IRAQ; CHAVEZ; ECUADOR; MYLES FRECHETTE IN BUENOS AIRES;

UNCLAS BUENOS AIRES 002705 SIPDIS STATE FOR INR/R/MR, I/GWHA, WHA, WHA/PDA, WHA/BSC, WHA/EPSC CDR USSOCOM FOR J-2 IAD/LAMA SIPDIS E.O. 12958: N/A TAGS: KPAO OPRC KMDR PREL MEDIA REACTION SUBJECT: IRAQ; CHAVEZ; ECUADOR; MYLES FRECHETTE IN BUENOS AIRES; 12/06/06; BUENOS AIRES ¶1. SUMMARY STATEMENT Key international stories today include the US Pentagon's director Robert Gates' statements regarding the war in Iraq; the aftermath of Venezuelan President Chavez' re-election; and the outcome of Ecuadorian elections. Conservative "La Prensa", business-financial "InfoBae" and "Ambito Financiero" report on yesterday's PAS press round table with Ambassador Myles Frechette. ¶2. OPINION PIECES - "The (US) Pentagon admits 'We are not winning the war in Iraq" Ana Baron, Washington-based correspondent for leading "Clarin," writes (12/06) "'The US is not winning the war in Iraq.' 'What we are doing is not satisfactory.' 'There is a certain risk of a regional confrontation.' 'We can dramatically reduce the number of US soldiers.' Everything Robert Gates, the new head of the US Pentagon, said yesterday is to some extent obvious... "Nevertheless, on the verge of entering a government that has systematically denied the simplest truths, his statements represented a spectacular sign that things are starting to change in Washington, perhaps in spite of the president himself. Former advisors to his father, like Gates, the so-called 'realistic group,' finally managed to replace neo-conservatives and start designing new geopolitics that will impact the whole world." - "The intervention" Marcelo Cantelmi, international editor of leading "Clarin," writes (12/06) "The statement made by the new head of the US Pentagon reveals a reality that is widely known in spite of the White House's insistence to deny it. "However, there is an extraordinary element in Robert Gates' testimony - it entails a viewpoint change on the war in Iraq, which does not seem to have taken into account the position of US President George W. Bush and his VP, Dick Cheney. "Gates' statement... acted just like an advanced of a takeover of the USG. It is not hard to imagine where Bush and his power will stand when this powerful group known as 'the realistic ones' states that everything was wrong and that negotiation should be sought, even with Iran. It is a tremendous sign of weakness of both Bush and his staff. It is the collapse of fundamentalist positions and it announces, in the form of an emergency, a new global policy." - "Mercosur could lose trade benefits with the US" Conservative "La Prensa" (12/06) reports "The USG will shortly review its GSP and Argentina could lose a tariff umbrella that in 2005 resulted in exports for 616.5 million dollars. The White House wants to use this program for the benefit of the poorest countries and several senators also want to use it to punish countries that hindered the progress of the Doha Round and the FTAA. "This is what Myles Frechette, a former member of the Foreign Service and current international consultant on commercial issues, said during a round table with journalists at the US Embassy." - "'Argentina and Brazil could pay for their rejection of the FTAA'" Business-financial "Ambito Financiero" (12/06) reports "Myles Frechette, a former head of the Council of the Americas and Americas Society and currently an expert in foreign trade and a member of a consulting company in Washington, said that 'President Kirchner's change of attitude regarding the US does not seem long standing. There is obvious relief in Washington, because the President set aside his aggressive public tone against the US, but I do not see substantial changes. "'I believe the Doha Round is unlikely to be accepted by the US. The Trade Promotion Authority will fall due next July 7. If no deal is reached, we will have to wait several more years. Chances that Washington agrees to the terms are next to zero. It depends on Europe lowering farm subsidies, then the US would follow suit. This is not going to happen.' "... The FTAA does not exist as a possibility as long as farm subsidies are not removed. However, the US will make progress on bilateral deals and could make up a free trade area with (Colombia, Peru, Ecuador, Bolivia),something that would help bring more investment to the region." - "More labor reforms to attract investment" Business-financial, center-right "InfoBae" reports (12/06) "Invited by the US Embassy, Myles Frechette, an international consultant on commercial issues, gave a conference in which he spoke about globalization and trade deals." "In his viewpoint, the FTAA has given way to bilateral deals." "... Frechette acknowledged that ever since the FTAA vanished as a possibility, Washington has attempted to 'harmonize bilateral deals with Latin America.' "He pointed out that 'this would help to attract investment to all the countries and possibly in one year we could have deals with Ecuador and Chile. And we would also like to reach (trade deals) with Argentina and Brazil.' ¶3. EDITORIALS - "Renewed support for Hugo Chavez" Leading "Clarin" editorializes (12/06) "Venezuela has just renewed its support for President Chavez and re-elected him for another six-year term... "... With this overwhelming support, Chavez has the path cleared to consolidate his policies of heavy state interventionism in the economy... "The political direction Venezuela has taken under Chavez is also the result of the crisis and collapse of a political system that ran the country during four decades and was unable to successfully tackle the challenges and changes of the '90s. "... Chavez's political and economic influence will continue to spark controversy, opportunities, expectations and mistrust in the region." - "A change of direction in Ecuador" An editorial in daily-of-record "La Nacion" reads (12/06) "The victory of the nationalist left-winger Rafael Correa will mark a strong economic and social change in the country following a long period of political instability. "... Although Correa won after having toned down his discourse and taking some distance from Hugo Chavez..., he will obviously try to quickly fulfill his campaign promises..., which included the decision not to renew the agreement with the US for the rental of the Manta naval base, and, in contrast with Colombia and Peru, not to reach an FTA with the US, a situation that will fracture the free trade Andean corridor and the prospects of sub-regional integration. "Correa's task during the next four years will not be easy. In addition to his little governmental experience, he will not control the fragmented national Congress, which is in hands of the opposition, and will be compelled to hold permanent negotiations and, perhaps, to moderate his stances." To see more Buenos Aires reporting, visit our classified website at: http://www.state.sqov.gov/p/wha/buenosaires MATERA