the Middle 
East. 
 
¶2. OPINION PIECES AND KEY STORIES 
 
- "The US could impose commercial sanctions on Argentina" 
 
Ana Baron, Washington-based correspondent for leading "Clarin," 
writes (08/08) "The Bush administration will analyze whether it 
'will limit, suspend or remove' the commercial advantages granted to 
Argentina in the framework of the so-called GPS (General Preferences 
System). This would affect some 15 per cent of the Argentine trade 
flow with the US, which amounts to 616 million dollars. It would 
affect exports of leather, aluminum, textiles, among others. 
 
"... Another 12 countries could also be affected in the same way 
(Brazil and Venezuela in Latin America). Argentina has already 
suffered commercial retaliation through this system... 
 
"A USTR's spokesperson, Stephen Norton, said that 'this is not a 
punitive measure' for what happened in  WTO Round negotiations or 
the positions vis-`-vis the FTAA. However, it is not a secret that 
the GPS has always been used not only to help developing countries 
but also to advance US commercial interests. 
 
"A Latin American diplomatic source told 'Clarin' that the Bush 
administration recently used this system to pressure the smallest 
Central American and Caribbean countries to sign bilateral trade 
deals with the US." 
 
- "A political sign" 
 
Daniel Juri, columnist of leading "Clarin," writes (08/08) 
"Washington's decision to suffocate the Mercosur 'biggies' will be 
an issue for President Nestor Kirchner, who has never hesitated to 
confront even 'God's representatives on Earth' themselves. However, 
Kirchner has always measured his words with the Bush administration 
and he took care of his relationship with President Bush. 
 
"This is why Argentine diplomacy will have to be balanced vis-`-vis 
this Washington reaction. This is a political rather than an 
economic sign. And, as a consequence, it smells like a warning 
vis-`-vis (Kirchner's) increasingly closer ties with Venezuelan Hugo 
Chavez, the new Uncle Rich of the region." 
 
- "The US hinders Argentine exports for 1.5 billion dollars" 
 
Business-financial "Ambito Financiero" front-pages (08/08) "Last 
week, in the framework of an IDB Board meeting, the USTR had a 
critical position about Argentina when discussing an IDB fund 
release for the country. She was right because the bank had released 
a loan to promote Argentine meat exports, which were banned by the 
Government. However, yesterday's decision of the USG was much more 
important. 
 
"The USG will remove tariff preferences for Argentine products, 
which will negatively impact on (Argentine) exports for 1.5 billion 
dollars. Truly enough, the measure will affect some other countries 
(Brazil, Venezuela, China and India). This is the group that set the 
strongest position in the recent failed Doha Round negotiation - it 
wanted to eliminate farm subsidies of the US, the EU and Japan. 
 
"Nonetheless, approaching Venezuelan Hugo Chavez and allowing his 
entry into Mercosur had to have a cost and influenced George W. 
Bush's decision. Who wins? Countries like Chile, which negotiated an 
FTA with the US outside of Mercosur." 
 
- "The US punishes Argentina - it will hinder more exports" 
 
Carlos Burgueo, columnist of business-financial "Ambito 
Financiero," writes (page 3) "The US announced yesterday that it 
could remove its GSP as retaliation against developing countries for 
not accepting the US proposal in the failed Doha Round. In the case 
of Argentina and Brazil, the US also wants to punish their 
partnership with Venezuela within Mercosur, the commercial deal that 
they reached with Cuba, and their lack of willingness to discuss the 
FTAA. 
 
"If the measure is put into practice, Argentina could lose 
commercial advantages involving exports up to 1.5 billion dollars. 
On the contrary, Peru, Ecuador, Chile, Colombia and perhaps Uruguay 
could reap benefits. 
 
"... The US is currently Argentina's third largest commercial 
partner, after Brazil and the EU... The products involved by the GSP 
would from now on pay tariffs up to 35% and, as a consequence of 
this, the US could go down in its trade relationship with Argentina 
and become its fifth commercial partner." 
 
 
- "The US could make Mercosur exports more expensive" 
 
Alejandro Bercovich, economic columnist of business-financial "El 
Cronista," comments (08/08) "The USG announced yesterday that it 
will analyze whether it 'will limit, suspend or remove' the 
commercial advantages it has unilaterally granted for 32 years to 
Argentina, Brazil, Venezuela and other ten mid-sized developing 
countries. According to these advantages, these countries have been 
allowed to place their imports in the US market under the so-called 
GSP. 
 
