US embassy cable - 05ASUNCION786

UNCLAS ASUNCION 000786 
 
SIPDIS 
 
STATE FOR WHA/BSC AND EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR SCRONIN AND LYANG 
NSC FOR KIM BREIER 
TREASURY FOR OSIA MAUREEN WAFER 
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR 
COMMERCE FOR ITA SARAH COOK 
SOUTHCOM FOR POLAD DAN JOHNSON 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, MARR, MOPS, ECIN, PA, KICC 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, JUNE 11-17 
 
REF: ASUNCION 744 
 
 1.  (U) Summary 
----------------- 
 
-- MERCOSUR Summit to Focus on Economic Integration 
-- Flap Over U.S.-Paraguayan Military Exercises 
-- New Leaders in Congress 
-- Chavez to Address Congress but not Meet President 
 
MERCOSUR Summit to Focus on Economic Integration 
--------------------------------------------- --- 
2.  The 28th Mercosur Summit, focusing on economic 
integration and cooperation, is scheduled to take place 6/17 
to 6/20 in Asuncion (ref A).  Foreign Ministers will meet 
6/18-6/19 before the Presidents gather on 6/20.  According to 
the MFA, the Presidents of Argentina, Brazil, Uruguay, Chile, 
Ecuador, Colombia, Venezuela, Peru, and Panama will attend. 
Bolivia's President has not yet confirmed. President Nicanor 
Duarte Frutos will meet bilaterally with the Presidents of 
Argentina, Brazil, Chile, and Panama; Foreign Minister Leila 
Rachid will meet with her counterparts from Ecuador and 
Venezuela. 
 
Flap Over U.S.-Paraguayan Military Exercises 
-------------------------------------------- 
3.  A 6/13 article in the Argentine newspaper, El Clarin, 
criticizing the Paraguayan Senate's decision in May to extend 
immunities to participants in a variety of U.S.-Paraguayan 
military exercises -- scheduled to occur in the course of 18 
months from July 2005 to December 2006 -- and suggesting 
these exercises were a harbinger to creation of a U.S. base 
in Paraguay, prompted significant press treatment here on the 
issue.  On 6/14, FM Rachid and MOD Gonzalez gave a press 
conference defending the decision, qualifying it as 
consistent with GOP treatment of cooperation agreements with 
other countries and with Paraguay's commitments under the 
Rome Treaty.  In the press and during the 6/16 Senate 
plenary, many Senators similarly defended the decision 
extending to U.S. participants immunities granted to 
administrative and technical staff at the Embassy.  On 6/23, 
the Senate will vote on whether to grant U.S. participants 
permission to enter for these exercises.  There has been some 
talk of granting permission to enter in sixth month stints or 
for each individual exercise versus all of the exercises 
covered during the entire 18 months. Post will report with an 
update septel. 
 
New Leaders in Congress 
----------------------- 
4.  The Chamber of Deputies elected Congressman Victor 
Bogado, the candidate of President Duarte's ruling Colorado 
(ANR) party as its new President on June 16. Bogado won his 
seat with support from six dissident Congressmen from the 
opposition Authentic Radical Liberal Party (PLRA) and one 
from the Country in Solidarity Party (PPS).  In exchange for 
their support for Bogado, dissident Congressmen Luis Neuman 
(PLRA) and Lino Aguero (PPS) were elected as first and second 
Vice Presidents respectively. 
 
Chavez to Address Congress but not Meet President 
--------------------------------------------- ---- 
5.   Senate President Miguel Carrizosa and former House 
President Oscar Saloman have invited Venezuelan President 
Chavez to address a joint session of the Paraguayan Congress 
on June 20 during his visit to Paraguay in connection to the 
Mercosur Summit.  We are not aware that any other President 
has been invited to address the Congress.  We understand