Identifier
Created
Classification
Origin
09MONTEVIDEO726
2009-12-11 19:13:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Montevideo
Cable title:
MERCOSUR SUMMIT PREDICTABLY SHORT ON ECONOMIC PROGRESS, BUT
how-toVZCZCXYZ0012 RR RUEHWEB DE RUEHMN #0726/01 3451914 ZNR UUUUU ZZH R 111913Z DEC 09 FM AMEMBASSY MONTEVIDEO TO RUEHC/SECSTATE WASHDC 0081 INFO MERCOSUR COLLECTIVE
UNCLAS MONTEVIDEO 000726
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECIN ECON ETRD UY
SUBJECT: MERCOSUR SUMMIT PREDICTABLY SHORT ON ECONOMIC PROGRESS, BUT
OFFERS POLITICAL SOAPBOX
REF: MONTEVIDEO 700; MONTEVIDEO 718
-------
SUMMARY
-------
UNCLAS MONTEVIDEO 000726
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECIN ECON ETRD UY
SUBJECT: MERCOSUR SUMMIT PREDICTABLY SHORT ON ECONOMIC PROGRESS, BUT
OFFERS POLITICAL SOAPBOX
REF: MONTEVIDEO 700; MONTEVIDEO 718
--------------
SUMMARY
--------------
1. (SBU) SUMMARY: On December 8, heads of state of Mercosur's four
full members and aspiring member Venezuela gathered in Montevideo
for the bloc's 38th Presidential Summit. As expected, (ref A)
dialogue at the summit focused more on regional politics and less
on tangible progress of the economic bloc, which was scarce.
Summit leaders signed a strident declaration refusing to accept the
results of the November presidential elections in Honduras. On
Colombia, Venezuela's President Chavez said there would "never be
war with a brother nation," but railed against U.S. use of
Colombian bases and lambasted Colombian President Uribe for giving
asylum to individuals alleged to have attempted to assassinate him.
Leaders at the summit failed to advance long-standing issues such
as elimination of the double imposition of the common external
tariff and agreement on a customs code, but reaffirmed the bloc's
intent to further free trade discussions with the EU and extended
the temporary admission system, which allows some imported
materials to enter free of tariffs, until 2016. END SUMMARY
--------------
MERCOSUR'S 38TH SUMMIT
--------------
2. (U) On December 8, Montevideo hosted the 38th Presidential
Summit of Mercosur; the Southern Cone Common Market composed of
Argentina, Brazil, Paraguay and Uruguay that has Chile and Bolivia
as associate members, and to which Venezuela is in process of
adhering. The presidents of Argentina, Brazil and Paraguay and
aspiring member Venezuela were in attendance. Colombian Vice
President Francisco Santos participated as an observer while Chile
and Mexico each sent their Foreign Ministers. Peru was represented
by a mid-level official and Bolivia chose to not attend.
--------------
REGIONAL POLITICS TAKES CENTER STAGE
--------------
3. (U) The Presidents of the four full members of Mercosur and
Venezuela signed a declaration condemning the "coup" in Honduras
and refused to recognize the result of the November 29 Presidential
elections in that country. In the declaration, the presidents
stated that they "reiterate their most energetic condemnation of
the coup d'etat in the Republic of Honduras and consider
unacceptable the serious violations of human rights and fundamental
liberties of the Honduran people." The declaration called the
elections unconstitutional, illegitimate, illegal and a blow to the
democratic values of Latin America and the Caribbean. In her
summit speech, Argentine President Fernandez de Kirchner hinted
that Mercosur should apply economic sanctions against Honduras and
emphasized her belief that the matter should be resolved in the
OAS.
4. (SBU) Venezuelan President Chavez used his 10-minute time
allocation, and several subsequent interjections, to rail against
the U.S. presence in Colombia, Colombia in general, and "Mexico's
intervention in Honduras," for nearly an hour. Chavez also
criticized Colombia for giving asylum to those accused of trying to
oust him in 2002. Vice President Santos countered that his country
has not shown aggression towards its neighbor and that asylum, like
it or not, was a well-established institution in Latin America. He
pointed out a couple of Colombian fugitives currently enjoying
asylum in Brazil and Uruguay. There was a single positive exchange
between the two, when Chavez said that Venezuela would never go to
war against a brother nation. Santos welcomed that comment.
