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C O N F I D E N T I A L BUENOS AIRES 000376

SIPDIS

SIPDIS

WHA FOR A/S SHANNON, DAS DUDDY, AND WHA/BSC
P FOR HEIDE BRONKE
NSC FOR JUAN ZARATE AND JOSE CARDENAS

E.O. 12958: DECL: 02/27/2017
TAGS: PREL PGOV ECON VZ AR
SUBJECT: (C) U.S.- ARGENTINE RELATIONS: DR. JEKYL AND MR.
KIRCHNER

REF: A. BUENOS AIRES 360
¶B. BUENOS AIRES 311
¶C. BUENOS AIRES 305
¶D. BUENOS AIRES 302
¶E. BUENOS AIRES 301

Classified By: Ambassador E. Anthony Wayne for reasons 1.4
(b)and(d)

¶1. (C) Summary and Comment: Argentina's President Nestor
Kirchner is trying to stake out a position for himself close
to Chavez yet still working well with the U.S. on issues
important to Argentina. With domestic political advantage
and 2007 elections in mind, we expect Kirchner to continue
the balancing act. Kirchner will lash out with largely
indirect criticism, he will cozy up to Chavez, and yet he
will maintain a number of open doors to us. Kirchner
recognizes the value of maintaining quiet, positive relations
with the U.S. -- particularly on key strategic issues, e.g.
non-proliferation and counterterrorism -- but sees no value
domestically in aligning himself publicly with the U.S. or
its policies. In fact, he gets a domestic boost from lashing
out at perceived pressure and in striking an independent
pose, a la Charles de Gaulle. Argentina's commercial and
economic relationship with Venezuela is also of strategic
importance (refs. a, b), the difference being that,
domestically, Kirchner does perceive value, in particular
electorally, in publicly linking himself to Chavez; he is
bringing home the bacon. The meetings between senior GoA
ministers and AG Gonzalez and U/S Burns and A/S Shannon were
uniformly positive, recognizing an important common agenda in
many areas (refs c-d and septels), and the press play from
the visits was positive and profuse. In light of this
dynamic, Kirchner's statements in Venezuela -- that Argentina
will "not contain Venezuela" and his invitation for Chavez to
visit in March are indicative of the GoA's desire to maintain
what they see as a "balance" in relations with the U.S. and
Venezuela. End Summary.

¶2. (C) Attorney General Gonzales' February 6-7 visit, and U/S
Nick Burns and A/S Shannon's February 8-9 visit to Buenos
Aires and meetings with senior Kirchner ministers served to
underscore improving bilateral relations, the breadth of that
relationship, as well as highlight U.S. policy priorities in
the region. Kirchner insiders, Cabinet Chief Alberto
Fernandez and Planning Minister Julio De Vido, confirmed to
Burns and Shannon the importance of the relationship to the
GoA, the strong working-level cooperation on
counterterrorism, counternarcotics, and international support
for non-proliferation. Together with Foreign Minister
Taiana, they shared concerns about the situation in Bolivia
and Ecuador, and the need for strengthening stability in the
region, including through joint efforts in Haiti. They also
emphasized the importance they place on attracting U.S.
investment (although a negative decision made public during
the visit regarding a U.S. investment fund seeking a share of
a local energy transmitting company, indicates that the
actual message to potential investors, at best, is mixed).
Cabinet Chief Fernandez publicly characterized relations as
"good" the day after Burns' visit.

¶3. (C) The Kirchner style from the beginning, however, has
been combative in the face of real, imagined and fabricated
challenges from sources as varied as the Catholic church,
neoliberalism and the "Washington consensus," the World Bank
and IMF, parasitic foreign multi-nationals, the press and
political opponents (whether from within or from outside the
Peronist party) and -- indirectly stated -- the the U.S.
This style has stood him in good stead. As the economy
boomed, buoyed by favorable external factors, his popularity
ratings have soared, and have remained high, due in no small
part to his pugnacious character.

