VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #1068/01 2170947
ZNR UUUUU ZZH
R 040947Z AUG 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1686
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1843
RUEHBO/AMEMBASSY BOGOTA 1785

UNCLAS BUENOS AIRES 001068 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PREL ECON ETRD PTER PINR BO CO PY MX IR UY AR
SUBJECT: A/S SHANNON ENGAGES WITH GOA OFFICIALS AT U.S.-ARGENTINE 
BILATERAL CONSULTATIONS 
 
REF: (A) BUENOS AIRES 0984 (B) BUENOS AIRES 0976 (C) BUENOS AIRE 
0975 (D) BUENOS AIRES 0974 
 
¶1. (SBU) Summary:  In connection with the July 10-11 bilateral 
consultations with the GOA, A/S Shannon used a lunch, dinner and an 
unscheduled meeting with FM Taiana to raise regional and global 
issues with GOA officials.  At lunch, the GOA expressed frustration 
with the Doha Development Round but great satisfaction at the 
progress made in the U.S.-Argentina bilateral relationship.  In the 
office call on FM Taiana, A/S Shannon reviewed just-concluded 
consultations and the agreements signed on cooperation in 
alternative energy, nanotechnology, national parks and cultural 
exchanges.  Shannon addressed GOA concerns about the re-launching of 
the U.S. Fourth Fleet, noting it had no offensive capability nor 
intent.  Shannon and Taiana discussed the situation in Bolivia, and 
Shannon raised concerns about lack of cooperation on alternative 
development efforts in Bolivia.  At dinner, Taiana was upbeat on 
relations with Paraguay, Mexico and Uruguay.  He was sharply 
critical of Iran.  Shannon and USOAS Ambassador urged GOA support 
for a positive 2009 Summit of the Americas in Trinidad.  End 
summary. 
 
---------------------------- 
Lunch hosted by DFM Taccetti 
---------------------------- 
 
¶2. (U) Following the first round of plenary bilateral discussions 
July 10, Deputy Foreign Minister Vittorio Taccetti hosted a lunch 
for Assistant Secretary Shannon, Treasury Deputy Assistant Secretary 
O'Neill and Ambassador Wayne.  Also attending were Argentine 
Ambassador to the U.S. Hector Timerman, U/S for Multilateral Affairs 
Raul Ricardes, U/S for Bilateral Affairs Vicente Espeche-Gil, Chief 
of Staff Alberto D'Alotto, North America Director Antonio Trombetta, 
and Foreign Ministry Director of International Economic Negotiations 
Nestor Stancanelli. 
 
¶3. (SBU) GoA Frustration at WTO DDR Stalemate (ref Buenos Aires 
0962):  Ambassador Stancanelli repeated standard GoA DDR points: 
Developed countries are asking far too much of developing countries 
in relaxing industrial tariff protection and offering far too little 
in compensating reductions in distortive agricultural subsidies.  A 
number of DDR "personalities" including Brazilian FM Celso Amorim 
and EU Trade Commissioner Peter Mandelson are playing outsized roles 
in debate and negotiation and significant changes in both tone and 
developed nation offers on the table will be needed to re-energize 
the process.  As things stand now, Stancanelli concluded, "we are in 
a Catch-22 situation that serves none of our common interests in 
successfully concluding this round."  DFM Taccetti added that "the 
GoA has no plan B," and its valid concerns must be addressed. 
 
¶4. (SBU) A Toast to Moving Forward Bilaterally:  In his closing 
toast, Vice Minister Taccetti spoke of "moving beyond errors of the 
past" (a clear allusion to bilateral frictions generated by the 
December 2007 Antonini-Wilson scandal) and Argentina's intention to 
"move forward" in its bilateral relations with the U.S.  A/S Shannon 
called the two days of bilateral consultations a vehicle for 
deepening bilateral ties and a means to ensure that Argentina's 
interests are fully and clearly presented to the incoming USG 
administration.  He called Argentina and the U.S. "on the cutting 
edge of diplomatic engagement" given our shared values and common 
perspectives. 
 
------------------------------------ 
Meeting with Foreign Minister Taiana 
------------------------------------ 
 
¶5. (SBU) Europe:  Following the lunch, Assistant Secretary Shannon, 
Treasury DAS O'Neill and Ambassador met with Foreign Minster Taiana, 
who had just returned from Spain.  Taiana noted that European 
leaders were preoccupied with recession fears, with Spanish 
President Rodriguez Zapatero using the "crisis" word to describe an 
economy beset with slow growth stalled construction and labor 
strife.  Low Eurozone growth favors Argentina in the near term, 
Taiana said, with European investors bound to look for new 
opportunities in third countries like Argentina whose natural 
resource base and continued strong economic growth offer them 
opportunities not available closer to home. 
 
