VZCZCXYZ0013
PP RUEHWEB

DE RUEHAC #0986/01 3371001
ZNR UUUUU ZZH
P 031001Z DEC 07
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC PRIORITY 6400
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHME/AMEMBASSY MEXICO 0183
RUEHGT/AMEMBASSY GUATEMALA 0110

UNCLAS ASUNCION 000986 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PREL OVIP PGOV PA
SUBJECT: CODEL REID AFFIRMS U.S. INTEREST IN PARAGUAY 
 
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SUMMARY 
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¶1. (SBU) During its November 25-27 visit to Asuncion, CODEL Reid met 
with senior-most leaders of all three branches of government.  The 
CODEL met Foreign Minister Ramirez, who Senator Reid thanked for his 
 
role in securing a meeting with President Duarte earlier that 
morning (septel).  Ramirez recognized the importance of Paraguay's 
relationship with the United States, but said the United States has 
been "distant" of late; he also expressed interest in a trade 
agreement and biofuels assistance.  "You'll note hunger, poverty and 
social differences during your visit," Ramirez said, which along 
with the changing rules of the international community create a 
"fertile space" for regional populism.  In a meeting with 
Congressional leadership, Senator Reid underscored that the United 
States has spent "too little time on our southern neighbors," 
promising that would change.  The CODEL engaged its Paraguayan 
counterparts on energy issues and pending legislation to strengthen 
intellectual property protections; the Paraguayans requested a 
biofuels agreement and promised to pass terrorism legislation next 
term.  Supreme Court President Pucheta and MCA Threshold Program 
coordinator Walde briefed on Paraguay's efforts to strengthen its 
judicial system and to reduce corruption.  The Senators also visited 
a several USAID projects and had lunch with Peace Corps volunteers. 
Widespread media coverage portrayed the visit as "a strong 
counterpoint to Hugo Chavez" and a show of U.S. interest in 
improving relationships throughout the hemisphere.  The delegation's 
theme of strengthening relations with Latin America resonated well 
and set just the right tone as Paraguay approaches its April 20 
national elections.  END SUMMARY. 
 
 
¶2. CODEL Reid, including Senate Majority Leader Harry Reid (D-NV), 
Senator Thad Cochran (R-MS), Senator Jeff Bingaman (D-NM), Senator 
Kent Conrad (D-ND), Senator Byron Dorgan (D-ND), Senator Mike Crapo 
(R-ID), and Senator Robert Menendez (D-NJ) visited Asuncion November 
25-27.  Staffers Marcel Lettre, Anna Gallagher, Mike Castellano, 
Federico De Jesus, Serena Hoy, and Kay Webber, and military escort 
Colonel Mike Barbero, were also part of the delegation.  Ambassador 
Cason accompanied the CODEL on its entire program. 
 
-------------------------------------- 
MEETING WITH FOREIGN MINISTER RAMIREZ 
-------------------------------------- 
 
¶3. (SBU) In the delegation's meeting with Foreign Minister Ruben 
Ramirez, Senator Reid thanked Ramirez for his role in securing a 
meeting with President Duarte earlier that morning (septel).  (NOTE: 
President Duarte initially declined to meet the delegation, but upon 
Ramirez's urging, changed his mind.  END NOTE).  Ramirez said 
President Duarte asked him how he should conduct the meeting with 
the CODEL, and that Ramirez advised Duarte to be frank and open 
given that the Senators, like Duarte, were politicians.  Senator 
Reid noted his appreciation for the delegation's candid exchange 
with President Duarte.  Ramirez told Senator Reid that Las Vegas, 
Nevada (Senator Reid's home state) honored him with a certificate 
when he served as Paraguay's Consul in Los Angeles from 1997-98. 
Ramirez proudly showed Senator Reid the certificate, noting that his 
time in the United States was "an important experience in his life." 
 
 
¶4. (SBU) Ramirez then recognized the value of Paraguay's 
relationship with the United States, but said that the United States 
has been "distant" of late.   Ramirez said Paraguay has informed the 
United States of this perception, particularly regarding the two 
countries' economic relations.  Dovetailing on President Duarte's 
plea for unilateral trade preferences (septel), Ramirez noted that 
preferences would have a great impact on Paraguay's economy. 
Ramirez asserted that ATPDEA has negatively impacted Paraguay's 
trade within the region.  He lamented Paraguay's lack of a sea coast 
and reported that it costs from 20 to 60 percent more to export the 
same product from Paraguay than from Argentina to the United States. 
 "Paraguay's relationship with the United States is a top priority," 
Ramirez said, but he asserted that Paraguay wants a more expansive 
trade relationship, including a trade agreement, with the United 
States.  On energy, Ramirez said Paraguay wants to develop biofuels, 
and lamented its lack of international influence because it does not 
produce gas. 
 
