VZCZCXYZ0001
OO RUEHWEB

DE RUEHBU #0123/01 0361728
ZNR UUUUU ZZH
O 051728Z FEB 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2976
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 000123 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: OVIP PREL EAIR EWWT ETRD AR
SUBJECT: Argentina: Codel Costello Supports Expanding Bilat Ties, 
Including CivAir and Port Security Cooperation 
 
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Summary 
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¶1. (SBU) Codel Costello, a delegation of eight U.S. Representatives 
plus professional staff from the House Transportation and 
Infrastructure Civil Aviation Subcommittee, met with representatives 
of U.S. civil aviation companies and with senior GoA officials, 
including Planning Minister De Vido and Transportation Secretary 
Jaime, to support our expanding bilateral civil aviation ties. 
 
¶2. (SBU) Planning Minister De Vido made a special effort to return 
to the capital to meet with the Codel and he instructed Secretary 
Jaime to do the same.  The Foreign Ministry similarly called to 
offer a meeting between the Codel and the Foreign Minister on a 
Friday afternoon during Argentina's summer vacation period.  In both 
cases, GoA officials indicated they wanted to send a positive 
message to the new Obama Administration that they want to have a 
good relationship. 
 
¶3. (SBU) Codel members noted the importance that their Committee and 
the incoming Obama administration assign to air transport safety and 
security, supported U.S. company efforts to sell and lease new 
Boeing aircraft to the Argentine flag carrier, and raised a number 
of specific U.S. air carrier concerns with GoA officials, including 
on airport security police understaffing, differential and 
discriminatory airport fees charged to international and domestic 
carriers and the GoA's recent refusal of a routine Continental 
airlines codeshare application.  The Codel also reviewed and 
responded positively to the notable cooperation with the GoA in 
improving port security for the growing cargo trade between the U.S. 
and Argentina.  They toured the private Exolgan port which hosts the 
joint USG/GoA Container Security Initiative (CSI) and receiving a 
briefing by GoA Customs Director Tirabassi. 
 
¶4. (SBU) In a meeting with Argentine Foreign Minister Jorge Taiana, 
the Codel stressed the importance of Argentina to the United States 
and their desire to strengthen relations.  Taiana praised the new 
administration of President Obama and the bilateral relationship 
with the United States, noting strong cooperation in 
counter-terrorism, counter-narcotics, and other areas.  The Codel 
visit received widespread and positive media coverage emphasizing 
good bilateral relations in newspapers in the capital and provinces, 
as well as radio and television. 
End Summary 
 
¶5. (U) An eight-Representative delegation of the House Committee of 
Transportation and Infrastructure Civil Aviation Subcommittee, led 
by Subcommittee Chairman Jerry Costello (D-IL) visited Buenos Aires 
January 30 - February 1.  Costello was accompanied by ranking 
Subcommittee Republican Representative John Duncan (R-TN), 
Representative Henry Brown (R-SC), Representative Tim Holden (D-PA), 
Representative Edie Bernice Johnson (D-TX), Representative Steve 
LaTourette (R-OH), Representative Dan Lipinski (D-IL), and 
Representative Solomon Ortiz (D-TX).  The delegation was accompanied 
by John Cullather, Staff Director, Subcommittee on Maritime 
Transportation, Holly Woodruff Lyons, Staff Director Subcommittee on 
Aviation, Christa Fornarotto, Staff, Subcommittee on Aviation, 
Suzanne Newhouse, Minority Counsel, and Laurie Bertenthal, 
Legislative Assistant, Subcommittee on Aviation.  Codel Costello's 
focus in Argentina was on supporting our expanding bilateral civil 
aviation ties and on reviewing our notable cooperation with the GoA 
in improving port security for the growing cargo trade between our 
nations. 
 
--------------------------------------------- ----- 
Codel Meets with U.S. Civil Aviation Industry Reps 
--------------------------------------------- ----- 
 
¶6. (SBU) The Codel met with representatives of four U.S. commercial 
air carriers serving the Buenos Aires market (American Airlines 
General Director Sergio Hurtado and American's Washington-based 
Managing Director, International and Government Affairs Michael 
Wascom; Continental Airlines General Manager Diego Garcia; Delta 
Airlines Sales Manager Javier Diaz; and United Airlines Country 
Manager Rodolfo Meyer), air express courier Federal Express 
(represented by legal counsel Elizabeth Freidenberg), Boeing 
Commercial Airplanes Sales Director Van Rex Gallard,  General 
Electric Commercial Aviation Service Argentina President Alejandro 
Bottan, and Sabre Holdings Argentina Travelocity Managing Director 
Jorge Cordova. 
 
