U.S.-EU MEETINGS ON LATIN AMERICA

C O N F I D E N T I A L USEU BRUSSELS 001276

SIPDIS

SIPDIS

C O R R E C T E D C O P Y (TEXT)

E.O. 12958: DECL: 04/16/2017
TAGS: PREL PGOV EAID EUN MX DR GT CO VZ NI BO ES
HO, XM, XK
SUBJECT: U.S.-EU MEETINGS ON LATIN AMERICA

Classified By: Deputy Political Minister Counselor Alyce
Tidball for reasons 1.4 (b) and (d)


1. (U) SUMMARY. US-EU Committee on Latin America (COLAT)
troika consultations, held February 12 in Brussels, included
discussion of Nicaragua, Venezuela, Colombia, Bolivia,
Mexico, Brazil, Cuba and Central American gangs. The U.S.
delegation consisted of WHA PDAS Charles Shapiro, USEU Deputy
Political Minister Counselor Alyce Tidball, USAID Counselor
Pat Lerner, and USEU Poloff Daphne Lyman. The EU side was
led by German MFA Director for Latin America Enver
Schrombgens, Commission Representatives Marie Anne Coninsx,
Head of Unit DG Relex G1 and Petros Mavromichalis Head of
Unite DG Relex G2; Council Representatives Karl Buck Head of
Division for Latin America and Nicolas Pascual de la Parte
Head of Task Force for UN and Latin America; and Portuguese
MFA Director for Latin America Helena Coutinho. 2. (C)
Participants generally agreed on situation assessments for
most countries, with Cuba presenting the greatest divergence
of EU and U.S. opinion. Discussions revealed a shared sense
of growing concern towards developments in Nicaragua,
Venezuela, and Bolivia, as well as an acknowledgment of
progress in Mexico and Colombia. The EU's Latin America
policy emphasizes the need to promote "social cohesion"
through efforts to fight poverty, inequality and exclusion.
Regarding Cuba, the Presidency is currently drafting a
non-binding policy paper on EU medium and long-term
strategies toward Cuba. (NOTE: Since the February 12 COLAT
meeting the draft policy paper did not achieve consensus and
the committee will go back to the Political and Security
Committee (PSC) for new instructions. END NOTE.) The EU
questioned the continuing usefulness of Helms-Burton,
identifying it as the major difference in our policies toward
Cuba. Shapiro encouraged the EU to be more active in
promoting democratic changes in Cuba through greater civilian
and economic engagement. END SUMMARY
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2. (C) Nicaragua
--------------
The Portuguese, leading the discussion on Nicaragua, first
noted some positive democratic developments in the recent
election of Daniel Ortega such as the opposition's
recognition of Ortega's legitimate win, Ortega's promise to
proceed with parliamentary reform, and his decision to remain
in CAFTA for now. The Nicaraguans, they said, have high
expectations of this government to address the huge
challenges of improving social conditions and eradicating
poverty. They noted that Ortega's initial statements seemed
moderate, but that it is "too soon to see," and they will be
monitoring his support in the National Assembly and the
Liberal-Sandinista Pacto, with especial wariness of Chavez'
influence. Coninsx, noted that Nicaragua receives one of the
biggest assistance packages from the EU in Latin America, and
that the new 2007-13 assistance program will focus on
promoting good governance and democracy, education (both
primary and secondary),and the investment climate (with
attention to the macro-economic side). Mavromichalis,
commented with skepticism on Ortega's stance on corruption,
noting various relatives in high positions (including his
brother and two sons),and also on the future of the Pacto
and Aleman, noting that the U.S. and EU need to have a
position on the situation as it could be difficult to require
Aleman to stay in jail. PDAS Shapiro said that the U.S.
generally concurs with this assessment.
--------------

3. (C) Venezuela
--------------
Schrombgens led the discussion on Venezuela. He described
with great concern the assessment of the direction in which
Chavez is headed, which very strongly resembles the U.S.
interpretation. He mentioned particular concern over Chavez'
landslide victory and the opposition's unfortunate strategy
of boycotting parliamentary elections, thus allowing Chavez
to be granted extraordinary powers. He noted that Chavez'
"21st Century Socialism" is very similar to that of the 20th
Century (a specific observation the U.S. has also made).
Schrombgens said that Chavez is continuing with his
self-empowerment through nationalization of private companies
(Schrombgens was skeptical about the promise of payment in
full),reshuffling of the Cabinet, censorship (e.g. the
refusal to renew the broadcasting license of RCTV),and his
moves to create a single socialist party with participation
of all Venezuelan citizens. Schrombgens also mentioned the
EU's role in election observation as well as the Sumate
trial. He stated that the common EU assessment is that "a
step by step approach and quiet diplomacy are the only ways
to be influential," noting that Chavez will probably be able
to maintain this path as long as there is a demand for
Venezuelan oil.


