ARGENTINA ON IAEA FUEL BANK DISCUSSIONS AND IAEA

C O N F I D E N T I A L BUENOS AIRES 000668

SIPDIS

E.O. 12958: DECL: 06/09/2014
TAGS: PREL PARM KNNP IAEA AR
SUBJECT: ARGENTINA ON IAEA FUEL BANK DISCUSSIONS AND IAEA
BUDGET

REF: A. STATE 57105

B. STATE 57093

Classified By: CDA Tom Kelly for reasons 1.4 (b) and (d).


1. (SBU) Political Officer spoke June 5 with the Argentine
Foreign Ministry's Director for International Security,
Nuclear and Space Affairs (DIGAN),Gustavo Ainchil, to
deliver Refs A and B demarches.


2. (SBU) Addressing the International Atomic Energy Agency
(IAEA) budget, Ainchil said that although the Foreign
Ministry was committed to maintaining its financial support
for the IAEA despite the global financial crisis, the 23
percent budget increase he understood to be proposed by the
Director General was far too much. Argentina would follow
the lead of the Latin American Group on budget questions, he
said, and would be comfortable with increases that kept pace
with inflation. He said the Latin American delegates would
not be prepared to go to their leadership with proposals for
large increases, suggesting that even nine percent was
outside the GOA's comfort zone.


3. (SBU) Ainchil said that the GOA was fundamentally
uncomfortable with "having a discussion about the scope of
the IAEA mission through a discussion of the budget." The
consideration of a broader mandate for technical assistance
related to nuclear security needed to go slower, he said, and
informal discussions in Geneva were the way to begin.


4. (C) Ainchil said that the agitation for a broader IAEA
scope of work, coupled with the proposals for nuclear fuel
banks (see para 5 below) and in the context of the IAEA
Director General election, had left G-77 countries with the
impression that they were "being pushed." The South
Africans, he said, had cleverly linked their candidacy for
IAEA DG with this reaction among G-77 countries. Ainchil
said he had lunch with the Japanese DG candidate Amano to
warn him of this reaction and urge him to modify his campaign
to minimize the perception that it was tied to an agenda of
expanding the IAEA mission and budget. He told Amano that
"if the perception is that you want to change the functions
of the IAEA, it will be problematic" for your candidacy.


5. (SBU) Ainchil saw an inter-related discussion going on at
the IAEA: the Additional Protocol, the "cartelization of
enrichment," and the budget. Argentina is approaching these
issues pragmatically, and Ainchil said that he had held
extensive discussions the previous day with Vice Foreign
Minister Victorio Taccetti and with the head of the Argentine
Atomic Energy Commission. His views, he said, reflected
those of the Vice Foreign Minister.

Fuel Bank Issues
--------------


6. (SBU) Ainchil said that Argentina was open to discussing
the draft papers in Geneva and that the GOA was not opposed
to "some cartelization of nuclear fuel." Countries like
Argentina, he said, were likely only to support proposals
that encouraged market mechanisms for concentrating fuel.
They would reject outright any coercion or legal obligations
to abandon their own rights under Article 4 of the NPT.


7. (SBU) Addressing Argentina's specific needs for nuclear
fuel, Ainchil said that Argentina would not want to be
reliant on sources far away. At the present time Argentina
was purchasing fuel from U.S. companies, in part because the
large cost benefits related to their taking back the waste.
Ainchil noted that Argentina had to consider the possibility
that this beneficial arrangement would end one day (perhaps
with the disappearance of the USG subsidies),so that
Argentina had to retain the right and capacity to reprocess
waste. Regional cartelization, likely coordinated by
Argentina and Brazil for South America, would be more
acceptable than pressure to rely on a distant fuel bank.


8. (SBU) Ainchil said more broadly that he wondered if we
were appropriately considering the dangers of increased
maritime traffic in nuclear fuel that would come with
concentration of fuel production. Finally, he said that
although he had had positive discussions with the Russians
about their proposal for a fuel bank, he saw some downsides
in dependence on a P5 country for fuel.

Comment
--------------


9. (SBU) Ainchil is disposed to work with the United States
Government, and his counsel on these issues should be sought
when he is in Geneva. He is signaling clear limits for the

GOA on these issues, but he could be helpful in reaching a
compromise with other G-77 members.
KELLY