Cablegate: Argentina: Codel Engel Addresses Bilateral Relations

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CODEL
SIPDIS

E.O. 12958: DECL: 2035/02/24
TAGS: OREP ECON ELAB PGOV PREL AR
SUBJECT: Argentina: Codel Engel Addresses Bilateral Relations

CLASSIFIED BY: Alex Featherstone, Political Counselor; REASON:
1.4(B), (D)

1. (SBU) Summary: Codel Engel enjoyed a very productive visit to
Buenos Aires, January 5-7. The Codel was led by Eliot Engel (D-NY)
and included Shelly Berkley (D-NV), Pedro Pierluisi (D-PR) and Lynn
Woolsey (D-CA). President Cristina Fernandez de Kirchner (CFK) met
with the Codel for two hours and shared her views on bilateral and
hemispheric relations, the Middle East, and Iran among other
matters. Foreign Minister Jorge Taiana stressed the GoA's desire
to work with the USG on a broad range of global and regional
issues. Buenos Aires Mayor and Presidential contender Mauricio
Macri offered the Codel his views on the Argentine economy,
strengthening bilateral ties and the rule of law. The Codel paid a
historic visit to the headquarters of Argentina's powerful trade
union confederation, the CGT. End Summary

Meeting with President CFK
----------------------------------

2. (C) Chairman Engel opened the meeting saying he was here to see
his good friend, the President, and to continue strengthening the
bilateral relationship, adding that, upon his return to Washington,
he will urge that Secretary Clinton and President Obama meet with
CFK. CFK thanked Engel and agreed that such meetings would do
much to strengthen U.S.-Argentine relations. She noted that
Argentina and she personally had looked forward to an Obama
Presidency that, for the moment, has not met expectations, citing
differences between Argentina and the U.S. over Honduras, U.S.
military presence in Colombia, and the Israeli-Arab conflict
(noting her recent meetings with Israeli President Peres and
Palestinian President Abbas). CFK said that, despite policy
differences with former President Bush, her husband and then
President Nestor Kirchner had met with Bush a month after
Kirchner's election and that she and her husband had enjoyed an
excellent relationship with former WHA A/S Shannon. In contrast,
she said that Obama has met with many other South American leaders
but not her and that the new WHA A/S Valenzuela expressed criticism
toward the government during his first visit to Argentina last
month. ""I can't ignore this,"" she added.

3. (C) Engel responded that he mentioned his support for a POTUS
meeting because it is important for the bilateral relationship and
the need to put everything out on the table for review. As
Americans and Democrats he and the other members here also have
high hopes for the Obama Presidency. At the moment, the health
care legislation has been dominating the national agenda, delaying
greater focus on employment creation, climate change, and foreign
policy priorities. Engel added that President Obama will be in ""a
good place soon"" to refocus. He said that he had spoken to
Valenzuela before coming to Argentina regarding the flap over his
comments, and it is clear that the comments were taken out of
context by press reports. Engel added that Valenzuela shares our
goal of good relations, and ""I will work hard to get us there.""
Engel said that he is stressing in all of his private and public
interactions here that U.S. and Argentina share many common
interests - much more than what divides us, and we need to put
aside our minor differences and misunderstandings to work together
on our broad common agenda.

4. (C) Engel thanked CFK for Argentina's vote in the IAEA
vis-a-vis Iran, noting Brazil's disappointing abstention on the
latest vote. On Honduras, he said that the U.S. also shares
Argentina's concern about the dangerous precedent set by the coup.
Engel said that Zelaya should have been reinstated before
elections, but, failing that, we now have an opportunity to use the
elections as a way out of the crisis and for he benefit of the
Honduran people. Regarding the Arab-Israeli conflict, Engel said
that we all want the same thing, i.e., an Israeli-Jewish state and
a Palestinian-Arab state living side-by-side, but the history of
negotiations has thus far been Israel offering concessions that
would achieve this result that are then ultimately rejected by the
Palestinians, first Arafat and now Abbas. Congresswoman Berkley
thanked CFK for her strong stand against anti-semitism in Venezuela
and elsewhere, but expressed disappointment that Argentina voted
for rather than abstaining on the Goldstone Report, which was
terribly biased against Israel. She added that all four members of
the delegation would encourage a POTUS meeting with CFK.

