Argentina: Codel Costello Supports Expanding Bilat Ties,

UNCLAS BUENOS AIRES 000123 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: OVIP PREL EAIR EWWT ETRD AR SUBJECT: Argentina: Codel Costello Supports Expanding Bilat Ties, Including CivAir and Port Security Cooperation -------------- Summary -------------- ¶1. (SBU) Codel Costello, a delegation of eight U.S. Representatives plus professional staff from the House Transportation and Infrastructure Civil Aviation Subcommittee, met with representatives of U.S. civil aviation companies and with senior GoA officials, including Planning Minister De Vido and Transportation Secretary Jaime, to support our expanding bilateral civil aviation ties. ¶2. (SBU) Planning Minister De Vido made a special effort to return to the capital to meet with the Codel and he instructed Secretary Jaime to do the same. The Foreign Ministry similarly called to offer a meeting between the Codel and the Foreign Minister on a Friday afternoon during Argentina's summer vacation period. In both cases, GoA officials indicated they wanted to send a positive message to the new Obama Administration that they want to have a good relationship. ¶3. (SBU) Codel members noted the importance that their Committee and the incoming Obama administration assign to air transport safety and security, supported U.S. company efforts to sell and lease new Boeing aircraft to the Argentine flag carrier, and raised a number of specific U.S. air carrier concerns with GoA officials, including on airport security police understaffing, differential and discriminatory airport fees charged to international and domestic carriers and the GoA's recent refusal of a routine Continental airlines codeshare application. The Codel also reviewed and responded positively to the notable cooperation with the GoA in improving port security for the growing cargo trade between the U.S. and Argentina. They toured the private Exolgan port which hosts the joint USG/GoA Container Security Initiative (CSI) and receiving a briefing by GoA Customs Director Tirabassi. ¶4. (SBU) In a meeting with Argentine Foreign Minister Jorge Taiana, the Codel stressed the importance of Argentina to the United States and their desire to strengthen relations. Taiana praised the new administration of President Obama and the bilateral relationship with the United States, noting strong cooperation in counter-terrorism, counter-narcotics, and other areas. The Codel visit received widespread and positive media coverage emphasizing good bilateral relations in newspapers in the capital and provinces, as well as radio and television. End Summary ¶5. (U) An eight-Representative delegation of the House Committee of Transportation and Infrastructure Civil Aviation Subcommittee, led by Subcommittee Chairman Jerry Costello (D-IL) visited Buenos Aires January 30 - February 1. Costello was accompanied by ranking Subcommittee Republican Representative John Duncan (R-TN), Representative Henry Brown (R-SC),Representative Tim Holden (D-PA), Representative Edie Bernice Johnson (D-TX),Representative Steve LaTourette (R-OH),Representative Dan Lipinski (D-IL),and Representative Solomon Ortiz (D-TX). The delegation was accompanied by John Cullather, Staff Director, Subcommittee on Maritime Transportation, Holly Woodruff Lyons, Staff Director Subcommittee on Aviation, Christa Fornarotto, Staff, Subcommittee on Aviation, Suzanne Newhouse, Minority Counsel, and Laurie Bertenthal, Legislative Assistant, Subcommittee on Aviation. Codel Costello's focus in Argentina was on supporting our expanding bilateral civil aviation ties and on reviewing our notable cooperation with the GoA in improving port security for the growing cargo trade between our nations. -------------- -------------- Codel Meets with U.S. Civil Aviation Industry Reps -------------- -------------- ¶6. (SBU) The Codel met with representatives of four U.S. commercial air carriers serving the Buenos Aires market (American Airlines General Director Sergio Hurtado and American's Washington-based Managing Director, International and Government Affairs Michael Wascom; Continental Airlines General Manager Diego Garcia; Delta Airlines Sales Manager Javier Diaz; and United Airlines Country Manager Rodolfo Meyer),air express courier Federal Express (represented by legal counsel Elizabeth Freidenberg),Boeing Commercial Airplanes Sales Director Van Rex Gallard, General Electric Commercial Aviation Service Argentina President Alejandro Bottan, and Sabre Holdings Argentina Travelocity Managing Director Jorge Cordova. ¶7. (SBU) In their comments to the delegation, U.S. commercial air carriers highlighted the attractiveness of the