¶7. (SBU) In their comments to the delegation, U.S. commercial air 
carriers highlighted the attractiveness of the Argentine market, 
with bilateral tourism volumes increasing steadily and with two U.S. 
carriers, American and Delta, requesting and receiving additional 
flight frequencies in 2008.  They appreciated U.S. government 
advocacy on their behalf, both in Washington and at the Embassy, and 
noted that some improvements in GoA civil aviation oversight and 
coordination would enhance the attractiveness of the Argentine 
 
market.  American Airlines noted that Airport Security Police (PSA, 
under Justice Ministry authority) understaffing has resulted in 
passenger immigration control back-ups that result in costly 
aircraft departure delays.  Delta Airlines noted that recent GoA 
officials' statements that they intend to impose reciprocal visa 
fees ($130 per passenger for U.S. visitors, equivalent to our visa 
application fee) to fund GoA airport immigration infrastructure 
improvement, could negatively impact tourism volumes.  United 
Airlines commented on the differential landing fees charged in 
Argentina that unfairly benefit Argentine flag carrier Aerolineas 
Argentinas and on the poor ground service provided by monopoly 
baggage handling company Intercargeo (see para. 4). Continental 
Airlines echoed United's concerns with Intercargo and noted the 
GoA's surprise January 2009 failure to approve a renewal of its 
third-party code-share with COPA airlines. (Note: Embassy demarched 
GoA civil aviation authorities on this issue in January 2009, noting 
that such third-party codeshares are specifically authorized in our 
updated 2007 bilateral civil aviation accord). 
 
¶8. (SBU) Finally, air express courier Federal Express noted 
legislative discrimination against foreign air express couriers, 
which hinder their ability to provide competitive door-to-door 
service for time sensitive and/or high value packages.  Essentially, 
the GOA considers Federal Express as well as UPS to be exporters of 
the products they ship.  This causes long delays in package 
processing through Customs since express shipping companies only 
have the limited information provided them on package contents in 
the airway bill of lading. 
 
¶9. (SBU) Boeing highlighted its aggressive approach to 
re-nationalized flag carrier Aerolineas Argentinas (which currently 
flies older 737s and MD -80 aircraft on domestic routes and some 
747s in international routes) and its hopes to finalize the sale of 
two latest-generation Boeing 737-700s for approximately US$ 80 
million.  A key concern for Boeing is Aerolineas' lack of access to 
competitive long term financing (Eximbank remains closed in 
Argentina pending GoA repayment of approximately US$ 400 million in 
arrears to the Bank).  G.E. Capital, which currently leases 10 
aircraft to Aerolineas at monthly payments in the $15 million range 
noted its proposal to lease an additional 10 737-700s to Aerolineas 
for monthly payments in the $25 million/month range.  G.E., which 
also sells a variety of U.S. manufactured power generation and high 
technology equipment to Argentina, emphasized the importance of the 
USG continuing to encourage the GoA to stand fast against 
protectionist pressures brought on by the international financial 
crisis.  Finally, Sabre noted Aerolineas' large outstanding debt to 
the company for reservation system software services and noted that 
Argentina economy in general could benefit from less heavy-handed 
government regulation. 
 
--------------------------------------------- -- 
Mtg with Planning Minister, Transport Secretary 
--------------------------------------------- -- 
 
¶10. (SBU) The delegation met with the two most senior GoA officials 
responsible for Argentina's air, land and waterway transportation 
networks, Planning Minister Julio De Vido and his Transportation 
Secretary Ricardo Jaime.  Also attending were Director of Civil 
Aviation Affairs Alba Thomas Hattie, ORSNA (the GoA entity that 
regulates privatized airport authority AA2200) Vice President 
Alejandro Orchansky, and Undersecretary of Ports and Navigable 
Waterways Ricardo Lujan. (De Vido and, at his boss's instructions, 
Jaime both returned to Buenos Aires just for this meeting.  They 
arranged substantial media coverage.) 
 