5. (C) CFK said it is hard to understand why Brazilian President
Lula was given a meeting with President Obama - despite Brazil's
negative IAEA vote and Lula's meeting with Ahmadinejad, while she

is refused after Argentina's strong stand against Iran in the IAEA
and counter-terrorism. On Honduras, CFK said that, not all, but
most UNISUR members see recognition of the new government as
impossible as long as no one involved in the coup is punished,
adding that ""for many of us"" a military coup ""is too close to
home."" On Arab-Israeli peace, CFK said that the U.S, with its
great weight in the region, must convince Israel to tone down its
response to provocations and to work for a comprehensive settlement
that includes a border on the Golan Heights. The same is true with
counter-terrorism, she added. Violent retaliation only fuels
terrorist recruits and more terrorism. Greater efforts must be
made to solve the Arab-Israeli and other underlying conflicts, as
well as establishing greater intelligence and logistics
capabilities. On Goldstone, CFK said that, while not perfect and
Argentina does not support all of the recommendations, the Report's
thrust that there must be an improvement in living conditions in
Gaza is right. She noted that Hamas's violent activities, although
wrong, cannot be equated to state-sponsored violence, which
Argentines suffered during the Dirty War. She added that no state
has prosecuted terror activity more aggressively than Argentina.

6. (C) Engel said that the U.S. was also concerned about growing
Iranian activity in South America, especially growing evidence that
Chavez is providing Iran with logistical and political support to
conduct terrorist activities. Engel added that the U.S. is puzzled
by Argentina's and others' concerns over the latest U.S.-Colombian
agreement that merely codifies long-standing cooperation on
combating narco-terrorism.

7. (C) CFK responded that Argentina's counter-terrorism concerns
do not involve Venezuela, but the tri-border area where
US-Argentine cooperation is strong. She said that, as you are
aware, Chavez is a friend, and ""I can assure you he is neither
anti-semitic nor a supporter of terrorism. She added that his ties
with Iran are related to ""international politics."" With respect to
the U.S.-Colombian agreement, CFK said that a clear UNASUR
understanding and agreement is key to regional peace. In
Bariloche, the terms of the agreement were never clear, and to many
of us it still appears that aspects of the agreement (such as a
landing strip suitable only for large aircraft) are still more
suitable for a conventional war than counter-narcotics. CKF added
that there has been a great deal of criticism against Chavez for
thwarting democracy by overstaying in power but none against Uribe
for doing the same - there must be equal treatment of all.

8. (C) CFK concluded by saying that, as President and a Peronist,
she wanted to thank the U.S. delegation for being the first
official U.S. visitors to meet and lunch with the Argentine Labor
Confederation. It was an important gesture and precedent. Engel
said he agreed and promised to return to Argentina as soon as he
can.

At the MFA
-------------

9. (C) Prior to their meeting with CFK Codel Engel called on
Foreign Minister Jorge Taiana, who warmly welcomed the Codel and
Ambassador Martinez and opened the meeting by highlighting the
deeply positive aspects of the bilateral relationship, emphasizing
common values and principles, citing democracy, freedom, human
rights and security as areas of cooperation. Chairman Engel noted
that he viewed the United States and Argentina as natural friends
and allies and that he hoped to enhance the relationship.

Economic Outlook
----------------------

10. (C) Taiana said that 2009 had been a test of the strength of
world economies and observed that, all things considered, Argentina
had weathered the storm relatively well. He also noted that, for
Argentina, the economic downturn had followed an unprecedented six
years of robust growth, a period, Taiana observed, unprecedented in
Argentina's last 40 years of history. He confidently predicted
that 2010 will be a good year for Argentina economically and the
country is now well positioned to enjoy a sustained period of
expansion. He observed that Argentina finds itself now in the same
position it enjoyed 100 years ago, i.e., commodity prices are high
and industrial imports are relatively cheap. The country has vast
natural resources, superior human capital in its well-educated work

force and enjoys excellent productivity.

Hemispheric Agenda
------------------------

11. (C) Taiana also addressed what he believes to be the
appropriate roles for Argentina and the United States to play in
the hemisphere. He stated that the U.S. should generally refrain
from interfering in purely regional matters and should address its
neighbors with a positive agenda. Alleviation of poverty is one
area, in addition to those already noted, where the U.S. could play
an enhanced positive role.

12. (C) He specifically objected to the Defense Cooperation
Agreement with Colombia to formalize the status of the U.S.
military forces assisting in counter-narcotics operations. Taiana
understands why a country such as Brazil feels threatened having
outside troops based so close to a sensitive region, the Amazon,
where local stewardship of natural resources is routinely a point
of international criticism. Engel pointed out that the agreement
is not changing the relationship that the U.S. Military has with
Colombia, it is only codifying the facts on the ground. The
agreement does not add a single American soldier to the forces
already present in the country. Taiana responded that it is fair
to draw a distinction between operations and permanent bases.

13. (C) Taiana stated that the defense of the region should be
conducted without the interference of outside forces. He noted
that relations within South America are now very positive; Mercosur
is expanding, and relations between Argentina and Chile have
improved to the point that they are jointly fielding a battalion of
UN peacekeepers.