Argentine market, with bilateral tourism volumes increasing steadily and with two U.S. carriers, American and Delta, requesting and receiving additional flight frequencies in 2008. They appreciated U.S. government advocacy on their behalf, both in Washington and at the Embassy, and noted that some improvements in GoA civil aviation oversight and coordination would enhance the attractiveness of the Argentine market. American Airlines noted that Airport Security Police (PSA, under Justice Ministry authority) understaffing has resulted in passenger immigration control back-ups that result in costly aircraft departure delays. Delta Airlines noted that recent GoA officials' statements that they intend to impose reciprocal visa fees ($130 per passenger for U.S. visitors, equivalent to our visa application fee) to fund GoA airport immigration infrastructure improvement, could negatively impact tourism volumes. United Airlines commented on the differential landing fees charged in Argentina that unfairly benefit Argentine flag carrier Aerolineas Argentinas and on the poor ground service provided by monopoly baggage handling company Intercargeo (see para. 4). Continental Airlines echoed United's concerns with Intercargo and noted the GoA's surprise January 2009 failure to approve a renewal of its third-party code-share with COPA airlines. (Note: Embassy demarched GoA civil aviation authorities on this issue in January 2009, noting that such third-party codeshares are specifically authorized in our updated 2007 bilateral civil aviation accord). ¶8. (SBU) Finally, air express courier Federal Express noted legislative discrimination against foreign air express couriers, which hinder their ability to provide competitive door-to-door service for time sensitive and/or high value packages. Essentially, the GOA considers Federal Express as well as UPS to be exporters of the products they ship. This causes long delays in package processing through Customs since express shipping companies only have the limited information provided them on package contents in the airway bill of lading. ¶9. (SBU) Boeing highlighted its aggressive approach to re-nationalized flag carrier Aerolineas Argentinas (which currently flies older 737s and MD -80 aircraft on domestic routes and some 747s in international routes) and its hopes to finalize the sale of two latest-generation Boeing 737-700s for approximately US$ 80 million. A key concern for Boeing is Aerolineas' lack of access to competitive long term financing (Eximbank remains closed in Argentina pending GoA repayment of approximately US$ 400 million in arrears to the Bank). G.E. Capital, which currently leases 10 aircraft to Aerolineas at monthly payments in the $15 million range noted its proposal to lease an additional 10 737-700s to Aerolineas for monthly payments in the $25 million/month range. G.E., which also sells a variety of U.S. manufactured power generation and high technology equipment to Argentina, emphasized the importance of the USG continuing to encourage the GoA to stand fast against protectionist pressures brought on by the international financial crisis. Finally, Sabre noted Aerolineas' large outstanding debt to the company for reservation system software services and noted that Argentina economy in general could benefit from less heavy-handed government regulation. -------------- -- Mtg with Planning Minister, Transport Secretary -------------- -- ¶10. (SBU) The delegation met with the two most senior GoA officials responsible for Argentina's air, land and waterway transportation networks, Planning Minister Julio De Vido and his Transportation Secretary Ricardo Jaime. Also attending were Director of Civil Aviation Affairs Alba Thomas Hattie, ORSNA (the GoA entity that regulates privatized airport authority AA2200) Vice President Alejandro Orchansky, and Undersecretary of Ports and Navigable Waterways Ricardo Lujan. (De Vido and, at his boss's instructions, Jaime both returned to Buenos Aires just for this meeting. They arranged substantial media coverage.) ¶11. (SBU) In their introductory comments, De Vido and Jaime emphasized the role that the successive Nestor Kirchner and Cristina Fernandez de Kirchner administrations have played in rehabilitating Argentina's long distance railway networks (with only 18,000 km of a previous 48,000 km network currently in use) and navigable river infrastructure (with over US$ 3 billion invested in dredging and port development along the Parana/Paraguay waterway over the past five years). On accomplishments in civil aviation, Jaime cited Argentina's recovery of FAA Category One safety status in 2005, the creation of a GoA entity, ANAC, to oversee