MINISTER'S TOUGH TALK ON PAPER MILL DISPUTE,

C O N F I D E N T I A L MONTEVIDEO 000155

SIPDIS

SIPDIS

DEPT FOR WHA/BSC AND EB/TPP
DEPT PLEASE PASS USTR
NSC FOR DFISK AND SCRONIN
USDOC FOR WHA/DAS WBASTIAN

E.O. 12958: DECL: 02/13/2016
TAGS: PREL EPET ENRG SOCI UY
SUBJECT: MINISTER'S TOUGH TALK ON PAPER MILL DISPUTE,
ARGENTINA AND BOLIVIAN GAS

REF: A. MONTEVIDEO 00154

B. MONTEVIDEO 00149

Classified By: Charge D'Affaires James D. Nealon
for reasons 1.4 (B) and (D)


1. (C) Summary: During a meeting with Charge to discuss
upcoming visits to the U.S. (ref A),Industry Minister Jorge
Lepra commented that Uruguay is searching for international
support in its dispute with Argentina over the construction
of giant paper mills on a shared river (ref B). He added
that lack of confidence in Argentina has prompted the GOU to
try and access Bolivia's gas reserves via the existing
pipelines through Brazil. Lepra was also harshly critical of
the Peronists and their historical attitude towards Uruguay.
End Summary.


2. (C) On February 14, Industry Minister Jorge Lepra met with
the Charge to discuss upcoming visits to the US, including a
Vazquez-POTUS meeting on May 1. Lepra explained the
"seriousness" with which the GOU views the paper mill dispute
with Argentina and asked him for suggestions of who might be
able to assist in resolving it. Referring to the GOA as "the
worst face of the Peronist party" and the "piqueteros" as
"fascists", he said "a brother slapping another in the face
needs a big uncle to put a stop to it." Lepra was
pessimistic that either the OAS or the World Bank were
capable of resolving the issue. Visiting Spanish ForMin
Miguel Angel Moratinos has offered to ForMin Gargano to
mediate the dispute (one of the two plants in question is
Spanish). Incidentally, Lepra was quite dismissive of
Gargano, as being "completely out-of-the-loop."


3. (C) Lepra said the GOU was convinced that Argentina was
capable of withholding natural gas supplies to Uruguay
despite Mercosur and other arrangements. Therefore, the GOU
was considering the purchase of Bolivian natural gas routed
through Brazil, in order to satisfy Uruguay's energy needs.
He said that President Vazquez would visit La Paz on March 13
(after he attends Chilean President-elect Michelle Bachelet's
inauguration in Santiago) to meet with Bolivia's President
Evo Morales. In return for a gas deal, Lepra said the GOU
would lend Bolivia support in its quest for an access to the
Pacific Ocean through Chile and offer it port facilities at
Nueva Palmira on the Uruguay river for Atlantic commerce.
"Of course, the price of Bolivian gas is the big question",
he noted.


4. (C) Comment: Lepra is well and favorably known to the
Embassy and is a staunch ally of the US. We were somewhat
surprised at his harsh assessment of the "justicialist" GOA
,which he considers to be more "brown shirt" than "leftist".
He recalled the days when Juan Domingo Peron had banned
Uruguayans from entering Argentina during the 1950s. End
Comment.
Nealon