MISSILE TECHNOLOGY CONTROL REGIME (MTCR):

C O N F I D E N T I A L STATE 050050 BUENOS AIRES FOR EST:A. SCHANDLBAUER E.O. 12958: DECL: 05/31/2033 TAGS: MTCRE PARM PREL ETTC TSPL AR SUBJECT: MISSILE TECHNOLOGY CONTROL REGIME (MTCR): ARGENTINE SPACE LAUNCH VEHICLE (SLV) PROGRAM (U) REF: A. LA NACION ARTICLE OF 05 AUGUST 07 (AND SUBSEQUENT) ¶B. 00 BUENOS AIRES 1211 (AND PREVIOUS) ¶C. 00 STATE 43295 ¶D. 99 STATE 153139 (AND PREVIOUS) ¶E. 99 BUENOS AIRES 4356 ¶F. 99 BUENSO AIRES 5768 ¶G. 99 BUENOS AIRES 657 ¶H. 99 BUENOS AIRES 694 ¶I. 99 BUENOS AIRES 598 ¶J. 99 STATE 261161 (AND PREVIOUS) ¶K. 92 BUENOS AIRES 6466 ¶L. 92 BUENOS AIRES 4636 ¶M. 92 STATE 186032 ¶N. 93 STATE 33962 ¶O. 94 STATE 245377 ¶P. 94 BUENOS AIRES 2735 ¶Q. 94 BUENOS AIRES 6094 ¶R. 94 BUENOS AIRES 7658 ¶S. 00 STATE 1581 ¶T. 07 STATE 10771 ¶U. 07 BUENOS AIRES 1793 ¶V. 08 BUENOS AIRES 138 ¶W. 08 BUENOS AIRES 170 ¶X. 08 BUENOS AIRES 124 ¶Y. DURHAM-VAROTTO DISCUSSION OF 14 SEPTEMBER 07 Classified By: ISN/MTR Director Pam Durham. Reason: 1.5 (B),(D). ¶1. (U) Classified by ISN/MTR Director Pam Durham. Reason: 1.5 (B),(D). ¶2. (U) This is an action request. Embassy Buenos Aires, please see paragraph 15. ¶3. (C) BACKGROUND: According to published reports (REF A), the Argentine Commission for Space Activities (CONAE) is overseeing an enterprise known as VENG to develop space vehicles, particularly satellite launch vehicles (SLVs),and launch services. Pursuant to this effort, VENG has developed and tested the Tronador I rocket. Development of the Tronador rocket and development of a hydrazine concentrate pilot plant at Falda del Carmen also are underway. Hydrazine is a key substance in liquid rocket fuel, and the Falda del Carmen plant was part of Argentina's dismantled Condor II missile program. Per REF V, this ""space program"" seems to have approval from the Government of Argentina (GOA). ¶4. (C) The GOA's/CONAE's plans to develop a rocket for space launch purposes -- and to develop rocket propellant at the Falda del Carmen facility -- is of interest to the U.S. because it appears inconsistent with the understanding on SLVs and dismantlement of the rocket motor production facility at Falda del Carmen reached between Argentina and the United States prior to Argentina becoming a member of the Missile Technology Control Regime (MTCR) in 1994. ¶5. (C) In the 1980's/early 1990's, Argentina was actively engaged in the development of the Condor ballistic missile program, which clearly was intended to produce MTCR Category I military missiles, including for export to Egypt and Iraq. (NOTE: An MTCR Category I missile system is one that can carry a payload of at least 500 kg to a range of at least 300 km. END NOTE.) The Condor program represented a serious missile proliferation concern and a major irritant in our bilateral relationship. This situation was further aggravated by Argentina's attempts to camouflage - and thereby maintain - the Condor program by calling it an SLV program. SLVs and ballistic missiles are almost identical in design, fabrication, and function. Their technologies are essentially interchangeable, and there are virtually no technologies that support SLV development that would not also facilitate ballistic missile development. Any rocket capable of putting a satellite into orbit also is by definition an MTCR Category I syste m. It also is inherently capable of delivering weapons of mass destruction (WMD) against surface targets, and many countries have used the same boosters to deliver both weapons and satellite payloads. ¶6. (C) To address the concerns raised by the Condor program, the United States insisted that Argentina dismantle its existing missile facilities and agree to forego Category I missiles. In addition, because Argentina sought to disguise the Condor program as an SLV program, we also insisted on restrictions on Argentina's SLV activities. The United States -- and the MTCR as a whole -- sought and obtained from the GOA written assurances that Argentina would undertake specific actions to dismantle the rocket production facilities at the Falda del Carmen plant. The MTCR Partners requested these actions to ensure that Argentina's MTCR-class missile program could not be revived. ¶7. (C) Accordingly, in 1992, the GOA assured U.S. officials -- including then-Under Secretary Bartholomew -- that Argentina had no SLV program and that Argentina did ""not now or anytime in the foreseeable future"" contemplate development of an SLV (REF K and REF L). The GOA provided similar assurances to the MTCR during April 1992 meetings with the multinational MTCR outreach team. While Argentina did not state unequivocally that it would ""never"" pursue an indigenous SLV capability, the diplomatic record indicates that the United States has understood this to be the case since 1992. ¶8. (C) With regard to dismantlement of the Falda del Carmen rocket-motor production facility, the GOA provided written assurances to the MTCR in late 1993 that it would take specific steps to dispose of the MTCR Category I missile manufacturing equipment located at the Falda del Carmen plant (REFS N-R). These assurances were key to the MTCR Partners' decision to admit Argentina to the Regime and included agreement to: --seal the casting pits in such a way that they cannot be put to their originally intended use (i.e., rocket motor production); --remove from the propellant mixer all sets of gears and