Uruguay: A/S Valenzuela's December 16-17 Visit

C O N F I D E N T I A L MONTEVIDEO 000641

SIPDIS
FOR WHA/BSC DRUCKER, DASCHBACH

E.O. 12958: DECL: 2019/12/31
TAGS: PREL UY
SUBJECT: Uruguay: A/S Valenzuela's December 16-17 Visit

CLASSIFIED BY: Alfred Schandlbauer, CDA, State, Exec; REASON: 1.4(B),
(D)

Summary

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1. (C) During A/S Valenzuela's December 16-17 visit to Uruguay,
he met with Uruguayan President-elect Jose "Pepe" Mujica, Foreign
Minister Pedro Vaz along with five other ranking Uruguayan career
diplomats, and with Minister of Defense (and former foreign
minister) Gonzalo Fernandez. Mujica told Valenzuela that Uruguay
needs the United States, and that he wants to have an open dialogue
with U.S. officials. Uruguay will keep its strong commitment to
UN peacekeeping missions, Mujica said. In the region, Mujica is
concerned about the situation of Paraguayan President Lugo, and
agreed with Valenzuela on the importance of showing support for
Paraguay's constitutional order. After Valenzuela explained the
U.S. position on Honduras in detail, FM Vaz gave the strongest
signal yet that Uruguay could eventually recognize the result of
the November 29 presidential elections. End Summary.



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Meeting the President-Elect

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2. (C) In what he described as an introductory call, A/S
Valenzuela met December 17 with President-elect Jose Mujica, Vice
President-elect Danilo Astori, and Foreign Minister-designate
Ambassador Luis Almagro. Valenzuela began by emphasizing his pride
in representing an administration that is looking to set a positive
tone with the countries of the Western Hemisphere, values
multilateralism, and embraces international law. He congratulated
Mujica on his election, and stressed that he hoped both countries
could contextualize the relationship as one that would take into
account the past, but focus on the future. Valenzuela also
extolled Uruguay's commitment to the principles of political
pluralism, strong institutions, and the rule of law.




3. (C) Mujica told Valenzuela that Uruguay "really needs" the
United States, that he personally is looking at the bilateral
relationship with an eye toward the future rather than back at the
past, and that he has "a strong will to have an open relationship"
with the United States. Valenzuela echoed the need for an open
dialogue between our two countries, and noted the importance of
constant demonstrations of our shared values. Charge Matthewman
detailed areas of current cooperation (specifying instances in
international organizations like the WTO and IAEA, and in the areas
of counternarcotics and money laundering; science, technology, and
health),and Astori discussed his satisfaction with our burgeoning
partnership, giving special attention to the mutual benefits
resulting from the existing Trade and Investment Framework
Agreement.




4. (C) Valenzuela expressed appreciation for Uruguay's personnel
contributions to UN peacekeeping efforts. Mujica admitted to
having a "confused" personal view on the subject, which he said
owed to a conflict over what he believes to be the proper role of
the Uruguayan military (domestic support as needed, e.g. disaster
relief and infrastructure development) and Uruguay's obligations to
the rest of mankind. He told Valenzuela he has come to the
conclusion that there are always going to be places in the world
that need the help of Uruguayan peacekeepers and that obligation is
important. Moreover, Uruguay and its peacekeepers derive
considerable benefits from such operations, Mujica said, noting as
the principal advantages enhanced international prestige for the
country and formative personal experiences for the soldiers
themselves. For those reasons, Mujica continued, "we won't change
the peacekeeping policy and will try to make it even better."
However, there are and will continue to be many conflicts around
the world for which Uruguay has no responsibility, Mujica stressed.





5. (C) Valenzuela shared impressions from his December 15-16 trip
to Argentina, which prompted Mujica to say: "We have a little
problem with Argentina over a bridge, but we'll resolve it. We're

trying to clean the sidewalk in front of our house. We'll do our
part, all that we can." He was similarly expressive on the subject
of Paraguay, listening with interest as Valenzuela explained
President Lugo's current difficult situation, and replying with
deliberation that "Uruguay would not want anything to happen to
Lugo. Paraguay is a country with very little institutional
strength, not like Uruguay." Valenzuela assured him that the
United States will work to avoid any "unexpected" happenings in
Paraguay, telling Mujica that both the United States and Brazil
agree that what happened in Honduras must be avoided in Paraguay.



