ARGENTINA: AMBASSADOR'S MEETING WITH CHIEF CABINET

C O N F I D E N T I A L BUENOS AIRES 000178

SIPDIS

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E.O. 12958: DECL: 02/14/2018
TAGS: PREL PGOV ECON EINV EPET KPAO KCOR MARR VZ AR
SUBJECT: ARGENTINA: AMBASSADOR'S MEETING WITH CHIEF CABINET
MINISTER ON STRENGTHENING THE BILATERAL RELATIONSHIP

REF: A. BUENOS AIRES 124


B. WAYNE-SHANNON-MCMULLEN EMAILS 2/12/08

C. BUENOS AIRES 172

Classified By: Ambassador E. Anthony Wayne for reasons (B) and (D).


1. (C) Summary: On February 12, Ambassador lunched with
Argentina's Chief Cabinet Minister Alberto Fernandez (AF) in
the first in a newly initiated series of monthly lunches
developed to help manage U.S.-Argentine relations. Topics
covered included working with A/S Shannon and others to
foster U.S.-GOA relations; VIP visits to and from Argentina;
U.S. investment; problems with GoA economic statistics;
Trafficking in Persons; and possible U.S. medical advice for
a disabled GoA official close to AF. Comment: AF is
demonstrating a strong commitment to U.S.-Argentine
relations. His efforts contrast with those of his long-time
rival in the GoA, Planning Minister Julio De Vido, who
traveled to Venezuela this week to negotiate an oil-for-food
deal with the GBRV and to be photographed with Chavez. It
looks like AF's subsequent request to publicize his phone
call with A/S Shannon (ref b) reflects in part an effort to
demonstrate ties with both the USG and Venezuela. It may
also reflect the Fernandez-De Vido rivalry. End
summary/comment.


2. (C) Following up on the Ambassador's reftel January 31
meeting with President Cristina Fernandez de Kirchner (CFK),
Ambassador lunched with Alberto Fernandez (AF),the
President's Cabinet Minister who had negotiated a solution to
recent U.S.-Argentine difficulties. Fernandez and the
Ambassador had agreed to begin regular monthly meetings to
discuss bilateral issues and to try to manage successfully
any challenges that might arise. This lunch was hosted at a
private hotel by a close private sector advisor to Fernandez,
Gustavo Cinosi, who played a vital intermediary role in the
U.S.-Argentine reconciliation.

Fernandez-Shannon Phone Call and Upcoming Travel
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3. (C) WHA A/S Shannon had called AF earlier in the day (as
previously agreed) to discuss AF's travel to the United
States and Shannon's possible travel to Argentina. AF
confirmed that he and ex-president Nestor Kirchner would
travel to New York to participate in a Council of Americas
seminar in the first two weeks of March, and Shannon had said
that he would like to arrange a meeting with them and then
subsequently visit Argentina, AF said. The Ambasador said
that A/S would have to leave on a trip March 13 and thus it
would be better if AF's visit could take place before that.
AF agreed he would try to arrange his travel dates to reflect
Shannon's availability.


4. (C) AF said he wanted to use his visit and that of Foreign
Minister Taiana, as well as the subsequent visit of A/S
Shannon to Argentina, to keep momentum going in bilateral
relations. He noted his hope that we could manage these
meetings and travels by top officials, including Secretary
Rice, to avoid any new reversals in our relationship and to
highlight that we are working together. For example, if
Secretary Rice were traveling to the region, AF said he hoped

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it would not look like the USG was hopscotching over
Argentina, as this would set off the Argentine press. AF
said he knows that the U.S. has strong ties with Brazil and
regular meetings are held at ministerial levels, and that
there are good reasons to visit Peru, Chile, or Uruguay. At
the same time, he said, he wants to keep our bilateral ties
moving positively and not see negative press stories in
Argentina that would endanger the confidence-rebuilding
process.