14. (C) The issue of actions that countries in the hemisphere took
in response to the coup in Honduras ousting President Manuel Zelaya
was a second point of disagreement. While Taiana noted that this
matter is now in the past, it has not been forgotten, and he
criticized U.S. actions in accepting the results of a tainted
election rather than backing Argentina's call for a restoration of
Zelaya. Chairman Engel responded by noting that he had
participated in the Organization of American States meeting in
Honduras and the last picture taken with his camera was of him
standing alongside Zelaya. He indicated that the Arias decision to
proceed with the previously scheduled election was sound since it
offered the only practical way out of the crisis. The bottom line
for the Chairman, is that this is an issue that should be put
behind us and kept in perspective.

Iran Vote
-----------

15. (C) As a coda to the friendly and largely positive meeting,
Chairman Engel thanked Taiana for Argentina's vote against Iran at
the International Atomic Energy Agency. He noted that in contrast
to Brazil, Argentina had taken an unequivocal stand against the
development of nuclear weapons by the world's leading state sponsor
of international terrorism.

Mayor and Presidential Candidate
----------------------------------------

16. (SBU) Ambassador Martinez and Codel Engel met with Buenos
Aires City Mayor Mauricio Macri, who was accompanied by Buenos
Aires City Minister of Justice and Security Guillermo Montenegro,
the Chief of the City's newly-formed Metropolitan Police, former
national deputy Eugenio Burzaco, and the Director General of
International Relations Fulvio Pompeo. Macri and City officials
were welcoming and expressed interest in closer collaboration with
the USG, particularly in the area of legal training.

On the Argentine Economy
--------------------------------

17. (C) Congressman Engel solicited Mayor Macri's views on the
economy, Argentina's debt, and the breaking reports indicating CFK
had asked for Central Bank Governor Martin Redrado's resignation.
Macri said he agreed with the Central Bank's position, describing
the situation as ""completely unnecessary"" and ""not good"" because it
creates new problems while shifting global attention again to
weakness in Argentina's economic management. He said Redrado's
resignation or replacement should be handled by Congress, not by
the executive branch. Macri concluded that the situation further
weakens Argentina's ability to attract foreign investment, which is
already undermined by weak institutions and a lack of clear ground
rules. Security Minister Montenegro added that another deterrent to

foreign investment is the perception of a growing drug trafficking
problem in Argentina.

18. (C) Congressman Pierluisi asked Macri for his views on
resolving the Paris Club debt. Macri responded that it is ""very
important"" for Argentina to pay back its debt, but that the key
issue is how Argentina will finance it. He said that while he is an
engineer and not an economist, ""economics 101"" dictates that a
country should pay its debt with its surplus not its reserves.

Strengthening U.S.-Argentine Relations
--------------------------------------------- --

19. (C) In responding to Chairman Engel's question on
U.S.-Argentine relations, Macri said he understands that the U.S.
has other foreign priorities and, given Argentina's lackluster
performance in recent years, he does not expect the relationship to
be one of equal partners. The Mayor underscored the importance of
bilateral cooperation in narcotrafficking and terrorism. He added
that Argentina is in a weaker state than in 1994 when the Argentine
Jewish Mutual Association (AMIA) was bombed. Noting that President
Obama is looking for partnerships based on equal participation, the
Ambassador asked Macri for suggestions of other areas where the two
countries could work together toward achieving common goals. The
Mayor said that continued cooperation on narcotrafficking and
terrorism would help bring the two countries closer together.
Metropolitan Police Chief Burzaco said human trafficking should
also be top on the bilateral agenda.

Cooperation on Rule of Law
---------------------------------

20. (C) Security Minister Montenegro praised U.S. legal training
and judicial exchanges for having aided Argentina in strengthening
its judicial system, and expressed interest in increasing such
programs. Montenegro said the training of judges is critical,
noting that ""politics and economics"" are controlling the judicial
branch and undermining its independence. Metropolitan Police Chief
Burzaco said that City officials are working to portray a City that
abides by the rule of law, and that they want to show the world
""another face of Argentina,"" but that it will take some time for
this new Argentina to rise to the national level.

On Hugo Chavez's Regional Activity
--------------------------------------------

21. (C) Noting USG concern over terrorism, Congressman Engel
asked the Mayor if he agreed with U.S. perceptions that the
Venezuelans are giving the Iranians a foothold in the region.
Macri said he agreed and added that nothing surprises him when it
comes to Venezuelan President Hugo Chavez. He claimed that the
Kirchners had given free rein to Chavez to operate in Argentina as
if he were in Venezuela.

