CODEL ENGEL VISITS PARAGUAY

UNCLAS ASUNCION 000791

SENSTIVE
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TO WHA/BSC MDASCHBACH, H FOR DAS JSTARR, H/CTO DRICH

E.O. 12958: N/A
TAGS: OREP ETRD PREL ECON PA
SUBJECT: CODEL ENGEL VISITS PARAGUAY


1. (SBU) SUMMARY: Congressman Engel (D-NY) led an eight-member,
bipartisan delegation to Paraguay November 11-13 to strengthen
commercial ties and affirm U.S. interest in Paraguay. Senate
President Gonzalez Quintana opened the delegation's November 11
meeting with the Paraguayan Congress by affirming that the diverse
Paraguayan Congress is committed to supporting the new Lugo
government. Mr. Engel assured his Paraguayan counterparts of the
U.S. desire to strengthen the long and deep friendship between the
United States and Paraguay and to continue working together for our
mutual benefit; Paraguay's congressional representatives responded
enthusiastically to the Codel's message regarding closer relations
and affirmed that they need U.S. assistance and support. President
Lugo expressed gratitude November 11 to the Codel for the "great
international solidarity" shown for Paraguay, including by President
Bush in his October meeting with Lugo. Mr. Engel conveyed the
delegation's warm feelings for Paraguay, desire for increased
engagement, and interest in supporting Lugo's social justice agenda.
Lugo explained the top six priorities for his administration are:
land reform; judicial reform; strengthening institutions; a national
emergency plan to deal with environmental, health, education and
social issues; economic development; and control of natural
resources. Lugo made the case for "fair trade, not free trade,"
with benefits for Paraguay. Congressman Engel's delegation, which
was the largest U.S. congressional delegation to ever visit
Paraguay, conveyed a strong message regarding U.S. interest in
expanding commercial relations, and was warmly received by both the
public and private sectors as well as covered by the national media.
END SUMMARY.
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ENGEL WITH PARAGUAY'S CONGRESS: THE US WANTS CLOSER RELATIONS
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2. (SBU) Senate President Enrique Gonzalez Quintana opened Codel
Engel's meeting with the Paraguayan Congress November 11 by telling
them that the diverse Paraguayan Congress is committed to supporting
the new Lugo government. "We're conscious of our responsibility to
look for mechanisms to respect democracy and rule of law," he said.
Gonzalez congratulated the delegation on the previous week's U.S.
elections, and said Paraguay wants to follow the United States'
democratic example.

3. (SBU) After introducing his delegation, which included
Congressman Dan Burton (R-IN),Maxine Waters (D-CA),Maurice Hinchey
(D-NY),Virginia Foxx (R-NC),Nydia Velazquez (D-NY),Lincoln Davis
(D-TN),and Brad Miller (D-NC),Mr. Engel assured his Paraguayan
counterparts of U.S. desire to strengthen the long and deep
friendship between the United States and Paraguay and to continue
working together for our mutual benefit. "It's not an accident that
we're visiting Paraguay," Mr. Engel said, "we're here because this
is a time of new opportunities." Engel conveyed his vision of
increased engagement with Latin America under the Obama
administration, which Congresswoman Velasquez reinforced in fluent
Spanish. "If we neglect the region," Mr. Engel said, "we do so at
our own peril." Paraguay's congressional representatives responded
enthusiastically to the Codel's message regarding closer relations,
and affirmed that they need U.S. assistance and support. They
pledged their continued commitment to fight contraband, narcotics
trafficking, and terrorism, as well as to maintain strong relations
with the United States.
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ENGEL TO LUGO: I'LL INTRODUCE A TRADE BILL FOR PARAGUAY
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4. (SBU) President Fernando Lugo, along with Foreign Minister
Alejandro Hamed Franco and Chief of Staff Miguel Lopez Perito,
received Codel Engel November 11 and conveyed gratitude for the
"great international solidarity" shown for Paraguay, including by
President Bush in his October meeting with Lugo. Lugo acknowledged
the high expectations and curiosity regarding his administration,
and assured the delegation that his government would be
characterized by transparency, honesty, and concern for the poor.
Lugo congratulated his visitors on the U.S. election and wished
President-elect Obama "a natural, logical transition." Lugo mused
that public service offers a way to serve our people and use our
power to help them. "We have much to learn from the United States,"
he said, "and much to build. Our people deserve it."

5. (SBU) Congressman Engel conveyed the delegation's warm feelings
for Paraguay, desire for increased engagement, and interest in
supporting Lugo's social justice agenda. Congressman Engel also
asked Paraguay to reconsider its position which blocks a waiver for
U.S. trade preference programs in the WTO. A change in position,
Engel said, would send a positive message regarding the bilateral
relationship, and would help him in advocating for trade preferences
for Paraguay. Engel said he was willing to introduce legislation in
January to give Paraguay trade preferences, and that he would urge
President-elect Obama to support his bill. In response to Lugo's
question about how an Obama administration will conduct foreign
policy, Congressmen Engel and Burton were hopeful that the United
States would be more engaged in the region, but noted that President
Obama's first challenge would be the U.S. economy.

6. (SBU) Lugo explained the top six priorities for his
administration are: land reform; judicial reform; strengthening
institutions; a national emergency plan to deal with environmental,
health, education and social issues; economic development; and
control of natural resources. Lugo said Paraguay's democratic
institutions had been synonymous with the Colorado Party for over 60
years, and related his own personal difficulties in getting his
teaching certificate because he was not a Colorado. On economic
issues, Lugo expressed interest in strengthening small businesses
and offering investors legal security. On energy, he mentioned the
Itaipu Dam, which Paraguay shares with Brazil, stating that Paraguay
uses only 5 percent of its share and "donates" the rest to Brazil.
Lugo told the delegation that he sees himself as a protagonist for
peaceful change. He said that during his campaign, he traveled the
entire country and listened to the people. "The voice of the people
is the voice of God," he said. Lugo said Paraguay could not relax
when it comes to security, and promised to continue to fight
terrorist financing and drug trafficking with U.S. assistance and
support. Lugo told the delegation that he wants to clean up
Paraguay's image. He alluded to the difficulties he is having in
building consensus, and admitted there are no "magic formulas" to
solve Paraguay's problems.

7. (SBU) Lugo made the case for "fair trade, not free trade," with
benefits for Paraguay. He said his administration is still
designing its foreign policy but that Paraguay supports regional
integration. "Mercosur," he said, "has many faults." Lugo opined
that Paraguay and Uruguay need to expand their presence in Mercosur,
lamenting that Mercosur prevents Paraguay from signing independent
trade agreements. Lugo promised his team would study the WTO
situation and make a rational decision (septel).

8. (SBU) COMMENT: Congressman Engel's delegation, which was the
largest U.S. congressional delegation to ever visit Paraguay,
conveyed a strong message regarding U.S. interest in expanding
commercial relations, and was warmly received by both the public and
private sectors. The delegation's meeting with President Lugo
served to bring Paraguay's position in the WTO to Lugo's attention
in order to ensure the "buy-in" necessary to move the issue forward.
END COMMENT.

The delegation did not have an opportunity to clear this message
before departing post.

AYALDE