¶11. (SBU) In their introductory comments, De Vido and Jaime 
emphasized the role that the successive Nestor Kirchner and Cristina 
Fernandez de Kirchner administrations have played in rehabilitating 
Argentina's long distance railway networks (with only 18,000 km of a 
previous 48,000 km network currently in use) and navigable river 
infrastructure (with over US$ 3 billion invested in dredging and 
port development along the Parana/Paraguay waterway over the past 
five years).  On accomplishments in civil aviation, Jaime cited 
Argentina's recovery of FAA Category One safety status in 2005, the 
creation of a GoA entity, ANAC, to oversee the transition from 
military to civilian control of civil aviation, and the 
rehabilitation and expansion of over 30 of Argentina's domestic 
airports. 
 
¶12. (SBU) Rep. Costello noted that civil aviation safety and 
security are among the top priorities of the Civil Aviation 
Subcommittee and of the incoming Obama administration.  He noted and 
appreciated the GoA's close cooperation with our FAA and TSA on 
these issues.  In response to Rep. Duncan's question on reports of 
Airport Security Police (PSA) understaffing, Secretary Jaime noted 
that the independent PSA operates under Justice Ministry (not 
Planning Ministry) authority and was created in 2005 to replace a 
prior security force under military Air Force oversight.  In 
response to Rep. Johnson's question as to the percentage of sea 
freight cargo containers scanned, Undersecretary Lujan noted that 
 
the GoA is working to comply with international standards and that 
at present containers are selectively scanned in accordance with 
risk assessment protocols. 
 
¶13. (SBU) Responding to Rep. La Tourette's question the application 
of differential airport landing fees for foreign and domestic 
carriers (see para. 4), Secretary Jaime noted that these fees were 
set by an earlier Supreme Court ruling. (In fact, this Supreme Court 
ruling related to a complaint by Mexicana Airlines and spoke only to 
the GoA's right to charge airlines in multiple currencies and 
not/not to the GoA's right to charge differential fees to domestic 
and international carriers.  U.S. carriers continue to suffer 
effective discrimination vis-a-vis Argentine flag carrier Aerolineas 
Argentinas, with the flag carrier paying international airport fees 
in pesos, and U.S. carriers paying substantially higher fees in US 
Dollars.  Following a suit brought by several U.S. carriers, the 
U.S. Department of Transportation (DoT) in 2003 imposed a fee on all 
AA fights to the U.S., at a cost that compensates for this 
disparity.  Today, DoT reports that this escrow account balance 
totals about US$ 7 million). 
 
¶14. (SBU) Rep. La Tourette noted that Continental Airlines, a major 
employer in his Ohio district, had expressed concern about the GoA's 
recent rejection of Continental's application to renew a third party 
codeshare with its partner COPA Airlines. Civil Aviation Director 
Hatti responded that the GoA's refusal related to Continental's 
request to modify codeshare authorized departure and arrival points 
and that the issue should be resolved once the GoA and Panama 
conclude bilateral civil aviation agreement negotiations in April 
¶2009. (Continental legal counsel notes that this airline's codeshare 
renewal request did not, in fact, request any modification of 
codeshare departure or arrival points, that such third party 
codeshare requests are specifically authorized in the 2007 U.S./GoA 
bilateral civil aviation agreement, and that a prior Continental 
codeshare renewal request had been approved by the GoA subsequent to 
the July 2007 signing of the U.S. GoA bilateral agreement update. 
Embassy has demarched GoA civil aviation officials on this matter 
and will continue to press the GoA to observe the letter of our 
bilateral civil aviation agreement). 
 
--------------------------------------------- - 
Delegation Meeting with Foreign Minister Taiana 
--------------------------------------------- -- 
 
¶15. (SBU) In a follow-on meeting with Foreign Minister Jorge Taiana, 
Rep. Costello and other Codel members stressed the importance of 
Argentina to the United States and their desire to strengthen 
relations.  Taiana praised the new administration in Washington and 
the bilateral relationship with the United States, noting strong 
cooperation in counter-terrorism, counter-narcotics, and other 
areas.  Accompanying FM Jorge Taiana were Argentine Ambassador to 
the United States Hector Timerman, VFM Vittorio Taccetti, COS 
Alberto D'Alotto, and North America Director Antonio Trombetta. 
 
¶16. (SBU) Rep. Costello introduced his delegation, noting it had 
five Democrats and three Republicans, and that its members had a 
broad range of interests reflected in their committee assignments. 
(Three served on the House Science Committee, Rep. Ortiz was chair 
of the House Armed Services Sub-Committee on Readiness, Rep. 
Latourette served on the Appropriations Committee, and Rep. Holden 
on the Agriculture Committee.)  He noted that Rep. Duncan had been 
to Argentina twice before, and Rep. Ortiz many times, and he 
introduced Rep. Duncan as co-chair of the Codel.  Rep. Duncan 
underscored the delegation's desire to build on the strong extant 
ties of friendship between Argentina and the United States. 
 