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Meeting with Senior Foreign Ministry Officials

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Honduras

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6. (C) The discussion during Valenzuela's several-hour meeting and
working lunch with foreign ministry officials centered on the
situation in Honduras, which Vaz noted was the focus during the
recently concluded Mercosur summit in Montevideo. Valenzuela took
note of the Mercosur joint position, as expressed in a summit
communiquC),and then explained the U.S. position in detail,
offering an insider's perspective of the sequence of events. He
first underscored what he described as the basics of the situation:
The U.S. recognizes that a coup d'etat took place in Honduras, and
a coup in the hemisphere is not to be tolerated. As a consequence,
we joined the other countries of the hemisphere in suspending
Honduras from the OAS. Valenzuela outlined the efforts of Costa
Rican President Oscar Arias to mediate the issue, and gave a
detailed description of the contents of the Tegucigalpa-San Jose
Accord and the steps (and missteps) surrounding its signature.




7. (C) Another important factor to consider, Valenzuela continued,
is that an electoral process was ongoing that preceded the coup and
President Mel Zelaya's efforts toward reinstatement. In fact,
Valenzuela explained, Zelaya's own vice president had resigned
months before the coup to run in the primaries. Valenzuela
emphasized that the turnout was approximately the same as the
turnout for Honduras' previous presidential elections, and that the
U.S. and other countries had determined that the election --
generally speaking -- met international standards. Not to
recognize the legitimacy of that process would therefore mean the
Honduran people would be punished twice: first, by the coup itself,
and then by being denied a legitimate electoral exit from Honduras'
current political pariah status. Valenzuela further explained
that the U.S. views the election as a necessary step for Honduras,
but not in itself a sufficient step to bring Honduras back into the
OAS in good standing. Necessary actions still to be completed
include the creation of a government of national unity, the
creation of a truth commission, and the restoration of President
Zelaya.




8. (C) Valenzuela summed up by reiterating that all of the U.S.'s
actions in this case have sent a strong message that coups will not
be tolerated, and that the best way forward would be the formation
of a government of national unity. After appearing to closely
consider Valenzuela's words, Vaz offered the strongest possibility
yet that Uruguay might eventually accept the results of the
Honduran elections, saying that Uruguay "could take the election
results in Honduras under consideration, but only after an accord
between Hondurans" that would demonstrate that both sides had found
common ground.



Pathways to Prosperity

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9. (SBU) During a broader discussion about the region, Valenzuela

remarked that the U.S. is looking forward to Uruguay's continuing
participation in the Pathways initiative. FM Vaz replied that he
has attended two Pathways ministerial meetings, and noticed a
qualitative improvement in the more recent. The major improvement,
Vaz said, was that organizers had begun to take into account the
fact that each country in the hemisphere has different and
distinguishing characteristics. Vaz praised the initiative by
saying that it appears to offer the prospect of producing tangible
benefits for the people of the hemisphere. With that in mind, he
continued, Uruguay hopes to use its experience in becoming the
first country in the world to fully realize the
one-laptop-per-child program to help other countries in the region
improve the computer literacy of their children.



Trade Policy

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10. (SBU) Uruguayan Ambassador to the U.S. Carlos Gianelli offered
a paean to our Trade and Investment Framework Agreement, and then
asked about whether the Obama Administration has arrived at a
specific trade policy for the region. Valenzuela replied that the
succession of serious crises that Obama has had to deal with since
taking office has meant some delays, so we're still having internal
discussions. Valenzuela noted that the Democratic Party is not a
protectionist party, and there is a broad consensus among
policymakers and legislators in the U.S. that international trade
is vital to our country's economic health. Still, Valenzuela
cautioned, everyone also understands that trade and trade
agreements are not magic wands.



Building Bridges

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11. (U) Gianelli commented favorably on Uruguay's "sister"
relationship with Minnesota, and Vaz asked how to strengthen such
ties. Valenzuela answered by explaining the importance of contact
with local leaders, and how their motivated participation in the
relationship could spur it to mutual advantage. Remarking that
most Uruguayan beef enters the U.S. through Philadelphia,
Valenzuela recommended establishing a similarly friendly
relationship with Philadelphia officials and civil society.
Gianelli was grateful for the suggestion, which he said he would
act upon.



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Meeting with Minister of Defense

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A Friend of the U.S.

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12. (C) A/S Valenzuela met with Minister of Defense Gonzalo
Fernandez December 17. Fernandez is President Tabare Vazquez's
closest advisor. He served as Vazquez's chief of staff for the
first three years of the administration, then foreign minister for
the subsequent 18 months before moving over to handle the defense
portfolio September 2009. When Fernandez assumed his role at the
MFA, relations with the U.S. improved immediately. Valenzuela
began the meeting by recognizing the excellent relations we
developed with the Vazquez government, with Fernandez as our
principal interlocutor. Fernandez replied that he and Vazquez had
always sought to have a good relationship with the U.S., first with
President Bush and now with President Obama. As testament to that,
Fernandez recounted episodes, such as working toward the compromise
on Cuba at the OAS meeting in San Pedro Sula and pushing to move
the U.S.-Colombia Defense Cooperation Agreement (DCA) off the
heads-of-state agenda in UNASUR, in which he worked to help the
U.S. Fernandez pronounced himself encouraged by what he described

as evidence pointing to the likelihood that the Mujica
administration will continue the Vazquez/Fernandez foreign policy
line. He discounted the possibility of any significant foreign
policy changes, saying Uruguay doesn't have much policy space
within which to move.



