Identifier
Created
Classification
Origin
07BUENOSAIRES2223
2007-11-16 13:53:00
CONFIDENTIAL
Embassy Buenos Aires
Cable title:  

PULP MILL DISPUTE: GUARDEDLY HOPEFUL THAT

Tags:  PGOV PREL ECON EINV SENV UNGA AORC FI UY AR 
pdf how-to read a cable
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RR RUEHWEB

DE RUEHBU #2223/01 3201353
ZNY CCCCC ZZH
R 161353Z NOV 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 9717
INFO RUEHAC/AMEMBASSY ASUNCION 6691
RUEHBR/AMEMBASSY BRASILIA 6575
RUEHCV/AMEMBASSY CARACAS 1591
RUEHHE/AMEMBASSY HELSINKI 0056
RUEHLI/AMEMBASSY LISBON 0033
RUEHMD/AMEMBASSY MADRID 1949
RUEHMN/AMEMBASSY MONTEVIDEO 6900
RUEHSG/AMEMBASSY SANTIAGO 0909
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFISS/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFISS/DEPT OF JUSTICE WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
C O N F I D E N T I A L BUENOS AIRES 002223 

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/15/2017
TAGS: PGOV PREL ECON EINV SENV UNGA AORC FI UY AR
SUBJECT: PULP MILL DISPUTE: GUARDEDLY HOPEFUL THAT
ARGENTINE CONCERNS ARE EASING

REF: A. MONTEVIDEO 964


B. BUENOS AIRES 1776

C. BUENOS AIRES 1707

Classified By: ECONOMIC OFFICER IAN SHERIDAN, REASONS 1.4 (B and D)

C O N F I D E N T I A L BUENOS AIRES 002223

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/15/2017
TAGS: PGOV PREL ECON EINV SENV UNGA AORC FI UY AR
SUBJECT: PULP MILL DISPUTE: GUARDEDLY HOPEFUL THAT
ARGENTINE CONCERNS ARE EASING

REF: A. MONTEVIDEO 964


B. BUENOS AIRES 1776

C. BUENOS AIRES 1707

Classified By: ECONOMIC OFFICER IAN SHERIDAN, REASONS 1.4 (B and D)


1. (C) INTRODUCTION AND SUMMARY. Concerns over the pulp mill
dispute have calmed down in Buenos Aires, despite the sharp
words and protests generated last weekend when Uruguayan
President Tabare Vazquez gave the order to commence
operations November 9 at the pulp mill in Fray Bentos,
western Uruguay. The first shipment of cellulose destined to
Europe left port on November 15 (ironically transported on an
Argentine-flagged vessel). Although Post understands that,
on the Uruguayan side, there are concerns about a possible
escalation of the conflict, most Argentines (apart from a
vocal minority) are tired of the issue and do not anticipate
the GOA trying to escalate this dispute. Since the start of
the mill operations, we have seen some possibly encouraging
signs. Embassy has kept its distance from this issue and
believes that the USG is best served by continuing to stay
out of this dispute. END INTRODUCTION AND SUMMARY.

-------------- --------------
Starkly different views of the dispute between Argentina and
Uruguay
-------------- --------------


2. (SBU) Ref A portrayed a serious Uruguayan preoccupation
about the dispute and possible reactions from its giant
neighbor, now that the mill has begun operations. Yet, as
previously reported, Argentine public opinion continues to be
either tired of or indifferent towards the issue. The GOA
and public are now more focused on the change of government,
and coming summer holidays. There has always been a lot of
criticism of the Gualeguaychu activists here, and sympathy
for the Uruguayan side. Argentine tourists who vacation in

Uruguay, those who have family ties there, and business
people near the border continue to suffer from these
roadblocks.

-------------- --------------
Recent actions: More posturing, tensions, lost opportunity
-------------- --------------


3. (SBU) While for some, last week's Ibero-American summit
was the last best chance for any resolution, many observers
believe there never was any real chance of a resolution, so
long as the bridge in Gualeguaychu leading to Uruguay remains
blocked (GOU's position) and the protesters' bottom line
remained that the mill be moved (always an unrealistic
option). And no matter when the mill began - before, during
or after the summit - there was going to be some kind of
outcry.


4. (SBU) Ref A noted that President Vazquez reportedly felt
that the Spanish mediators were not honest brokers, and
possibly too beholden to their own vast economic interests
here. Local press reports also noted that the scheduled
GOA-GOU "technical meetings" in Santiago ended in disaster,
as the GOA side arrived with no authority to negotiate some
kind of compromise. That, coupled with Kirchner's public
support of 20-odd Argentine paper mill protesters at the
summit, was the last straw. The Kirchners and the GOA sought
to put blame for the break-down of Spanish mediation efforts
on the Uruguayans' shoulders, but many local commentators
blame both sides. Even observers who have sympathized with
the GOU felt that Vazquez could have gained sympathy by
ordering the commencement of the plant after the summit, not
during it. The GOA was also reportedly infuriated with
Vazquez's comparing of the Argentine bridge blockages with
the United States' "blockade" of Cuba, a charge that this
rhetorically left government found intolerable.

