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