US embassy cable - 04BUENOSAIRES2291

C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 002291 
 
SIPDIS 
 
FOR U/S LARSON, WHA FOR A/S NORIEGA, WHA FOR PDAS DERHAM, 
WHA/BSC, WHA/EPSC, AND EB FOR A/S WAYNE, EB/IFD/OMA 
PASS NSC FOR TOM SHANNON, MIKE DEMPSEY, NILMINI GUNARATNE, 
AND DEL RENIGAR 
PASS USTR FOR PETER ALLGEIER, SUE CRONIN 
USCINCSO FOR POLAD 
 
E.O. 12958: DECL: 08/10/2014 
TAGS: ETRD, PGOV, PREL, AR, MERCOSUR, FTAA 
SUBJECT: FORMER PRESIDENT DUHALDE ON KIRCHNER, FTAA AND 
VENEZUELA 
 
Classified By: Ambassador Lino Gutierrez for Reasons 1.4 (b) and (d) 
 
1.  (C) Summary:  Former President Eduardo Duhalde claims 
that a MERCOSUR-led "South American Union" will be announced 
before year's end.  He claimed to support free trade and 
FTAA, especially after the recent compromise reached at the 
WTO meeting in Geneva.  Duhalde said President Kirchner is 
more pragmatic than ideological, and said that he wanted to 
help him.  Duhalde discounted any challenge by President 
Kirchner or First Lady Cristina Kirchner to his control of 
Buenos Aires Province.  On Venezuela, he said that a 
democratic solution was the only way out of the current 
conflict, though he expressed the opinion that a Chavez 
victory would be better on the whole for Argentina.  End 
Summary. 
 
2. (SBU) Former President of Argentina and President of the 
MERCOSUR Commission Eduardo Duhalde (protect) came over for 
coffee at the Residence August 9.  Duhalde arrived ten 
minutes early, and said, "Unlike others (read President 
Kirchner) I am always punctual." 
 
Still Bitter 
------------ 
 
3. (C) It was clear that Duhalde still feels he was slighted 
by the USG during his term as president.  He said the United 
States "disrespected us" and that President Bush would not 
even call him on the phone.  When President Bush finally 
called Duhalde in Davos, by then Duhalde said he recommended 
that the President get in touch with his successor.  Duhalde 
claimed that the U.S. had not paid attention to Latin America 
under the Bush Administration.  I disagreed with Duhalde's 
assessment, reminding him of the situation the U.S. faced 
after September 11.  Despite Duhalde's hurt feelings, he 
opined that President Bush's reelection would be "better for 
Argentina," since he has concluded that prospects for FTAA 
and free trade would be better under a Bush Administration. 
 
Toward a South American Union 
----------------------------- 
 
4. (SBU) Duhalde said South America is moving inexorably 
toward a "South American Union" which will be announced by 
the end of the year.  The goal will be to create a bloc like 
the European Union in South America, though Duhalde 
acknowledged that an EU-like entity is still "decades away." 
MERCOSUR will take the lead in forming this alliance. 
Duhalde sees no contradiction between a South American Union 
and FTAA.  Duhalde is also working with Argentina, Brazil and 
Paraguay to create a special fund to help Paraguay and 
Bolivia. 
 
FTAA 
---- 
 
5. (SBU) "We want free trade, but on fair terms," Duhalde 
proclaimed.  The WTO agreement in Geneva provides an 
opportunity for the elimination of subsidies, though Duhalde 
does not believe it will be easy.  But in Duhalde's view, 
FTAA is a must if Latin America is ever going to sustain 
economic growth and no longer be the region with the most 
inequality on the planet. 
 
