ARGENTINA WELCOMES AMBASSADOR SCHULTE'S

UNCLAS BUENOS AIRES 001449 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: AORC KNNP IAEA ENRG TRGY PREL AR SUBJECT: ARGENTINA WELCOMES AMBASSADOR SCHULTE'S CONSULTATIONS ON IRAN AND SYRIA; WILL WAIT FOR BRAZIL ON ADDITIONAL PROTOCOL QUESTIONS ¶1. (SBU) Summary: Argentine Vice Foreign Minister Victorio Taccetti welcomed Ambassador Schulte's October 16 consultations in Argentina, confirming Argentina's predisposition to cooperate with the U.S. internationally and at the IAEA. In the meeting with VFM Taccetti and at a lunch hosted by the Director for Nuclear Issues Ambassador Elsa Kelly, Schulte thanked the Government of Argentina (GOA) for its support on Iran, for voting at the Nuclear Suppliers Group (NSG) to facilitate the U.S.-India civilian nuclear agreement, and for its responsible management of nuclear technology. He described U.S. and IAEA concerns about Syria's clandestine program, requested Argentine support for inclusion of the NPT Additional Protocol (AP) as part of a criteria-based approach to restricting the export of nuclear technology, and described U.S. support for a nuclear fuel bank arrangement to ease nuclear fuel supply concerns among countries not possessing enrichment capabilities. Ambassador Kelly was generally receptive to the U.S. views. She noted Argentina's general readiness to conclude the NPT Additional Protocol but repeated that the GOA would go forward on the issue only with Brazil due to bilateral arrangements between the countries. Although she raised concerns about use of a country's AP status as a criterion for restricting its import of nuclear technologies, she intimated that Argentina probably would be able to support some NSG agreement establishing criteria-based restrictions on the transfer of these technologies. She noted upcoming consultations with Brazil and thought that the two sides would discuss the NSG initiative. Ambassador Kelly was supportive of the fuel bank concept, following up with specific questions about different international proposals and the costs. Both Kelly and VFM Taccetti restated their concerns about the India civilian nuclear arrangement, which they had supported only with reservations and at ours and India's request; she thought the deal would ultimately weaken the NPT. Ambassador Schulte gave newspaper and television interviews during the visit. He also led a positive and detailed discussion of non-proliferation issues at an Argentine think tank. End Summary. ¶2. (U) U.S. Ambassador to International Organizations in Vienna Greg Schulte engaged a range of public officials and non-government interlocutors during a one-day visit to Buenos Aires October 16. He was received at the Foreign Ministry by Vice Foreign Minister Victorio Taccetti and hosted at lunch by Ambassador Elsa Kelly, the MFA Director for International Security, Nuclear and Space Affairs (DIGAN). Ambassador Wayne participated in the meeting with VFM Taccetti. DCM, EST Counselor and Pol-Mil Officer joined the lunch given by Ambassador Kelly; she included a number of MFA officials along with officials from the Argentine Nuclear Regulatory Authority and the National Commission on Atomic Energy (CNEA); two officials had experience in international inspections. Amb. Schulte gave interviews with leading daily newspapers La Nacion (published) and Clarin (pending) as well as a taped interview with a national network, America TV. He concluded the visit with a roundtable discussion of non-proliferation issues at the leading international affairs think tank in Argentina, the Argentine Council on International Relations (CARI). Seeking Sustained Argentine Support on Iran, Syria and North Korea -------------- -------------- ¶3. (SBU) In the meeting with Taccetti and the working lunch, Ambassador Schulte thanked Argentina for its consistent support on issues including Iran. He noted the excellent collegial support he had received first from Ambassador Kelly, when posted to Vienna, and from her successor Ambassador Curia. On Iran, Schulte described U.S. support for the P5 plus one dual-track approach, with the offer of negotiations, predicated on Iran's abandonment of enrichment, coupled with ongoing sanctions. He conceded our frustration that international efforts had not yet persuaded Iran to change course but said that the increasing unanimity in the international community against Iran's enrichment program had generated evident debate in Iran about the costs of these efforts. Iran's enrichment effort had become more effective, with an estimate of 4000 centrifuges in operation and increasing levels of enrichment. Our concern over Iran was profound given the conclusive evidence of a weaponization program (probably shelved in 2003, Schulte noted, but never disavowed) and the major effort at enrichment. We estimated that Iran would have sufficient quantities of enriched Uranium to pursue weaponization between 2010 and 2015, Schulte said. He described the Iranian justification of processing for civilian nuclear fuel as patently bogus, given that Iran's one power generating reactor at Bushehr would be supplied by Russia. ¶4. (SBU) Schulte underscored the importance of a firm international line on Iran, emphasizing that strong statements from a country like Argentina were probably more important than U.S. declarations on Iran. He noted that he and his Russian colleague had worked closely to coordinate substantively identical statements on Iran even after the Georgia crisis so as to convince Iran that there was no opening to exploit between Moscow and Washington. In response to Taccetti's question about Russian and Chinese motivations, Schulte explained his convictions that both were sincere in wanting to avoid a nuclear armed Iran, with each having real interests at stake in the Gulf that would be compromised by a regional nuclear arms race and by other dangers that would attend Iranian