VZCZCXYZ0451
OO RUEHWEB

DE RUEHBU #0230/01 0631930
ZNR UUUUU ZZH
O 041930Z MAR 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3153
INFO RUEHLO/AMEMBASSY LONDON 1308
RUEHME/AMEMBASSY MEXICO 1762
RUCNMER/MERCOSUR COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL

UNCLAS BUENOS AIRES 000230 
 
SIPDIS 
SENSITIVE 
 
Treasury for Nancy Lee 
NSC for Mike Froman 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD EAGR PREL KSUM AR
SUBJECT: Argentina G-20 Update: President Previews GoA G-20 
Positions, Sherpa Pledges Coordination, UK Officials Sound Out GoA 
Priorities 
 
Ref:  Buenos Aires 168 
 
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Summary 
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¶1. (SBU) President Kirchner, in March 1 remarks to Argentina's 
parliament on the upcoming G-20 meeting, confirmed that she will 
call for the wholesale reform of Bretton Woods institutions, 
including the conversion of IFIs into no-conditionality lending 
sources to emerging markets.  She said she will also emphasize 
global coordination of macroeconomic policies in order to sustain 
global demand and for joint action to regulate tax havens.  GoA 
Sherpa and Ambassador to the U.S. Hector Timerman clarified to 
Ambassador March 2 that Argentina will state its position and 
worldview clearly, but plans to work constructively and will do 
nothing to undermine U.S. Summit goals. On G-20 member nation 
initiatives to help the poorest, GoA Agriculture Secretary Cheppi 
told Ambassador February 25 that Argentina is already working with 
the Inter-American Development Bank and with countries like Spain 
and Germany to provide agricultural technical assistance to other 
countries and could do more if asked in the G-20 context.  The UK 
Embassy in Argentina reported to post on recent meetings with the 
GoA on G-20 themes by UK Financial Secretary Steven Timms and 
Foreign Office Minister Lord Malloch Brown.  Argentine Central Bank, 
Economy Minister, and Foreign Ministry leadership called for IMF 
reforms to include new "light" conditionality credit facilities and 
previewed a GoA proposal to be made at the upcoming mid-March G20 
Finance Ministers meeting to have member nations lend reserves to 
the IMF in order to allow it to leverage additional resources into 
expanded no- or low-conditionality credits.  On trade issues, GoA 
officials reiterated the standing GoA line that Argentina will take 
all necessary steps to protect domestic industrial production and 
called for the G-3 to put a "very substantive" proposal on the table 
to serve as a basis for credibly re-launching the WTO Doha dialogue. 
 End Summary. 
 
--------------------------------------------- 
President Kirchner on Argentina's G-20 Agenda 
--------------------------------------------- 
 
¶2.  In her March 1 remarks to the opening of the Argentine 
parliament's 127th session, President Cristina Fernandez de Kirchner 
(CFK) led off with remarks on the global financial crisis, the 
"fall" of conventional economic wisdoms, and the GoA's G-20 
priorities.  She called current global economic and financial 
distress "only the tip of the iceberg," with the reigning global 
economic paradigm itself in crisis.  She argued that the current 
economic model is based on "subordination, not cooperation, in which 
rules are only enforced for weak or emerging market economies."  CFK 
said that, at the G-20, Argentina would reiterate the policies it 
has consistently put forward since 2003, the year her husband was 
elected president.  These policy prescriptions included, she said, 
the wholesale reform of Bretton Woods institutions as well as the 
global coordination of macroeconomic policies in order to sustain 
global demand.  Dealing with only the immediate global banking 
crisis, CFK argued, begs the broader question of how to restore 
confidence in the global financial order and how to support those 
emerging market economies which have reached the limits of their 
debt capacity.  IFI reform should include their conversion into 
no-conditionality lending sources to the emerging markets which, she 
said, have accounted for 75% of global economic growth in the last 
10 years.  CFK also called for joint action to regulated tax havens 
(in her terminology, "fiscal paradises"), which she claimed shelter 
over 40% of global capital. 
 