4. (C) PDAS Shapiro agreed with the EU assessment, noting
that where Venezuela is now has been completely predictable
as Chavez has done everything he said he would. He mentioned
with concern that Chavez is continuing to gain control over
supposedly independent institutions such as the Supreme Court
and the Attorney General and is eliminating any checks and
balances that may have existed in the Venezuelan government.
He acknowledged that quiet diplomacy is good but "not always
sufficient," and while praising the EU presence at the Sumate
trial, encouraged the EU to be more proactive in working with
political parties and institutions to promote opposition,
especially as the U.S. currently has little influence (as
evidenced by the stand-still of coordination on
counter-narcotics and the lack of response from Chavez to
U.S. initiatives to engage). Shapiro also noted some
concerns not mentioned by the EU such as weapons purchases,
the growing relationship with Iran, loss of control of
identification documents, and an increase in potential
narcotics trafficking activities. Coninsx from the
Commission acknowledged awareness of and shared concern over
these issues in the EU, saying that their response is
discussions on social cohesion and regional integration, and
maintaining cooperation with civil society to strengthen the
opposition without polarization. She noted that EU
assistance of about 40 million euros (approximately 52
million USD) over the next five years will focus on
governance and diversification of exports.
--------------

5. (C) Colombia
--------------
PDAS Shapiro, leading discussion on Colombia, praised the
current direction of the GOC. He showed appreciation for EU
and Member State support to date, and encouraged support for
Colombia,s new "Strategy for Strengthening Democracy and
Social Development," which will focus on reducing poverty,
coordinating civilian and military efforts in newly secured
areas, and pay special attention to minorities and human
rights. He highlighted a shift in the balance of U.S.
funding towards the soft side, noting that the main areas for
assistance for post-paramilitary demobilization are
prosecution, OAS monitoring, reparations, and reintegration
programs. He also mentioned interest in the GOC-ELN talks,
but noted that the ELN has some tough decisions to make; they
should agree to a ceasefire and release their kidnapped
prisoners. He noted that the President is visiting Colombia
in March. He also mentioned that a U.S.-Colombia FTA is in
Congress, noting that it will be a different discussion with
the Democrats in the majority. He also noted with enthusiasm
that Colombia grew by 6% last year, saying that economic
progress will be the key to solving its problems.


6. (C) Karl Buck described the recent visits of FM Araujo and
MOD Santos, who favorably impressed the Europeans. During
these visits the EU learned that Colombia would like to
pursue a South African model of a Truth and Reconciliation
Commission. Buck sees reintegration of demobilized
paramilitary members as the big issue, but also expressed
concern for the rights of the victims and the problem of
child soldiers. He also mentioned progress on the
humanitarian exchange as three EU governments had been
permitted to contact the FARC. He noted with pleasure that
the EU welcomed the U.S. shift towards soft, funding. He
observed that like Afghanistan, Colombia needed to create a
stable situation to combat drugs, and also noted the need to
inform surrounding nations of the risks of condoning or not
resisting narcotics trafficking from Colombia. Aude
Maio-Coliche, Commission DG Relex G3 Colombia Desk, mentioned
that External Affairs Commissioner Ferrero Waldner is going
to Colombia in the third week of April. She also stated that
the EU provided assistance of Euros 270 million
(approximately 351 million USD) to Colombia in 2001-06, and
will program assistance for Euros 160 million (approximately
208 million USD) in 2007-13. This will focus mostly on
supporting communities receiving ex-combatants, with another
program directed at victims and protecting those who defend
them. She also mentioned that the EU had been actively
participating in the G-24 working group on Colombia.
Schrombgens asked Shapiro for his thoughts on the scandals
regarding ties between politicians and paramilitaries, and
Shapiro responded that it was to be expected that the
paramilitaries would make such accusations, and that some of
them may well be true, but regardless it is important for the
truth and reconciliation process to continue.
--------------