acquisition of nuclear weapons capability. ¶5. (SBU) Ambassador Schulte provided detailed information to Taccetti and at the working lunch on IAEA findings regarding the destroyed nuclear facility in Syria. He praised the good work of IAEA inspectors even without Syrian cooperation. Syria, Schulte said, could now follow one of two paths: the path of Libya in coming clean and working its way back into the international system, or the course taken by Iran of denial and obfuscation. It was a great concern that Syria appeared to be leaning in the wrong direction. Syria too needed to hear consistent messages from countries around the world, and we counted on Argentina to sustain its principled approach to such issues as Syria was brought before the IAEA. ¶6. (SBU) Schulte also briefly described the to-and-fro of North Korean positions with the six-party talks, speculating that, whatever the leadership situation there, the Government appeared bent on extracting the maximum amount of concessions possible with the deal. He described the goal of having North Korea eventually reenter the NPT as a non-nuclear weapons state and said we might call on Argentina for support in this process. Argentina and the Additional Protocol -------------- ¶7. (SBU) Schulte described the U.S. objectives at the late November NSG meeting in developing effective, criteria-based restrictions on the spread of nuclear enrichment technology to states not currently possessing the capability (he noted that Argentina and Brazil were recognized by the United States as enrichment capable). We had initially pushed for a complete prohibition on the export of this technology, Schulte noted, but the U.S. had listened to objections and developed an alternative. Among the criteria we hoped to utilize was whether the intended recipient country had signed the NPT Additional Protocol (AP). Ambassador Schulte was careful to describe our efforts to recognize in doing so that neither Brazil nor Argentina had signed the AP. While our goal was that both countries would sign, in the interim we were content to draft an export restriction regime that required the recipient countries to have the AP but not Argentina or Brazil, given their special status. ¶8. (SBU) Kelly, although ultimately quite pragmatic in her approach to this issue, pushed back initially, arguing that the IAEA and not the NSG was the appropriate mechanism through which to add restrictions on the export of nuclear technology. This was so particularly given the NPT's affirmative statement regarding the diffusion of nuclear technology for peaceful uses to developing countries in Article 4, she argued. Moreover, many developing countries would find the provisions of the AP quite onerous, particularly those that were in the early stages of exploring and developing nuclear power. The chief for Nuclear Affairs and Institutional Communication at Argentina's Nuclear Regulatory Authority, Elena Maceiras, asked whether some developing countries might be asked to implement appropriate elements rather than the full scope of the AP, or, alternatively, utilize other safeguards. Raual Racana, President of the Regulatory Authority, said that Argentina itself would be hardpressed to implement in the AP even though it had no political objections of its own the concept (he noted in particular the challenges of locating archived documents regarding the country's nuclear programs). Kelly pushed further, saying that some suspected U.S. motives in trying to restrict nuclear capable countries from engaging in legitimate trade with developing nations interested in nuclear power. She suggested that perhaps the criteria would apply only to non-NSG members (Ambassador Schulte responded that we envisioned the criteria based standards applying to transfers to any countries other than the recognized current technology holders). Kelly also noted that Argentina had no political objection to signing the AP itself (though the question had not been put to the President),but underscored Argentina's position that its bilateral mechanism, the Argentine-Brazilian Agency for Accounting and Control of Nuclear Materials (ABACC),made it impossible for Argentina to move forward without Brazil. ¶9. (SBU) Ambassador Schulte acknowledged Kelly's concerns and pressed for a criteria-based regime to address our countries' shared concerns about proliferation. He emphasized again our readiness to work with Brazil and Argentina to reach an agreement at the NSG that would acknowledge and not restrict Argentina and Brazil as non-signatories of the AP. Told that Brazil seemed to be taking a pragmatic approach toward resolving this question, Kelly moved away from her strong position, speculating that an upcoming consultative visit to Argentina by Brazilian Counselor Santiago Mourao might facilitate efforts by the two countries to identify a suitable way forward to support the U.S. objectives, at least in terms of some NSG criteria for technology transfers (the AP being the harder piece for both). When Ambassador Schulte later raised with VFM Taccetti the criteria-based export control approach at the NSG, Kelly spoke positively about the prospects for finding some mechanisms. ¶10. (SBU) Kelly added in the working lunch that she had lobbied the Brazilians to sign the AP and did not understand their objections. A member of her team speculated that it might have something to do with the Brazilian military's involvement in the program, or speculation that Brazil wanted to hide the original source of its enrichment technology. Fuel Banks -------------- ¶11. (SBU) Schulte took the opportunity to describe USG support for the concept of a nuclear fuel bank as a mechanism to give assurances to countries seeking to utilize nuclear power that the market would provide the necessary low enriched uranium. He noted both Russian and IAEA proposals as viable, with the objective of creating at least two reactor loads available to countries in good standing with the IAEA. He described ongoing efforts to raise funds for an effort spearheaded by the private Nuclear Threat Initiative (NTI) to finance an effort, noting the USG contribution of USD 50 million to the effort (one-half of the required total). If it worked, Schulte said, the fuel bank would never have to be utilized, providing only an additional layer of assurance to the market. Schulte also noted that Iran was particularly vehement in objecting to this idea because it undermined its case for developing its enrichment capability - proving already its utility. Kelly was receptive to the idea, noting that she had been briefed on the ideas previously and found them compelling. U.S.