Relationship with Kirchner 
-------------------------- 
 
6. (C) Regarding his reportedly rocky relationship with 
President Kirchner, "I want to help him," Duhalde assured.  I 
repeated President Bush's statement that the United States 
wanted Argentina and President Kirchner to succeed.  Duhalde 
agreed that Kirchner had to finish his term for the good of 
Argentina and its democracy.  As to Kirchner's supposed 
leftist ideology, do not be fooled by Kirchner's rhetoric, 
cautioned Duhalde.  He is essentially a pragmatist.  "Look at 
his cabinet," he said.  "They are all centrist or 
center-right," and he specifically mentioned Minister of 
Defense Jose Pampuro, Minister of the Presidency Alberto 
Fernandez, Minister of the Interior Anibal Fernandez, 
Minister of Health Gines Garcia and Minister of the Economy 
Roberto Lavagna.  What about Minister of Planning Julio De 
Vido?  "I don't know him well, but he's a classic Peronist." 
 
7. (C) In Duhalde's view, Kirchner has made a tactical 
mistake by placing himself on the center-left side of the 
political spectrum.  "He's not going to get many more votes 
on the Left," while he could lose considerably on the Right. 
Duhalde criticized Kirchner's disorganization and lack of 
punctuality.  He hopes Kirchner will learn the longer he is 
in office.  Until then, Duhalde sees no other choice but to 
help Kirchner.  Will Kirchner challenge Duhalde's control of 
BA province by running First Lady Cristina Fernandez de 
Kirchner (who runs well in the polls) for a Senate seat, as 
the press has speculated?  Not in your life, according to 
Duhalde.  Kirchner simply cannot afford the embarrassment of 
his wife losing a provincial election, so this will not 
happen.  Duhalde expects an agreement with Kirchner on the 
selection of provincial candidates for next year's election. 
 
Venezuela 
--------- 
 
8. (C)  Duhalde confirmed he will leave on Thursday for 
Venezuela, where he will be an electoral observer at the 
August 15 referendum.  He is convinced that "the only 
solution in Venezuela is a democratic one."  I agreed, and 
said that it was important that the referendum process be 
democratic and transparent.  Duhalde agreed.  That said, he 
believes from Argentina's perspective it would be better if 
Chavez won the referendum.  "Otherwise, there will be 
anarchy."  "Better to have stability in Venezuela than to 
have both Colombia and Venezuela in turmoil," he claimed. 
 
Other Countries 
--------------- 
 
9. (C) President Alvaro Uribe in Colombia is Duhalde's 
favorite president.  "Colombia's problem is our problem. 
When I was Menem's vice-president, I visited then-President 
Barco and delivered two (anti-guerrilla) aircraft to him," he 
recounted.  Elsewhere the region is in turmoil, including 
Peru and Bolivia.  Duhalde is impressed by Bolivian President 
Mesa but not by President Toledo of Peru. 
 
Comment 
------- 
 
10. (C) Duhalde was tanned (unusual in the Southern 
Hemisphere winter) and in good spirits.  He still feels 
Argentina and the Hemisphere owe him for keeping Argentina 
stable after the 2001-2 crisis.  Although he has said 
publicly he wants to retire from politics, it is clear he 
remains heavily engaged in day-to-day political events here. 
Despite his bitterness about perceived slights and his 
occasional anti-FTAA public pronouncements, I found him eager 
to maintain contact to compare notes on occasion. 
 
11. (C) As the strong man of Buenos Aires province, which 
contains one third of the Argentine population, Duhalde 
remains the second-most powerful political figure here after 
the President.  His public standing in the polls is still 
highly negative, as he is blamed by many for causing 
President De la Rua's downfall (something he vehemently 
denies), for the corruption of the Buenos Aires Province 
government and police, and by some in the Left for the death 
of two piqueteros during a demonstration while he was 
president.  Yet President Kirchner may have concluded that it 
is easier to govern by striking a deal with Duhalde.  There 
have been indications of late that Duhalde and Kirchner may 
agree on a common list of candidates for the important 2005 
national and local elections.  Under any scenario, Eduardo 
Duhalde will remain a force to be reckoned with in Argentina 
for some time to come. 
GUTIERREZ