7. (C) Bolivia
--------------
Regarding Bolivia, Schrombgens noted that the hope placed in
Morales as the first president elected by a majority in
Bolivia was fading as he has failed to use his legitimacy to
bridge the gaps in society and incorporate indigenous law.
Schrombgens said there was great concern in the EU about
Morales' close ties with Venezuela and Cuba, the
deterioration of the democratic constitution, the prospect of
legalizing coca cultivation, and the increasing violence.
Nicolas Pascual de la Parte mentioned the visit of
opposition leader Governor of Cochabamba Manfred Reyes Villa
with HR Solana, noting that he seemed to be delivering a
"catastrophic scenario" of a secession movement in the east,
and also criticized Morales for adopting the pretension of
being able to start Bolivia over from scratch.


8. (C) PDAS Shapiro agreed with the general concerns, noting
that both sides of the internal Bolivian conflict were
employing confrontational tactics that were exacerbating
ethnic tensions. He applauded the Presidency,s statement in
January on the violence in Cochabamba. He noted that the
U.S. still engages with Morales, mentioning trade
negotiations, and saying that we believe diverse
international engagement with the GOB will make them be more
pragmatic, stressing the importance of respecting the rights
of the legal opposition and strengthening democratic
institutions for ALL Bolivians, which would have to
incorporate the indigenous majority. He also applauded the
EU,s increased engagement on the cocaine issue, noting that
most of the drugs resulting from increased coca production in
Bolivia would probably end up in the EU. Commission
representative Coninsx described the EU,s economic aid
contribution, noting that the EU and Member States account
for 77 percent of all aid to Bolivia, with the EC focus on
economic opportunities, the fight against drugs, and
integrated water management. She then asked about the
certification procedure in March, strongly expressing hope
that the U.S. will continue to engage with the GOB. Shapiro
responded that there was fierce internal debate over the
issue, with political concerns against counter-narcotics
concerns, noting that he did not know how it would turn out.
He mentioned that the reduction of funding for U.S.
counter-narcotics activities reflected a re-prioritization of
assistance efforts which was accompanied by an increase in
other areas, although the overall budget had decreased.
--------------

9. (C) Mexico
--------------
PDAS Shapiro led discussion on Mexico, expressing pleasure
with the initial months of Caldron's presidency. Coninsx
noted that the EU has strong relations with Mexico and
considers it a rich to middle-income country with regional
disparities. The EU's modest 2007-13 assistance package will
focus on social cohesion as the main concerns now are
inequality and the rise of violence, as well as lessons
learned from EU regional policy. She asked about the U.S.
stance on crime and immigration, two key issues. Shapiro
responded that the U.S. is trying to increase cooperation
with the GOM on northern border security. He also noted that
immigration is an essential part of the relationship (as
evidenced by the fierce public debate currently occurring)
because of the wage differential and the need for workers in
the U.S, mentioning the three approaches proposed by the
Administration focusing on border control, employer
sanctions, and temporary worker visas to match workers with
jobs. He also noted that we are encouraging Mexico's efforts
to take a leadership role in Central and indeed all of Latin
America, for example with th Plan Puebla-Panama to reduce
energy costs in Central America through homogenization of
standards, building an oil pipeline from Mexico, and
connecting the electrical grids. Coninsx agreed that energy
will be a key theme in the future of EU relations with Mexico
and all of Latin America. Pascual de la Parte then discussed
Calderon's visit to Europe, saying that the emphasis was on
the need for foreign investment, and ensuring political
stability and a legal framework to foster such investment.
He believes that the recent reduction in oil revenues could
give Calderon the opportunity he needs to reform the fiscal
system, and even open the door for the foreign investment in
energy currently not allowed in Mexico. He also mentioned
that Solana will be visiting Mexico on 17 April, on his way
to the Rio-EU summit meeting in Santo Domingo (18-20 April).
--------------

