PAPERMILL DISPUTE HAS FINLAND'S ATTENTION

,UNCLAS MONTEVIDEO 000376 SIPDIS SIPDIS DEPT FOR WHA/BSC BARNES, CROFT AND MURRAY DEPT ALSO FOR EB A/S WAYNE AND WHA/OAS DCENTO DEPT PLEASE PASS USTR TREASURY FOR OASIA FOR DOUGLAS COMMERCE FOR ITA/MAC BASTIAN NSC FOR FISK AND CRONIN E.O. 12958: N/A TAGS: PREL SOCI EINV SENV AORC UY SUBJECT: PAPERMILL DISPUTE HAS FINLAND'S ATTENTION REF: MONTEVIDEO 00353 AND PREVIOUS ¶1. (U) In Uruguay there has been widespread dissatisfaction over reports from Sao Paulo that Brazil and Argentina will not support the papermill dispute's submission to Mercosur's conflict resolution mechanism, as Presidents Lula da Silva and Nestor Kirchner apparently consider the affair to be purely bi-lateral. The reports also maintained that Argentine President Kirchner has called for another environmental impact study on the plants. The news came on the eve of President Vazquez' April 25 departure for a nine-day official visit to Mexico and the U.S. Uruguay contends that the dispute is multilateral in nature because the continued international bridge blockades have also affected commerce with Chile, Paraguay and Bolivia -- and indirectly involve Finland and Spain because their private companies are building the contested plants. Uruguay also maintains that the plants have been sufficiently studied for environmental concerns. ¶2. (U) On April 26, local newspapers headlined Argentina's and Brazil's reported decision not to take up the papermill dispute under Mercosur auspices, as Uruguay has long sought. A number of articles were openly anti-Argentine or anti-Mercosur in their tone and implied that the dispute could be raised at the next EU-Mercosur meeting in Vienna on May 11. ¶3. (U)) Meanwhile, Finland's Minister for Foreign Trade Paula Lehtomaki arrived in Montevideo to discuss trade and investment issues, including those related to the Finnish company Botnia's pulp mill under construction in Fray Bentos where a bridge remains blocked by Argentine protesters. During her April 25-26 visit, Minister Lehtomaki privately and publicly lent her support for Botnia's billion-dollar pulp mill project on the Uruguay river, saying that the plant used environmentally safe technology that has been proven safe by 19 such plants operating in Finland and elsewhere and have been backed by exhaustive scientific studies. She also said that the Botnia plant represented Finland's largest private overseas investment, but stressed that the GOF did not interfere with private contracts. Lehtomaki said she will later travel to Chile and Peru, but has canceled her trip to Argentina, publicly stating that she was ""not a welcome guest"" in Argentina. ¶4. (SBU) Comment: We have been told by members of President Vazquez' entourage that he may raise the papermill dispute at his May 4 meeting with POTUS with no expectations for the US to take sides in the matter. However, we also understand that Uruguay is seriously contemplating lodging a formal complaint at the OAS. Apparently some officials are also hoping to enlist Finland's help further when it assumes the EU pro-tempore presidency next July, if the paper mill dispute is not resolved by then. End Comment. Nealon