-India Civilian Nuclear Cooperation -------------- ¶12. (SBU) Vice Foreign Minister Taccetti received Ambassador Schulte's presentations on Iran, Syria, and the NSG questions with interest and support, intervening to underscore Argentina's interest in cooperating with the United States on these issues before complaining about U.S. and Indian pressure to facilitate the U.S.-India Civilian Nuclear agreement at the NSG. India, he said, had been much less subtle, primarily emphasizing its imports from Argentina and arguing that Argentina should give its support to an important partner. Taccetti said that in accepting the NSG proposal Argentina had recognized many practical and political considerations, including India's status as a partner to the U.S. in a dangerous region, its democracy, and its rapidly growing energy needs. Schulte, who had opened by thanking Taccetti for Argentina's support of the agreement, acknowledged Taccetti's concern about the principles of NPT adherence but shared his confidence that, in five to ten years, we would look back on the agreement as a clear positive. While we would have preferred to bring India in to the NPT, Schulte said, that had clearly not been viable. Instead, he said, the agreement had brought India as close as possible to the safeguards and rules of the global non-proliferation regime, a net positive for the principles of non-proliferation. Press and Public Outreach -------------- ¶13. (SBU) Ambassador Schulte conducted three press interviews during his visit, with leading newspapers "La Nacion" and "Clarin," and with broadly available television network America TV. The "La Nacion" interview was published on October 19 (translation to be faxed to USMISSION UNVIE). Schulte effectively parried efforts in all three interviews to paint the Iran issues as a conflict between Iran and the United States, emphasizing Argentina's consistent support, its agreement with U.S. concerns, and the unanimity internationally that Iran stop enrichment activities. He noted that only Venezuela and Syria had supported the Iranian position. Pressed whether China and Russia had been supportive, Schulte acknowledged that the two countries might not have moved as quickly toward sanctions as we would have liked but that both countries were firm on the issue and had compelling and evident interests in preventing Iranian development of a nuclear weapon. Schulte shared the 2010-2015 estimate of when Iran might have sufficient enriched Uranium to deploy a weapon if it developed the capacity. ¶14. (SBU) All three journalists asked about potential policy change toward Iran under a new U.S. Administration. Ambassador Schulte emphasized that he could only speak for the policies of President Bush but shared that, based on his careful observation of both leading candidates for the Presidency, U.S. policy would remain at least as firm. Both had addressed the importance of supporting the IAEA and of insisting that Iran stop enrichment. Asked about the impact of the global financial crisis, Schulte insisted it would have no discernible effect on international unanimity on the question of Iranian enrichment; he added that the accompanying drop in the price of petroleum was magnifying the effect of economic sanctions (and probably far outdoing them),creating costs for Tehran that could severely limit the Iranian governments effort to sustain support at home for its policies. ¶15. (SBU) Ambassador Schulte concluded his Argentina program with a useful roundtable discussion organized by the Argentine Council on International Relations (CARI). The event was attended by approximately 25 Argentines, many with expertise in the non-proliferation area. Questions focused on Iran and on the U.S.-India civilian nuclear deal. One questioner asked a probing question about the future of the IAEA given its purported resource needs and the challenges it was facing as it moved away from its more purely technical mandate of years past. Schulte agreed that the IAEA had become more political, citing as an example the contentious political debates sparked by the question of a Middle East Nuclear Weapons Free Zone. The Ambassador's availability and candor were clearly appreciated by the audience. Comment: An Excellent Investment -------------- ¶16. (SBU) The visit by Ambassador Schulte was highly useful to our efforts to maintain and build Argentine support for key non-proliferation objectives. His cordial and frank explication of several key non-proliferation challenges and the U.S. perspective will pay continuing dividends as an investment with the GOA. Argentina is typically in a good position on these issues, but some are difficult for Argentina either on principle or in practice, and explaining USG approaches in this fashion may be crucial to bringing them around. Placing Ambassador Schulte in front of local academics/diplomats and the press was also quite useful. Most importantly, it both dispels some of the less charitable views of U.S. policies on Iran, non-proliferation, and it builds Argentine ownership as a partner in these efforts. ¶17. (U) Ambassador Schulte provided input to this cable but did not review the text. WAYNE