VZCZCXYZ0052
RR RUEHWEB

DE RUEHBU #0231/01 0631955
ZNR UUUUU ZZH
R 041955Z MAR 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3155
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 000231 
 
USDA FOR FAS/OA/OCRA/ONA/OGA/OFSO 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: EAGR ECON EINV PGOV PHUM AR
SUBJECT: Argentina: Production Minister Giorgi on G-20 and Bilateral 
Agricultural and Trade Issues 
 
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Summary 
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¶1. (SBU) Production Minister Debra Giorgi met with Ambassador 
February 25.  The discussion included the G-20 process and related 
agricultural technical assistance the GoA is providing to poorer 
countries as well as outstanding bilateral trade frictions.  Giorgi 
noted the significant increase in 2008 bilateral trade to the US$ 12 
billion level and asked for expedited approval of Argentine lemon 
and beef exports to the U.S. in the context of Argentina's bilateral 
trade deficit.  She proposed bilateral meetings of the Consultative 
Committee on Agriculture between the Secretariat of Agriculture in 
her ministry and the USDA in the second half of 2009.  Ambassador 
raised U.S. interest in access for beef and poultry.  The 
discussions also included cooperation on biofuels development, 
ongoing coordination on biotechnology issues in international 
negotiations, the GoA's concern about a new US CVD investigation on 
diesel engine piston rings, the status of GoA industrial 
reactivation efforts in the face of the global economic downturn, 
and the size and importance of bilateral tourism.  END SUMMARY 
 
¶2. (U) Ambassador met with Minister Giorgi on February 25 in their 
first meeting since her late November 2008 appointment as the head 
of the newly created Ministry of Production. The newly 
re-established Ministry of Production controls four secretariats: 
(1) The Secretariat of Industry, Foreign Trade and Small Business 
and (2) the Secretariat of Agriculture, Fishing and Food; (3) the 
Secretariat of Tourism; and (4) Prosper-AR, the national investment 
agency.  The Minister was accompanied by Agriculture Secretary 
Carlos Cheppi, Chief of Cabinet Horacio Cepeda and Under Secretary 
for Commercial Policy and Administration Eduardo Bianchi.  Economic 
and Agricultural Counselors attended the meeting with the 
Ambassador. 
 
¶3.  (SBU) The discussion started with multilateral issues, where the 
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.  Agriculture Secretary Cheppi 
noted that Argentina is already working with the BID and countries 
like Spain and Germany to provide technical assistance in other 
countries.  He went on to say that Argentina would be in a position 
to provide technical assistance on broader basis. 
 
¶4. (SBU) Giorgi noted Argentina's substantial competitive advantages 
in the production of biofuels (both biodiesel and ethanol) and her 
hope to work with the United States in this area.  The Ambassador 
explained that the U.S. had offered to work in this area with 
Argentina following the 2007 signing of our bilateral biofuels 
accord with Brazil in this area and the energy is a priority of the 
new Administration.  The Minister noted that there are opportunities 
not only in the area of technical cooperation but also on broader 
policy and demand issues for biofuels. 
 
¶5. (SBU) Giorgi highlighted ongoing cooperation and coordination 
between the U.S. and Argentina in biotechnology, where the U.S. and 
Argentina have been important allies in negotiations taking place in 
the WTO, the Cartagena Protocol and Codex.  The Ambassador 
congratulated the Minister for the recent approval of a new biotech 
cotton variety by Argentina, noting the importance of dealing with 
biotechnology issues on a scientific basis.  The Ambassador went on 
to note the importance of resolving the longstanding dispute between 
the GOA and Monsanto over royalties for Monsanto's Roundup Ready 
soybean variety.  Secretary Cheppi explained that the GOA is 
developing a new seed law with input from all parties that could 
help resolve this issue, but movement has been stalled due to the 
ongoing dispute with the farm sector.  He noted that there is 
already a fair amount of agreement on what needs to be done. 
 
-------------------------------- 
Bilateral Trade and Ag Frictions 
-------------------------------- 
 
¶6. (SBU) The Minister noted that, while she is pleased that 
bilateral trade with the U. S. jumped substantially in 2008 to over 
$12 billion, Argentina is running a trade deficit with the United 
States and so she would like to see longstanding access issues for 
Argentine products to the U.S. resolved.  In particular, she raised 
the approval of lemons and beef exports to the U.S. as a top 
priority.  Secretary Cheppi stated that technical issues on approval 
of lemons have now been resolved and that it is important that the 
USDA move forward with publication of the rule to allow lemon 
imports.  He also pressed for approval of fresh beef imports for 
both Patagonia and the rest of the country.  The proposed rule for 
approval of fresh beef from Patangonia was published two years ago 
and there is currently a team from the USDA in the region reviewing 
its status.  With respect to approval of fresh beef exports from the 
rest of the country, he noted that Argentina is in the same or 
better sanitary situation as Uruguay and that there is no 
justification for the U.S. allowing imports from Uruguay and not 
from Argentina.  Cheppi also raised the interest of Argentina is 
gaining access for other citrus products as well as the upcoming 
APHIS visit for approval of a fruit fly free zone in Mendoza 
province. 
 
