VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #0807 1911149
ZNR UUUUU ZZH
R 101149Z JUL 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 4048
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 000807 
 
SIPDIS 
SENSITIVE 
 
PASS USTR FOR KATHERINE KALUTKIEWICZ 
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 
US SOUTHCOM FOR POLAD 
 
E.O. 12958: N/A 
TAGS: ETRD EINV AR
SUBJECT: Argentine Government Responds Calmly to GSP Review 
 
Refs: (A) State 69463 
  (B) 2006 Buenos Aires 1985 
 
------------------- 
Summary and Comment 
------------------- 
 
¶1. (SBU) The GoA's response to the removal of Argentine biodiesel 
from receiving duty-free treatment after a review of the Generalized 
System of Preferences (GSP) program was measured.  A Foreign 
Ministry press release on the review didn't mention the removal, and 
a GoA Minister said there was "no animosity" in the decision.  This 
calm response is a welcome departure from what occurred in 2006 (ref 
B), when the U.S. Trade Representative announced that Argentina's 
eligibility for the GSP program would be reviewed.  At that time, 
then-President Nestor Kirchner made harsh public statements 
following press reports which called that review a political 
"reprisal."  End Summary and Comment. 
 
¶2. (SBU) Econoff advised U.S. Desk Officer Marcelo Cesa of the 
results of USTR's annual GSP review on June 30, shortly after the 
information was posted on the USTR website.  Cesa commented that 
Argentine exports of biodiesel - the lone Argentine product affected 
by the change - had already fallen considerably in 2009 due to the 
elimination of the "splash and dash" subsidy in late 2008.  (U.S. 
International Trade Commission data indicates that U.S. imports of 
biodiesel from Argentina had fallen 75% y-o-y in the first four 
months of 2009, to $39 million, including just $851,000 in April 
2009.) 
 
--------------------------------------- 
GoA Public Comments Neutral and Factual 
--------------------------------------- 
 
¶3. (U) The Foreign Ministry issued a brief press release on the main 
page of their website on July 1.  The release was entitled 
"Argentina Explains the Scope of Annual GSP Revision," and said 
(informal translation of the complete text): "The U.S. 
Administration published the results of the annual Generalized 
System of Preferences (GSP) revision yesterday, which involves 
numerous products from diverse countries.  The system establishes 
that if a country's exports to the U.S. exceed $135 million dollars 
or 50% of total U.S. imports of a given product, it will be 
considered sufficiently competitive and excluded from the program." 
 
¶4. (U) According to a comment provided exclusively to leading daily 
Clarin, Minister of Production Debora Giorgi said that "These 
measures imply no animosity toward our country, but rather are 
reviews that affect specific products, not countries.  The United 
States determines that these products do not need a duty-free 
benefit to compete in their market.  We will evaluate the way this 
impacts or affects our products, and our exports, and later we will 
make an appropriate presentation to the U.S. government." 
 
KELLY