Peacekeeping: An Unexpected Burden

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13. (C) Valenzuela stressed U.S. appreciation for Uruguay's
extraordinary personnel contributions to UN peacekeeping
operations, congratulating Fernandez on Uruguay's perennial
standing as the largest per-capita provider of peacekeeping troops.
Fernandez was grateful, saying the U.S. has always offered a
helping hand in the area, but then begged Valenzuela's indulgence
in airing some difficulties Uruguay is currently experiencing
funding its operations. According to Fernandez, the UN is eight
months and USD 30 million in arrears to Uruguay, a circumstance
that has meant many Uruguayan peacekeepers are not getting paid.




14. (C) Fernandez said his ministry had been borrowing money to
make up for the delayed UN funds, but had recently exhausted its
borrowing facility at the state-run Banco Republica. That forced
him to introduce a law, which had to be passed in a special session
of Uruguay's recessed Congress, allowing the Ministry of Defense to
borrow an additional USD 6 million, all of which went immediately
toward back salaries. Predicting an unfriendly response if he has
to introduce another, similar bill to keep paying his soldiers,
Fernandez indicated that he is very worried about being able to
maintain the tempo of operations. He further stated that the UN
consistently replied to his appeals for payment by saying it was
unable to respond due to U.S. arrears, which was the reason he was
raising the subject with Valenzuela. Valenzuela committed to look
into the matter and to do all that he could to move the issue
forward.



A Former FM's Take on Argentina & UNASUR

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15. (C) The difficult relationship with Argentina stemming from the
dispute over the location of a paper pulp mill on the Uruguayan
side of the Rio Uruguay, which forms a border between the two
countries, was Fernandez's bugbear over the last three years. He
described Argentina's conduct in that period as "the most
irrational thing I've ever seen," and told of countless secret
meetings to resolve the situation that came to nothing because the
Argentine side was acting in bad faith. It was that dispute that
led Fernandez to conclude that Uruguay had to veto Ecuadorian
President Rafael Correa's nomination of former Argentine President
Nestor Kirchner as head of UNASUR, an organization whose utility
Fernandez questioned.




16. (C) When Valenzuela asked about UNASUR's role, Fernandez
replied that it is an organization that has not shown itself
capable of handling any crisis. He gave as an example of competent
crisis management the most recent flare-up between Colombia and
Ecuador, which was handled first by the Rio Group and then by the
OAS. Describing various regional organizations (Mercosur, UNASUR,
Rio Group, the OAS) as concentric circles, Fernandez questioned
UNASUR's relevance. Fernandez seemed especially galled by the
media focus of many UNASUR heads of state at meetings, describing
such meetings as "shows, nothing else." Valenzuela allowed that he
also had questions about an organization of disparate members that,
without a counterweight, was bound to be dominated by one member,
Brazil. Fernandez replied that it was exactly that reason why the
OAS, with the U.S. as an anchor, would remain the most important
regional body. Fernandez ended by predicting a limited future for
UNASUR, saying that it could act as a "shock absorber" for the
region's frictions, but would never be able to resolve problems
alone.

Vazquez in 2014?

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17. (SBU) Fernandez told Valenzuela that he will not have an
official role in a Mujica administration, but would instead return
to his law practice. He took care to note, however, that he would
be back if President Vazquez decides on another run for president
in 2014. Fernandez pointed out that Vazquez is leaving office with
an approval rating of over 70 percent, almost 20 percent higher
than Mujica's vote total, and would almost certainly be the
favorite in any political race he decides to enter in Uruguay.



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Press

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18. (U) Valenzuela spoke to a wide range of Uruguayan media and
wire service outlets at a press availability that followed his
meeting with President-Elect Mujica. About 20 print and electronic
journalists attended. Characterizing Uruguay as a welcoming
country, Valenzuela told his audience that he came without a fixed
agenda, and was primarily interested in activities that would
benefit Americans and Uruguayans. The Assistant Secretary told his
audience that the U.S. understands and welcomes regional economic
integration, and at the same time acknowledged his desire to
strengthen the U.S.-Uruguay TIFA. He underscored the gravity of
the coup d'etat in Honduras, and stressed the importance of the
national election held there on November 29. Valenzuela's visit
resulted in several days of overwhelmingly positive press.




19. (U) A/S Valenzuela cleared this communication.
SCHANDLBAUER