SECRETARY GUTIERREZ MEETS URUGUAYAN VP RODOLFO NIN

C O N F I D E N T I A L LIMA 003105

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/24/2016
TAGS: PGOV ECON EFIN EINV ETRD PINR PE
SUBJECT: SECRETARY GUTIERREZ MEETS URUGUAYAN VP RODOLFO NIN


Classified By: A/POL David C. Brooks, for Reasons 1.4 (c,d)

--------------
Summary:
--------------


1. (C) Commerce Secretary Gutierrez and Ambassador Struble
met with Uruguayan Vice President Rodolfo Nin and Uruguayan
Ambassador to Peru Juan Oddone on 7/27. Nin said the GOU was
most interested in an FTA with the U.S. He dismissed radical
gestures by Hugo Chavez, stating that the new left in Latin
America in countries like Brazil, Chile and Uruguay is
pragmatic and eager for foreign investment. Nin also
complained that Brazil seemed to be throwing its weight
around excessively in MERCOSUR. End Summary.

--------------
Uruguay Interested in an FTA
--------------


2. (C) Vice President Nin was very open about Uruguay's
interest in a Free Trade Agreement (FTA) with the United
States. With the collapse of WTO negotiations in Doha, he
noted, an FTA remained the best and only way to pursue
expanded markets and deal with the problem of U.S.
agricultural subsidies. Nin said that there is a hard-left
sector in Uruguay that would oppose any such agreement, but
that their opposition is neither strong nor substantial. He
joked that an FTA could easily bypass much opposition by
simply calling it something else.


3. (C) Nin ticked off a number of points of convergence
between the U.S. and Uruguay, all of which make an FTA
attractive. First, the United States is the number one
consumer of Uruguay's meat exports. Second, President Bush
is well regarded in Uruguay due to his timely help to Uruguay
during the 2002 Argentine debt crisis. Finally, Nin noted
that Latin American countries would need FTAs to respond to
the surging economies in Asia (China, India, Vietnam,
Singapore). "The world," he said, "is developing economic
blocs, and we need to balance this" (by signing an FTA
between the U.S. and Uruguay).

--------------
Chavez/Radicalism Do not Resonate
--------------


4. (C) Secretary Gutierrez welcomed the Vice President's
interest in an FTA. He noted Uruguay's comparative advantage
in exporting high-quality red meat that already meets U.S.
phytosanitary standards. Secretary Gutierrez characterized
the present moment as "historic," a time when ideology has
been left behind and "it's all about creating employment."


5. (C) Nin acknowledged the sea change in attitudes toward
economic agreements with the U.S., stating that, "We (in
Latin America) are democratic now." Nin took issue with
those who say the left is making a comeback in the region.
He cited the examples of Uruguay, Brazil and Chile as
countries that have left-oriented governments but are neither
hostile to the U.S. nor to foreign investment. Their course
is distinct from that of Cuba or Venezuela. Nin
characterized Venezuelan President Chavez' proposal to create
a South American army as "a dumb idea." He noted that,
despite sky high oil prices and huge petroleum reserves,
Venezuela still suffers from a 52 percent poverty rate with
28 percent living in extreme poverty (vs. 13 percent in the
U.S.)

--------------
Criticism of Brazil
--------------


6. (C) Nin noted that Uruguay had already signed an FTA with
Mexico two years ago, an action that annoyed Brazil. He
characterized the Brazilians' complaints as motivated by sour
grapes. They were frustrated simply because "they were not
the first ones" to sign an FTA with someone outside MERCOSUR.
Nin also complained about the Brazilians' own recent talks
with Argentina about creating a common Brazilian-Argentine
currency. He lamented their lack of consultation in
undertaking these talks and said that this was
"inappropriate" behavior for a trade bloc partner that should
know enough to consult with economic associates in such an
undertaking.
STRUBLE