mixing blades; and --relocate from the Falda del Carmen rocket motor plant either the AP grinder or the X-ray machine, and use both items only for non-missile (which includes non-SLV) purposes. To our knowledge, Argentina has honored faithfully its explicit commitments related to dismantlement of the Condor II missile program. ¶9. (C) In 1999 (REF D),the GOA sought release from its 1992 commitments regarding SLV development, and expressed great disappointment when the U.S. declined to do so. The GOA argued that the U.S. decision disadvantaged Argentina vis-~-vis other MTCR Partners and infringed on Argentine sovereignty. It also argued that while Argentina did provide assurances to the U.S. in 1992 regarding SLV development, it had not permanently renounced its right to peaceful use of space technologies, including SLV development. Subsequently, in late 1999/early 2000, following further discussion of the issue, the GOA made clear that it had no intention of pursuing development of an indigenous SLV capability, largely due to financial concerns. However, in an April 2000 non-paper (REF S),the GOA reiterated its view on SLV development, noting that it believed it inappropriate to limit Argentina's future ""peaceful pursuit"" of an SLV based on past events. It also indicated that U.S. dialogue on this matter would continue. ¶10. (C) After seeing press reporting in August 2007 on the Tronador program, U.S. officials informally raised the launch vehicle issue with the CONAE Director Dr. Conrado Varotto (REF U and REF Y). During those September 2007 discussions, Varotto said Argentina has no intention of proliferating missile technology but needs a reliable solution to its space launch problem. It has decided that contracting for launches of its satellites on foreign boosters is too costly, and is pursuing an SLV program as a cost-effective way to get its satellites into orbit. With regard to its 1992 commitments, Varotto said the commitment on SLVs was for the ""foreseeable future,"" not ""forever,"" and that the passage of time had changed Argentina's situation. At the same time, Varotto said Argentina is serious about nonproliferation and its commitments with regard to the Condor program. The facilities used in the Condor program have been completely dismantled, and Argentina has developed a new facility (at the same industria l park) for the SLV program that does not implicate the old Condor facilities. Additionally, the Tronador SLV is a liquid-propellant system whereas the Condor was a solid propellant system. ¶11. (C) During REF Y discussions, the U.S. was skeptical of Dr. Varotto's suggestion that building and maintaining an SLV infrastructure would be less costly than contracting for launches, but noted that the priority concern for the U.S. was nonproliferation. SLVs are MTCR Category I systems and inherently capable of WMD delivery. SLVs and ballistic missiles also are essentially identical in design, form, and fabrication and any developments in one area could be applied to the other. Given past concerns about Argentina trying to disguise its missile program as an SLV program and the interest of the U.S. and other MTCR countries in preventing the spread of missiles and missile-related technology that could potentially fall into the hands of proliferators and terrorists, the U.S. hoped that Argentina would continue to abide by its 1992 commitments. U.S. officials also noted that the United States has maintained a policy since September 1993 of not encouraging MTCR member countries' ""new"" SLV programs. (NO TE: In this context, ""new"" means SLV programs the United States did not cooperate with prior to the advent of the MTCR in 1987. END NOTE.) Argentina therefore should not expect U.S. support for its program even if the United States and Argentina simply agree to disagree about Argentina's 1992 commitment on SLVs. Varotto hoped that the two sides could think creatively about ways to resolve the issue, possibly including by the United States agreeing to support Argentina's SLV program if certain transparency measures were implemented. ¶12. (C) In light of sensitivities in the broad U.S.-Argentina bilateral relationship, the United States has not raised this issue formally with the GOA. However, during discussions with the U.S. Embassy in Buenos Aires in February 2008 (REF V),Dr. Varotto indicated that the SLV program remains a high priority. He also suggested strongly that the GOA would be open to unobtrusive transparency measures, including briefing the MTCR on the details of the program. END BACKGROUND. ¶13. (C) PURPOSE/OBJECTIVE: We support the peaceful pursuit of space as outlined in the President's Space Policy. Washington agencies have been considering how to balance its response to Argentina's pursuit of a space launch vehicle program in light of the understanding on SLVs and dismantlement of the Condor missile program reached in 1992 between the United States and Argentina prior to Argentina becoming an MTCR member. That review has now concluded, and the United States has determined that while the United States and Argentina continue to hold different understandings of Argentina's SLV commitments, there is little likelihood that the GOA could be persuaded to abandon its SLV program and we do not intend to pursue such an outcome. Rather, given the past history of the SLV issue and the ongoing priority we place on missile