Identifier
Created
Classification
Origin
06BUENOSAIRES1905
2006-08-24 19:25:00
CONFIDENTIAL
Embassy Buenos Aires
Cable title:  

GOA FOREIGN MINISTRY KEEN ON EVENTUAL OECD

Tags:  ECON OECD AR 
pdf how-to read a cable
VZCZCXRO0262
OO RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHQU RUEHTM RUEHVC
DE RUEHBU #1905/01 2361925
ZNY CCCCC ZZH
O 241925Z AUG 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5665
INFO RUCNMRC/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS PRIORITY
RUEHFR/AMEMBASSY PARIS PRIORITY 1121
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEAWJA/DEPT OF JUSTICE WASHDC PRIORITY
RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHMFISS/HQ USSOUTHCOM MIAMI FL PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 001905 

SIPDIS

SIPDIS

EMBASSY PARIS FORWARD USMISSION OECD
E FOR THOMAS PIERCE, WHA FOR WHA/BSC, AND WHA/EPSC,
EUR/ERA FOR JULIE COOPER AND FRANK PARKER
PASS NSC FOR JOSE CARDENAS
PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE
EX-IM BANK FOR MICHELE WILKINS
OPIC FOR GEORGE SCHULTZ AND RUTH ANN NICASTRI
PASS USTR FOR SUE CRONIN AND MARY SULLIVAN
TREASURY FOR ALICE FAIBISHENKO
USDOC FOR ALEXANDER PEACHER AND JOHN ANDERSEN
US SOUTHCOM FOR POLAD

E.O. 12958: DECL: 08/23/2016
TAGS: ECON OECD AR
SUBJECT: GOA FOREIGN MINISTRY KEEN ON EVENTUAL OECD
MEMBERSHIP, NEAR TERM ECONOMIC REVIEW


Classified By: EconCouns D.P. Climan. Reasons 1.5 (B,D)

-------
Summary
-------

C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 001905

SIPDIS

SIPDIS

EMBASSY PARIS FORWARD USMISSION OECD
E FOR THOMAS PIERCE, WHA FOR WHA/BSC, AND WHA/EPSC,
EUR/ERA FOR JULIE COOPER AND FRANK PARKER
PASS NSC FOR JOSE CARDENAS
PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE
EX-IM BANK FOR MICHELE WILKINS
OPIC FOR GEORGE SCHULTZ AND RUTH ANN NICASTRI
PASS USTR FOR SUE CRONIN AND MARY SULLIVAN
TREASURY FOR ALICE FAIBISHENKO
USDOC FOR ALEXANDER PEACHER AND JOHN ANDERSEN
US SOUTHCOM FOR POLAD

E.O. 12958: DECL: 08/23/2016
TAGS: ECON OECD AR
SUBJECT: GOA FOREIGN MINISTRY KEEN ON EVENTUAL OECD
MEMBERSHIP, NEAR TERM ECONOMIC REVIEW


Classified By: EconCouns D.P. Climan. Reasons 1.5 (B,D)

--------------
Summary
--------------


1. (C) The GoA participates actively in OECD affairs as an
observer state and its Foreign Ministry is keen to have
Argentina considered for eventual full membership status.
Accepting that OECD accession is a long term play, the
Foreign Ministry sees its still pending request for an OECD
review of Argentina's economic performance as a step on this
path - and as a vehicle to gain international recognition for
the country's strong post-crash economic performance. One of
the OECD's yardsticks for its "like-mindedness" accession
criteria is a commitment to market-based economic policies
and so it appears unlikely an OECD review would offer
Argentina the approbation it seeks. Post supports
Argentina's request for an OECD economic review that could
help inform a domestic debate on the efficiency and
sustainability of the GoA's current heterodox economic policy
mix. More broadly, Post supports Argentina's long term
accession bid as a vehicle to encourage GoA adoption of the
substantive governance and economic policy disciplines
required of OECD members. End Summary

-------------- --------------
GoA Goal: From Observer Status to Full Membership
-------------- --------------


2. (U) EconCouns paid an August 18 courtesy call on GoA
Foreign Ministry National Director of International Economic
Negotiations Ambassador Nestor Stancanelli and his Deputy,
Ambassador Enrique Julio de la Torre.


