AMBASSADOR WAYNE'S JANUARY 31 MEETING WITH CHIEF

C O N F I D E N T I A L BUENOS AIRES 000222 SIPDIS SIPDIS E.O. 12958: DECL: 02/05/2017 TAGS: PREL PGOV ECON AR SUBJECT: AMBASSADOR WAYNE'S JANUARY 31 MEETING WITH CHIEF OF CABINET ALBERTO FERNANDEZ REF: BUENOS AIRES 00141 Classified By: Ambassador E. Anthony Wayne for Reasons 1.4 (b) and (d). ¶1. (C) SUMMARY: On January 31, Ambassador Wayne called on Chief of Cabinet Alberto Fernandez. Ambassador Wayne talked through four areas for more work: cooperation on security issues (narcotics trafficking, counterterrorism); support for democracy; creating a more inviting investment climate and deepening youth and other exchanges. He cited the February visits of Attorney General Alberto Gonzales and Under Secretary Nicholas Burns and Assistant Secretary Thomas SIPDIS Shannon as opportunities to make progress. ¶2. (C) Fernandez spoke frankly about Argentine foreign policy. He said that democracy is taking root in many South American countries and that Argentina serves as a positive example in the region and tries to demonstrate democratic values through its actions. He noted that while in some areas Argentina would retain a "distinct" policy, in others the U.S. and Argentina could cooperation closely. Fernandez tried to rebut the notion that U.S. business is wary of legal uncertainty and economic intervention in Argentina, making companies reluctant to commit to long-term large-scale investment. Fernandez stressed that Argentina needs increased U.S. investment and said that he dreams that Patagonia will attract the same level of information technology investment as Israel. He said he particularly looked forward to seeing Shannon and Burns. END SUMMARY. ¶3. (C) On January 31, Ambassador Wayne called on Chief of Cabinet Alberto Fernandez. Ambassador Wayne expressed gratitude for the GOA's cooperation on counternarcotics and counterterrorism and that he looks forward to more cooperation on such security issues. Ambassador also raised the issue of supporting democracy in the region, encouraging Argentina's ability to serve as a positive example for its neighbors. On economic issues, Ambassador Wayne highlighted the long and successful history of U.S. companies investing in Argentina, but stressed that greater legal certainty and transparency were needed before U.S. companies would feel comfortable making more long-term investments. The Ambassador raised the Eton Park case as an example, saying that he hoped U.S. participation in the energy sector was welcome and that the selection process would be fair and transparent. Ambassador Wayne mentioned the February visits of Attorney General Alberto Gonzales and Under Secretary Nicholas Burns and Assistant Secretary Thomas Shannon as opportunities to make progress. He highlighted the work the Embassy is doing to build mutual understanding through student, teacher, and cultural exchange programs as important for building long term mutual understanding. ¶4. (C) Fernandez said that U.S.-Argentine collaboration is "off to a good start" and that the two countries share excellent cooperation on counternarcotics and counterterrorism. Fernandez said that Argentina has a mature and respectful relationship with the U.S. (COMMENT: Fernandez' description of the U.S.-Argentine relation has been used--almost word for word--by other GOA officials recently, though Fernandez said that he was saying "more than other members of the government would" and described himself as the most liberal, most pro-capitalism member of the government. END COMMENT.) Fernandez welcomed the visit of Under Secretary Nicholas Burns and Assistant Secretary Thomas Shannon, noting that Shannon is a good friend of the Argentines and understands them well. ¶5. (C) Fernandez spoke frankly about Argentine foreign policy. He said that although Argentina has a good relationship with the U.S., Latin America as a whole has felt neglected by the U.S. for a long time. He noted that the U.S. and Argentina can cooperate o many issues but on some, Argentina would maintain a "distinct" approach. While Fernandez agreed that Argentina serves as a positive example of democracy in the region, he indicated that Argentina is reluctant to involve itself in the domestic affairs of other countries, noting the cases of Bolivia and Venezuela. He said that he did not see any critical situations in the region, but that the tension between the U.S. and Venezuela was concerning. Fernandez said the situation in Bolivia is complex, as it involves a cultural phenomenon that is hard for outsiders to understand. (COMMENT: Fernandez seemed to be referring to the cultural and ethnic division in Bolivia between the indigenous and largely underrepresented population and the mostly-European wealthy population in Bolivia. END COMMENT.) He described Ecuadorian President Rafael Correa as internationally minded and open to democracy. Fernandez said he thinks democracy is taking root strongly in several countries--Argentina, Brazil, Uruguay, Chile, and Peru--to the benefit of the region. ¶6. (C) On investment, Ambassador Wayne explained that Argentina needs to improve legal certainty and transparency if it hopes to attract more long-term U.S. investment. He raised the case of U.S. investment company Eton Park, which is preparing to become a minority partner in an electric sector disinvestment by Petrobras, and stressed his hope that Eton Park's investment offer would be fairly considered. Fernandez rebutted the notion that U.S. business is wary of legal uncertainty and economic intervention in Argentina, making companies reluctant to commit to long-term large-scale investment. He said that he thinks this argument is a weak excuse because the GOA's procurement processes are transparent and fair. He said that there is a lot of talk about "government intervention," but that the only intervention is on prices, and only to keep inflation at bay. He compared Argentina's circular history of inflation to alcoholism: "you can't put alcohol in front of an alcoholic, so the government is trying to keep the temptation to inflate prices out of reach of the country." Fernandez described the GOA's role in controlling the domestic economy as "recuperating the role of arbiter." He said that they are working to establish the rules of "fair play" instead of allowing the "rules of the jungle" to govern competition. ¶7. (C) Fernandez stressed that Argntina needs increased U.S. investment and said that he dreams that Patagonia will attract the same level of information technology investment as Israel. He acknowledged that Argentina needs to win the confidence of U.S. investment, but said there are excellent investment opportunities in the "private sector" in Argentina right now. He highlighted that Argentina has an extremely talented work force in television, movies, and production. Though he said that most of the investment issues are the purview of Planning Minister Julio DeVido, Fernandez encouraged the Ambassador to work with him as well to strengthen U.S.-Argentine relations. The Ambassador said he was doing so, and Fernandez said he looked forward to meeting with Burns and Shannon. WAYNE