¶6. (SBU) Consultation Process:  A/S Shannon reviewed the gist of 
bilateral consultations, noting the signing of agreements and 
declarations on cooperation in alternative energy, nanotechnology, 
national parks and cultural exchanges.  A second round of bilateral 
 
discussions planned for the coming fall in Washington are to be 
preceded by working group meetings and a third round of bilateral 
discussions in the spring of 2009 will offer the GoA an opportunity 
to build relations with the incoming USG administration.  Shannon 
also noted his earlier discussions with CFK on the U.S. Fourth Fleet 
and concerns about current developments in Bolivia (reftel). 
Shannon clarified that standing up the Southern Command's Fourth 
Fleet was largely an administrative exercise with neither offensive 
capability nor intent, and that the USG continues to respect the 
principle of territorial integrity. 
 
¶7. (SBU) Bolivia:  On current developments in Bolivia, Shannon 
reviewed U.S. concerns including the recent poorly controlled 
demonstration in front of the U.S. Embassy in La Paz, harassment of 
USAID projects and officials, and GoB accusations that the Peace 
Corps is in fact a USG intelligence agency.  Shannon said he plans 
to visit La Paz July 21 with INL A/S David Johnson to try to improve 
dialogue with President Morales and his government.  The GoB's 
designation of USAID as an "agency non grata" is hurting U.S. 
alternative development efforts that are closely linked to our drug 
interdiction efforts.  President Morales' priority is not improving 
bilateral relations with the U.S., Shannon concluded, but rather 
maintaining domestic political control following his political 
rejection by five of nine Bolivian provinces. 
 
¶8. (SBU) Bolivia EOM:  Taiana noted that Argentina would be offering 
financial support for an OAS observer mission to the August 10 
recall referendum that could help lower temperatures.  Shannon noted 
that he had spoken with OAS Secretary General Insulza and with OAS 
Under Secretary for Political Affairs (and Argentine former foreign 
minister) Dante Caputo on OAS plans for this observer mission.  "We 
saw in Venezuela the kinds of problems that arise when observers are 
not perceived as neutral," he said.  Taiana noted that former 
Bolivian President (2003-05) and current journalist Carlos Mesa, who 
is annoyed with Morales, has maintained a good relationship with 
ex-president Nestor Kirchner.  It's worth reviewing his recent 
writings on Bolivia, Taiana suggested. 
 
Dinner with Taiana 
------------------ 
 
¶9. (U) Taiana hosted A/S Shannon, Ambassador Wayne, U.S. Permrep to 
the OAS Ambassador Hector Morales, DCM Tom Kelly and Polcouns Alex 
Featherstone for dinner July 11.  Taiana was joined by DFM Taccetti, 
Ambassador Timerman, Chief of Staff Alberto D'Alotto and U/S for 
Latin America Agustin Colombo. 
 
¶10. (SBU) Paraguay:  Taiana said he believed President-elect Lugo 
was seeking out potential allies in the Colorado Party, which struck 
him as a good idea boding well for governability, since the 
Colorados had been in power for the last 60 years and knew the ins 
and outs of public administration.  Taiana said he had heard that 
Lugo would pick Alejandro Hamed, currently Paraguayan Ambassador to 
Lebanon, to be his Foreign Minister.  Taiana indicated he thought 
the Paraguayan Senate should accept President Duarte's resignation 
and allow him to take a seat as senator.  In a tone of weary 
exasperation, Taiana also anticipated the new Lugo administration 
would resume requests to renegotiate Paraguay's share of revenues 
from Yacyreta dam.  He noted that Paraguayan soy had been key during 
Argentina's ongoing agricultural crisis in keeping Argentine soy 
mills and shippers busy, so much so that Argentina's soy export 
numbers had not fallen despite the virtual lockout by Argentine soy 
producers. 
 
¶11. (SBU) Energy:  Shannon noted media coverage of that day's 
opening of the Petrocaribe summit in Guatemala.  Shannon pointed out 
the growing need for Latin America to develop its production 
capacity, particularly in the energy sector.  Ambassador Wayne 
described the impact of rapidly rising energy prices and food prices 
on poor countries, including those of Central America, and related 
anxieties about using foodstuffs for biofuels.  He noted President 
Bush's request for an additional $1 billion in food aid for lower 
income countries.  Ambassador Morales recalled from his experience 
at the IDB that the bank was seeking to help countries explore 
alternatives to oil consumption to help sustain economic growth. 
 
