VZCZCXYZ0005
RR RUEHWEB

DE RUEHBU #1255/01 2522045
ZNR UUUUU ZZH
R 082045Z SEP 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1980
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS BUENOS AIRES 001255 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EAGR EFIN BEXP AR
SUBJECT: CODEL PETERSON'S SEPTEMBER 4 MEETING WITH 
PRESIDENT KIRCHNER 
 
¶1. (SBU) Summary:  Argentine President Cristina Fernandez de 
Kirchner met September 4 with a U.S. congressional delegation 
led by Collin Peterson of Minnesota.  The President supported 
holding bilateral discussions later this year to try to 
resolve market access issues involving Argentine lemons and 
beef, as well as U.S. beef and chicken.  The President 
briefed on Argentine agricultural taxes and support programs, 
and the congressmen talked about the U.S. approach.  The 
President explained that she believed her decision to repay 
Paris Club debt could encourage investment and economic 
relations with the members of the Paris Club.  At the end of 
the meeting, she expressed appreciation to the Ambassador for 
the positive U.S. statement regarding the debt decision and 
asked for U.S. support as experts seek to reconcile numbers 
surrounding the debt owed and try to reach agreement on 
repayment.  End Summary. 
 
¶2. (U) Argentine President Cristina Fernandez de Kirchner 
(CFK) held a friendly and wide-ranging meeting with four U.S. 
Congressmen for well over an hour on September 4. 
Representatives Collin Peterson (D-Minn.), Marion Berry 
(D-Ark.), Jerry Weller (R-Ill.), and Ben Chandler (D-Ky.) 
were joined by Ambassador Wayne.  Foreign Minister Taiana, 
Economy Minister Fernandez, Agriculture Secretary Cheppi and 
Ambassador to the United States Timerman accompanied the 
President. 
 
Bilateral Agricultural Issues 
----------------------------- 
 
¶3. (U) CFK asked where the Congressmen would travel in 
Argentina, and on learning of their visits to Rosario, Santa 
Fe, and Cordoba province, she extended an invitation for the 
Congressmen to visit the southern region of Patagonia when 
they could return.  She asked Agricultural Secretary Cheppi 
to brief her on the discussions earlier in the afternoon 
surrounding two Argentine agricultural market access issues 
with the United States: lemons and beef.  She noted the 
potential value of increased lemon exports for job creation 
in Tucuman province and the special importance she attached 
to allowing Argentine beef exports to the United States, 
notably first from Patagonia.  Cheppi presented the Argentine 
arguments that the USDA should allow free access to the U.S. 
market and that it had been agreed in discussions with 
Representative Peterson that the way to proceed was to have 
talks on agricultural trade issues between the two countries, 
probably after the U.S. elections. 
 
¶4. (SBU) Representative Peterson said that he thought the 
U.S. Department of Agriculture was getting close to issuing a 
finding on both access of meat from Patagonia to the United 
States and of Argentine lemons.  He noted that the USG also 
had market access problems that merited discussion, including 
the unwarranted exclusion of U.S. beef and chicken from the 
Argentine market.  Thus, he had suggested discussions after 
the U.S. elections on all of the issues.  The President asked 
a number of questions about both issues.  Ambassador Wayne 
and Agricultural Secretary Cheppi presented various aspects 
of the reasons for the market access problems concerning U.S. 
and Argentine meats and Argentine lemons.  After about 20 
minutes of discussion, CFK said she understood. 
 
¶5.  (SBU) Congressmen Peterson said his committee would 
support the USG abiding by all the health and scientific 
rules, but would want Argentina to do likewise.  His 
committee, he said, would support finding a solution to all 
the access problems.  However, the solutions needed to be 
worked out among the two Agricultural services in the 
executive branches.  CFK agreed that it was important that 
both Argentina and the USG follow the rules, and that we open 
up agricultural trade between the two countries. 
 
¶6. (U) The Congressmen provided CFK with a briefing on the 
difficulty of forging agreement on the recent U.S. 
agriculture bill and the complicated nature of U.S. 
agriculture interests.  She said she understood various 
interests of different districts, but thought that the 
overriding interests of providing the consumer with the best 
prices should win out.  Representative Peterson explained 
that, in his view, the United States had priced food too 
cheaply for the consumer and that now it was a great 
challenge for farmers to make money in the United States.  He 
indicated that only about 10% of U.S. consumer income goes to 
food, and that out of the $60 billion that will be expended 
 
each year under the new farm bill, only about 10% will go to 
the farmers.  The rest will go for food stamps, lunch school 
programs, etc.  CFK said she was surprised by that and 
described the situation in Argentina where families spend a 
higher percentage of their income on food, with the poorest 
spending about 60% of their income on food each month. 
 
