PARAGUAY POLITICAL AND ECONOMIC UPDATE, AUGUST 28

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SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, AUGUST 28
- SEPTEMBER 3



1. (U) Summary
-- Smells Like Drugs
-- Thousands Receive Medical Care
-- Paraguay Interested in FTA - Someday

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Smells Like Drugs
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2. (U) On August 26, the National Anti-Drug Secretariat
(SENAD) Canine Unit detected and seized 7.3 kilograms (kg) of
cocaine and detained Pedro Adrian Venero Murillio, a Mexican
national. The cocaine, with an estimated value of USD
51,018, was woven into the clothing and found in three (3)
suitcases. SENAD believes the drugs were bound for the
United States via Mexico. According to news reports, on
August 28, Colombian national, Julio Cesar Ramirez Gutierrez,
was also detained in connection with Venero Murillio.

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Thousands Receive Medical Care
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3. (U) On August 29, medical professionals from the New York
Air National Guard began the third Medical Readiness Exercise
Training (MEDRETE) this year in Paraguay. The team of 32
includes doctors, nurses and medical technicians with various
skills. They are in the Department of Caazapa, located
approximately 146 miles east of Asuncion, and are rotating
among 6 locations providing pediatric, OB-GYN, dental,
optical and pharmaceutical services. The team has seen
approximately 800 to 900 patients per day and is scheduled to
complete its work on September 7.

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Paraguay Interested in FTA - Someday
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4. (U) President Nicanor Duarte Frutos arrived in Santiago,
on August 29, for an official visit with Chilean President
Ricardo Lagos. Both signed an agreement that will increase
the export quota for Paraguayan meat to Chile from 7,000
metric tons to 14,000 metric tons. They also signed a joint
declaration on mutual cooperation, the defense of democracy,
and the promotion of human rights. On August 30, after
praising the "Chilean model," President Duarte was asked if
Paraguay intended to seek a Free Trade Agreement (FTA) with
the United States as Chile had. President Duarte hedged a
bit, noting that Paraguay needs to continue with its process
of changing its economic model, and that customs revenues
provide the majority of government revenues. He added that
Paraguay needs investment and additional markets for its
exports, and that it has a lot of work ahead before the
country is ready to assume "attitudes and commitments" like
those of Chile. However, he stated that one goal of his
government's efforts is to prepare Paraguay to accept greater
commitments in international markets. While Paraguay
presently views the world from its perspective as a member of
Mercosur, he was committed to adopting a foreign policy
tailored to Paraguay's interests. On August 31, Duarte
Frutos dedicated a duty-free port for Paraguay in
Antofagasta, Chile. Duarte told the press his country is
contributing to the fight against narco-trafficking,
money-laundering, and piracy in the Tri-border region.
KEANE