¶12. (SBU) Mexico:  Taiana claimed the GOA enjoyed excellent 
relations with Mexico and was preparing for a visit in November by 
Mexican President Calderon.  President CFK had a great, warm rapport 
with Calderon.  The GOA had pressed Mercosur to invite the GOM to 
Mercosur meetings.  He said Argentina had mounted a special exhibit 
pavilion at the prestigious Sinaloa Fair.  Taiana confessed a 
 
personal motive for building stronger relations with Mexico.  He 
said two of his grandchildren lived in Tulum south of Cancun (and 
his only other grandchild lives in Brazil). 
 
¶13. (SBU) Iran:  Taiana said he was deeply worried by Iran, which 
appeared to put it on a collision course with the international 
community.  Shannon agreed that Iran's nuclear ambitions and its 
support for terrorism made it deeply troubling, particularly as it 
was sitting astride a political fault line in a deeply troubled 
region.  Taiana repeated several times that the Iranian regime had 
done nothing to help clear up the 1994 bombing that killed 85 
Argentines at the AMIA Jewish community center.  The Iranian 
government insisted it was not involved yet its refusal to cooperate 
with the AMIA investigation in any way was highly suspicious, said 
Taiana.  Ambassador Timerman noted the U.S. House of Representatives 
was expected to pass a resolution July 17 expressing congressional 
support for the investigation. 
 
¶14. (SBU) Uruguay:  Ambassador Wayne noted that Argentina's 
relations with Uruguay seemed to have improved.  Taiana agreed, 
indicating that the agreed strategy over the Botnia dispute was to 
wait for the International Court of Justice to issue a finding, but 
noted that Argentine protesters were still blocking the bridge to 
Uruguay at Gualeguaychu. He pointed out that the original 
explanation for blocking the bridge 20 months earlier had been to 
obstruct any truckloads or construction machinery going from 
Argentina to help in the construction of the Botnia paper mill in 
Uruguay.  Construction was completed, but the protesters continued 
to block the bridge with the pretext of hurting Uruguay's tourism -- 
but Uruguay's tourism grew 25%.  Then the protesters said they would 
remain on the bridge to garner international attention to their 
cause, but, Taiana noted, the international community was siding 
with Uruguay.  Timerman pointed out that Alfredo De Angeli, a highly 
popular leader of the farmer strike, got his start as a leader of 
the anti-Botnia protesters in Gualeguaychu.  Timerman wryly 
lamented, "We created De Angeli and his Maoist uprising!" He also 
referred to growing divisions within the Gualeguaychu protesters. 
 
¶15. (SBU) Summit of the Americas:  Shannon noted that the next 
Summit of the Americas in April 2009 would be early in the next 
administration.  Taiana agreed it was important that the Summit turn 
out well for the new president and said it was a "shared 
responsibility" for Latin American leaders to ensure that the U.S. 
could engage productively with the region.  "Let's see how we can 
contribute," he said.  Taiana thought it was interesting that 
Trinidad & Tobago would be the host for the Summit, because of its 
leadership role in the Caribbean and its role as energy producer. 
(As an aside, he mentioned that all of the liquified natural gas 
being shipped to Bahia Blanca for re-gasification was Trinidadian.) 
Ambassador Morales gave a briefing on U.S. ideas for the Summit 
agenda. 
 
¶16. (SBU) Colombia:  Shannon praised Uribe's successful July 2 
rescue of 15 FARC hostages and noted the deteriorating situation of 
the FARC due to the series of setbacks since the March 1 killing of 
Raul Reyes.  He said the GOC would dispense with international 
facilitation and pursue direct talks with the FARC.  Taiana asked if 
anyone else had heard a rumor that the father of Clara Rojas's son 
Emmanuel was FARC Secretariat member "Timochenko."  (No one else 
had.)  Taiana welcomed the previous day's announcement that Uribe 
had asked Colombian Ambassador to Argentina Jaime Bermudez to serve 
as his foreign minister.  Taiana described Bermudez as "very capable 
and very close to Uribe," and said he had ably defended Colombia's 
position during its recent dispute with Ecuador.  Ambassador Colombo 
noted that Colombia had been playing a very positive role in Bolivia 
as a member of the Group of Friends, and that Camilo Reyes in 
particular had been very supportive.  Shannon reiterated his earlier 
plea for Argentina to continue working closely with Brazil and 
Colombia in that effort. 
 
¶17. (U) WHA A/S Shannon cleared this cable. 
 
WAYNE