10. (C) Brazil
--------------
Leading the discussion on Brazil, PDAS Shapiro noted that the
U.S. cooperates with Brazil on energy, health, environment,
science and technology, and biofuels, and that we have good
working level relationships in the areas of law enforcement
and counter-narcotics. The major concerns are inequality,
drugs and terrorist financing. He mentioned the need to
encourage Brazil to take advantage of its potential
leadership position by encouraging Lula as a leader of the
modern, forward-looking left to exert more influence on his
neighbors, and conveying to the Brazilians that they have
much to lose by political instability and increased drug
trafficking in Bolivia. Regarding biofuels, Shapiro noted
that the U.S. and Brazil account for 80% of the world's
ethanol production, and said a market-driven approach is
needed for expansion, targeting poor economies with
production potential. To that end, ethanol should be turned
into a commodity, and infrastructure improved to encourage
private sector development. He noted that Brazil could
become an economic superpower if it could break the 3-3.5%
growth barrier.


11. (C)Beatrix Martins, DG Relex G4 Deputy Head of Uni for
the Brazil Desk, said the EU is helping Brazil attack its
problem of regional differences by assisting, through
dialogue and an exchange of best practices, in development of
a Regional Planning Policy similar to that of the EU. The EC
is in the process of organizing an international biofuels
conference, which Brazilian President Lula will attend, in
Brussels in early July. The conference will focus on market
problems, sustainable development, environmental impact, and
research progress. The EU is currently negotiating an FTA
with Mercosur, but not making much progress due to focus on
Doha, Venezuela's membership, Bolivian uncertainty, internal
rows, and a lack of action to address huge structural
asymmetries within the group. This brought the discussion
back to Brazil's leadership role, as they are 70% of
Mercosur, with strong reiteration by the EU of the need to
encourage Brazil to "believe in themselves" and assume the
responsibilities of their new leadership position.
--------------

12. (C) Gangs
--------------
PDAS Shapiro led off the discussion by noting the connection
between Central American and U.S. gangs because of the flow
of people. Pascual de la Parte noted that Madrid is now
experiencing a similar problem. Shapiro said the U.S. is
working through OAS and SICA on anti-gang and prevention
strategies regionally, nationally, in the private sector, and
in immigrant communities abroad, mentioning the upcoming
international anti-gang conference in El Salvador during the
week of April 25, 2007, and stressing as a prevention method
assisting community based alternatives to gang related
activities. Pascual de la Parte mentioned that Spain has
recently enacted a program to grant "gangs" cultural
association status with government funding, which has allowed
the groups to feel integrated and respected, and seems to be
keeping them under control. The problem of deportees was
specifically discussed, as the receiving governments in Latin
America and especially the Caribbean complain they cannot
deal with the number of people coming in, citing as a reason
the lack of information. Shapiro noted that the information
is sent from the U.S., but could have the potential to be
buried in the transfer, provoking the suggestion that the
records be sent with the persons to whom they refer and a
general agreement on the need to have a greater sharing of
information. This also generated a discussion on the need
for reintegration programs, potentially similar to those used
with the Balkan refugees, which essentially stated the need
to "send them back with something useful in their luggage"
and focused on training done at a community level. There was
also a general acknowledgment of the need for greater
cooperation on this issue; Coninsx requested information on
U.S. programs on reintegration.
--------------

13. (C) Cuba
--------------
PDAS Shapiro started discussion on Cuba, saying we all want
the same goal: a transition to a democratic society and not
the establishment of a dynasty by transferring power from a
dictator to his brother. He said it is clear Fidel Castro is
not coming back, and the current slow-motion scenario now
makes it more important for us (the U.S. and the EU) to send
the message that we expect change. He expressed U.S.
interest in the EU's new policy paper on Cuba, wondering
specifically about strategy and political support. Karl Buck
responded that there are not many details from the policy
paper available as it has not been discussed internally. He
said the EU is assuming a stable situation in Cuba, noting
that collective control is in place, there is no opposition,
and strong nationalism; but he also mentioned that there is
no common line in the EU as each Member State refers to its
individual experiences. He also noted a perceived change in
the U.S. itself, citing Administration policies, the
Democratic Congress, and the lack of a charismatic leader of
the U.S.-Cuban population. He stated that Cuba is not
isolated, as demonstrated by its position in the UN Human
Rights Council, strong support from UNGA, and economic
support from Venezuela, China and tourism. All of these
observations, Buck said, make Helms-Burton seem "silly" to
the EU, and he asked if it is still useful. Buck averred
that Helms-Burton has not been successful, it does not really
affect Cuba anymore, outsiders are the real victims, and it
could have a titling effect on the leadership. Shapiro
countered by saying that Helms-Burton is a law, not a policy,
and could allow for more lenient treatment of Cuba if there
are demonstrable steps towards democracy. Buck also noted
that Raul Castro shows great capacity to discuss. Ultimately
he thinks the EU's role in transition will be small and aimed
at supporting peace, especially in light of the large numbers
of European tourists in Cuba.


