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O 241925Z AUG 06
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TO RUEHC/SECSTATE WASHDC IMMEDIATE 5665
INFO RUCNMRC/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS PRIORITY
RUEHFR/AMEMBASSY PARIS PRIORITY 1121
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C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 001905 
 
SIPDIS 
 
SIPDIS 
 
EMBASSY PARIS FORWARD USMISSION OECD 
E FOR THOMAS PIERCE, WHA FOR WHA/BSC, AND WHA/EPSC, 
EUR/ERA FOR JULIE COOPER AND FRANK PARKER 
PASS NSC FOR JOSE CARDENAS 
PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE 
EX-IM BANK FOR MICHELE WILKINS 
OPIC FOR GEORGE SCHULTZ AND RUTH ANN NICASTRI 
PASS USTR FOR SUE CRONIN AND MARY SULLIVAN 
TREASURY FOR ALICE FAIBISHENKO 
USDOC FOR ALEXANDER PEACHER AND JOHN ANDERSEN 
US SOUTHCOM FOR POLAD 
 
E.O. 12958: DECL: 08/23/2016 
TAGS: ECON OECD AR
SUBJECT: GOA FOREIGN MINISTRY KEEN ON EVENTUAL OECD 
MEMBERSHIP, NEAR TERM ECONOMIC REVIEW 
 
 
Classified By: EconCouns D.P. Climan.  Reasons 1.5 (B,D) 
 
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Summary 
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¶1. (C) The GoA participates actively in OECD affairs as an 
observer state and its Foreign Ministry is keen to have 
Argentina considered for eventual full membership status. 
Accepting that OECD accession is a long term play, the 
Foreign Ministry sees its still pending request for an OECD 
review of Argentina's economic performance as a step on this 
path - and as a vehicle to gain international recognition for 
the country's strong post-crash economic performance.  One of 
the OECD's yardsticks for its "like-mindedness" accession 
criteria is a commitment to market-based economic policies 
and so it appears unlikely an OECD review would offer 
Argentina the approbation it seeks.  Post supports 
Argentina's request for an OECD economic review that could 
help inform a domestic debate on the efficiency and 
sustainability of the GoA's current heterodox economic policy 
mix.  More broadly, Post supports Argentina's long term 
accession bid as a vehicle to encourage GoA adoption of the 
substantive governance and economic policy disciplines 
required of OECD members.  End Summary 
 
--------------------------------------------- ---- 
GoA Goal: From Observer Status to Full Membership 
--------------------------------------------- ---- 
 
¶2. (U) EconCouns paid an August 18 courtesy call on GoA 
Foreign Ministry National Director of International Economic 
Negotiations Ambassador Nestor Stancanelli and his Deputy, 
Ambassador Enrique Julio de la Torre. 
 
¶3. (SBU) Stancanelli noted Argentina's status as one of eight 
observer nations in the 30-member OECD, its active 
participation in a the OECD's investment committee and 
various working groups, and high level (Vice Minister of 
Economy Oscar Kangerson's) participation in the OECD's May 
2006 Ministerial.  He emphasized the GoA's desire to further 
strengthen its ties with the OECD and noted as a "strong hint 
of our interest" in eventually acceding to full member status 
the Foreign Ministry's recent decision to create a special 
OECD unit within their newly established Directorate of 
International Economic Negotiations. 
 
¶4. (SBU) The Foreign Ministry, Stancanelli said, has reviewed 
the OECD's May 2004 "Strategy for Enlargement and Outreach" 
and sees Argentina as a prime accession candidate in terms of 
the OECD's "like-mindedness" and "significant player" 
proposed eligibility criteria.  "We understand the OECD is an 
organization with high standards that demands substantial 
participation by member countries," he said, noting that 
former GoA Foreign Minister Guido DiTella had submitted an 
application to the OECD for full membership in September 
1997, an application never withdrawn or ever formally 
acknowledged by the OECD.  De la Torre called Latin American 
observer states Brazil, Chile and Argentina "crucial OECD 
partners" in the region whose eventual membership will help 
transform the OECD into a truly global institution.  "We are 
aware that OECD accession will be a slow process and we know 
that Latin American governments will have to improve our 
organization to meet high OECD standards," he concluded, and 
asked for U.S. support in this process. 
 
--------------------------------------------- ----- 
OECD Econ Review of Argentina - A Step on the Path 
--------------------------------------------- ----- 
 
¶5. (C) Stancanelli turned to Argentina's strong interest in 
 
BUENOS AIR 00001905  002 OF 002 
 
 
having the OECD undertake a comprehensive review of 
Argentina's economy, much, he said, as it has already done 
for Chile and Brazil.  However, he said that one or two OECD 
members, likely including France, had opposed the review.  De 
la Torre asked that the U.S. support the GoA's request for an 
economic review.  An "objective" OECD study of Argentina's 
economic performance and progress over the past three years 
would, de la Torre concluded, help put to rest the rancorous 
post-mortem debate over whether and how blame should be 
apportioned for Argentina's December 2001 default between the 
GoA, IFIs and "enabling" private sector financial 
institutions. 
 
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Comment 
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¶6. (C) While the Foreign Ministry's Directorate of 
International Economic Negotiations is eager to proceed on 
the OECD accession track, the prospect of closer OECD ties 
has yet to register in public statements by senior Kirchner 
administration officials.  That said, there remains a strong 
element of "me-tooism" in Argentine foreign policy 
initiatives and any hint that Brazil and Chile are being 
actively considered for full OECD membership will certainly 
elicit a GoA response.  Post supports Argentina's long term 
accession bid as a vehicle to encourage the GoA's progressive 
adoption of the substantive governance and economic policy 
disciplines required of OECD members. 
 
¶7. (C) The Foreign Ministry clearly sees an OECD economic 
review as a vehicle to gain recognition and approbation for 
Argentina's strong and sustained post-crash recovery.  Post 
is aware of a Washington inter-agency consensus reached in 
the Spring of 2006 not to support such a review given budget 
outlays involved and given the opportunity cost of other OECD 
country analyses forgone.  This view could bear revisiting: 
 
¶8. (C) There is general agreement among international credit 
and market analysts that the GoA's populist subsidies and 
interventions in numerous production and service sectors, its 
substantial public investment without the benefit of formal 
cost/benefit analysis and its heterodox price and export 
control policies are unsustainable in the medium term and 
will likely exacerbate the volatility of an eventual 
correction.  One of the OECD's fundamental yardsticks for its 
"like-mindedness" accession criteria is a nation's commitment 
to market-based economics.  An objective OECD review that 
points out how far Argentina has strayed from the free market 
path could help inform a domestic debate on the efficiency 
and sustainability of Argentina's current economic policy mix. 
MATERA