VICE PRESIDENT BIDEN'S MARCH 27 MEETING WITH

C O N F I D E N T I A L SECTION 01 OF 03 SANTIAGO 000309

SIPDIS

E.O. 12958: DECL: 04/02/2019
TAGS: OVIP BIDEN JOSEPH PREL ECON PGOV SOCI UY
SUBJECT: VICE PRESIDENT BIDEN'S MARCH 27 MEETING WITH
URUGUAYAN PRESIDENT TABARE VAZQUEZ

Classified By: Ambassador Paul Simons for reasons 1.4 (b/d).


1. (U) March 27, 2009; 6:30 pm ) 7:05 pm; Vina del Mar,
Chile.


2. (U) Participants:

U.S.
Joseph Biden, Vice President
Antony Blinken, National Security Advisor to the
Vice President
Brian McKeon, Deputy National Security Advisor to
the Vice President
Dan Restrepo, Senior Director, Western Hemisphere
Affairs, National Security Council
Craig Kelly, Principal Deputy Assistant Secretary
of State for Western Hemisphere Affairs, U.S.
Dept. of State
Jennifer Spande (notetaker),Senior Political Officer, U.S.
Embassy Santiago

URUGUAY
Tabare Vazquez, President
Alvaro Garcia, Minister of Economics
Ariel Belgamino, Presidential Advisor
Jorge Vazquez, Presidential Secretary
Carlos Pita, Uruguayan Ambassador in Chile


3. (C) Summary: On the margins of the Progressive
Governance Leaders Summit in Chile, Vice President Joseph
Biden and Uruguayan President Tabare Vazquez focused their
March 27 bilateral discussion on further developing the
"excellent" U.S. and Uruguayan relationship, a shared
commitment to reducing inequality in their own countries, and
collaborating to find solutions to the economic crisis. End
Summary.

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Biden: Crisis is an Opportunity to Push for Equitable
Economic Growth
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4. (C) Vice President Biden opened the meeting by sending
regards from President Obama and noting that they both
admired the incredible work that President Vazquez had done
in a difficult position. Biden emphasized his eagerness to
meet with South and Central American leaders during this
trip, and the Administration's desire to use this visit to
signal their interest in developing a new relationship with
the hemisphere. He and President Obama want to listen to
others' thoughts on the financial crisis and other topics as
well as sharing their own views.


5. (C) While climbing out of the "deep hole" of the economic
crisis, the U.S. and other leaders must also work to lay a
new foundation for sustained and equitable economic growth.
Between World War II and the 1970s, workers' real incomes
rose along with the country's economic output. Since then,
however, the American middle class has experienced a net loss
in real income. Simply providing a safety for the most
vulnerable is not sufficient, Biden said; they must also have
a ladder out of poverty.


6. (C) The Vice President acknowledged the seriousness of
the current economic crisis, but said that as a "congenital
optimist," he believes that world leaders can change the
economic dynamic. President Obama,s stimulus package
includes investments in education, energy, and health care
because long-term growth is impossible without strengthening
these sectors.

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Vazquez: Relations with U.S. "Excellent," Eager for More
Cooperation
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7. (C) President Vazquez said he had followed the U.S.
election very closely and was pleased with the example it set
of free democratic expression. He agreed that a new
relationship between the U.S. and Latin America was "possible
and necessary" not just for the sake of this hemisphere, but
for the whole world. No country can ignore the United
States, because it is the world,s largest power. Vazquez
hopes that Uruguay's relationship with the U.S. will go
further and be based on mutual respect, positive dialogue,
and increased exchange of political, scientific, and cultural
leaders.


8. (C) The U.S.-Uruguay relationship, which has historically

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been very strong, has reached an "excellent" level in the
last four years, the Uruguayan President said. Vazquez
highlighted several areas of cooperation, including the
recent signings of a Bilateral Investment Treaty and Trade
and Investment Framework Agreement (TIFA); agreements on
environmental cooperation, scientific exchanges, and trade;
and phyto-sanitary cooperation which has led to increased
Uruguayan agricultural exports to the U.S. In terms of
moving the relationship ahead, Vazquez noted that his
government was willing to discuss additional protocols under
the TIFA --intellectual property rights, government
purchases, and e-commerce. He also signaled his interest in
increasing bilateral cultural and scientific exchanges.

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Vazquez: Uruguay Strong as Financial Crisis Looms
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9. (C) Uruguay is in a privileged position due to its
natural and human resources. The country is dedicated to
liberty, democracy, peaceful co-existence with other nations,
and fighting terrorism. Vazquez is committed to reducing the
economic gap in Uruguay. He believes in rights to health,
education, and dignified work and sees these as the basis for
strong international relations.


10. (C) Vazquez noted that during the December 2008 Latin
America and Caribbean Summit in Bahia, Brazil he had called
on his fellow leaders to stop blaming their problems on the
legacy of Portuguese, Spanish, British, and American
imperialism. While imperial legacies do have some lingering
negative effects, too often this is a fig leaf for Latin
American countries' own failure to address education, social,
and health concerns.


11. (C) Vazquez noted that Uruguay is in a good position to
face the financial crisis, having reduced vulnerabilities in
recent years and enacted some counter-cyclical measures in
the last few months. As a result, Uruguay's GDP has grown
while some of its neighbors have experienced contractions and
Uruguay has significant foreign investment. The President
noted that he believed protectionism would only aggravate the
crisis and had asked the presidents of Brazil and China to
avoid protectionist measures. Uruguay is eager to engage
with the U.S. in developing a plan to address the crisis.

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Biden: Our Economic Success is Linked to Yours
-------------- --


12. (C) The U.S. does not see economics as a zero-sum game,
the Vice President stated, asserting that U.S. economic
success lies in the success of Uruguay and other western
hemisphere countries. The Vice President rejected
protectionism but affirmed the need to ensure that free trade
creates good jobs. In the longer term, the Obama
administration would like to see free trade based on employee
rights and environmental protection to ensure that the jobs
created by free trade agreements are good ones and that
negative environmental impacts are minimized. "We need to
make sure that the protectionist instinct is not fulfilled,"
the Vice President said, noting that sometimes trade wars
lead to physical conflicts.


13. (C) Stimulating the economy is the most urgent task
before the G-20, the Vice President noted. Nonetheless, he
called for members to jettison the idea that re-regulation is
an economic cure-all.

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Closing the Income Gap in U.S. and Uruguay
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14. (C) The Vice President explained that, domestically, the
Obama administration has said that one critical measure of
their first term success will be whether the living standards
of the American middle class and those aspiring to be middle
class rise. Toward that end, Biden has gone to every cabinet
agency and asked what they are doing to meet this goal,
including in the areas of health, child development,
eldercare, jobs, and the environment.


15. (C) President Vazquez closed the meeting by sharing his
commitment and approach to reducing poverty. In two years,
Uruguay has reduced poverty from 33 to 21 percent by enacting
structural reforms such as expanding access to health care,
giving every public school student and teacher their own
computer, and establishing an income tax to pay for these
programs.

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16. (U) The Office of the Vice President cleared this
message.
SIMONS