US embassy cable - 98CARACAS3816

C O N F I D E N T I A L SECTION 01 OF 04 CARACAS 003816 
 
E.O. 12958: DECL: 12/14/08 
TAGS:  PREL, PGOV, VE, BR, AR, CI, CO 
SUBJECT:  CHAVEZ VICTORY LAP AROUND THE REGION 
 
REF: (A) STATE 233224, (B) BRASILIA 4779, (C) BUENOS AIRES 6552, 
(D) BUENOS AIRES 6606 
 
CLASSIFIED BY THOMAS A. SHANNON, POLITICAL COUNSELOR.  REASON: 
1.5(D). 
 
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SUMMARY 
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1. (U)  PRESIDENT-ELECT HUGO CHAVEZ PAID POST ELECTION COURTESY 
CALLS ON ARGENTINE PRESIDENT CARLOS MENEM, CHILEAN PRESIDENT 
EDUARDO FREI, BRAZILIAN PRESIDENT HENRIQUE CARDOZO, AND COLOMBIAN 
PRESIDENT CARLOS PASTRANA DURING A DECEMBER 15-18 WHIRLWIND 
REGIONAL TOUR OF BRAZIL (REF B), ARGENTINA (REFS C AND D), AND 
COLOMBIA.  DURING THE TRIP HE EMPHASIZED THE IMPORTANCE OF 
INTEGRATION, ANNOUNCED THAT VENEZUELA WOULD CONSIDER SEEKING ENTRY 
TO MERCOSUR INDEPENDENT OF ITS ANDEAN COMMUNITY PARTNERS IF ANDEAN 
PACT NEGOTIATIONS WITH MERCOSUR DID NOT SPEED UP, RESURRECTED THE 
IDEA OF CREATING A VENEZUELAN-BRAZILIAN BINATIONAL PETROLEUM 
COMPANY (LATER EXTENDING THE PROPOSAL TO COLOMBIA AS WELL), AND 
ANNOUNCED PRE-INAUGURATION PLANS TO VISIT THE UNITED STATES AND 
EUROPE TO ADVERTISE HIS GOVERNMENT'S OPENNESS TO INTERNATIONAL 
INVESTMENT.  IN COLOMBIA, CHAVEZ URGED THE COLOMBIAN INSURGENTS TO 
DISARM, AND "OPEN THE ROAD TO PEACE."  CHAVEZ' MERCOSUR REMARKS 
SPARKED CONTROVERSY AT HOME AND CONSTERNATION IN COLOMBIA.  HE 
SOUGHT TO SMOOTH RUFFLED FEATHERS BY CASTING HIS REMARKS IN LIGHT 
OF THE IMPORTANCE OF REGIONAL INTEGRATION, BUT LEFT CLEAR THAT 
VENEZUELA WOULD NOT ALLOW ITS RELATIONSHIP WITH MERCOSUR TO BE HELD 
HOSTAGE BY ANDEAN PACT NEGOTIATIONS.   END SUMMARY. 
 
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MERCOSUR A "STRATEGIC OBJECTIVE" 
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3. (U)  CHAVEZ BEGAN HIS TRIP ON DECEMBER 15 IN BRAZIL WHERE HE 
RAISED THE POSSIBILITY THAT VENEZUELA MIGHT UNILATERALLY SEEK TO 
JOIN MERCOSUR (REF B).  MEETING WITH MENEM AND FREI IN BUENOS AIRES 
ON DECEMBER 16, CHAVEZ DECLARED VENEZUELA'S INCORPORATION INTO 
MERCOSUR AS A "STRATEGIC OBJECTIVE" THAT WILL "CONTRIBUTE TO 
DEEPENING THE PROCESS OF LATIN AMERICAN INTEGRATION" (REF C).  THE 
PRESIDENT-ELECT PROPOSED THAT VENEZUELA'S INTEGRATION INTO MERCOSUR 
SHOULD OCCUR IN TWO PHASES, BEGINNING WITH AN AGREEMENT SIMILAR TO 
THAT OF CHILE'S, THEN MOVING FORWARD TO FULL INCORPORATION. 
 
