VZCZCXYZ0000
PP RUEHWEB

DE RUEHBU #0931/01 1852129
ZNR UUUUU ZZH
P 032129Z JUL 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC PRIORITY 1487
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHBS/USEU BRUSSELS

UNCLAS BUENOS AIRES 000931 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON PHUM AR
SUBJECT: ARGENTINA:  HIGHLIGHTS OF JULY 1-2 MERCOSUR SUMMIT 
 
REF: BUENOS AIRES 0894 
 
¶1. (SBU) Summary and Introduction:  Mercosur and associated member 
country presidents meeting at the July 1-2 Mercosur summit in 
Tucuman, Argentina, strongly condemned the EU's toughened 
immigration policies and declared their intention to fight their 
enforcement.  President Cristina Fernandez de Kirchner (CFK) 
defended her export tax policy on soybeans and blamed the increase 
in commodity prices on financial speculators.  As a group, the 
Mercosur leaders expressed concerns over "speculation," with some 
urging the formation of a common policy in the face of rising food 
prices globally.  Finally, the presidents spoke of the "strategic 
need" for broader integration within the bloc.  Hugo Chavez was, 
ultimately, a no-show at a rally organized on the margins of the 
summit by pro-GOA leftist organizations, reportedly at the behest of 
CFK concern over the likelihood that comments from Chavez and local 
firebrands such as Hebe de Bonafini and Luis D'Elia would not 
facilitate the delicate, ongoing debate in the legislature over the 
agricultural export tax issue.  End Summary. 
 
EU Immigration Policy Unites Mercosur 
------------------------------------- 
 
¶2. (SBU) The European Union's toughened immigration policies served 
to unite the Mercosur and associate member presidents at the 
regional organization's 35th summit in San Miguel de Tucuman, 
Argentina on June 30 and July 1.  They were unanimous in their 
vigorous denunciation, even altering the language in the final 
summit declaration from "deep concern" to "reject."  Host and 
Mercosur president pro tempore Cristina Fernandez de Kirchner (CFK) 
called the EU's Return Policy "unacceptable" and said it "sends [the 
world] back to other xenophobic times."  Evo Morales stated the EU 
policy damaged the dignity of human beings and wondered "where is 
the European soul?"  President Lula said it was hateful persecution 
and that "there is a cold wind of xenophobia blowing again with 
false responses to economic and social challenges."  President 
Bachelet noted that "we (Latin America) were very generous with the 
Europeans who came in the last century.  It is not fair that our 
people receive such denigrating treatment."  President Lula, who 
assumed the Mercosur presidency pro tempore at the summit, promised 
to press the EU not to apply the stricter new measures scheduled to 
be implemented in 2010. 
 
¶3. (U) Mercosur leaders announced their intention to allow their 
citizens to cross their borders with just national identity 
documents, no longer requiring passports for South American travel. 
The press noted that, although there was no implementation date, 
this was the summit announcement that had the greatest practical 
impact for Argentine citizens, who are able to travel to neighboring 
countries with identification cards but would now be able to arrive 
in non-bordering countries such as Ecuador or Peru as well. 
(Comment:  So far as we can tell there was little discussion of the 
potential public security effects of this decision or of a timeline 
for implementation.) 
 
Financial Speculators Responsible for Rising Food Prices 
------------------------------------------- 
 
¶4. (SBU) CFK used the occasion of her opening remarks to mount a 
strong defense of the GOA's increased taxes on soy exports (reftel 
and previous reporting).  Only president Chavez specifically 
supported CFK's policy, relating the farm sector demonstrations with 
the coup attempt against him.  President Tabare Vazquez was 
implicitly critical, however, of GOA actions, calling for a common 
policy in the face of mounting food prices.  President Lula also 
implied disagreement with GOA policy, noting the historically large 
swings in commodity prices, "for which we have to take advantage of 
the moments of equilibrium." 
 
¶5. (U) CFK, in her remarks, linked rising global food prices to 
speculation in the commodities markets.  She noted that when banks 
"started taking on water" (referring to the U.S. mortgage crisis), 
financiers shifted their focus to agricultural commodity markets, 
and speculation accelerated.  Other leaders expressed their shared 
concerns about the effects of speculation in the commodities 
markets.  Lula said his government was forming a team to analyze the 
behavior of the futures markets.  Tabare Vazquez said regional 
integration processes were fundamental to counter current price 
trends.  Chavez proposed the creation of a high-level working group 
to analyze the question of food security.  He also said that, as 
long as the price of oil remained above $100 a barrel, he would 
contribute a dollar of every barrel to an emergency fund for food 
security in Mercosur, calculating this could raise $920 million a 
year. 
 