"... The announcement of the review occurred just a few weeks after 
the failure in WTO negotiations... However, the spokesperson of the 
USTR, Stephen Norton, told EFE wire service that 'this review should 
not be interpreted as a punitive measure.'" 
 
- "'The decision to grant preferences is a unilateral measure'" 
 
Business-financial "El Cronista" carries an interview with Argentine 
Secretary for International Economic Relations Alfredo Chiaradia, 
 
SIPDIS 
who opines 'These kinds of reviews are usually performed because 
they are unilateral. We are granted them following a unilateral 
decision and we can be deprived of them in the same way because 
those measures are not negotiated among governments.' 
 
"... 'In this way, we are fully aware that this is a unilateral 
scheme that is subject to regular reviews... The current review the 
USG is carrying out is something legitimate.'" 
 
- "Bush is analyzing the elimination of commercial advantages 
previously granted to our country" 
 
Conservative "La Prensa" reports (08/08) "According to USTR Susan 
Schwab, the USG is analyzing 'limiting, suspending or removing' the 
commercial benefits it has granted to Argentina, Brazil, Venezuela 
and other developing countries for three decades. 
 
"The review of the GSP occurred after the failure of the WTO Doha 
Round, which was due to the lack of consensus on the reduction of 
farm subsidies and tariffs." 
 
- "Exports to US are jeopardized" 
 
Business-financial, center-right "InfoBae" reports (08/08) 
"According to USTR Susan Schwab, the US is analyzing whether it will 
remove the commercial benefits it has granted to Argentina for 
decades, which involve exports to the US for more than 600 million 
dollars per year. 
 
"The possibility to eliminate GSP benefits was announced some weeks 
ago after the failure of WTO Doha Round negotiations was made 
public. 
 
"In said negotiation, many developing countries, which are now on 
the verge of losing benefits, questioned the US farm subsidies." 
 
- "The Argentine Government is awaiting a formal notification" 
 
Natasha Niebieskikwiat, political columnist of leading "Clarin," 
writes (08/08) "There will not be any official response from the 
Argentine Government to the announcement made by Washington, which 
put in doubt the continuity of the GSP... 
 
"A high-ranking FM source said 'We will not comment on something 
that has not been officially notified.' 
 
"'Washington officials clarified that the decision to suspend, limit 
or remove the GSP is not retaliation. Therefore, we do not take this 
decision as retaliation.' 
 
"However, even in Washington, it has been sustained that the GSP 
suspension would be hiding sanctions that are aimed at wielding 
political and commercial pressure." 
 
- "Bush urges the UN to approve a cease fire" 
 
Leonardo Mindez, on special assignment in Washington for leading 
"Clarin," comments (08/08) "(US President) George W. Bush 
interrupted his vacation in Texas to urge the UN to approve 'as soon 
as possible' a resolution putting an end to the war in Lebanon and 
Israel. 
 
"While the US President acknowledged the Arab League's criticism of 
the US-French draft resolution, he insisted that this is the best 
choice for a total cease fire. 
 
"... While the US president and Secretary Rice admitted that they 
were listening to the claims from both sides to draft the 
resolution, Bush did not accept the main Arab claim - the immediate 
withdrawal of Israeli troops from Lebanon. The US prefers to wait 
until the international force is deployed in the area before 
pressuring Israel to withdraw its troops." 
 
- "The obstacles to an agreed upon resolution" 
 
Oscar Raul Cardoso, international analyst of leading "Clarin," 
opines  (08/08) "The US and France managed to merge their wishes in 
one draft resolution on the war in Lebanon, which, in spite of this 
consensus, was not passed yesterday by the UN Security Council. Just 
like any other forced solution, the proposal had to leave aside many 
central issues of the crisis. 
 
"While Washington managed to introduce the idea of future 
international troops under Chapter 7 of the UN Charter, Paris 
privileged the idea of a cease fire that could become a real one in 
a fast way. The text has already been rejected by the Lebanese 
government... 
 
"... Even when a first resolution was approved by the UN Security 
Council, there is no security about the next step, this is the 
formation of an international force intended to create a barrier of 
separation between Hezbollah and Israel. The risk that this force 
could become a virtual Israeli representative in the fight on 
ultra-Islamic guerrillas makes that just a few countries are willing 
to contribute to it." 
 
To see more Buenos Aires reporting, visit our 
classified website at: 
http://www.state.sqov.gov/p/wha/buenosaires 
 
MATERA