¶4. (SBU) Kirchner demonstrated again over the last two weeks
his willingness to attack external institutions for domestic
political gain. He lashed out on several occasions at the
IFIs and other international organizations, rejecting their
latest gentle criticisms of GoA economic policies and blaming
them again for the 2001/2002 financial crisis and also for
current high poverty levels. His outburst followed mildly
critical comments from the World Bank and World Trade
Organization officials about the sustainability of the GoA's
economic policies. He was also responding to an IMF
spokesman's comment to the press that an IMF agreement was
normally a prerequisite for Paris Club debt rescheduling.
Despite the IMF's explanation that this was a Paris Club, not
IMF, requirement, Kirchner blamed the IMF -- his favorite
whipping boy -- for blocking a Paris Club deal. He and his
Economic Minister, Felisa Miceli, also used the opportunity
to pander to the public's extreme hostility towards the IMF
by rejecting categorically any possibility of a Fund program
with Argentina.

¶5. (C) This dynamic helps explain the two faces of Kirchner
we see in our bilateral relations. Kirchner is essentially
pragmatic but excessively focused on domestic issues and
public opinion. The low point in recent bilateral relations,
occasioned by the GoA performance at the Mar del Plata Summit
of the Americas in November 2005, perhaps convinced Kirchner
he had gone a bit too far down the populist route. Since
then, we have seen a gradual and steady improvement in
relations with an increasing willingness by senior-level
officials in engaging in dialogue with us and in identifying
areas where we can strengthen cooperation.

¶6. (C) However, we do not expect to see a public embrace of
the U.S. or many of our policies. The public image of the
U.S. in Argentina is the lowest in the region. Kirchner's
regular verbal assaults on policies and institutions linked
in the public mind to the U.S., e.g. globalization and the
international financial institutions, resonate very well here
as long as they don't foretell a serious break (see latest
INR U.S Image paper from the Oct-Nov 2006 Latinobarometro
poll comparing Argentina with 17 other regional publics).
Kirchner calculates -- with at least one eye always on the
next election -- that there is little up-side to being linked
too closely with the U.S., and little down-side to
occasionally "standing firm" and "protecting the people's
interests" before the hegemonic power.

¶7. (C) The press here eggs this on, couching many issues as
the ideological struggle between the U.S. and Venezuela for
predominance in the region. As a reflection of this, GoA
actions are either portrayed as pro-Chavez or as a
rapprochement with the U.S. Contacts inform us that Kirchner
also sees himself as maintaining this balance between the two
-- a la Charles de Gualle between the cold war powers U.S.
and USSR. The Embassy has seen on several occasions, when
the press appears to be too caught up in portraying the
improving U.S.- GoA relations, that Kirchner will find an
opportunity to publicly stick a pin in that balloon. In the
aftermath of the Gonzalez/Burns/Shannon visits, Kirchner,
while in Venezuela recently to sign a number of commercial
agreements, may have felt compelled to "right the balance"
and demonstrate his independence with his gratuitous remark
that Argentina would not "contain" Chavez (ref. A). The
media here has, in fact, tied Kirchner's comments in
Venezuela to Burns/Shannon remarks made here during their
recent visit that the U.S. could work well with governments
like Argentina and Brazil but that Venezuela was "another
matter."

¶8. (C) Comment: It is clear we have foreign policy
differences with the Kirchner administration, particularly
over how we view Chavez and his actions in Venezuela and the
region. Press reports here say Chavez will be paying a
return visit to Kirchner next week, coinciding with President
Bush's visit to Uruguay (septel - Senior GoA contacts tell us
the visit is still unconfirmed). Ambassador has expressed
our strong concerns that Chavez will use the occasion to
organize another anti-U.S. rally (as is being reported in the
press), and that such an act would negatively impact our
bilateral relations. This, unfortunately, would be the type
of gesture to be expected of Kirchner; one focused on
short-term electoral political gain, with little thought for
longer-term consequences. We should not expect significant
changes in the GOA's foreign policy or GOA public statements
in support of the U.S. Nor is Kirchner likely to change many
of his interventionist economic tendencies. All of this is
especially true in an election year. But on most of the key
bilateral and multilateral issues important to the U.S., in
fact, we believe we can continue to build strong cooperation
in a quiet, deliberate way.
WAYNE