the transition from military to civilian control of civil aviation, and the rehabilitation and expansion of over 30 of Argentina's domestic airports. ¶12. (SBU) Rep. Costello noted that civil aviation safety and security are among the top priorities of the Civil Aviation Subcommittee and of the incoming Obama administration. He noted and appreciated the GoA's close cooperation with our FAA and TSA on these issues. In response to Rep. Duncan's question on reports of Airport Security Police (PSA) understaffing, Secretary Jaime noted that the independent PSA operates under Justice Ministry (not Planning Ministry) authority and was created in 2005 to replace a prior security force under military Air Force oversight. In response to Rep. Johnson's question as to the percentage of sea freight cargo containers scanned, Undersecretary Lujan noted that the GoA is working to comply with international standards and that at present containers are selectively scanned in accordance with risk assessment protocols. ¶13. (SBU) Responding to Rep. La Tourette's question the application of differential airport landing fees for foreign and domestic carriers (see para. 4),Secretary Jaime noted that these fees were set by an earlier Supreme Court ruling. (In fact, this Supreme Court ruling related to a complaint by Mexicana Airlines and spoke only to the GoA's right to charge airlines in multiple currencies and not/not to the GoA's right to charge differential fees to domestic and international carriers. U.S. carriers continue to suffer effective discrimination vis-a-vis Argentine flag carrier Aerolineas Argentinas, with the flag carrier paying international airport fees in pesos, and U.S. carriers paying substantially higher fees in US Dollars. Following a suit brought by several U.S. carriers, the U.S. Department of Transportation (DoT) in 2003 imposed a fee on all AA fights to the U.S., at a cost that compensates for this disparity. Today, DoT reports that this escrow account balance totals about US$ 7 million). ¶14. (SBU) Rep. La Tourette noted that Continental Airlines, a major employer in his Ohio district, had expressed concern about the GoA's recent rejection of Continental's application to renew a third party codeshare with its partner COPA Airlines. Civil Aviation Director Hatti responded that the GoA's refusal related to Continental's request to modify codeshare authorized departure and arrival points and that the issue should be resolved once the GoA and Panama conclude bilateral civil aviation agreement negotiations in April ¶2009. (Continental legal counsel notes that this airline's codeshare renewal request did not, in fact, request any modification of codeshare departure or arrival points, that such third party codeshare requests are specifically authorized in the 2007 U.S./GoA bilateral civil aviation agreement, and that a prior Continental codeshare renewal request had been approved by the GoA subsequent to the July 2007 signing of the U.S. GoA bilateral agreement update. Embassy has demarched GoA civil aviation officials on this matter and will continue to press the GoA to observe the letter of our bilateral civil aviation agreement). -------------- - Delegation Meeting with Foreign Minister Taiana -------------- -- ¶15. (SBU) In a follow-on meeting with Foreign Minister Jorge Taiana, Rep. Costello and other Codel members stressed the importance of Argentina to the United States and their desire to strengthen relations. Taiana praised the new administration in Washington and the bilateral relationship with the United States, noting strong cooperation in counter-terrorism, counter-narcotics, and other areas. Accompanying FM Jorge Taiana were Argentine Ambassador to the United States Hector Timerman, VFM Vittorio Taccetti, COS Alberto D'Alotto, and North America Director Antonio Trombetta. ¶16. (SBU) Rep. Costello introduced his delegation, noting it had five Democrats and three Republicans, and that its members had a broad range of interests reflected in their committee assignments. (Three served on the House Science Committee, Rep. Ortiz was chair of the House Armed Services Sub-Committee on Readiness, Rep. Latourette served on the Appropriations Committee, and Rep. Holden on the Agriculture Committee.) He noted that Rep. Duncan had been to Argentina twice before, and Rep. Ortiz many times, and he introduced Rep. Duncan as co-chair of the Codel. Rep. Duncan underscored the delegation's desire to build on the strong extant ties of friendship between Argentina and the United States. ¶17. (SBU) Taiana said it was always an honor to receive U.S. congressional delegations representing a "pueblo amigo." He listed the many