VZCZCXYZ0015
RR RUEHWEB

DE RUEHMN #0828/01 2501843
ZNY CCCCC ZZH
R 071843Z SEP 06
FM AMEMBASSY MONTEVIDEO
TO RUEHC/SECSTATE WASHDC 6237
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 0444
RUEHLP/AMEMBASSY LA PAZ SEP SANTIAGO 2902
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC
RUMIAAA/CDR USSOUTHCOM MIAMI FL

C O N F I D E N T I A L MONTEVIDEO 000828 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/BSC AND EB 
DEPT PASS USTR FOR EISSENSTAT AND CRONIN 
NSC FOR FISK AND CARDENAS 
TREASURY FOR OASIA FOR DOUGLASS 
USDOC FOR ITA/MAC/BASTIAN 
SOUTHCOM FOR POLAD 
 
E.O. 12958: DECL: 09/07/2016 
TAGS: PREL ETRD ECON UY
SUBJECT: ECONMIN ASTORI SAYS GOU IS ON TRACK FOR JCTI 
 
REF: MONTEVIDEO 811 
 
Classified By: Charge d'Affaires James D. Nealon for 
reasons 1.4 (b) and (d). 
 
¶1. (C) Summary:  Charge met with Economy Minister Danilo 
Astori on September 6 to ascertain the GOU's plans prior to 
the October 2-3 JCTI in Montevideo.  Astori noted President 
Vazquez's personal investment to build consensus for his FTA 
vision and stressed the importance of the upcoming 
Vazquez-Lula meeting on September 8.  He confirmed that 
Industry Minister Lepra will go to Washington in 
mid-September and seek a meeting with USTR's Susan Schwab, at 
which time he may formally request an FTA.  Astori said he 
understands that an FTA would have to be modeled after the 
Peru FTA, given the time constraints linked with TPA 
expiration, but he emphasized the need for selected 
modifications, so as to avoid the appearance of Uruguay 
having "rolled over."  In a separate meeting on the same day, 
EconMin Trade Policy Director Dario Sarachaga told EconCouns 
that his technical team could accept much of the Peru FTA but 
would push very hard to put the GOU's imprimatur on the IPR 
chapter, for which the Uruguayan clear preference is the text 
of the US-Chile FTA.  Astori was convinced that Vazquez "is 
committed to an FTA and will look for any and all ways to 
reach this goal."  The next few weeks will be crucial.  End 
Summary. 
 
¶2. (C) Astori was very much focused and on message.  He 
recalled that he had first enunciated the need for closer 
trade relations with the U.S. over a year ago, and that nine 
months had already elapsed since his bombshell January 
interview in the business weekly Busqueda, which had called 
on the GOU to negotiate an FTA with the U.S.  Astori 
described the August 31 meeting of ministers in much the same 
way as Lepra had (reftel), with Vazquez very much in charge, 
laying out the strategy to follow and giving ministers their 
marching orders.  (Note:  Today's Busqueda ran an extensive 
description of this meeting, in which Lepra was tasked with 
continuing contacts with the U.S., Astori with lobbying his 
Brazilian and Argentine counterparts --this was done late 
last week in Rio--, Ag Min Jose Mujica with enlisting 
Chavez's support, and ForMin Reinaldo Gargano with contacts 
with the Argentine Foreign Minister.  The article also 
explains how Mujica succeeded in "co-opting" Gargano to go 
along with the President's plans.  End Note.)  Astori also 
said that Vazquez had mentioned he had contacted Chavez, who 
was allegedly ready to assist in bringing Brazil and 
Argentina over to Uruguay's position on FTAs (Note:  We had 
heard a similar line from Lepra.  End Note.) 
 