¶7.  (SBU) Congressman Peterson then asked about agricultural 
taxes and subsidies in Argentina.  CFK explained the policy 
of providing subsidies for fuel and other inputs with lower 
prices and by supporting lower costs by managing the exchange 
rate.  She noted that these positives for agriculture are 
balanced by the desires to keep domestic food prices down and 
to redistribute income from wealthy sectors to poorer ones. 
She explained that for soy and soy oil production, where 
domestic use accounted for only about 5% of production, 
export taxes were highest.  CFK also reviewed the wheat and 
corn tax and consumption statistics in Argentina. 
Congressman Peterson said that he had one recommendation: 
Argentina should set its export tax on biodiesel at the same 
level as its taxes on soybean oil.  Right now, he argued, 
with a lower tax rate on soy-based biodiesel, Argentina was 
encouraging a great deal of biodiesel production.  This, he 
said, might lead to a glut in the international market once 
the United States alters its law to take out a loophole which 
allows companies to get a subsidy ($1 per gallon) when a 
small amount of U.S. biodiesel is mixed with internationally 
sourced biodiesel and the product is re-exported to the 
European Union.  CFK asked Minister Fernandez and 
Agricultural Secretary Cheppi to examine this situation. 
 
Paris Club, U.S. Investment and U.S. Elections 
--------------------------------------------- - 
 
¶8.  (SBU) Congressman Peterson congratulated CFK on her 
announcement that Argentina would repay its Paris Club debt. 
CFK said it was an important decision because no country 
wants to leave debts unpaid and because Argentina wanted to 
send the signal that it was normalizing relations with the 
rest of the world.  She said she believed this was a win-win 
decision as it will also open Argentina to more investment 
and economic cooperation with the Paris Club countries.  CFK 
then provided an in-depth briefing on economic growth over 
the past five years, the drop in the debt-to-GDP ratio, and 
declining unemployment.  She noted increased investment and 
good investment opportunities offered by Argentina. 
Ambassador Wayne noted that over the past three or so years, 
U.S. companies have led in new investments in Argentina.  CFK 
and the Congressmen then talked a bit about the need to 
develop diverse sources of energy to keep growth on track in 
the future.  Congressman Weller discussed the potential for 
U.S.-Argentine partnership in areas of alternative energy 
development.  CFK discussed the Argentine nuclear program and 
research facilities at INVAP (a public-private company in 
Bariloche, Argentina).  She highlighted space cooperation 
with NASA.  She expressed her support for more such bilateral 
cooperation. 
 
¶9. (SBU) CFK and the Congressmen then discussed the U.S. 
presidential elections.  CFK shared some of her impressions, 
remarking that she and her husband and ex-President Kirchner 
had watched both party conventions on CNN each evening over 
the past two weeks.  The Congressmen shared some of their 
thoughts about the direction the election would take.  CFK 
noted that the new Vice Presidential candidate for the 
Republicans had run into a good deal of press criticism as 
had Senator Clinton on the Democratic side.  She shared her 
views that women in politics often get special criticism, 
noting that when she came to Buenos Aires as a Senator while 
her daughter was still young, the press asked about how she 
would care for her daughter.  CFK noted that the press 
doesn't raise this kind of concern with male politicians who 
have young children.  She also noted her sense that both U.S. 
candidates have very compelling life stories and the contest 
seems to encompass the contest between two important themes: 
change and patriotism. 
 
¶10.  (SBU) Congressman Peterson said that after his meeting 
with Governor Alperovich of Tucuman province earlier in the 
day, he had agreed to visit the province on his next trip. 
CFK said that Alperovich is one of the best governors in the 
country and recounted how he faced a great deal of 
anti-Semitism when he first ran for governor and then was 
re-elected with an overwhelming majority. 
 
 
¶11.  (SBU) At the conclusion of the meeting, CFK told the 
Ambassador that she appreciated the U.S. statement about her 
decision to pay back the Paris Club debt and that she hoped 
the U.S. would be able to work constructively as the process 
begins to reconcile numbers about the debt owed. 
Specifically, she referred to her hope to avoid any excessive 
penalty interest as Argentina had made an offer to pay $6.7 
billion at once.  In a side conversation with Economy 
Minister Fernandez, he acknowledged that the government would 
likely use a bond purchase to acquire the money from Central 
Bank reserves and that the government might need to adjust 
the initial decree issued to provide better legal protection 
for the process of the executive branch getting the money 
from the Central Bank reserves. 
 
¶12. (U) This cable has been cleared by Rep. Peterson. 
WAYNE