---------------------------------------- 
Ambassador Timerman on G-20 Coordination 
---------------------------------------- 
 
¶3. In a March 2 phone call to Ambassador Wayne, Argentine Ambassador 
to the United States and designated G-20 Sherpa Hector Timerman 
noted that he had very positive conversations with NSC Deputy and US 
G-20 Sherpa Mike Froman and with Treasury Deputy Assistant Secretary 
Nancy Lee and that he found U.S. positions very progressive. 
Timerman confirmed that Argentina will state its position and 
worldview clearly, but will do nothing to undermine U.S. Summit 
goals.  He stressed that Argentina wants to use the G-20 to 
demonstrate its intent to sustain good relations with the Obama 
 
 
administration and to work constructively with the United States. 
 
----------------------------------------- 
Ag Secretary on GoA Assistance to Poorest 
----------------------------------------- 
 
¶4. (SBU) In a February 25 meeting with Production Minister Debora 
Giorgi and Agricultural Secretary Cheppi, Ambassador noted that in 
the G-20 process there has been discussion of how to help the 
poorest countries during the ongoing financial crisis, particularly 
in agriculture, and that other countries would be looking to 
Argentina to contribute.  Cheppi noted that Argentina is already 
working with the Inter-American Development Bank and with countries 
like Spain and Germany to provide technical assistance to other 
countries.  He went on to say that Argentina would be in a position 
to provide technical assistance on broader basis, if asked in the 
G-20 context. 
 
--------------------------------------------- --- 
UK Treasury/Foreign Office Meet with GoA on G-20 
--------------------------------------------- --- 
 
¶5. (SBU) UK Embassy senior economist Andres Borenstein provided 
Econoff a readout on recent G-20 meetings with GoA officials: Steven 
Timms, Financial Secretary of the Treasury, met February 18 met 
during a half day visit to Argentina with Central Bank President 
Martin Redrado, Economy Minister Fernandez, and Foreign Ministry 
External Commerce Secretary Alfredo Chiaradia.  Earlier on February 
11, Lord Malloch Brown, Senior Minister in the UK Foreign Office met 
with Foreign Minister Jorge Taiana, Economy Minister Fernandez, 
Finance Secretary Lorenzino and Central Bank Vice President Miguel 
Angel Pesce. 
 
¶6. (SBU) Borenstein reported that Central Bank President Redrado 
confirmed to UK officials that Argentina will call for "light" IMF 
conditionality at the upcoming G-20 Finance Ministers' meeting and 
said Argentina would be prepared to lend GoA funds to the IMF 
provided the Fund would turn these around as low conditionality 
credits. (Note: Central Bank Vice President Pesce confirmed to 
Econoffs Feb 25 that the GoA will propose that member nations hold 
reserves at the IMF to provide it the wherewithal to leverage 
additional no- or low-conditionality credit lines to emerging 
economy members).  Borenstein reported Redrado saying that, while 
Argentina plans to actively contribute to the discussions on global 
financial market architecture and regulation, such discussion speaks 
to the next global financial crisis.  Argentina hopes to focus G-20 
participant attention on dealing with the current crisis via broader 
central bank and macroeconomic policy coordination.  Finally, 
Borenstein reported that Redrado called for the G-3 to put a "very 
substantive" trade liberalization proposal on the table in order to 
serve as a basis for credibly re-launching the WTO Doha dialogue. 
 
¶7. (SBU) UK Official meetings with Economy Minister Fernandez were 
less substantive than those with Redrado, Borenstein said. He noted 
however, Fernandez' "spirit" of engagement and his welcoming of the 
UK's own call for IMF voice and quota reform and for the creation of 
new and more flexible IMF credit instruments.  Borenstein noted that 
the UK considers the Fund's Short Term Liquidity Facility announced 
in October 2008 (up to 500% of quota, three month maturity) for 
eligible countries a failure since the key eligible players (South 
Korea, etc.) opted for other funding sources.  Borenstein also 
reported that Fernandez supported the UK's call for "meritocratic" 
leadership appointments to the Fund and Bank and called for an end 
to US and French "hegemony." 
 
¶8. Finally on Secretary Timms' meeting with External Commerce 
Secretary Alfredo Chiaradia, Borenstein reported that Chiaradia 
replayed the GoA's standing position on the Doha Development Round: 
Argentina is not reflexively protectionist, but will take all 
necessary steps to protect domestic industrial production and the 
high-wage employment it generates. 
 
WAYNE