14. (C) Karl-Otto Konig, Head of Unit for Mexico, Central
America, SICA, Caribbean, CARICOM, Ministry of Foreign
Affairs in Berlin, also representing the Presidency, stated
that the EU's new policy paper will be based on the Common
Position of 1996, but will be a non-binding framework drawn
from a consensus. It would be a set of recommendations on
how to engage with Cuba in the medium to long term, setting
out a strategy to encourage a transition to democracy.
(NOTE. We have since been informed that the policy paper
stalled due to lack of consensus in the Latin America
Committee and was returned to the Political and Security
Committee (PSC),which called for the development of the
strategy paper, for new instructions. The PSC instructed the
Committee to focus on renewal of the Common Position in June,
since agreement on a strategy paper is not possible. END
NOTE.)


15. (C) Javier Nino Perez DG Relex G1 Policy Officer from
the Commission, raised questions on how to more actively
engage the rest of Latin America and how Cuba will position
itself regionally. Shapiro responded that Latin America is
reluctant to engage. He said that Latin Americans don't like
to criticize each other, especially as Cuba pushes back.
Castro is also untouchable as "the number one anti-American,"
and communist parties throughout Latin America have lived off
of him for 40 years. He also mentioned that post-transition
there could be a myriad of other problems we may not have
even thought about, such as drugs and social services, and
the burden of dealing with these problems will fall
disproportionately on the U.S. He further noted that while
the Europeans are saying the embargo is a failure, European
engagement with the Castro government has not brought any
positive results. Pascual de la Parte agreed that neither
strategy has worked, noting there are some considerable
hurdles to jump over: there is no precedent, there is a need
to be wary of a nationalist reaction, we cannot expect help
from the rest of Latin America, our impact is limited with a
loss of economic influence and political isolationism, and we
cannot count on the opposition as they are small,
disorganized and surely infiltrated. We therefore have to be
patient and "wait for the situation to be ready" before we
join in not at the front, but on the side, and with
complementary strategies. Pascual de la Parte then said we
also have to trust each other and exchange information, to
which Shapiro responded that the U.S. is interested in
sharing information and views and that some Europeans have
better access to sectors of Cuban society. He also said that
the Cuban people deserve to have same right as any other
nations to decide their own future.


16. (C) Buck suggested flooding Cuba with money and contacts
to invoke rapid change, but Shapiro noted that the UK,
Canada, Mexico, Spain, etc. have been doing that with no
results. Pascual de la Parte said that the Cubans want a
better standard of living, but have been misinformed and
manipulated to believe they can achieve this under the
current regime. He also noted the need to reassure the Cuban
public that change is not dangerous, as well to sharpen and
play on the extreme contradictions of the regime, such as
human rights issues. There was general agreement with this
statement, and Shapiro pushed suggestions for EU action,
including opening information centers with access to the
internet and newspapers, distributing literature, recognizing
legitimate opposition, encouraging the media through venues
such as Reporters Without Borders, calling publicly and
privately for democratic steps such as the release of
political prisoners, encouraging European businesses in Cuba
to abide by ILO regulations, and encourage the ILO to meet
with labor leaders. These were duly noted by the Europeans.

17, (C) After the Troika consultations, Shapiro held a
bilateral meeting with the PSC Ambassador of Portugal and
then informal drinks with Latin American Ambassadors to the
European Union from Chile, Colombia, Mexico, Brazil, and
Peru. The Portuguese hoped to improve relations with Latin
America during their presidency, noting the large Portuguese
populations in those countries as well as strong bilateral
relations with Brazil. To this end they want to strengthen
the EU's bilateral relations with Brazil, which will focus on
energy and trade relations with Mercosur, with whom the EU is
currently negotiating an FTA, and are organizing an energy
summit in July. The Latin American Ambassadors demonstrated
a general frustration with the lack of involvement from the
EU.
PDAS Shapiro cleared this cable.
Gray
.