Identifier
Created
Classification
Origin
06MONTEVIDEO418
2006-05-11 15:01:00
CONFIDENTIAL
Embassy Montevideo
Cable title:  

VAZQUEZ LOBBIES HARD FOR TRADE TALKS WITH U.S. WORKING GROUPS FORMED

Tags:  ETRD ECON PREL UY 
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DE RUEHMN #0418/01 1311501
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INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHLP/AMEMBASSY LA PAZ MAY SANTIAGO 2848
RUMIAAA/CDR USSOUTHCOM MIAMI FL
RUEHC/DEPT OF AGRICULTURE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
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E.O. 12958: DECL: 05/10/2016
TAGS: ETRD ECON PREL UY
SUBJECT: VAZQUEZ LOBBIES HARD FOR TRADE TALKS WITH U.S. WORKING GROUPS FORMED


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

,C O N F I D E N T I A L MONTEVIDEO 000418

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DEPT FOR WHA/AS SHANNON AND EB/AS WAYNE
DEPT ALSO FOR WHA/BSC FOR BARNES, CROFT AND MURRAY
DEPT PLEASE PASS USTR
TREASURY FOR OASIA FOR DOUGLAS
COMMERCE FOR ITA/MAC BASTIAN
NSC FOR FISK AND CRONIN
SOUTHCOM FOR POLAD

E.O. 12958: DECL: 05/10/2016
TAGS: ETRD ECON PREL UY
SUBJECT: VAZQUEZ LOBBIES HARD FOR TRADE TALKS WITH U.S. WORKING GROUPS FORMED


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


1. (C) Summary: President Vazquez appears to have wasted no
time in pushing his trade agenda. At the May 8 Cabinet
meeting, he recounted the results of his ten-day trip to the
U.S. and Mexico, and of his meeting with POTUS on May 4. He
advocated for expanded trade talks with the U.S., which he
said could eventually lead to a Free Trade Agreement (FTA).
His Cabinet strongly supported Vazquez in this endeavor, with
11 ministers in favor and only two against (ForMin Gargano
and Communist Minister for Social Development Arismendi).
Charge met on May 10 with Industry Minister Lepra, who had
accompanied Vazquez on the trip, to get a first-hand account
of the GOU's next steps. Lepra confirmed the overwhelming
Cabinet support and requested that we provide some
information on specific benefits of trade agreements for
public consumption. He confirmed that the GOU was looking at
its FTA with Mexico as a model to start talks (Note: Post is
translating this agreement for USTR. End Note.) He added
that he would lead a committee of five ministers to oversee
the trade talks, and he provided the names of the members of
the technical negotiating team. When reminded of the
importance of a clear leader to head this technical team,
Lepra immediately picked up the phone to call Economy
Minister Astori. After the conversation with Astori, he told
Charge that they had decided upon EconMin Director of Trade
Sarachaga as the team leader. This would be confirmed after
discussing the issue with Vazquez at the next Cabinet meeting
on May 15. It appears that Vazquez and his economic team
have found more support for an FTA than they may have thought
possible so early after their return and are capitalizing on
the momentum. End Summary.


2. (C) On Monday May 8, shortly after his return, President

Vazquez called a Cabinet meeting to inform his ministers
about his ten-day trip to the U.S. and Mexico. Vazquez is
reported to have explained his vision of an increased trade
relationship with the U.S., leading to a possible FTA by
October. According to Vice-President Novoa and Industry
Minister Lepra, 11 out of 13 ministers expressed their
support for Vazquez's vision, with only Foreign Minister
Gargano (Socialist) and Social Development Minister Arismendi
(Communist) dissenting. According to the reports, Astori led
a strong, well-founded defense of the advantages of an FTA,
while Gargano threatened to resign if an FTA was ever signed
with the U.S. It appears that the level of support that
Vazquez garnered in this first Cabinet meeting was stronger
than expected. On the public front, the left-leaning daily
La Republica was unusually supportive, with overall favorable
reporting under a headline claiming that "The Government
pressed on the accelerator to make good on commercial
agreement with the U.S." A poll conducted by El Pais
indicated a strong majority of public support for a trade
agreement with the U.S.


3. (C) Charge met on May 10 with Industry Minister Lepra to
get a better understanding of the GOU's plans and to
coordinate actions. Lepra was very upbeat about the trip and
about the prospects for an FTA. He relished in the increased
isolation in which ForMin Gargano was finding himself. Lepra
and Charge agreed to coordinate public stance regarding the
ongoing negotiations, to ensure that the Embassy not move
ahead of President Vazquez. Lepra confirmed that the model
FTA that the GOU favored was the Uruguay-Mexico FTA, ""for
political reasons"". This agreement was supported by the
entire political spectrum, he explained, and by Uruguay's
Mercosur partners. In addition, Lepra noted that the
Uruguay-Mexico FTA, signed in 2004, is a third-generation
agreement based on an improved NAFTA model. Charge confirmed
that post was in the process of translating this document so
that USTR may compare it with our latest FTA. Lepra then
requested our assistance in providing him with information
about our FTA with Vietnam, not because it is a particularly
good FTA, he noted, but rather to counter opposition from the
Communist Party. "If Communist Vietnam, after fighting a
brutal war against the U.S., can turn around and sign an
FTA," he explained, "how can our Communists be against it?"
Lepra also requested information on job creation, investment
and poverty reduction brought about by FTAs, again for the
GOU's campaign to build up public support. Charge pledged to
provide the information. Post would appreciate any and all
such information to be shared with the GOU.


4. (C) Lepra said he would lead a political committee of five
ministers (Industry, Economy, Agriculture, Foreign Affairs
and Tourism),responsible for the trade talks. He also had a
technical negotiating team in mind, but was still unclear as
to who would lead this team. Charge noted the importance of
a solid negotiating team, with clear lines of authority,
given the short time frame in which negotiations were to be
conducted. Lepra immediately picked up the phone to call
EconMin Astori, with whom he agreed to have EconMin Trade
Director Sarachaga lead the negotiating team. He and Astori
would confirm their choice after the next Cabinet meeting on
May 15, he said.


5. (C) Comment: Clearly, Vazquez has returned from the U.S.
in a strengthened position to initiate trade talks and is
making the best out of the momentum he has encountered. The
GOU appears to be keenly aware of the tight timeframe to
negotiate an agreement and determined to make the most of
this opportunity. Embassy will continue to be the
interagency coordinator" for the GOU to ensure that no time
is lost due to lack of focus on organizational details. End
Comment.
Nealon