VZCZCXYZ0003
RR RUEHWEB

DE RUEHBU #1285/01 2591915
ZNR UUUUU ZZH
R 151915Z SEP 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 2030
RUCNMER/MERCOSUR COLLECTIVE
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS BUENOS AIRES 001285 
 
USDOC for 4321/ITA/MAC/OLAC/PEACHER 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD WTRO ECON EAGR PREL PTER AR BL IR
SUBJECT: Argentina: No Movement on Bilat Trade Issues, or Doha 
 
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SUMMARY 
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¶1. (SBU) In a September 4 meeting with visiting Codel, Argentine 
Foreign Minister Taiana and other Foreign Ministry officials 
protested the lack of U.S. market access for Argentine lemons and 
beef, but had no response to Codel requests for Argentina to allow 
imports of U.S. beef and poultry.  Codel members expressed hope that 
Argentine decisions would be made on scientific, not political, 
grounds, and that progress by the U.S. on the Argentine concerns 
would be met with reciprocal GoA progress on U.S. concerns.  On the 
WTO Doha Round, both sides were pessimistic about reaching a final 
deal in the short term, but Codel members played down GoA concerns 
that a final Doha deal would conflict with the current Farm Bill on 
subsidies for U.S. producers.  Participants discussed potential 
future bilateral cooperation on biofuels and concern over Bolivia 
possibly allowing Iran to found a TV station.  End Summary. 
 
¶2. (U) USG participants were Representatives Collin Peterson, (D-MN 
and Chair of House Committee on Agriculture), Ben Chandler (D-KY), 
Marion Berry (D-AR), Jerry Weller (R-IL), Ambassador Wayne, 
Agricultural Counselor, and Trade Officer (Notetaker).  GoA 
participants were Foreign Minister Jorge Taiana, Vice Foreign 
Minister Victorio Taccetti, Secretary of Trade Alfredo Chiaradia, 
National Director of International Economic Relations Nestor 
Stancanelli, Ambassador to the U.S. Hector Timerman, and Alejandro 
Casiro and Antonio Trombetta, Directors of North American Economic 
and Political Affairs, respectively. 
 
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Bilateral Trade: Beefs about Beef, Lemons, Poultry 
--------------------------------------------- ----- 
 
¶3. (SBU) Minister Taiana, after a brief discussion of the Codel's 
itinerary and an exchange about the common ground our countries 
share, noted Argentina's bilateral trade deficit with the U.S., and 
that it was one of few bilat trade deficits Argentina currently 
faces.  However, he stated this was "not a problem for us," as it 
gives Argentina an incentive to do better.  Upon hearing that the 
Codel's next meeting was with the Governor of Tucuman, Taiana noted 
that lemons was a very important issue to that small province (Note: 
U.S. imports of fresh Argentine lemons are currently blocked, and 
there is an active U.S. anti-dumping investigation on Argentine 
lemon juice).  Trade Secretary Chiaradia argued that there is "no 
technical reason for lemons not to enter U.S. market, or beef from 
Patagonia."  Rep. Peterson countered by expressing concern with 
Argentine restrictions on imports of beef and poultry.  On lemons, 
he noted that USDA had attempted to resolve the issue but was held 
back by a court case.  He warned the Argentines that California 
lemon growers may file a new case on different grounds seeking to 
block renewed imports and suggested that Argentina work though its 
Embassy to meet with the California growers.  However, he added the 
U.S. is "committed to following scientific" determinations, and 
expressed hope that the Argentines would do the same.  Rep. Weller 
regretted the lack of bilat trade agreement between our countries, 
and noted that while some Members of Congress are receptive to 
Argentine lemon imports, they want some kind of reciprocity.  As the 
U.S. moves towards allowing imports of Argentine lemons, he noted 
that the U.S. will expect movement from Argentina on allowing 
imports of U.S. beef and poultry. 
 