5. (C) AF said that he was very open to working with us
about how to manage this challenge - an early Shannon visit,
a brief meeting between Secretary Rice and Taiana in
Washington, or even a brief stop in Buenos Aires by the
Secretary, if that would be possible. The key, in his view,

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is to maintain and build momentum now that we are back on
track. The Ambassador said he would work closely with A/S
Shannon on good options. AF said that he also wanted to get
the most out of his trip to New York City with Nestor
Kirchner and would appreciate any suggestions. He expressed
interest in meetings with business organizations as well as
the Council of the Americas, and perhaps a call at a big
investment bank to get their take on the global economic
situation. Ambassador also went over upcoming U.S. visitors,
including Codel Engel, PDDNI Donald Kerr, Codel Shelby, FBI
visitors, and a number of public diplomacy visitors and

events.

CFK's Travel to the UK
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6. (C) AF said that President CFK had received an invitation
from Gordon Brown in his capacity as leader of the UK's Labor
Party to attend a meeting of international party leaders to
be held in the UK in April. This is the annual event
originally started by Tony Blair and Bill Clinton. AF said
he believed this would be a good opportunity for CFK to
interact with a variety of political leaders from key
countries.

Possible Medical Advice for a GoA official
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7. (C) GoA Ambassador-designate to the United States Hector
Timerman had raised with the Ambassador recently the case of
Jorge Rivas, who is Alberto Fernandez's deputy. Last
November, Rivas suffered a serious brain injury as a result
of a beating he sustained during an attempted car-jacking.
His recovery, said Timerman, has been frustratingly halting.
Timerman asked if the USG might be able to offer advice on
treatments to help Rivas recover. Ambassador subsequently
learned that the Embassy's regional physician had in other
cases helped make connections between U.S. specialists and
local individuals (especially officials) with serious
injuries. Ambassador explained Timerman's suggestion to AF,
and the possible assistance that our physician might be able
to provide. AF expressed much appreciation for the offer.
He said he would explore this possibility with the family and
get back to us.

GoA Decisions on Trafficking in Persons Legislation
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8. (C) The Ambassador recounted his discussion with Justice
Minister Anibal Fernandez earlier in the day on the need for
an Argentine federal law against trafficking in persons (ref
c). AF confirmed that CFK had decided to move rapidly with
the version of the law passed by Argentina's Senate even
though it does not have perfect language on the matter of
consent of adults. She did this on the understanding that it
would be very difficult to work through the differences on
the consent issue among legislators, and she wanted to get a
federal law in place rapidly so the government can start
acting more effectively against this problem. Ambassador and
AF had a long discussion on the matter of consent for adults.
AF argued that: 1) in Argentina, as in certain counties in
the U.S. state of Nevada, prostitution by individuals is
legal in Argentina; and 2) in cases where there is pressure
or coercion to engage in prostitution, other Argentine laws
will apply. Prosecutors, he claimed, can prove even
psychological pressure without much difficulty in Argentine
courts.

Encouraging Inward Investment & Reliable Economic Data
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9. (C) AF said the GoA wants our help in promoting U.S.
investment. The Ambassador said we would be happy to help,
but reminded AF that the key is that investors want certainty
about the rules of game and a workable, transparent system
for resolving disputes. Right now, neither of these is clear
in Argentina, and companies have to examine very closely
government policies that affect their particular industry or
service sector. For example, the energy sector faces
selective government intervention and an array of regulatory
and tax practices that can hardly be called
investment-friendly. The government has also just changed
important rules and imposed new taxes in the mining sector,
with neither advance notice nor consultation with industry
players. In contrast, the high tech and services sectors that
enjoy little government interference are attracting
significant investment, notably from the United States.


10. (C) The Ambassador noted that another troublesome problem
was the official statistics agency INDEC. The embassy had
worked hard over the last weekend to correct misleading
headlines in the leading daily "Clarin" that claimed in
headlines that we were taking sides in the debate about
INDEC's reliability on inflation. However, the Ambassador
continued, the GoA really needs to restore credibility to the
agency. It is very harmful that there is such a lack of
confidence in the GoA's statistics in Argentina and
internationally. AF argued that inflation is of special
concern to Argentines (given the nation's history of

hyperinflationary episodes) and that inflation is very hard
to measure. Ambassador accepted both points, but insisted
that public debate over basic economic data like prices harms
investor confidence, among other things.
WAYNE