¶5. (SBU) "You'll note hunger, poverty and social differences during 
your visit," Ramirez said, which along with changing rules of the 
international community and commerce (he cited United Nations, World 
Bank, and IMF reform) are creating a "fertile space" for populism 
throughout the region.  Ramirez complained that U.S. assistance is 
not channeled through the Paraguayan government, and urged the 
United States to work with his government on development assistance 
and anti-corruption initiatives.  Ramirez affirmed his belief that 
the United States is a great leader, but said Paraguay "didn't feel 
it."  "That's why we're here," replied Senator Reid. 
 
---------------------- 
CONGRESS-TO-CONGRESS 
---------------------- 
 
¶6. (U) In the delegation's meeting with the presidents of both 
chambers of congress (plus seven other key congressional leaders), 
Senator Reid underscored his belief that the United States has spent 
"too little time on our southern neighbors."  Senator Reid promised 
to do everything in his power to change that.  The Majority Leader 
then reaffirmed the United States' desire for better relations with 
Paraguay, and in reference to former President Rutherford B. Hayes' 
award of territory to Paraguay in 1878 following the War of the 
Triple Alliance, quipped that Hayes "was right to pay attention to 
Paraguay."  Senate President Miguel Saguier agreed that 
U.S.-Paraguayan relations are good but could improve.  Lower House 
President Oscar Salomon described the Senators' visit as "historic" 
and asked the United States to closely monitor Paraguay's April 2008 
elections, one of Paraguay's "most important democratic tests." 
Salomon also expressed concern about instability in neighboring 
Bolivia and the "external elements that are overly interested in 
it." 
 
¶7. (U) The CODEL members engaged their Paraguayan counterparts on 
energy issues and pending legislation to strengthen intellectual 
property protections.  On biofuels, the Paraguayans worried about 
U.S. cooperation with Brazil, encouraging the delegation to consider 
an agreement with Paraguay.  One Paraguayan legislator regretted 
that his country, despite its great potential on energy issues, is 
"giving its energy to a wealthy country," in reference to Paraguay's 
shared Itaipu Dam with Brazil.  Senator Menendez encouraged the 
Paraguayan Congress to pass its still-pending criminal code, 
including intellectual property protections.  In response, 
Paraguayan interlocutors asserted their compliance with 
international standards, citing "great progress" over the past ten 
years on trademark and copyright protections.  Saguier explained 
that the criminal code originally included a terrorism statute, but 
said "ideology got in the way" of its passage.  Senator Ana Mendoza 
de Acha further explained that, given Paraguay's dictatorial 
history, civic organizations feared the draft terrorism bill could 
be used to politically persecute citizens.  She said Congress would 
craft a more specific law to address those concerns.  Saguier 
affirmed that Paraguay is cognizant that any country can be a victim 
of terrorism at any time.  He assured the U.S. Senators that his 
Congress will pass terrorism legislation next term. 
 
------------------------------------------- 
SUPREME COURT BRIEFING ON ANTI-CORRUPTION 
AND JUDICIAL REFORM 
------------------------------------------- 
 
¶8. (U) Supreme Court President Alicia Pucheta outlined Supreme Court 
advances in strengthening Paraguay's judicial system and reducing 
corruption.  She highlighted USAID programs that have improved 
transparency and access to information regarding the budget, 
administrative decisions, and court rulings; established a new 
Communications Office, a new Code of Ethics and Ethics Office, 
information desks and a call center; and, improved the Court's web 
site and newsletter.  Minister Walde, Paraguay's Millennium 
Challenge Account (MCA) Threshold Program coordinator, provided an 
overview of the program, touching on Paraguay's progress on all 10 
components.  Walde emphasized steady improvement on the Control of 
Corruption scorecard, from eight percent in FY2005 to 30 percent in 
FY2008.  He stressed the uniqueness and importance of the Threshold 
Program in bringing together 28 government institutions to fight 
corruption.  Minister Walde closed by emphasizing Paraguay's goal of 
qualifying for a full MCA Compact. 
 
