Argentina: Production Minister Giorgi on G-20 and Bilateral

UNCLAS BUENOS AIRES 000231 USDA FOR FAS/OA/OCRA/ONA/OGA/OFSO SIPDIS SENSITIVE E.O. 12958: N/A TAGS: EAGR ECON EINV PGOV PHUM AR SUBJECT: Argentina: Production Minister Giorgi on G-20 and Bilateral Agricultural and Trade Issues -------------- Summary -------------- ¶1. (SBU) Production Minister Debra Giorgi met with Ambassador February 25. The discussion included the G-20 process and related agricultural technical assistance the GoA is providing to poorer countries as well as outstanding bilateral trade frictions. Giorgi noted the significant increase in 2008 bilateral trade to the US$ 12 billion level and asked for expedited approval of Argentine lemon and beef exports to the U.S. in the context of Argentina's bilateral trade deficit. She proposed bilateral meetings of the Consultative Committee on Agriculture between the Secretariat of Agriculture in her ministry and the USDA in the second half of 2009. Ambassador raised U.S. interest in access for beef and poultry. The discussions also included cooperation on biofuels development, ongoing coordination on biotechnology issues in international negotiations, the GoA's concern about a new US CVD investigation on diesel engine piston rings, the status of GoA industrial reactivation efforts in the face of the global economic downturn, and the size and importance of bilateral tourism. END SUMMARY ¶2. (U) Ambassador met with Minister Giorgi on February 25 in their first meeting since her late November 2008 appointment as the head of the newly created Ministry of Production. The newly re-established Ministry of Production controls four secretariats: (1) The Secretariat of Industry, Foreign Trade and Small Business and (2) the Secretariat of Agriculture, Fishing and Food; (3) the Secretariat of Tourism; and (4) Prosper-AR, the national investment agency. The Minister was accompanied by Agriculture Secretary Carlos Cheppi, Chief of Cabinet Horacio Cepeda and Under Secretary for Commercial Policy and Administration Eduardo Bianchi. Economic and Agricultural Counselors attended the meeting with the Ambassador. ¶3. (SBU) The discussion started with multilateral issues, where the Ambassador noted that in the G-20 process there has been discussion of how to help the poorest countries during the ongoing financial crisis, particularly in agriculture, and that other countries would be looking to Argentina to contribute. Agriculture Secretary Cheppi noted that Argentina is already working with the BID and countries like Spain and Germany to provide technical assistance in other countries. He went on to say that Argentina would be in a position to provide technical assistance on broader basis. ¶4. (SBU) Giorgi noted Argentina's substantial competitive advantages in the production of biofuels (both biodiesel and ethanol) and her hope to work with the United States in this area. The Ambassador explained that the U.S. had offered to work in this area with Argentina following the 2007 signing of our bilateral biofuels accord with Brazil in this area and the energy is a priority of the new Administration. The Minister noted that there are opportunities not only in the area of technical cooperation but also on broader policy and demand issues for biofuels. ¶5. (SBU) Giorgi highlighted ongoing cooperation and coordination between the U.S. and Argentina in biotechnology, where the U.S. and Argentina have been important allies in negotiations taking place in the WTO, the Cartagena Protocol and Codex. The Ambassador congratulated the Minister for the recent approval of a new biotech cotton variety by Argentina, noting the importance of dealing with biotechnology issues on a scientific basis. The Ambassador went on to note the importance of resolving the longstanding dispute between the GOA and Monsanto over royalties for Monsanto's Roundup Ready soybean variety. Secretary Cheppi explained that the GOA is developing a new seed law with input from all parties that could help resolve this issue, but movement has been stalled due to the ongoing dispute with the farm sector. He noted that there is already a fair amount of agreement on what needs to be done. -------------- Bilateral Trade and Ag Frictions -------------- ¶6. (SBU) The Minister noted that, while she is pleased that bilateral trade with the U. S. jumped substantially in 2008 to over $12 billion, Argentina is running a trade deficit with the United States and so she would like to see longstanding access issues for Argentine products to the U.S. resolved. In particular, she raised the approval of lemons and beef exports to the U.S. as a top priority. Secretary Cheppi stated that technical issues on approval of lemons have now been resolved and that it is important that the USDA move forward with publication of the rule to allow lemon imports. He also pressed for approval of fresh beef imports for both Patagonia and the rest of the country. The proposed rule for approval of fresh beef from Patangonia was published two years ago and there is currently a team from the