-------------- --------------
Still, some possibly encouraging signs since the mill has
begun
-------------- --------------


5. (SBU) GOA environment officials have apparently begun
monitoring the River Uruguay down river from the plant -- or
at least they're seen to be doing so. A federal judge has
also ordered tests, in response to a separate Entre Rios
Province complaint. This is important because it is a change
in GOA's position - and precisely what the protesters
reportedly strongly opposed. It marks a GOA shift of
strategy from a demand to move the plant to monitoring its
performance, and a tacit admission that the GOA recognizes
the plant's existence and even GOU's right to place it where
it is. This is a small but possibly significant development.
The test results, surely one of many that will be performed
by various parties, will reportedly be used in the pending
International Court of Justice (ICJ) case (ref A to C).
Monitoring the plant also moves the dialogue, ever subtly
(and hopefully) towards a more scientific basis, and away
from politics and posturing.


6. (SBU) Second, the GOA has continued its policy - as it has
throughout this conflict - of consistently limiting these
protests. Federal Police were out in full force on November
13 during the latest protest in front of the Uruguayan
Embassy (where protesters burned cauliflower and eggs to
simulate what they said was the plant's smell),and
reportedly kept the protesters a full block away. In fact,
the GOA has never allowed anything more than limited street
protests in Buenos Aires. Attempts to stop the ferry service
in Buenos Aires, a widely used alternative to travel to
Uruguay, have also been stymied. Also, even the most fervent
protesters have never resorted to violence, even during last
weekend's protests (in Buenos Aires and in Gualeguaychu),the
first since the mill began operating.


7. (U) Finally, the Kirchners themselves have -- in candid
moments -- openly acknowledged that the mill is a reality.
Cristina Kirchner recently said that the mill will function,
"sooner or later." President Kirchner, despite his stated
support for the protesters in Chile, himself said in New York
in September that the mill cannot realistically be moved.

--------------
"Military option" not at all likely
--------------


8. (C) There is absolutely no indication that GOA is
considering a military "solution" to this dispute, and the
GOA's own military operational capacity is very limited. Any
suggestions of a military "solution" here actually brings
about expressions of humor or disbelief. At the recent
Embassy-hosted Veterans Day event, a military contact only
barely jokingly said that as a matter of fact, right now, the
GOU probably has more active and usable aircraft and other
military assets than does the GOA, due to the latter's
sustained military budget cuts in recent years. For his
part, the Uruguayan defense attache in Argentina said that he
was unaware of even the remotest GOA or GOU military plans
related to this dispute.

-------------- --------------
So, what will happen? Probably a continuation of the deadlock

-------------- --------------


9. (SBU) There is clear evidence that the GOA and public
would love to get this problem behind it; perhaps the only
possible solution is some kind of face-saving solution for
all. Although impossible to predict, what we expect is that,
over time, as Argentines become accustomed to the mill's
presence and learn that there is (hopefully) minimal
environmental impact, sympathy for the protesters will
further decrease. (Although there is no evidence indicating
future violence, there is always the possibility of an
isolated event getting out of hand.) November 15 preliminary
environmental tests from the GOU indicated that the mill was
operating within normal ranges. We still understand from the
Finnish Embassy here and local press that any ICJ decision
could take months, if not over a year, and even then, its
"verdict" might very well be ambiguous. We expect that if
there is any clear-cut GOA ICJ "victory" or even an ambiguous
ICJ ruling, the activists and GOA will duly cite the ICJ's
legitimacy and claim victory. If there is a clear-cut "win"
for the GOU, the GOA and activists might very well ignore the
ruling, and even question the ICJ's legitimacy. We do not
have much optimism that the protesters will cease their
bridge blockade any time soon, no matter what the test
results or ICJ decisions indicate. And the GOA continues to
be loathe to interfere in any kind of public protests,
especially those that are seen to be non-violent, even if
they appear to violate basic tenets of Mercosur and the free
movement of people and trade.

--------------
Comment: Best that we continue to stay out of this dispute
--------------


10. (C) As we have done so all along, the USG is best served
by continuing to stay out of this dispute. This is
particularly relevant if we seek a better relationship with
the incoming GOA. Our hunch still is that Cristina Kirchner
will be a more subtle hand in managing this dispute and we
see very little gain in lining up up on one side or the other
at this time. We should discourage any Uruguayan suggestions
(ref A) that we would intensify military cooperation to
protect Uruguay from Argentina, or using an ostensible
military alliance with us as leverage with the Argentines.
WAYNE