VZCZCXRO7366
RR RUEHBI RUEHCHI RUEHCI RUEHCN RUEHLH RUESLE
DE RUEHBU #1644/01 2341803
ZNR UUUUU ZZH
R 221803Z AUG 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 8987
INFO RUEHAC/AMEMBASSY ASUNCION 6469
RUEHBK/AMEMBASSY BANGKOK 0063
RUEHBJ/AMEMBASSY BEIJING 0157
RUEHBR/AMEMBASSY BRASILIA 6323
RUEHCV/AMEMBASSY CARACAS 1429
RUEHHI/AMEMBASSY HANOI 0025
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RUEHJA/AMEMBASSY JAKARTA 0027
RUEHKL/AMEMBASSY KUALA LUMPUR 0053
RUEHLP/AMEMBASSY LA PAZ 4845
RUEHML/AMEMBASSY MANILA 0052
RUEHMN/AMEMBASSY MONTEVIDEO 6677
RUEHNE/AMEMBASSY NEW DELHI 0074
RUEHSG/AMEMBASSY SANTIAGO 0699
RUEHUL/AMEMBASSY SEOUL 0100
RUEHGP/AMEMBASSY SINGAPORE 0044
RUEHCI/AMCONSUL KOLKATA 0001
RUEHCN/AMCONSUL CHENGDU 0001
RUEHCG/AMCONSUL CHENAI
RUEHCHI/AMCONSUL CHIANG MAI 0001
RUEHGZ/AMCONSUL GUANGZHOU 0093
RUEHHK/AMCONSUL HONG KONG 0020
RUEHKP/AMCONSUL KARACHI 0009
RUEHLH/AMCONSUL LAHORE 0003
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RUEHRI/AMCONSUL RIO DE JANEIRO 2319
RUEHSO/AMCONSUL SAO PAULO 3486
RUESLE/AMCONSUL SHANGHAI 0017
RUEHSH/AMCONSUL SHENYANG 0005
RUEHIN/AIT TAIPEI 0029
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RHEHNSC/NSC WASHINGTON DC
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 03 BUENOS AIRES 001644 
 
SIPDIS 
 
SIPDIS 
 
EB/TPP/BTA/EWH FOR BETH LAMPRON 
WHA FOR WHA/BSC AND WHA/EPSC 
PASS NSC FOR MICHAEL SMART 
PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE 
PASS USTR FOR KATHERINE DUCKWORTH AND MARY SULLIVAN 
TREASURY FOR ROSELLEN ALBANO 
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 
US SOUTHCOM FOR POLAD 
SEOUL PLS PASS TO PUSAN 
 
E.O. 12958: N/A 
TAGS: ETRD EINV AR CH HK IN ID KN KS MY PK RP
SN, TW, TH, VM 
SUBJECT: NEW PROTECTIONIST NON-TARIFF BARRIERS TARGET 
CHINA, WOO DOMESTIC INDUSTRIAL SUPPORT 
 
REF: A. BUENOS AIRES 1496 
     ¶B. BUENOS AIRES 1445 
 
This cable replaces Buenos Aires 1628 - additional addressees 
have been added to reflect the potential impact of Argentine 
trade restrictions on a number of Asian exporting nations. 
 
------- 
SUMMARY 
------- 
 
¶1. (SBU)  President Kirchner and Economy Minister Peirano 
announced an ill-defined package of non-tariff protectionist 
measures that targets imports of plastics, textiles, 
artificial leather, and tires.  Growing Argentine imports 
from China (up 54% in the first half of 2007) were singled 
out as a growing threat to the GoA's goal of promoting a 
strong and diversified domestic industrial base.  Following 
recent GoA pre-election cuts in consumer income tax 
liabilities and an increase in pension payments, local media 
is interpreting this latest announcement as a move by the 
Kirchner administration to assure domestic industrial support 
for Senator (and First Lady) Cristina Kirchner's presidential 
candidacy.  End Summary. 
 
----------------------------------- 
Protectionist Measures Target China 
----------------------------------- 
 
¶2. (SBU) On August 17, President Kirchner and Economy 
Minister Miguel Peirano announced to an audience of 
industrial and trade chamber representatives a package of 
forthcoming protectionist import restrictions, which they had 
foreshadowed the day before as a small business exposition. 
The measures were justified by Kirchner and Peirano - and by 
industry reps - as a defense against "unfair competition," 
particularly from China.  (Chinese exports to Argentina rose 
54% in the first half y-o-y of 2007 to roughly US$ 2 
billion.)  On August 16, Kirchner stated that the measures 
would "favor domestic business and jobs," then noted August 
17 that "we want to compete with the world, but we also want 
 
BUENOS AIR 00001644  002 OF 003 
 
 
to have our investments."  Peirano explained that the 
policies will help to "administer trade in a way which allows 
balancing investment, employment and stability."  Juan Carlos 
Liscurain, President of the Argentine Industrial Union, said 
the decision was "a signal to keep betting on the future." 
 
¶3. (SBU) Media is reporting that the new protectionist 
measures will target plastics, textiles, artificial leather, 
and tires.  According to Adrian Makuc, the Economy Ministry's 
National Director of Trade Policy, nearly all of the measures 
have yet to be written.  He told Econoff August 17 that the 
measures will likely include non-automatic import licenses on 
products such as shoe uppers and artificial leather goods; 
quality controls on tires and bicycles; and changes in 
Customs procedures on at least toys and footwear, which would 
more strictly enforce quality control and safety concerns. 
(On the last he cited recent U.S. restrictions on toys 
imported from China.)  Makuc denied that there would be any 
new tariff barriers or tariff rate quotas applied.  He added 
that, as only the Customs procedures can be made 
China-specific without violating WTO norms, the other 
measures would probably be applied to all trading partners. 
 
------- 
Comment 
------- 
 
¶4. (SBU)  When Industry Secretary Peirano was named Economy 
Minister in July (Ref B), it was widely agreed that the GoA's 
already robust industrial policy would grow stronger still. 
From his first days in office, Peirano has expressed his 
conviction that promoting and sheltering the growth of a deep 
and diverse industrial base is fundamental to improving 
Argentina's terms of trade.  This package of new and as-yet 
poorly-defined non-tariff barriers speaks to Peirano's 
protectionist philosophy and to growing domestic concern over 
the surge in Chinese imports (which, in this era of Chinese 
prowess in the export of consumer goods, follows ineluctably 
from the GoA's consumption-led economic recovery strategy). 
This step also reflects domestic industry's share of the 
pre-election pinata after the GoA's recent announcement of 
 
BUENOS AIR 00001644  003 OF 003 
 
 
cuts in consumer income tax liabilities and an increase in 
pension payments. 
WAYNE