USDA in the region reviewing its status. With respect to approval of fresh beef exports from the rest of the country, he noted that Argentina is in the same or better sanitary situation as Uruguay and that there is no justification for the U.S. allowing imports from Uruguay and not from Argentina. Cheppi also raised the interest of Argentina is gaining access for other citrus products as well as the upcoming APHIS visit for approval of a fruit fly free zone in Mendoza province. ¶7. (SBU) The Ambassador noted that the U.S. also has market access issues for Argentina, in particular approval for exports of beef and poultry meat exports. U.S. exports of beef have been totally blocked due to BSE related restrictions applied by Argentina. The U.S. is also working on approval of poultry meat exports to Argentina and is still waiting for the final results of the visit of Argentine sanitary official to inspect poultry slaughter plants in the U.S. Secretary Cheppi responded that approval of beef exports by Argentina depend entirely on U.S. approval of Argentine beef exports. They are willing to apply the international standards of the OIE, which would allow U.S. beef exports, if the U.S. is willing to also apply OIE standards and allow Argentine beef exports. -------------- Consultative Committee on Agriculture (CCA) -------------- ¶8. (SBU) Minister Giorgi asked that the USDA consider holding consultations of the CCA in the second half of 2009. The last meeting of the CCA was in the U.S. in May 2007 and it is now Argentina's turn to host the CCA (which normally takes place annually). The Agricultural Counselor agreed to forward the request to officials at the USDA. -------------- GoA Concerned by New U.S. CVD Investigation -------------- ¶9. (SBU) Under Secretary Bianchi noted that in late February, the U.S. Department of commerce notified the GoA of a countervailing duty (CVD) investigation on diesel engine piston ring inserts produced by Santa Fe province company Clorindo Appo. He called this untimely in the context of current declining world trade volumes and asked for Embassy follow-up. He said the GoA would vigorously participate in the CVD process. (Note: The investigation requested by Ohio-based Quaker City Castings charges material injury to a U.S. industry and was published in the Federal Register February 23. The Register notes that the Department of Commerce does not plan to investigate the four principal alleged GoA subsidy programs cited by Quaker City, including preferred pre- and post-export financing and tax relief for capital goods production as they are either no longer in force or non-countervailable. End Note) -------------- --- GoA Industrial Reactivation Initiatives On Track -------------- --- ¶10. (SBU) Ambassador asked how high profile Production Ministry initiatives announced in December 2008 and January 2009 to boost flagging industrial manufactures via consumer incentive plans were moving forward. Giorgi responded that these plans, including GoA financing plans to promote the purchase of economy cars and trade in and financing plans for white goods (refrigerator, etc.) had started slowly but, following better internal GoA coordination and mid-course corrections, were now gaining momentum. She declined to discuss current sales volumes but acknowledged media criticism of production bottlenecks and initially unclear consumer qualification criteria and said that concrete sales results should be seen in March sales numbers -------------- Interest in Joint Efforts to Promote Tourism -------------- ¶11. (SBU) Ambassador noted that bilateral tourism between the U.S. and Argentina is big business, with over 250,000 Argentines traveling to the US and roughly 400,000 Americans traveling to Argentina in 2008. In light of recent declines in air traffic and tourism volumes linked to the global economic slowdown, Ambassador suggested that Interior Minister Randazzo's decision to postpone the imposition of reciprocal entry fees on American tourists equivalent to our visa application fees was appropriate. Ambassador asked how we could best work together to promote a tourism sector that provides substantial employment and government revenue for both Argentina and the United States. Giorgi asked whether the Embassy had been in touch with Tourism Secretary Enrique Meyer and Ambassador confirmed that post's Foreign Commercial Service and U.S. air carriers have been working with Meyer's office on a variety of tourism promotion initiatives. -------------- Production Ministry IV Candidate -------------- ¶12. (SBU) Ambassador said that the Embassy was pleased to host Production Ministry trade policy advisor Anastasia Daicich to participate in an February 2009 International Visitor program "Trade and Investment in a Globalized World." Giorgi said that Daicich had just returned to Argentina from this three week multi-city visit to the U.S. and called her in to meet the Ambassador. Daicich praised the IV program's content and the access it offered to U.S. trade policy decision makers and private sector players. WAYNE