nonproliferation, we want to seek full transparency into the GOA's SLV program, including annual consultations on the status of the program and the option for periodic site/s visits . We also want to request Argentina brief its SLV program to the MTCR Partners and encourage the GOA to describe its ongoing SLV efforts in its annual declaration to the Hague Code of Conduct Against Ballistic Missile Proliferation (HCOC). We believe this approach will keep this issue from being an irritant in our bilateral relationship. It also will reinforce our broad missile nonproliferation objectives by providing ongoing insight into the Argentine program and opportunities to weigh in with the GOA if program developments - including imports/exports relation to the program - raise concerns. ¶14. (C) We therefore propose to raise the SLV issue formally with the GOA, making clear that while the United States and Argentina continue to hold different understandings of Argentina's SLV commitments, we greatly value Argentina's ongoing support for missile nonproliferation and transparent approach to this matter and do not want this issue to be a source of concern in our bilateral relationship. In that spirit, we also want to note that while the United States does not support Argentina's pursuit of an MTCR Category I SLV, we understand that Argentina intends to go forward with development of such a system. Accordingly, we seek a GOA commitment to provide the United States with full transparency into its SLV program, including annual consultations on the status of the program and on imports/exports relating to the program and the option of periodic site/s visits. This could take the form of a letter from Dr. Varotto to Ambassador Wayne, for example. As an additional transparency measure, we also see k Argentina's commitment to brief the MTCR Partners on its SLV program - perhaps via a short information paper to all MTCR Partners - and to describe its SLV efforts in its annual declaration to the HCOC. ¶15. (C) ACTION REQUEST: Drawing on the talking points provided below and, as necessary and appropriate, the information in paragraphs 2-14 above, request Embassy Buenos Aires raise the SLV issue with CONAE Director Varotto and appropriate Argentine MFA officials and seek GOA commitment to providing the United States with full transparency into its SLV program. BEGIN TALKING POINTS: (CONFIDENTIAL/RELEASABLE ARGENTINA) --During the past several years our two governments have cooperated closely on missile nonproliferation issues, and we greatly value your leadership and support for the Missile Technology Control Regime's (MTCR's) efforts to stem the flow of missile technology and equipment worldwide. --In the cooperative spirit of our nonproliferation partnership, we would like to discuss with you Argentina's development of a space launch vehicle (SLV). --Specifically, we understand that the Commission for Space Activities (CONAE) is working to develop the Tronador rocket in order to launch satellites into orbit. Such an SLV would clearly be an MTCR Category I system, and raises questions concerning Argentina's commitments to the United States concerning SLV development. --Our two governments have discussed issues relating to these commitments on several occasions since 1992, and continue to hold vastly different understandings of Argentina's SLV commitments. --However, despite these differences, the United States recognizes and appreciates Argentina's efforts to pursue SLV development in an open and transparent manner. We also continue to highly value Argentina's activism on missile nonproliferation issues and look forward to continued collaboration in this area. --In this context, we want to advise your government that while the United States does not support Argentina's pursuit of an MTCR Category I SLV, we understand that Argentina intends to go forward with development of such a system. --We therefore would like to ask that as this effort proceeds, Argentina undertake to provide the United States with full transparency into its SLV program. --In our view, such transparency would be in keeping with our shared missile nonproliferation objectives and help to ensure that this matter does not become a source of irritation in our bilateral relationship. --Specifically, we would urge your government to agree to annual consultations on the status of Argentina's SLV program -- to include, as necessary and appropriate, discussion of potential imports/exports relating to the program -- as well as the option of periodic site/s visits by U.S. officials. --Additionally, we would like to ask that Argentina provide a one-time briefing to the MTCR Partners on its intention to pursue an SLV program. We similarly would urge Argentina to describe its SLV program in its annual declaration to the Hague Code of Conduct Against Ballistic Missile Proliferation (HCOC). --We know Argentina shares our commitment to international nonproliferation efforts and look forward to continued close cooperation with Argentina on issues of mutual concern. We hope we can work together to address the SLV issue in a mutually satisfactory way. END TALKING POINTS. ¶16. (U) Washington POC is ISN/MTR Director Pam Durham (Phone: 202-647-4931). Please slug any reporting on this issue for ISN and WHA. ¶17. (U) A word version of this document will be posted AT WWW.STATE.SGOV.GOV/DEMARCHE. RICE NNNN End Cable Text