Argentina Shows No Flexibility on Latest Doha NAMA Text

UNCLAS BUENOS AIRES 000989

USDOC for 4321/ITA/MAC/OLAC/PEACHER

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ETRD WTRO AR
SUBJECT: Argentina Shows No Flexibility on Latest Doha NAMA Text

Refs: (A) Buenos Aires 962
(B) Buenos Aires 589
(C) 07 Buenos Aires 1899


1. (SBU) Public comments by Foreign Minister Jorge Taiana, as well
as press reports, indicate a growing divide between MERCOSUR members
Argentina and Brazil over their respective WTO Doha Development
Round (DDR) negotiating positions, despite a July 14 meeting in Rio
de Janeiro of MERCOSUR Foreign Ministers reportedly intended to
achieve a common position on the latest DDR agriculture and
non-agricultural market access (NAMA) draft texts. A GoA Foreign
Ministry press release issued after the meeting quotes Taiana saying
"We're not satisfied" with the latest July 10 NAMA draft, adding "We
have to work much harder to reach a balanced (NAMA) position." The
release also cites the need to recognize "the important contribution
that developing countries - like ours - are having on the (Doha)
Round." A July 13 editorial in leading Argentine daily La Nacion
contrasts Argentina's DDR stance to Brazil's gradual progress from
the "closed and solitary" position of Argentina to a more open
position.


2. (SBU) A key difference between Argentina and Brazil DDR positions
is over how to allow individual developing country customs union
members additional flexibility to shield sensitive industries from
import tariff cuts. Brazil and the U.S. were two of twelve WTO
members who reach an accord in June on DDR customs union treatment;
the GoA calls the agreement unacceptable as it offers Argentina less
favorable treatment that do to other developing countries not in
customs unions. Argentine Foreign Ministry National Director of
Economic Negotiations Nestor Stancanelli said at the time that
Argentina needs to be able to shield 16.5% of its NAMA tariff lines
from cuts, with no restriction on volume of trade, as opposed to the
draft proposal which would allow them to shield 14% of tariff lines
and up to 19% of trade by volume.

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COMMENT
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3. (SBU) The Foreign Ministry's uncompromising press release echoes
recent private comments by Taiana to the Ambassador (Ref A) and
Argentina's DDR position remains essentially unchanged from its
position on earlier draft texts (Refs B, C). As Argentina's economy
shows increasing evidence of slowing following six years of 8-plus
percent GDP growth, the GoA is coming under increasing domestic
pressure to protect its inefficient (certainly relative to Brazil)
industrial base. The GoA has repeatedly called draft NAMA texts
"unacceptable" and has offered little more forward-leaning than
vague promises of "room to maneuver" on agricultural and services
agreements. End Comment.

WAYNE