things that Argentina and the United States shared in common, both nations having vast territories at opposite ends of the hemisphere, immigrant populations, federal systems, similar constitutions, and shared values of democracy and integrity. He said that Argentina's public education system had been propelled by President Sarmiento's mid-nineteenth century recruitment of U.S. women teachers to come to Argentina and train teachers. Argentines had long been going to the United States for higher education, but he was gratified to see growing numbers of U.S. students coming to Argentina. Taiana claimed there was already a fluid bilateral relationship based on mutual respect with the potential for building and deepening those ties. He underscored the importance of mutual understanding, and he said the MFA's doors were always open for a frank and constructive dialogue with American representatives. ¶18. (SBU) Taiana said that Argentines were "very sincerely delighted" with President Obama's inauguration, and there were great expectations of the new administration. He extolled the productive bilateral cooperation in counter-terrorism, counter-narcotics and other law enforcement and security issues. He noted that -- unlike other regions -- Latin America had no weapons of mass destruction, no intractable racial or religious or ethnic conflicts. He pointed to the building of trust between Brazil and Argentina over the last 25 years as a great contribution to world peace, and noted it was relevant to the Codel's transportation agenda, citing Argentine-Brazilian cooperation in developing proposals for bicoastal corridors between the Atlantic and Pacific as well as the River Plate's estuary "hidrovia" that would require significant investment but had the potential for making transportation of sub-regional trade more efficient and economic. Paraguay was already using the river to send one million tons of soy to crushing and processing facilities in Argentina. He said the GoA had a strong vocation for Southern Cone integration, marshaling its political will with the socio-economic conditions needed to move ahead with integration. He concluded that air transportation was obviously a vital priority for Argentina due to its vast territory, and he noted that the GoA was striving to bolster its radar coverage to boost air control and proper surveillance. ¶19. (SBU) Rep. Costello acknowledged we "live in challenging times" requiring major investmets in infrastructure to reactivate the economy and ultimately to improve the quality of life of our citizens. He noted the Codel's departure from the U.S. had been delayed by its participation in a key vote three days earlier on a bill that provided for $100 billion of investment in infrastructure, and later this year the U.S. Congress would take up consideration of a $500 billion highway bill. The Congress was also planning to review water resources legislation. Rep. Johnson opened her remarks by stressing the importance of Argentina to the United States. She noted the two countries shared a growing appreciation for the importance of their cultural and ethnic diversities. She said she and her colleagues were open to talking about management of water resources, and she raised Washington's concerns about narco-trafficking through the region, asking specifically for GOA views on whether vessels and containers needed to be checked 100% or on a spot basis. ¶20. (SBU) Taiana stressed GoA commitment to cooperate in global and bilateral counter-narcotics efforts. He said Argentina traditionally was not a production country but a venue for transit to Europe, with a small but rapidly growing domestic consumption problem. He said there was significant awareness of the drug issue, and recalled that the GoA took to heart the warning by Mexican President Calderon, when, speaking from experience, he urged President Cristina Kirchner (CFK) during a recent visit to "nip the problem in the bud." Taiana said the GOA was likewise committed to counter-terrorism cooperation, noting Argentina had been the victim of international terrorist attacks in the 1992 bombing that destroyed the Israeli Embassy, killing 29 persons, and the 1994 bombing of a Jewish community center, killing 85 persons. Argentina was one of the first in the hemisphere to "suffer first-hand" the scourge of international terrorism. It remained a priority concern for Argentines, and GoA policy was very clear in condemning and combating terrorism. Taiana said the GoA was very appreciative of USG support in going after the perpetrators of the 1992 and 1994 bombings, and he detailed the assistance it received from the USG in obtaining Interpol red