U/S PADILLA "SETS THE TABLE" WITH URUGUAYAN

C O N F I D E N T I A L MONTEVIDEO 000190 SIPDIS SIPDIS DEPT PLEASE PASS USTR E.O. 12958: DECL: 04/09/2018 TAGS: PREL ECON ETRD UY SUBJECT: U/S PADILLA "SETS THE TABLE" WITH URUGUAYAN MINISTERS AT SUCCESSFUL INNOVATION FORUM Classified By: Ambassador Frank E. Baxter, for reasons 1.4 (b) and (d). ¶1. (C) Summary: On March 30-31, Commerce U/S Chris Padilla led the U.S. delegation (along with Commerce, State, USDA and TDA reps) attending the Americas Innovation Forum (AIF) in Punta del Este, Uruguay, the GOU's follow-up to the June 2007 Americas Competitiveness Forum in Atlanta. Over 1,100 participants attended the Innovation Forum, which brought together prominent public and private sector innovators from throughout the region to discuss issues ranging from innovative policies and education to biofuels and next generation technologies. On the margins of the AIF, U/S Padilla met separately with the ministers of Foreign Affairs, Industry and Economy (Finance). U/S Padilla reiterated the President's desire to negotiate an FTA with Uruguay when the time is right. If, as he hopes, the Colombia FTA is approved in the House of Representatives before the August recess and by the Senate shortly thereafter, the USG would suggest "setting the table" by initiating formal talks with Uruguay at that time. The ministers welcomed the USG's continued interest in free trade talks and expressed their willingness to continue down this common path, building on the existing Trade and Investment Framework Agreement (TIFA). End Summary. A successful Innovation Forum -------------- ¶2. (U) Uruguay committed to hosting the Americas Innovation Forum (AIF),after a high-level GOU delegation attended the Americas Competitiveness Forum of Atlanta in June 2007. The GOU renewed its committment during the visit to Uruguay of Commerce Secretary Carlos Gutierrez in October 2007, when the Secretary signed an agreement to cooperate in the SIPDIS organization of the AIF. Post and USDOC worked closely with the GOU over the subsequent months in preparing the event. In the end, over 1,100 participants attended the Innovation Forum, and GOU officials repeatedly thanked the Ambassador for the USG assistance in what turned out to be a truly successful world-class event. ¶3. (U) The Forum kicked off on Sunday, March 30, in Punta del Este, with speeches by Uruguayan President Vazquez and One Laptop Per Child's creator Nicholas Negroponte. Uruguay is the first to commit to providing laptops to each elementary student (by the end of the Vazquez administration),thus clearly recognizing that investments in education and technology will help develop a new generation of innovators. The program is well underway, with over 200,000 laptops already in the hands of students. The following two days brought together Forum participants in discussions of biotech, education, innovative government policies, bottlenecks, biofuels, and other related issues. U.S. private sector involvement included Google, Microsoft, Apple and ITG. The optimal mix of public and private sector participants allowed for a frank examination of what works and what does not in today's global economy. U/S Padilla recoognizes GOU for contributions -------------- ¶4. (C) U/S Padilla thanked Foreign Minister Gonzalo Fernandez for his leadership in the OAS, helping to resolve the dispute between Colombia and Ecuador. He thanked Uruguay for hosting the AIF and encouraged the GOU to attend the Commerce Department's Competitiveness Forum in Atlanta in August 2008. He noted that in 2007, for the first time, two-way trade between the U.S. and Uruguay had exceeded one billion dollars, and he confirmed that the USG would like to deepen our trade ties. He suggested that FM Fernandez meet with Commerce Secretary Gutierrez when he comes to Washington at the end of April for the TIFA Council Meeting. "Setting the table" for FTA talks in the fall -------------- ¶5. (C) U/S Padilla explained that the USG continues to want to negotiate an FTA with Uruguay. If, as he hopes, the Colombia FTA is approved in the House of Representatives by the August recess and by the Senate in September, the USG would suggest "setting the table" by initiating formal talks at that time. While the negotiations likely would not be concluded in the Bush Administration, it would be productive to get them started. Padilla noted that the Chile, Singapore and Jordan agreements were all initiated before Fast Track authority was in place, and in fact the Jordan agreement was completed without Fast Track as well. He also pointed out that the Singapore FTA talks were launched very late in the Clinton administration and the legislation was passed by the Bush administration, so there was a precedent for late timing as well. GOU agrees with this approach, building on TIFA -------------- -- ¶6. (C) FM Fernandez welcomed the USG's continuing interest in trade talks. He noted that the GOU had similar problems with union opposition as does the United States with respect to the Colombia FTA. He acknowledged that he faced criticism from his Mercosur partners but said he planned to take a hard line: "We need to have flexibility (to negotiate FTAs) and they will give it to us, because they need us." Fernandez delivered a lapidary verdict on Mercosur: "Brazil does what it wants, Argentina what it can, Uruguay what it is allowed to, and Paraguay nothing." He indicated his intention to move closer to Chile and Mexico, in order to counterbalance the influence of his larger Mercosur partners. ¶7. (C) Fernandez believes that the TIFA process remains very useful. He plans on signing a science and technology agreement and a bilateral work agreement at the TIFA meeting in Washington in late April, as well as announcing progress on SPS issues. Fernandez stressed that continued progress in the TIFA will help to build support for market access talks. He indicated that the GOU would look at making progress on pending issues such as IPR and government purchases. For his part, Economy Minister Astori also welcomed Padilla's proposal, commenting that he was looking forward to an FTA with the U.S. He believed there was sufficient support in Uruguay for an FTA in the mid-term and underlined the importance of an FTA to Uruguay's economy. Importantly, Astori highlighted the importance of President Vazquez's mention of IPR protection in his opening remarks to the AIF, and noted that was the first time in Uruguay, given the political sensitivity on IPR. Reassurances on the state of U.S. economy -------------- ¶8. (C) U/S Padilla outlined his perspective on the state of the U.S. economy in his meeting with Minister Astori. He acknowledged that U.S. investors and consumers are extremely cautious, as no one knows exactly how much bad debt is still out there. He explained that the fundamentals still look fairly strong and that the USG believes that the economy will pick up in the fall after the effects of the stimulus package and the Federal Reserve's actions begin to take full effect. Padilla was also interested in the work being done in Uruguay on cellulosic ethanol, and he provided Industry Minister Daniel Martinez with a copy of a recent Commerce Department study on the potential of cellulosic ethanol in the United States. Agreement on the way forward -------------- ¶9. (C) Comment: Padilla's suggested timeline for opening market access talks was well received by his GOU interlocutors. With both Foreign and Economy ministers on board --a first since this government came to power 3 years ago, the next six months can now serve to "set the table", in the U/S's words, and to give the Uruguayans time "to think about how to do it," in Fernandez's words. Post's and USDOC's assistance in organizing the successful Innovation Forum was also perceived as another sign of enduring U.S. friendship with Uruguay. End Comment. ¶10. (U) This cable was cleared by U/S Padilla. Matthewman