--------------
MERCOSUR DEVELOPMENTS
--------------
5. (SBU) Leaders at the summit did not advance long-standing issues
such as elimination of the double imposition of the bloc's common
external tariff and agreement on a customs code. Paraguay's
President Lugo took the mantle usually carried by Uruguay, and
criticized the function of Mercosur and the bloc's failure to
address economic asymmetries. As the host, President Vazquez did
not dwell on the lack of progress on its key goals: harmonizing
competitiveness-distorting public policies, eliminating current
non-tariff barriers (NTBs),and adopting mechanisms to deal with
new NTBs.
6. (SBU) Mercosur extended its temporary admission system until
2016. That system offsets some of the effects of double
application of tariffs. The temporary admission regime allows
imported materials, which are later re-exported, to be free from
tariffs and is an important, legal loop-hole that benefits
Uruguayan industry.
7. (U) Mercosur also reaffirmed the bloc's longstanding stated
intent to further free trade discussions with the European Union,
announcing a meeting in the first half of 2010 when Spain and
Argentina will hold the EU's and Mercosur's presidencies,
respectively.
8. (U) Brazilian President da Silva argued in favor of Venezuela's
adhesion to Mercosur, saying it would add scale and balance to the
bloc. During his discourse, he predicted his country's senate
would affirm Venezuela the next day. NOTE: On December 9, the
Brazilian senate postponed its decision on the matter. The
Paraguayan parliament has yet to take up the matter. END NOTE.
9. (SBU) After the summit, emboffs met three of the four Mercosur
Secretariat technical consultants to discuss its outcomes. While
the group admitted politics took its usual place at the center of
Mercosur discussions and several key issues seem to be on ice, they
noted that the bloc continued to strengthen and refine its
institutions, and cited progress in certain areas that remained in
the background. For example, an earlier decision to allow open
residency within Mercosur was implemented during Uruguay's
presidency. In addition, they noted progress to increase
coordination of judicial processes, and reciprocal recognition of
certain academic degree programs, especially in the medical fields.
Mercosur may not stand up to the economic integration achieved in
the EU, the officials said, but it is doing reasonably well when
compared to other economic blocs.
--------------
COMMENT: POLITICS AS USUAL
--------------
10. (SBU) COMMENT: The GOU seemed happy to get through its turn at
the helm, which came at an awkward time of transition as President
Vazquez prepares to transfer the Presidential sash to Jose "Pepe"
Mujica. Mujica took full advantage of having the Mercosur summit
in his backyard, meeting individually with each of his soon-to-be
counterparts (Ref B).
MATTHEWMAN
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECIN ECON ETRD UY
SUBJECT: MERCOSUR SUMMIT PREDICTABLY SHORT ON ECONOMIC PROGRESS, BUT
OFFERS POLITICAL SOAPBOX
REF: MONTEVIDEO 700; MONTEVIDEO 718
--------------
SUMMARY
--------------
1. (SBU) SUMMARY: On December 8, heads of state of Mercosur's four
full members and aspiring member Venezuela gathered in Montevideo
for the bloc's 38th Presidential Summit. As expected, (ref A)
dialogue at the summit focused more on regional politics and less
on tangible progress of the economic bloc, which was scarce.
Summit leaders signed a strident declaration refusing to accept the
results of the November presidential elections in Honduras. On
Colombia, Venezuela's President Chavez said there would "never be
war with a brother nation," but railed against U.S. use of
Colombian bases and lambasted Colombian President Uribe for giving
asylum to individuals alleged to have attempted to assassinate him.
Leaders at the summit failed to advance long-standing issues such
as elimination of the double imposition of the common external
tariff and agreement on a customs code, but reaffirmed the bloc's
intent to further free trade discussions with the EU and extended
the temporary admission system, which allows some imported
materials to enter free of tariffs, until 2016. END SUMMARY
--------------
MERCOSUR'S 38TH SUMMIT
--------------
2. (U) On December 8, Montevideo hosted the 38th Presidential
Summit of Mercosur; the Southern Cone Common Market composed of
Argentina, Brazil, Paraguay and Uruguay that has Chile and Bolivia
as associate members, and to which Venezuela is in process of
adhering. The presidents of Argentina, Brazil and Paraguay and
aspiring member Venezuela were in attendance. Colombian Vice
President Francisco Santos participated as an observer while Chile
and Mexico each sent their Foreign Ministers. Peru was represented
by a mid-level official and Bolivia chose to not attend.