Regional Integration 
-------------------- 
 
¶6. (U) CFK linked the region's historically strong levels of growth 
in recent years with the new generation of democratic leaders, who, 
she said, focus more on social demands.  She stressed that had 
always been a "challenge/goal" in the past, but that it "was now a 
strategic need" both for the growth of the countries and for the 
defense of the region's natural resources. 
 
¶7. (SBU) In other remarks, CFK stated her support for Bolivia's 
request to have Mercosur observers during the country's upcoming 
recall referendum.  And, in her focus on the past, she praised the 
Chilean "School of Journalists" for having apologized for some of 
its members' covering-up of facts during the Chilean dictatorship 
and for expelling those involved in the cover-up. 
 
The Hugo Chavez Show 
-------------------- 
 
¶8. (SBU) The Hugo Chavez show was relatively restrained compared to 
previous visits to Argentina, probably at the behest of local 
authorities.  He was openly supportive of CFK's controversial soy 
export tax policy and, in public remarks, compared the farm protests 
against the GOA to the attempted coup against his government in 
¶2002.  "Recently, I watched on television the expressions against 
the Argentine government, and it appeared very much like what 
happened in Venezuela in 2001: an oligarchy that does not want 
change and refuses to recognize the legitimacy of the government and 
the laws provided in order to benefit everyone."  Chavez did note, 
however, that it was an internal problem and he had "no intention" 
of interfering. 
 
¶9. (SBU) Chavez also strongly echoed the regional integration 
message, insisting that "until we break the mechanisms of foreign 
dependence and internal exclusion in each country we will not be 
truly independent." 
 
¶10. (SBU) Of the Mercosur leaders, Chavez was one of the most 
emphatic in condemning the EU's new immigration policies.  "We too 
will apply the law of return; the investments should go.  They 
[Europeans] have banks in Venezuela, petroleum investments, gas 
investments.  We would have to apply a law of return.  Take all of 
your capital, too." 
 
¶11. (SBU) Chavez used his opening remarks at the summit to take a 
jab at the USG.  He criticized the U.S. Navy's reactivation of the 
Fourth Fleet, identifying it as a "threat" to Latin America.  Chavez 
characterized it as a U.S. attempt to gain access to the region's 
natural resources and control strategic Latin American waterways 
such as the Amazon, Parana, and Orinoco Rivers.  Evo Morales joined 
Chavez in his disapproval of U.S. military presence in the region, 
affirming his intention not to allow a U.S. military base in his 
country. 
 
¶12. (SBU) A public rally (at which Chavez was billed as the featured 
speaker), organized by pro-GOA leftist groups and scheduled to take 
place July 1 in Tucuman's main soccer stadium on the margins of the 
official summit, was ultimately cancelled.  The official reason 
reported in the press was that Chavez's people backed out because of 
concerns over security arrangements.  The alternate explanation, 
also reported in the press, was that Chavez backed out at the behest 
of CFK, who was concerned over the likelihood that exhortations from 
Chavez and the likes of such local firebrands such as Hebe de 
Bonafini and Luis D'Elia would not facilitate the delicate, ongoing 
debate in the legislature over the agricultural export tax issue. 
 
Comment 
------- 
 
¶12. (SBU) The Mercosur summit was largely overshadowed in Argentine 
media coverage by reporting on congressional efforts to resolve the 
120-day old agricultural crisis. Mercosur diplomatic sources tell us 
that the GOA, preoccupied with its domestic political situation, did 
not even begin to communicate logistical details about the summit in 
the remote provincial town of Tucuman until five calendar days 
before it was to begin.  Commentators noted that CFK took an 
unusually small delegation with her to Tucuman, and that her husband 
Nestor dropped off the manifest at the last minute.  While in 
Tucuman, CFK reportedly remained in close telephonic consultation 
with her advisors back home regarding developments in congressional 
negotiations.  The summit proceeded largely as scripted (per 
reftel), which for the GOA was a desirable outcome. 
 
WAYNE