VZCZCXYZ0519
RR RUEHWEB

DE RUEHBU #0253/01 0600734
ZNR UUUUU ZZH
R 290734Z FEB 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 0355
INFO RUCNWTO/WORLD TRADE ORGANIZATION COLLECTIVE
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL

UNCLAS BUENOS AIRES 000253 
 
SIPDIS 
 
PASS USTR FOR KATHERINE DUCKWORTH AND MARY SULLIVAN 
USDA FAS/ONA FOR ROBERT RIEMENSCHNEIDER AND GREGG YOUNG 
EEB/TPP/MTA FOR BILL CRAFT AND CHEVER VOLTMER 
PASS NSC FOR DPRICE AND MSMART 
TREASURY FOR MMALLOY AND LTRAN 
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 
US SOUTHCOM FOR POLAD 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD WTRO ECON EAGR EINV PREL AR
SUBJECT: ARGENTINA: GOA DOWNBEAT ON DOHA SERVICES "SIGNALING" 
EXERCISE 
 
Ref:  (A) STATE 18370 
 
      (B) 07 BUENOS AIRES 1558 
 
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Summary 
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¶1. (SBU) In a sharp response to Ref A letter from USTR Schwab on 
upcoming WTO Doha Development Round (DDR) services negotiations, 
Foreign Ministry Trade Secretary Alfredo Chiaradia argued that 
Schwab's linking the USG's ability to agree to modalities on 
Agriculture and NAMA to our confidence in an equivalently ambitious 
services outcome was an example of U.S. "imperiousness" that 
"inverts the accepted hierarchy" of DDR Ag and NAMA priorities. 
Progress on linked Ag and NAMA modalities will remain the GoA's 
"benchmark" to measure DDR progress.  Chiaradia called current Ag 
and NAMA draft proposals "unbalanced," with agriculture commitments 
significantly less ambitious than NAMA -- and developing country 
Swiss coefficients in the NAMA draft more than Argentina can handle 
given domestic political constraints.  Chiaradia did offer that the 
GoA has "room to maneuver" on services, and promised a formal reply 
to USTR Schwab's letter shortly.  End Summary. 
 
--------------------------------------------- --- 
GoA: Services Signaling "Inverts" DDR Priorities 
--------------------------------------------- --- 
 
¶2. (SBU) CDA, Econ Counselor, and Trade Officer met February 27 with 
Ambassador Alfredo Chiaradia, Secretary of Trade in the Foreign 
Ministry and lead multilateral trade negotiator for the GoA, and 
Luis Niscovolos, Director of Multilateral Economic Negotiations in 
the Argentine Foreign Ministry to pass USTR Schwab's request (Ref A) 
that the GoA participate in an upcoming series of signaling meetings 
to advance WTO services negotiations.  Chiaradia called the USTR's 
direct linkage of USG ability to agree on Agriculture and NAMA 
modalities to our confidence of an equivalently ambitious services 
outcome an example of U.S. "imperiousness" that "inverts" the 
accepted DDR negotiating hierarchy of Agriculture and NAMA as 
priorities.  While paragraph 24 of the 2004 DDR Hong Kong 
Declaration calls specifically for "comparable" levels of 
Agriculture and NAMA ambition, Chiaradia recalled no consensus 
statement from prior DDR Ministerials making an equivalent statement 
on levels of ambition in services.  The U.S., he concluded, is 
attempting to raise DDR service sector negotiations to a level of 
importance not "consecrated" in prior DDR consensus documents. 
 
--------------------------------------------- ------ 
GoA DDR Priorities:  Agriculture First and Foremost 
--------------------------------------------- ------ 
 
¶3. (SBU) Chiaradia called agriculture negotiations the "locomotive" 
for broader DDR progress from the GOA's perspective, and stressed 
repeatedly that the manner in which the 170-plus unresolved issues 
in the latest Agriculture modalities text are dealt with would set 
Argentina's "benchmark" for level of ambition in NAMA.  He called 
the latest NAMA modalities draft tabled by committee chair 
Stephenson "unacceptable" and insisted that "disequilibria" between 
the latest Ag and NAMA texts be addressed.  Only when agricultural 
issues are clarified, Chiaradia said, could the same level of 
ambition be applied to NAMA and eventually, perhaps, to services. 
Chiaradia explained that, from Argentina's perspective, the level of 
ambition in the NAMA negotiating text is significantly higher than 
that in Agriculture, with bound tariff rate cuts Argentina is being 
asked to make on the order of 65%, while proposed agriculture cuts 
are in the 40% range and riven with loopholes.  Failing to deal 
promptly and substantively with Agriculture and NAMA discrepancies, 
he concluded, could sour the entire DDR round. 
 
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Drawing the Line on NAMA 
------------------------ 
 
¶4. (SBU) The GoA is not prepared to make NAMA bound tariff cuts of 
65%, Chiaradia said, adding "we'd like to receive an indication from 
the U.S. that it recognizes and respects our sensitivities in NAMA. 
I want to transmit a clear message to the USG that you cannot push 
us so hard on NAMA tariffs.  It simply won't work." 
 
¶5. (SBU) Chiaradia concluded that the GoA would be "attentive to how 
the (services) situation develops," that Argentina does not want to 
be perceived as either protectionist or negativist, and that the GoA 
truly wants to see the DDR negotiations conclude successfully. 
After CDA emphasized the growing importance of services to the 
Argentine economy and the GOA's own stake in an ambitious DDR 
services outcome, Chiaradia offered that the GoA has "room to 
maneuver" on services, and promised a formal reply to USTR Schwab's 
letter shortly.  Niscovolos later expressed doubts to Econ Counselor 
and TradeOff that the GoA would be at all forthcoming at upcoming 
Services signaling meetings and said that any Argentine/U.S. bilats 
on the margins of those service sector discussions might be a "waste 
of time." 
 
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Comment 
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¶6. (SBU) Trade Secretary Chiaradia's message was an unambiguous 
rejection of any effort to link levels of Services ambition to those 
being proposed in Ag and NAMA texts.  This is, perhaps, 
understandable in light of Argentina's increasing reliance on 
agricultural commodity exports and the GoA's laser-like focus on 
protecting, promoting, and diversifying its industrial base.  But it 
is disappointing given Argentina's competitive advantage in service 
sector exports and the role this dynamic and innovative sector is 
playing in mobilizing world-class Argentine human capital. 
Employment in Argentina's software and information services industry 
alone is up 300%, and service exports in these sectors is up 500% 
since 2002. 
 
¶7. (SBU) Post will continue to emphasize the U.S. and Argentina's 
common interest in benefiting from freer global markets in services. 
 A successful conclusion to WTO trade negotiations with ambitious 
openings in Argentina's services offer will help ensure that 
Argentina's service sector continues to be an engine of GDP growth, 
employment, and national pride. 
 
WAYNE