¶3. (C) Astori emphasized the importance of the upcoming 
September 8 meeting between Lula and Vazquez in Porto Alegre. 
 He confirmed that the single-item agenda for this one-hour 
meeting was to seek Brazil's support for Uruguay's decision 
to seek bilateral FTAs.  Astori said he expected to have 
"good news to report on Friday."  He added that the GOU 
planned to present a formal request to Mercosur after the 
October JCTI regarding an FTA with the U.S.  The request 
would be made at an extraordinary assembly of the Mercosur 
Council called for this specific purpose, to be held either 
in Uruguay or in Brazil.  Astori quipped that Brazil appeared 
of late to be much more worried about Uruguay negotiating an 
FTA with China than one with the U.S. 
 
¶4. (C) Astori confirmed that Lepra will go to Washington in 
mid-September to advance the JCTI, possibly accompanied by 
Presidential Chief of Staff Gonzalo Fernandez.  Lepra will 
seek to meet with USTR Susan Schwab, he said, and quite 
possibly --depending on advances at Vazquez's next meeting of 
ministers on September 14-- to verbally request the opening 
of FTA negotiations at that time, i.e. prior to the JCTI. 
Astori said that Vazquez understood that the GOU would have 
to accept much of the text of the Peru FTA, if an agreement 
were to be concluded prior to the expiration of Trade 
Promotion Authority.  However, Astori emphasized that the GOU 
could not say so publicly and that some alterations would 
have to be made in a few chapters, so as to put Uruguay's 
imprimatur on the document.  He explained that this was the 
only way to "sell" an agreement to the government's 
constituency.  The President is "committed to an FTA", Astori 
sressed, and "will look for any and all ways to reach this 
goal." 
 
¶5. (C) Earlier in the day, EconCouns had met with EconMin 
Trade Policy Director Dario Sarachaga, to assess progress by 
the GOU's technical teams.  Sarachaga said the teams were 
making good progress with their analysis.  He noted that they 
were receiving technical assistance from the World Bank and 
from Chilean experts who had been involved in Chile's own FTA 
negotiations.  He said the document that Vazquez had 
cirulated to the opposition some three weeks ago, which gave 
a preliminary assessment of the cost-benefit of an FTA, had 
been a poor summary of the study the Econ Ministry had 
prepared.  Since then, the Econ Ministry had absorbed the IPR 
portfolio from the Industry Ministry, so that it now handles 
almost all sectors, except for minor areas left to the 
Foreign Ministry.  In passing, he lamented "confusing" USG 
signals over the past month, which had made his job more 
difficult.  We all know that an FTA is the only way to get 
what we want, he said. 
 
¶6. (C) It was clear to the technical team, Sarachaga said, 
that the GOU would have to accept the quasi-totality of the 
Peru FTA because of TPA time constraints.  He stressed, 
however, that this could in no way be admitted publicly.  We 
could accept the first ten chapters as they are, he said, but 
we would have to make changes in some of the following 
chapters, most of them cosmetic to give the appearance that 
the GOU is not being "dictated" a format.  He expected, 
however, that the GOU would push hard for more subtantial 
changes to the IPR chapter, "the only chapter where we have 
more significant discrepancies."  Sarachaga noted that the 
IPR chapter in the US-Chile FTA was more consistent with the 
Uruguayan reality and would not require any legislative 
changes.  He believed that, because of the visibility of IPR 
issues, this was the perfect chapter in which to put 
Uruguay's imprimatur, as evidence that the GOU did not just 
accept the text of the Peru FTA wholesale.  In addition, he 
noted that any and all references to a Chilean text would 
make the whole document much easier to "sell", because of the 
ideological affinities between the Chilean and Uruguayan Left. 
 
¶7. (C) Comment:  Our meetings at the Econ Ministry track with 
what we had heard from Lepra.  The additional information and 
details gleaned in these meetings confirm that Vazquez is 
moving down the road towards an FTA with eyes wide open and 
with a defimite plan of action.  Vazquez has invested himself 
personally in this endeavor and he has put his government's 
credibility on the line.  We will report next week following 
the Vazquez-Lula meeting.  End Comment. 
Nealon