AUSTRALIAN RESPONSE TO DEMARCHE ON DEMOCRACY IN

C O N F I D E N T I A L CANBERRA 001662 SIPDIS SIPDIS DEPARTMENT FOR WHA/AND LOURDES CUE AND EAP/ANP E.O. 12958: DECL: 11/20/2017 TAGS: PGOV PHUM AS VE SUBJECT: AUSTRALIAN RESPONSE TO DEMARCHE ON DEMOCRACY IN VENEZUELA REF: STATE 157026 (NOTAL) Classified By: Political Counselor James F. Cole for reasons 1.4 (b),(d ). ¶1. (SBU) We presented reftel demarche points to John Owens, Assistant Secretary for Canada and Latin America, Department of Foreign Affairs and Trade, on November 20. Owens was joined by John M.L.Woods, Director for the Canada and Latin America Section, and Philip C.W.Lowday, Executive Officer. ¶2. (C) Owens said Australia was following with concern events in Venezuela, including President Chavez' latest constitutional reform proposal and watching for any signs that the government was deviating from the path of a market-based economy. While the Australian government's current caretaker status, in advance of the November 24 national election, constrained its ability to speak out more forcefully, Australia was attempting to register its concerns in more more low key ways. For example, Owens himself had recently expressed concerns to the Venezuelan charge in Canberra about constitutional developments in his country, warning of the need to maintain a stable investment atmosphere, if Venezuela was to progress. Earlier in the year, Australian Treasurer Peter Costello had criticized the Venezuelan leader in Parliament for his moves to nationalize the oil industry, and for calling the U.S. President "a killer, a genocidal murderer and a madman," he added. ¶3. (C) Woods commented that Venezuela appeared to be following Cuba's lead in seeking to expand its influence in the South Pacific. The Venezuelan Vice Minister for Foreign Affairs, Vladimir Poljak, had attended the late October Pacific Island Forum as an observer, at Tonga's invitation. Poljak had held out the promise of discounted fuel and construction of a regional fuel storage facility as means of cementing relations with Pacific Island states, noting that would Venezuela would end the use of fuel as a weapon of domination over smaller countries, Wood said. ¶4. (SBU) Trade between Australia and Venezuela amounts to about AUD 25 million (USD 22.3 million) per year, almost 90 percent of which involves Australian exports of ships, medecines, and wines. Investment is minimal; Australian mining giant BHP Billiton closed down its USD 780 million hot briquetted iron plant in Venezuela recently. For budget reasons, Australia closed its embassy in Caracas in 2003.