notices for several of the Iranians it had indicted. ¶21. (SBU) Rep. Duncan said he appreciated Argentina's commitment to combating terrorism but urged "common sense" and restraint in addressing the problem, noting a historical tendency to over-react to this type of security problem. He said there were many other threats and problems requiring attention. Taiana took the point, saying he thought national security required a comprehensive approach. He offered as an example Argentina's record in "legalizing" up to a half million undocumented immigrants from Paraguay, Bolivia and Peru. He claimed that integrating the immigrants into Argentine society had, among other things, helped keep them from succumbing to organized crime such as trafficking in persons or narcotics. Rep. Holden and Rep. Costello extended an invitation to Taiana, other GoA officials and legislators to visit Washington. Ambassador Timerman thanked the members and said he and his staff in Washington were helping organize several visits to the United States by Argentine legislators to reciprocate the visits made by U.S. Codels to Argentina. ¶22. (SBU) The MFA arranged a brief press conference at the end of the meeting to allow for substantial media coverage. Representatives Costello, Ambassador Wayne and Argentine Ambassador Timerman gave upbeat comments. -------------- Ambassador Hosts Reception for Codel -------------- ¶23. (SBU) Following the Planning Ministry and Foreign Ministry meetings, Ambassador hosted a reception for the Codel that included U.S. private sector civil aviation and port security representatives, GoA officials from the Planning and Foreign Ministries, elected lower house parliamentary representatives, and media. The Ambassador's remarks, widely quoted in local media, stressed the delegation's focus on supporting our expanding bilateral civil aviation ties and on reviewing our notable cooperation in improving the port security for the growing cargo trade between our nations. On behalf of the delegation, Rep. Costello acknowledged the strength of bilateral commercial and diplomatic ties between the U.S. and Argentina. Despite the Friday afternoon time slot, during Argentina's annual summer vacation, around 150 Argentines attended, indicating the high interest locally in anything connected with the new U.S. administration. -------------- Tour of Port of Buenos Aires CSI Faculty -------------- ¶24. (U) On Saturday, January 31, the delegation toured the privately owned Exolgan port in the Province of Buenos Aires, which hosts the joint U.S. /GoA Container Security Initiative (CSI) and handles 72% of all outbound container exports to the U.S. and 80% of all inbound container imports from the U.S. The delegation was briefed by Embassy Immigration and Customs Enforcement (ICE) Director Steve Kleppe, Exolgan Director General Juan Carlos Vasquez and GoA Customs Director Silvina Tirabassi. ¶25. (SBU) ICE's Kleppe provided an overview of the Argentine CSI and linked Trade Transparency Unit programs since their respective 2005 and 2006 inceptions and praised the proactive cooperation of Exolgan officials and GoA customs authorities. Vasquez noted that roughly 2% of the 31,000 containers Exolgan exports to the U.S. are scanned by CSI equipment but that fully 40% of containers are manually inspected by Argentine customs authorities who work out of the port. Tirabassi noted that the GoA had invested over US$ 60 million in the past five years in upgrading its container inspection technology and in improving risk assessment protocols. -------------- Positive Media Coverage of Codel Visit -------------- ¶26. (SBU) Codel Chairman Costello, who commented positively on the Embassy's intensive public affairs outreach program, made the delegation available to engage the media to help advance mission goals. As a result, the Embassy's Press Section coordinated with the Codel to prepare and issue press releases on events of public interest: the MFA and Planning Ministry meetings, the delegation visit to the port and Mrs. Costello's academic session on Fulbright scholarships. Chairman Costello and Representative Duncan consented to join Ambassador Wayne in a press stake-out following the MFA meeting late Friday. These press opportunities generated positive coverage in newspapers in the capital and provinces, as well as radio and television, emphasizing good relations. Media placements of note included the Saturday front page in English-language Buenos Aires Herald, a full page spread in left-leaning Pagina/12, and a Channel 7 television spot. Press coverage continued through Tuesday February 13. ¶27. Representative Costello cleared this cable in draft. WAYNE