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Doha: Some Common Ground, Farm Bill not the Problem 
--------------------------------------------- ------ 
 
¶4. (SBU) Chiaradia raised the WTO Doha Round, noting active GoA 
participation in the process, and stated the GoA was "concerned 
about the quality of the package presented there."  However, he also 
noted that, except for the issues of agricultural subsidies and 
industrial tariffs, the GoA shares most of the goals of the USG - 
such as more open agricultural markets around the world, and 
increased services trade.  He described the Round as "not very 
alive" at the moment, and said he thinks WTO Secretary General Lamy 
and Brazilian FonMin Amorim are too optimistic if they believe it 
will be resolved during September talks in Geneva.  Peterson 
expressed similar doubts, which the other Members echoed.  Chiaradia 
also opined that a Doha end result might conflict with current U.S. 
laws, clearly implying the Farm Bill.  Peterson disagreed that there 
would be such a conflict: "If prices fell that far (such that low 
prices forced total subsidies for U.S. growers higher than caps 
being discussed in Doha negotiations), our producers would be out of 
business - and so would yours."  He stated that the U.S. 
agricultural sector doesn't see this as a good agreement, largely 
for lack of market opening by Japan, the EU and even Brazil.  He 
added that "I think it would be very hard to pass" in Congress, but 
"if we have to make decisions, we'll make them at the time." 
Chiaradia echoed the concerns about market access in those 
countries, and then asked if cotton subsidies would be a conflict, 
noting the proposal in the most recent draft for 82% cuts in U.S. 
cotton subsidies.  Rep. Berry stated, "Our cotton producers are in 
trouble right now," and said he has been telling his constituents 
not to expect a new Farm Bill when the current one expires in five 
years. 
 
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Biofuels - Potential for Cooperation? 
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¶5. (SBU) Taiana cited biofuels as an area of potential mutual 
benefit.  Peterson noted unhappiness in Europe with the U.S. "splash 
and dash" program (where biodiesel is imported from Argentina and 
other countries, mixed with a small amount of U.S. biodiesel and 
re-exported to the EU with a U.S. subsidy of $1 per gallon), plus 
that it's costing U.S. taxpayers.  He said Congress was trying to 
fix the loophole, but that doing so could reduce imports of 
Argentine biodiesel, because it might remove the incentive to use 
imported biodiesel rather than domestic.  He noted his long personal 
history of trying to advance biofuels usage, opposition to the same 
by large oil companies, and expressed his hopes for the biodiesel 
industry to move away from food crops to other plants, which would 
probably take at least five years.  Weller suggested more 
parliamentary exchanges on topics such as biodiesel.  Ambassador 
Wayne cited existing U.S./Argentine province/state relationships, 
and suggested exploring more, perhaps with Minnesota on biofuels. 
 
¶6. (SBU) Weller noted that Argentina had been the victim of Iranian 
terrorist activity (referring to the 1994 bombing of the 
Jewish-Argentine Friendship Center (AMIA) which killed 85 persons, 
and for which international arrest warrants have been issued for 
five current and former Iranian government officials and one 
Lebanese Hizballah leader), and encouraged Taiana and his colleagues 
to advocate against Bolivia allowing Iran to create a TV station in 
Bolivia.  He argued that this "could poison the minds of a lot of 
people," especially since he understands the intent is to broadcast 
throughout South America. 
 
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Comment 
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¶7. (SBU) The Argentine government has placed a high priority on 
gaining market access to the U.S. for fresh lemons and beef. 
Argentina is the largest lemon exporter in the world and views 
additional access for lemons as a way to create employment in a poor 
region of the country.  The issue of beef is more symbolic 
(particularly for the Patagonia region), since Argentina currently 
limits beef exports.  The Foreign Ministry gave no indication that 
decisions to allow imports of U.S. agricultural products were 
forthcoming, and their non-verbal responses reinforced that message: 
while Weller's concern about the Iranian TV station was met with 
nods and verbal affirmation, Peterson's expression of hope for 
agricultural trade decisions to be made scientifically was met by 
silence.  Given the political pressures the GoA currently faces over 
increased imports (see reftel for private sector demands about 
increased imports from China and GoA response in 2007), it seems 
unlikely that the GoA will open its markets unilaterally, no matter 
how well justified the move may be on scientific grounds.  However, 
a U.S. market opening would provide political cover for the GoA to 
allow additional market access, albeit limited, for some U.S. 
agricultural goods. 
 
WAYNE