-------------------------- 
USAID HEALTH CLINIC VISIT 
-------------------------- 
 
¶9. (U) The delegation visited a health clinic managed by the 
Paraguayan Center for Population Studies (CEPEP), a leading 
Paraguayan health sector NGO.  With USAID assistance, CEPEP, which 
provides reproductive health services through a network of four 
clinics and associated professionals working throughout the country, 
has expanded its focus to provide integrated primary health services 
to an estimated 24,000 Paraguayans annually.  USAID Health Officer 
Graciela Avila gave the CODEL an overview of USAID assistance in the 
health sector, including achievements in decentralized health 
services, establishment of 110 social pharmacies to provide low-cost 
medicines to Paraguayans in four departments, innovative health 
insurance systems, a new public-private initiative to expand access 
to cancer medicines, and improvements in the GOP's capacity to 
manage family planning programs. CEPEP Executive Director and former 
Health Minister Cynthia Prieto explained CEPEP's services and led 
the Delegation on a tour of the Clinic's facilities.  CODEL members 
interacted extensively and warmly with both medical staff and 
patients. 
 
-------------------------------- 
USAID PARAGUAY VENDE SITE VISIT 
-------------------------------- 
 
¶10. (U) The CODEL also visited the production plant of a family 
owned-business that receives technical assistance from USAID's 
Paraguay Vende (Paraguay Sells) program.  Hierbapar is managed by 
the family's two sons, who are impressive young entrepreneurs.  The 
company produces 60 different varieties of medicinal plants, 
aromatics seeds, and condiments.  With USAID support, Hierbapar 
experienced an annual average growth rate of 45 percent from 2004 to 
2007 and is currently exporting aromatic seeds to Europe and Japan. 
The company has a significant social impact on the municipality of 
Lima, Paraguay, with over 1,500 small farmers supplying its raw 
materials.  The disposable income of these small farmers has 
increased by more than four times since Hierbapar's founding.  With 
continued USAID support, Hierbapar is planning to expand its export 
markets and to add 500 suppliers.  The CODEL toured Hierbapar's 
facilities and received samples of its products.  While there, the 
CODEL also met with a young entrepreneur who started COMPASA, one of 
the few companies in Paraguay that works in recycling oil and fuel 
waste from Paraguay's rivers.  COMPASA started the recycling 
business in 2006, and as of October 2007 had recycled over 1,000,000 
liters of fuel and oil from the Paraguay River.  The recycled fuels, 
mostly diesel, are in large part exported to Brazil; small amounts 
are distributed for local consumption. 
 
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PEACE CORPS LUNCH 
------------------- 
 
¶11. (U) The Senators also lunched with six Peace Corps Volunteers, 
three of whom were from the Senators' home states.  The Volunteers 
represented Peace Corps Paraguay's five technical sectors -- 
agriculture (including beekeeping and crop extension), rural 
economic development, rural health and sanitation, environment, and 
education and youth.  The Senators and Volunteers discussed the life 
of a Volunteer in Paraguay, the country's transition to democracy, 
and socio-economic development.  Peace Corps Paraguay gave each 
Senator a copy of its 40th anniversary commemorative stamp, 
celebrating the history of the third largest Peace Corps program in 
the world. 
 
----------------------- 
PRESS COVERAGE/COMMENT 
----------------------- 
 
¶12. (SBU) Widespread media coverage portrayed the delegation's visit 
as "a strong counterpoint to Hugo Chavez" (La Nacion and Ultima 
Hora, 11/27) and a show of U.S. interest in improving relationships 
throughout the hemisphere.  Left-center Ultima Hora (11/27) ran 
three stories in disparate sections of the paper reflecting Senator 
Reid's comments in defense of a free press, a feature story on the 
delegation's visit to a USAID project promoting Paraguay exports, 
and Reid's responses to press questions about Chavez following the 
delegation's meeting with Congress.  "We understand Chavez speaks 
ill of the U.S. throughout the world," Senator Reid is quoted as 
saying.  "And he has also insulted President Bush... But we want to 
use the influence of the U.S. to improve relations and integrate the 
hemisphere."  Most major broadcast news (radio and television) 
operations in Paraguay carried reports and bulletins on the visit 
throughout the day.  COMMENT: The delegation's core theme of 
strengthening relations with Latin America resonated well across 
Paraguayan society, setting just the right tone of U.S. interest in 
Paraguay in the run-up to the April 20 national elections.  END 
COMMENT. 
 
This cable was cleared by Codel Reid. 
 
CASON