3. (SBU) Stancanelli noted Argentina's status as one of eight
observer nations in the 30-member OECD, its active
participation in a the OECD's investment committee and

various working groups, and high level (Vice Minister of
Economy Oscar Kangerson's) participation in the OECD's May
2006 Ministerial. He emphasized the GoA's desire to further
strengthen its ties with the OECD and noted as a "strong hint
of our interest" in eventually acceding to full member status
the Foreign Ministry's recent decision to create a special
OECD unit within their newly established Directorate of
International Economic Negotiations.


4. (SBU) The Foreign Ministry, Stancanelli said, has reviewed
the OECD's May 2004 "Strategy for Enlargement and Outreach"
and sees Argentina as a prime accession candidate in terms of
the OECD's "like-mindedness" and "significant player"
proposed eligibility criteria. "We understand the OECD is an
organization with high standards that demands substantial
participation by member countries," he said, noting that
former GoA Foreign Minister Guido DiTella had submitted an
application to the OECD for full membership in September
1997, an application never withdrawn or ever formally
acknowledged by the OECD. De la Torre called Latin American
observer states Brazil, Chile and Argentina "crucial OECD
partners" in the region whose eventual membership will help
transform the OECD into a truly global institution. "We are
aware that OECD accession will be a slow process and we know
that Latin American governments will have to improve our
organization to meet high OECD standards," he concluded, and
asked for U.S. support in this process.

-------------- --------------
OECD Econ Review of Argentina - A Step on the Path
-------------- --------------


5. (C) Stancanelli turned to Argentina's strong interest in

BUENOS AIR 00001905 002 OF 002


having the OECD undertake a comprehensive review of
Argentina's economy, much, he said, as it has already done
for Chile and Brazil. However, he said that one or two OECD
members, likely including France, had opposed the review. De
la Torre asked that the U.S. support the GoA's request for an
economic review. An "objective" OECD study of Argentina's
economic performance and progress over the past three years
would, de la Torre concluded, help put to rest the rancorous
post-mortem debate over whether and how blame should be
apportioned for Argentina's December 2001 default between the
GoA, IFIs and "enabling" private sector financial
institutions.

--------------
Comment
--------------


6. (C) While the Foreign Ministry's Directorate of
International Economic Negotiations is eager to proceed on
the OECD accession track, the prospect of closer OECD ties
has yet to register in public statements by senior Kirchner
administration officials. That said, there remains a strong
element of "me-tooism" in Argentine foreign policy
initiatives and any hint that Brazil and Chile are being
actively considered for full OECD membership will certainly
elicit a GoA response. Post supports Argentina's long term
accession bid as a vehicle to encourage the GoA's progressive
adoption of the substantive governance and economic policy
disciplines required of OECD members.


7. (C) The Foreign Ministry clearly sees an OECD economic
review as a vehicle to gain recognition and approbation for
Argentina's strong and sustained post-crash recovery. Post
is aware of a Washington inter-agency consensus reached in
the Spring of 2006 not to support such a review given budget
outlays involved and given the opportunity cost of other OECD
country analyses forgone. This view could bear revisiting:


8. (C) There is general agreement among international credit
and market analysts that the GoA's populist subsidies and
interventions in numerous production and service sectors, its
substantial public investment without the benefit of formal
cost/benefit analysis and its heterodox price and export
control policies are unsustainable in the medium term and
will likely exacerbate the volatility of an eventual
correction. One of the OECD's fundamental yardsticks for its
"like-mindedness" accession criteria is a nation's commitment
to market-based economics. An objective OECD review that
points out how far Argentina has strayed from the free market
path could help inform a domestic debate on the efficiency
and sustainability of Argentina's current economic policy mix.
MATERA