¶17. (SBU) Taiana said it was always an honor to receive U.S. 
congressional delegations representing a "pueblo amigo."  He listed 
the many things that Argentina and the United States shared in 
common, both nations having vast territories at opposite ends of the 
hemisphere, immigrant populations, federal systems, similar 
constitutions, and shared values of democracy and integrity.  He 
said that Argentina's public education system had been propelled by 
President Sarmiento's mid-nineteenth century recruitment of U.S. 
women teachers to come to Argentina and train teachers.  Argentines 
had long been going to the United States for higher education, but 
he was gratified to see growing numbers of U.S. students coming to 
Argentina.  Taiana claimed there was already a fluid bilateral 
relationship based on mutual respect with the potential for building 
and deepening those ties.  He underscored the importance of mutual 
understanding, and he said the MFA's doors were always open for a 
frank and constructive dialogue with American representatives. 
 
¶18. (SBU) Taiana said that Argentines were "very sincerely 
delighted" with President Obama's inauguration, and there were great 
expectations of the new administration.  He extolled the productive 
bilateral cooperation in counter-terrorism, counter-narcotics and 
other law enforcement and security issues.  He noted that -- unlike 
other regions -- Latin America had no weapons of mass destruction, 
no intractable racial or religious or ethnic conflicts.  He pointed 
 
to the building of trust between Brazil and Argentina over the last 
25 years as a great contribution to world peace, and noted it was 
relevant to the Codel's transportation agenda, citing 
Argentine-Brazilian cooperation in developing proposals for 
bicoastal corridors between the Atlantic and Pacific as well as the 
River Plate's estuary "hidrovia" that would require significant 
investment but had the potential for making transportation of 
sub-regional trade more efficient and economic.  Paraguay was 
already using the river to send one million tons of soy to crushing 
and processing facilities in Argentina.  He said the GoA had a 
strong vocation for Southern Cone integration, marshaling its 
political will with the socio-economic conditions needed to move 
ahead with integration.  He concluded that air transportation was 
obviously a vital priority for Argentina due to its vast territory, 
and he noted that the GoA was striving to bolster its radar coverage 
to boost air control and proper surveillance. 
 
¶19. (SBU) Rep. Costello acknowledged we "live in challenging times" 
requiring major investmets in infrastructure to reactivate the 
economy and ultimately to improve the quality of life of our 
citizens.  He noted the Codel's departure from the U.S. had been 
delayed by its participation in a key vote three days earlier on a 
bill that provided for $100 billion of investment in infrastructure, 
and later this year the U.S. Congress would take up consideration of 
a $500 billion highway bill.  The Congress was also planning to 
review water resources legislation.  Rep. Johnson opened her remarks 
by stressing the importance of Argentina to the United States.  She 
noted the two countries shared a growing appreciation for the 
importance of their cultural and ethnic diversities.  She said she 
and her colleagues were open to talking about management of water 
resources, and she raised Washington's concerns about 
narco-trafficking through the region, asking specifically for GOA 
views on whether vessels and containers needed to be checked 100% or 
on a spot basis. 
 
¶20. (SBU) Taiana stressed GoA commitment to cooperate in global and 
bilateral counter-narcotics efforts.  He said Argentina 
traditionally was not a production country but a venue for transit 
to Europe, with a small but rapidly growing domestic consumption 
problem. He said there was significant awareness of the drug issue, 
and recalled that the GoA took to heart the warning by Mexican 
President Calderon, when, speaking from experience, he urged 
President Cristina Kirchner (CFK) during a recent visit to "nip the 
problem in the bud."  Taiana said the GOA was likewise committed to 
counter-terrorism cooperation, noting Argentina had been the victim 
of international terrorist attacks in the 1992 bombing that 
destroyed the Israeli Embassy, killing 29 persons, and the 1994 
bombing of a Jewish community center, killing 85 persons.  Argentina 
was one of the first in the hemisphere to "suffer first-hand" the 
scourge of international terrorism.  It remained a priority concern 
for Argentines, and GoA policy was very clear in condemning and 
combating terrorism. Taiana said the GoA was very appreciative of 
USG support in going after the perpetrators of the 1992 and 1994 
bombings, and he detailed the assistance it received from the USG in 
obtaining Interpol red notices for several of the Iranians it had 
indicted. 
 
