Argentina: Rising Trade with Iran Prompts Jewish Community

UNCLAS BUENOS AIRES 001264

USDOC for 4321/ITA/MAC/OLAC/PEACHER
NEA/IR for SARAH GROEN

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ETRD ECON PTER PREL AR IR
SUBJECT: Argentina: Rising Trade with Iran Prompts Jewish Community
Outcry

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SUMMARY
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1. (SBU) Bilateral trade between Argentina and Iran has grown
rapidly in 2008, increasing to US$ 483 million in the first half of
2008 from under US$ 5 million in the first half of 2007, driven
mainly by Argentine agricultural exports. Paradoxically, the
increase in bilateral trade follows Argentina's 2007 issuance of
international arrest warrants for five current and former Iranian
government officials accused of participation in the 1994 bombing of
a Jewish cultural center in Buenos Aires which killed 85. There was
also evidence of Iranian involvement in the 1992 bombing of the
Israeli Embassy that killed 29 persons. The Iranian Charge
d'Affaires in Argentina denies that the jump in bilateral trade was
prompted by any change in GoI trade policy. Reaction from the
Jewish community in Buenos Aires has been decidedly negative. End
Summary.

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Bilateral Trade with Iran Grows 82-fold in 2008...
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2. (U) According to local media reports citing official GoA
statistics, total Argentine goods trade with Iran increased
eighty-two times in the first half of 2008 y-o-y, from US$ 5.88
million in the first semester of 2007 to US$ 483 million in the same
period of 2008. The increase was driven by Argentine exports, which
rose from $ 4.88 million to $ 480 million, while imports from Iran
grew from $1 to $3.2 million. Iran rose to become Argentina's
fourteenth-largest export market in the first half of 2008, from
104th in the first half of 2007. Raul Ochoa, a private sector trade
specialist, told press that "99% of what we export" to Iran is soy
products and corn.

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...despite GOA pursuit of Iranian Terrorists
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3. (SBU) The article attributes the 2008 increase to a change in
Iranian trade policy. The surge in Argentine exports to Iran
suggests the rapid restoration of a significant trade relationship.
Trade between Iran and Argentina had been substantial until 1998,
when the GoA expelled Iranian diplomats after evidence surfaced of
Iranian involvement in the 1992 bombing of the Israeli Embassy that
killed 29 persons and the 1994 bombing of a Jewish community center
that killed 85. In retaliation for the expulsion of its diplomats,
Iran suspended trade with Argentina, including $1.6 billion in
Iranian exports and imports of about $640 million worth of grain and
meat from Argentina. The GoA in November 2007 won a long and
hard-fought campaign (over Iranian objections) to get the Interpol
General Assembly to approve the issuance of international arrest
warrants for five current and former Iranian government officials on
one Lebanese Hizballah leader.


4. (U) In interviews with the local press, Iranian Charge d'Affaires
in Argentina Mohsen Baharvand, however, denies that the increase in
Argentine exports to Iran resulted from a specific "order" to lift
Iranian trade restrictions, and claimed that Iran was in a process
of privatizing foreign trade. Local media reports an Argentine
business leader calling Iran's earlier decision to block trade "a
serious blow," and said that the reversal was "a pleasant
surprise."

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Argentine Jewish Community Reaction Strongly Negative
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5. (U) Reaction to the increase in bilateral commerce from the local
Jewish community has been decidedly negative. Sergio Burstein,
member of the Association of Family Members and Friends of the
Victims of the AMIA attack, was quoted in the press on September 9
that "it's disgusting" that there are businesspeople "who prioritize
the economic and leave by the wayside" such a serious accusation.
Aldo Donzis, President of the Delegation of Argentine-Israeli
Associations (DAIA),was quoted in the press September 6 as saying
"It's inconceivable that the Justice Ministry has indicated Iran as
responsible for terrorist attacks in Buenos Aires and, as if nothing
had happened, maintain normal trade relations. It looks like we're
rewarding them."

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Comment
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6. (SBU) The growth in bilateral Argentine/Iranian trade is notable
in light of ex-President Nestor Kirchner's April 2007 comment: "It's
terrible how many Argentines sometimes wish we would prioritize

commercial exchanges and not find the truth about who committed
terrible acts here in our homeland. There is not a single coin, or
a hundred, or billions of coins which could be traded for the loss
of life and the evil attack that our countrymen suffered." Burstein
called upon current President Cristina Fernandez de Kirchner (Nestor
Kirchner's wife) to "block exports to Iran" until the accused are
brought to justice. The lack of such a decision thus far may
indicate a Casa Rosada decision to curry favor with estranged
agricultural interests. It is just as likely, however, to be a
trade development that occurred because of Iranian actions (perhaps
a conscious Iranian decision to make the trade relationship more of
a lever) that has until now escaped the notice of a GoA preoccupied
with more pressing concerns.

WAYNE