--------------
REGIONAL POLITICS TAKES CENTER STAGE
--------------
3. (U) The Presidents of the four full members of Mercosur and
Venezuela signed a declaration condemning the "coup" in Honduras
and refused to recognize the result of the November 29 Presidential
elections in that country. In the declaration, the presidents
stated that they "reiterate their most energetic condemnation of
the coup d'etat in the Republic of Honduras and consider
unacceptable the serious violations of human rights and fundamental
liberties of the Honduran people." The declaration called the
elections unconstitutional, illegitimate, illegal and a blow to the
democratic values of Latin America and the Caribbean. In her
summit speech, Argentine President Fernandez de Kirchner hinted
that Mercosur should apply economic sanctions against Honduras and
emphasized her belief that the matter should be resolved in the
OAS.
4. (SBU) Venezuelan President Chavez used his 10-minute time
allocation, and several subsequent interjections, to rail against
the U.S. presence in Colombia, Colombia in general, and "Mexico's
intervention in Honduras," for nearly an hour. Chavez also
criticized Colombia for giving asylum to those accused of trying to
oust him in 2002. Vice President Santos countered that his country
has not shown aggression towards its neighbor and that asylum, like
it or not, was a well-established institution in Latin America. He
pointed out a couple of Colombian fugitives currently enjoying
asylum in Brazil and Uruguay. There was a single positive exchange
between the two, when Chavez said that Venezuela would never go to
war against a brother nation. Santos welcomed that comment.
--------------
MERCOSUR DEVELOPMENTS
--------------
5. (SBU) Leaders at the summit did not advance long-standing issues
such as elimination of the double imposition of the bloc's common
external tariff and agreement on a customs code. Paraguay's
President Lugo took the mantle usually carried by Uruguay, and
criticized the function of Mercosur and the bloc's failure to
address economic asymmetries. As the host, President Vazquez did
not dwell on the lack of progress on its key goals: harmonizing
competitiveness-distorting public policies, eliminating current
non-tariff barriers (NTBs),and adopting mechanisms to deal with
new NTBs.
6. (SBU) Mercosur extended its temporary admission system until
2016. That system offsets some of the effects of double
application of tariffs. The temporary admission regime allows
imported materials, which are later re-exported, to be free from
tariffs and is an important, legal loop-hole that benefits
Uruguayan industry.
7. (U) Mercosur also reaffirmed the bloc's longstanding stated
intent to further free trade discussions with the European Union,
announcing a meeting in the first half of 2010 when Spain and
Argentina will hold the EU's and Mercosur's presidencies,
respectively.
8. (U) Brazilian President da Silva argued in favor of Venezuela's
adhesion to Mercosur, saying it would add scale and balance to the
bloc. During his discourse, he predicted his country's senate
would affirm Venezuela the next day. NOTE: On December 9, the
Brazilian senate postponed its decision on the matter. The
Paraguayan parliament has yet to take up the matter. END NOTE.
9. (SBU) After the summit, emboffs met three of the four Mercosur
Secretariat technical consultants to discuss its outcomes. While
the group admitted politics took its usual place at the center of
Mercosur discussions and several key issues seem to be on ice, they
noted that the bloc continued to strengthen and refine its
institutions, and cited progress in certain areas that remained in
the background. For example, an earlier decision to allow open
residency within Mercosur was implemented during Uruguay's
presidency. In addition, they noted progress to increase
coordination of judicial processes, and reciprocal recognition of
certain academic degree programs, especially in the medical fields.
Mercosur may not stand up to the economic integration achieved in
the EU, the officials said, but it is doing reasonably well when
compared to other economic blocs.
--------------
COMMENT: POLITICS AS USUAL
--------------
10. (SBU) COMMENT: The GOU seemed happy to get through its turn at
the helm, which came at an awkward time of transition as President
Vazquez prepares to transfer the Presidential sash to Jose "Pepe"
Mujica. Mujica took full advantage of having the Mercosur summit
in his backyard, meeting individually with each of his soon-to-be
counterparts (Ref B).
MATTHEWMAN