¶21. (SBU) Rep. Duncan said he appreciated Argentina's commitment to 
combating terrorism but urged "common sense" and restraint in 
addressing the problem, noting a historical tendency to over-react 
to this type of security problem.  He said there were many other 
threats and problems requiring attention.  Taiana took the point, 
saying he thought national security required a comprehensive 
approach.  He offered as an example Argentina's record in 
"legalizing" up to a half million undocumented immigrants from 
Paraguay, Bolivia and Peru.  He claimed that integrating the 
immigrants into Argentine society had, among other things, helped 
keep them from succumbing to organized crime such as trafficking in 
persons or narcotics.  Rep. Holden and Rep. Costello extended an 
invitation to Taiana, other GoA officials and legislators to visit 
Washington.  Ambassador Timerman thanked the members and said he and 
his staff in Washington were helping organize several visits to the 
United States by Argentine legislators to reciprocate the visits 
made by U.S. Codels to Argentina. 
 
¶22. (SBU) The MFA arranged a brief press conference at the end of 
the meeting to allow for substantial media coverage. 
Representatives Costello, Ambassador Wayne and Argentine Ambassador 
Timerman gave upbeat comments. 
 
------------------------------------ 
Ambassador Hosts Reception for Codel 
------------------------------------ 
 
¶23. (SBU) Following the Planning Ministry and Foreign Ministry 
meetings, Ambassador hosted a reception for the Codel that included 
U.S. private sector civil aviation and port security 
representatives, GoA officials from the Planning and Foreign 
Ministries, elected lower house parliamentary representatives, and 
media.  The Ambassador's remarks, widely quoted in local media, 
 
stressed the delegation's focus on supporting our expanding 
bilateral civil aviation ties and on reviewing our notable 
cooperation in improving the port security for the growing cargo 
trade between our nations.  On behalf of the delegation, Rep. 
Costello acknowledged the strength of bilateral commercial and 
diplomatic ties between the U.S. and Argentina.  Despite the Friday 
afternoon time slot, during Argentina's annual summer vacation, 
around 150 Argentines attended, indicating the high interest locally 
in anything connected with the new U.S. administration. 
 
---------------------------------------- 
Tour of Port of Buenos Aires CSI Faculty 
---------------------------------------- 
 
¶24. (U) On Saturday, January 31, the delegation toured the privately 
owned Exolgan port in the Province of Buenos Aires, which hosts the 
joint U.S. /GoA Container Security Initiative (CSI) and handles 72% 
of all outbound container exports to the U.S. and 80% of all inbound 
container imports from the U.S.  The delegation was briefed by 
Embassy Immigration and Customs Enforcement (ICE) Director Steve 
Kleppe, Exolgan Director General Juan Carlos Vasquez and GoA Customs 
Director Silvina Tirabassi. 
 
¶25. (SBU) ICE's Kleppe provided an overview of the Argentine CSI and 
linked Trade Transparency Unit programs since their respective 2005 
and 2006 inceptions and praised the proactive cooperation of Exolgan 
officials and GoA customs authorities.  Vasquez noted that roughly 
2% of the 31,000 containers Exolgan exports to the U.S. are scanned 
by CSI equipment but that fully 40% of containers are manually 
inspected by Argentine customs authorities who work out of the port. 
 Tirabassi noted that the GoA had invested over US$ 60 million in 
the past five years in upgrading its container inspection technology 
and in improving risk assessment protocols. 
 
-------------------------------------- 
Positive Media Coverage of Codel Visit 
-------------------------------------- 
 
¶26. (SBU) Codel Chairman Costello, who commented positively on the 
Embassy's intensive public affairs outreach program, made the 
delegation available to engage the media to help advance mission 
goals.  As a result, the Embassy's Press Section coordinated with 
the Codel to prepare and issue press releases on events of public 
interest: the MFA and Planning Ministry meetings, the delegation 
visit to the port and Mrs. Costello's academic session on Fulbright 
scholarships.  Chairman Costello and Representative Duncan consented 
to join Ambassador Wayne in a press stake-out following the MFA 
meeting late Friday.  These press opportunities generated positive 
coverage in newspapers in the capital and provinces, as well as 
radio and television, emphasizing good relations.  Media placements 
of note included the Saturday front page in English-language Buenos 
Aires Herald, a full page spread in left-leaning Pagina/12, and a 
Channel 7 television spot.  Press coverage continued through Tuesday 
February 13. 
 
¶27.  Representative Costello cleared this cable in draft. 
 
WAYNE