¶7. (SBU) The Ambassador noted that the U.S. also has market access 
issues for Argentina, in particular approval for exports of beef and 
poultry meat exports.  U.S. exports of beef have been totally 
blocked due to BSE related restrictions applied by Argentina.  The 
U.S. is also working on approval of poultry meat exports to 
Argentina and is still waiting for the final results of the visit of 
Argentine sanitary official to inspect poultry slaughter plants in 
the U.S.  Secretary Cheppi responded that approval of beef exports 
by Argentina depend entirely on U.S. approval of Argentine beef 
exports.  They are willing to apply the international standards of 
the OIE, which would allow U.S. beef exports, if the U.S. is willing 
to also apply OIE standards and allow Argentine beef exports. 
 
------------------------------------------- 
Consultative Committee on Agriculture (CCA) 
------------------------------------------- 
 
¶8.  (SBU) Minister Giorgi asked that the USDA consider holding 
consultations of the CCA in the second half of 2009.  The last 
meeting of the CCA was in the U.S. in May 2007 and it is now 
Argentina's turn to host the CCA (which normally takes place 
annually).  The Agricultural Counselor agreed to forward the request 
to officials at the USDA. 
 
------------------------------------------- 
GoA Concerned by New U.S. CVD Investigation 
------------------------------------------- 
 
¶9. (SBU) Under Secretary Bianchi noted that in late February, the 
U.S. Department of commerce notified the GoA of a countervailing 
duty (CVD) investigation on diesel engine piston ring inserts 
produced by Santa Fe province company Clorindo Appo.  He called this 
untimely in the context of current declining world trade volumes and 
asked for Embassy follow-up.  He said the GoA would vigorously 
participate in the CVD process. (Note: The investigation requested 
by Ohio-based Quaker City Castings charges material injury to a U.S. 
industry and was published in the Federal Register February 23.  The 
Register notes that the Department of Commerce does not plan to 
investigate the four principal alleged GoA subsidy programs cited by 
Quaker City, including preferred pre- and post-export financing and 
tax relief for capital goods production as they are either no longer 
in force or non-countervailable. End Note) 
 
--------------------------------------------- --- 
GoA Industrial Reactivation Initiatives On Track 
--------------------------------------------- --- 
 
¶10. (SBU) Ambassador asked how high profile Production Ministry 
initiatives announced in December 2008 and January 2009 to boost 
flagging industrial manufactures via consumer incentive plans were 
moving forward.  Giorgi responded that these plans, including GoA 
financing plans to promote the purchase of economy cars and trade in 
and financing plans for white goods (refrigerator, etc.) had started 
slowly but, following better internal GoA coordination and 
mid-course corrections, were now gaining momentum.  She declined to 
discuss current sales volumes but acknowledged media criticism of 
production bottlenecks and initially unclear consumer qualification 
criteria and said that concrete sales results should be seen in 
March sales numbers 
 
-------------------------------------------- 
Interest in Joint Efforts to Promote Tourism 
-------------------------------------------- 
 
¶11. (SBU) Ambassador noted that bilateral tourism between the U.S. 
and Argentina is big business, with over 250,000 Argentines 
traveling to the US and roughly 400,000 Americans traveling to 
Argentina in 2008.  In light of recent declines in air traffic and 
tourism volumes linked to the global economic slowdown, Ambassador 
suggested that Interior Minister Randazzo's decision to postpone the 
imposition of reciprocal entry fees on American tourists equivalent 
to our visa application fees was appropriate.  Ambassador asked how 
we could best work together to promote a tourism sector that 
provides substantial employment and government revenue for both 
Argentina and the United States.  Giorgi asked whether the Embassy 
had been in touch with Tourism Secretary Enrique Meyer and 
Ambassador confirmed that post's Foreign Commercial Service and U.S. 
air carriers have been working with Meyer's office on a variety of 
tourism promotion initiatives. 
 
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Production Ministry IV Candidate 
-------------------------------- 
 
¶12. (SBU) Ambassador said that the Embassy was pleased to host 
Production Ministry trade policy advisor Anastasia Daicich to 
participate in an February 2009 International Visitor program "Trade 
and Investment in a Globalized World."  Giorgi said that Daicich had 
just returned to Argentina from this three week multi-city visit to 
the U.S. and called her in to meet the Ambassador.  Daicich praised 
the IV program's content and the access it offered to U.S. trade 
policy decision makers and private sector players. 
 
WAYNE