Building Bridges with Argentine Labor
--------------------------------------------- ----

22. (SBU) The Codel paid an unprecedented visit on the General
Confederation of Labor (CGT) Argentina's largest national labor
organization at the invitation of powerful CGT Secretary General
Hugo Moyano. In his welcoming remarks, Moyano sharply criticized
neoliberal economics, claiming that they led to Argentina's 2001
peso crisis and the degradation of labor standards. Moyano also
characterized Assistant Secretary Valenzuela's comments reflecting
business concerns with rule of law and the investment climate
(reftel -BuenosAires1311) as mis-informed, stating that the true
period of social instability was the 1990s when the Menem
Adminsitration's privatization and exchange rate policies
undermined, he claimed, workers' rights. He also attacked the
Argentine Central Bank leadership's delay on transferring US $ 6.6
billion in reserves to meet debt payments coming due in 2010 while
the Obama Administration, he claimed, had recently used reserves to
prevent an economic meltdown in the United States.

23. (SBU) Congressman Engel disarmed Moyano by referring to
childhood memories of walking picket lines with his father - a
metalworker union member at the time. Engel expressed his support
for labor movements worldwide in their efforts to ensure social
justice, and quipped that statistics of his voting record in favor
of pro-labor legislation 98% of the time must be incorrect - that
he believes his record to be 100% in favor of labor. The Chairman
expressed his desire to improve already strong U.S.-Argentine
relations, building on an already solid foundation of friendship,
and in the process help build a bridge for future Embassy-CGT
interaction.

24. (SBU) Chairman Engel then turned to Representative Woolsey, as
Co-Chair of the Congressional Progressive Caucus and Chairwoman of
the Subcommittee on Workforce Protections of the House Committee on
Education and Labor, who stressed the mutually-strong dedication of
both countries to labor protections and standards. Woolsey
encouraged future cooperation in improving labor welfare standards
and protecting the workers that are the backbone of infrastructure
and the engine of economic growth. Woolsey expressed her
appreciation for the CGT's invitation, and in recognizing the
importance of the ""historic"" moment, asked ""What took us so long?""

25. (SBU) Following the remarks, several interesting
side-conversations ensued. Representatives Woolsey and Pierluisi
discussed with CGT leaders societal concerns ranging from
healthcare to drug use. In Argentina, unions run provide healthcare
to members, often running some of the largest hospitals in the
country. Medical coverage costs roughly 8% of union members'
salaries, but as a result, all costs are covered without co-payment
requirements. The Congressmembers were also surprised to learn
that, according to CGT leaders, narcotics concerns have shifted
from being a transshipment point to one of production and
consumption - with increasing consumption of ""paco"" ( low-quality
residual substance resulting from the manufacture of cocaine) which
can be found on the streets for as little as 1 peso (roughly 30
cents). After the delegation departed from the CGT headquarters,
union leadership expressed gratitude to Embassy's labor officer for
the historic visit as well as a desire to strengthen and deepen
their collective and individual unions' relationship with the
Embassy.

Ceremony of Remembrance at AMIA
------------------------------------------

26. (SBU) The Codel also visited the Argentine Jewish Mutual
Association (AMIA) to pay its respects to the victims of the 1992
Israeli Embassy bombing and 1994 AMIA community center bombing. In
addition to laying a wreath at the memorials to the victims of the
two events, the Codel met with the president of AMIA and DAIA
(another Argentine Jewish organization) and the parents of the one
of the victims of the AMIA bombing. The visit garnered strong
positive press coverage.

Press Coverage
------------------

27. (SBU) While Codel Engel's visit was overshadowed by two other
big Argentine stories - the death of popular music idol Sandro (the
""Argentine Elvis"") and the President's attempt to both transfer
Central Bank funds to the Argentine national treasury and fire the
Central Bank President (reftel: Buenos Aires 13) - media coverage
of the visit was uniformly positive. All major print media covered
the visit, giving special emphasis to the ""historic"" meeting at the
CGT headquarters. The delegation's visit to AMIA and meeting with
CFK also received prominent coverage. The more pro-GoA news
outlets, such as daily Pagina 12, called the visit in part an
attempt to ""minimize"" the remarks of Assistant Secretary Arturo
Valenzuela during a trip two weeks earlier, when he noted in a
press conference that U.S. business representatives had expressed
concern about ""judicial insecurity"" in the country. Other news
outlets, such as daily-of-record La Nacion and state-run news
agency TELAM, noted that the visit was meant to ""deepen"" already
""excellent"" bilateral ties. In a media environment in which the
smallest phrase can be taken as a signal from the USG and blown out
of proportion, Chairman Engel's ability to stay on message and,
regardless of the question, continuously repeat the purpose of the
visit ( to strengthen strong bilateral ties) was critical to the
positive media coverage the Codel received.

28. (C) Comment: This was a highly successful visit with valuable
positive engagement between U.S. Representatives and the GoA and
Argentine people at a number of levels. The President's two-hour
meeting with the Codel helped put to rest the media-fueled
impression that U.S.-Argentine relations were on the rocks. Taking
two hours out of her schedule while in the middle of a showdown
with the Central Bank, the President demonstrated that she was
willing to spend time with us and committed to strengthening
bilateral relations.
MARTINEZ

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