US embassy cable - 05ASUNCION1025

UNCLAS SECTION 01 OF 02 ASUNCION 001025 
 
SIPDIS 
 
STATE FOR WHA/BSC AND EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR LYANG 
NSC FOR SUE CRONIN 
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, PHUM, PREL, KCRM, ETRD, PA 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, AUGUST 7 - 
AUGUST 13 
 
1. (U) SUMMARY: 
--New Mission Chief to Cuba is Pro-Castro 
--Venezuelan Investment in Paraguay 
--Drugs, Thugs, Guns and Money 
--31 Small Economies Discuss Access at WTO 
 
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New Mission Chief to Cuba is Pro-Castro 
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2. (U) Luis Domingo Laino, son of Senator Domingo Laino, was 
nominated to be the Paraguayan Chief of Mission to Cuba.  The 
official designation awaits signature approval, which is 
merely a formality.  Senator Laino, a member of the Authentic 
Radical Liberal Party (PLRA), is known for his hostile views 
against U.S. policies, including Iraq.  Senator Laino is 
pro-Cuba and during the Venezuelan President Hugo Chavez 
visit, he met with Chavez. 
 
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Venezuelan Investment in Paraguay 
--------------------------------- 
3. (U) The Venezuelan government recently announced its 
desire "to do whatever it takes" to upgrade Paraguay's only 
oil refinery to handle five (5) times its current capacity, 
ideally lowering the price of fuel.  An increased refining 
capacity would presumably allow the GOP to better process 
Venezuelan crude oil.  The Venezuelan Ambassador to 
ParaguayJose Huerta Castillo also expressed his country's 
interest in buying several unused cooking oil factories.  He 
said that a Venezuelan governmental fund dedicated to 
investments in the Southern Cone would provide funding, and 
emphasized the job creation possibilities of the investment. 
He asserted that the factories would initially be owned by 
Venezuela, but that over time the workers themselves would 
gain ownership.  The Venezuelan Ambassador stated that the 
Venezuelan government wants to contribute to the 
strengthening of Paraguay,s energy sector. 
 
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Drugs, Thugs, Guns and Money 
---------------------------- 
 
4. (SBU) On August 11, Paraguay's National Anti-Drug 
Secretariat (SENAD) and Chilean law enforcement with the 
 
SIPDIS 
assistance of Bolivian authorities, conducted joint 
operations to capture members of an international drug ring 
as part of a controled delivery.  Law enforcement officials 
in Santiago, Chile apprehended 13 suspects and seized two (2) 
tons of marijuana.  SENAD arrested 11 in Asuncion and Colonel 
Oviedo, seizing 371 kilograms (kg) of marijuana in Colonel 
Oviedo and 337 kg in Asuncion.  Additionally, SENAD seized 
four (4) vehicles, weapons, and currency.  This operation 
began in Santiago in June when authorities learned of the 
truck hauling the drugs.  The operation demonstrated 
excellent cooperation and strenthened intelligence sharing 
among Paraguay, Bolivia, and Chile. 
 
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31 Small Economies Discuss Access at WTO 
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5. (U) On August 9 and 10, the United Nations Office of the 
High Representative for the Least Developed Countries, 
Landlocked Developing Countries and Small Island Developing 
States (OHRLLS), organized a conference of thirty-one (31) 
countries in Asuncion to establish a common position to be 
delivered during the December 2005 World Trade Organization 
(WTO) ministerial meeting in Hong Kong, China.  Those 
positions include: 
 
--Current WTO provisions on "freedom of transit" should be 
further strengthened and operationalized to improve the 
access of landlocked developing countries to world markets 
through their transit neighbors in the most efficient and 
cost effective manner. Transit services should be further 
liberalized to encourage competition, and transit rules and 
regulations should be simplified, harmonized, streamlined and 
made transparent. 
--Technical assistance is needed to help landlocked economies 
recover from loss of market share in textiles, following the 
December 31, 2004 expiration of the Agreement on Textiles and 
Clothing. 
 
--Simplified and streamlined accession procedures should be 
extended to the nine (9) landlocked developing countries that 
are not yet WTO members. 
KEANE