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MERCOSUR STATEMENTS PROVOKE CONCERN 
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4. (U)  CHAVEZ' MERCOSUR COMMENTS IN ARGENTINA AND BRAZIL PROVOKED 
STRONG NEGATIVE REACTION AMONG VARIOUS QUARTERS IN VENEZUELA. 
PUBLIC REACTIONS REFLECTED CONCERN THAT VENEZUELA WILL RENEGE ON 
ITS OBLIGATIONS AS A MEMBER OF THE ANDEAN COMMUNITY TO NEGOTIATE AS 
A UNIFIED GROUP A FREE TRADE AGREEMENT WITH MERCOSUR.  FOREIGN 
MINISTER MIGUEL ANGEL BURELLI RIVAS--WHO SAID THE INTERNATIONAL 
PRESS MAY HAVE MISCOMMUNICATED CHAVEZ'S WORDS--SAID THE GOV HAS 
TREATY OBLIGATIONS WITH THE ANDEAN PACT WHICH IT CANNOT 
UNILATERALLY PUT ASIDE.  HIS CRITICISMS WERE REPEATED BY OTHER 
VENEZUELAN LEADERS OF COMMERCE AND INDUSTRY WHO URGED THAT 
VENEZUELA REMAIN IN THE ANDEAN COMMUNITY, EVENTUALLY NEGOTIATING 
INTEGRATION WITH MERCOSUR AS A BLOC. 
 
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SPECTRE OF ADJUDICATION AND SANCTIONS RAISED 
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5. (U)  THE PRESIDENT OF VENEZUELA'S FOREIGN TRADE COUNCIL, SILVANO 
GELLENI, SPECULATED THAT VENEZUELA COULD BE BROUGHT BEFORE THE 
ANDEAN COURT OF JUSTICE BY THE ANDEAN COMMUNITY IF IT WERE TO 
ATTEMPT UNILATERALLY TO JOIN MERCOSUR.  HE ALSO MENTIONED POSSIBLE 
SANCTIONS FOR VIOLATING THE AGREEMENT, INCLUDING THE IMPOSITION OF 
TARIFFS AND OTHER TRADE RESTRICTIONS.  THE VENEZUELAN CHAMBER OF 
COMMERCE (CONSECOMERCIO), THE VENEZUELAN-COLOMBIAN ECONOMIC 
INTEGRATION COMMISSION, THE FEDERATION OF CHAMBERS OF COMMERCE 
(FEDECAMERAS), AND THE ASSOCIATION OF VENEZUELAN CHEMICAL AND 
PETROCHEMICAL INDUSTRIES ALSO ISSUED STATEMENTS CRITICAL OF CHAVEZ' 
DECLARATIONS ON MERCOSUR, AND STRONGLY SUPPORTED CONTINUED 
COOPERATION WITH THE ANDEAN COMMUNITY. 
 
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REAFFIRMS ANDEAN PACT COMMITMENTS 
--------------------------------- 
 
6. (U)  FOLLOWING THESE CRITICISMS, CHAVEZ SAID HE WAS NOT 
ADVOCATING THE VIOLATION OF AGREEMENTS PREVIOUSLY ARRIVED AT WITHIN 
THE ANDEAN COMMUNITY.  HOWEVER, HE SAID THAT HE WOULD DO WHATEVER 
HE COULD TO ADVANCE THE INTEGRATION OF VENEZUELA AND THE OTHER 
MEMBERS OF THE ANDEAN COMMUNITY WITH MERCOSUR.  THE PRESIDENT-ELECT 
ALSO COMMENTED THAT HE WOULD BE MAKING A TRIP TO THE UNITED STATES 
AND EUROPE PROBABLY BEFORE HIS FEBRUARY 2 INAUGURATION TO PERSUADE 
INVESTORS THAT HE WAS NOT A "BRUTAL EXTREMIST."  HE ADDED THAT 
"INVESTORS FROM ANYWHERE IN THE WORLD ARE WELCOME," AND THAT HIS 
GOVERNMENT COULD USE THE INVESTMENTS TO REDUCE THE FISCAL DEFICIT 
AND HELP FINANCE THE CONSTRUCTION OF INFRASTRUCTURAL PROJECTS. 
CHAVEZ ALSO SAID HE WANTED TO FIND WAYS TO REDUCE VENEZUELA'S 
DEPENDENCE ON PETROLEUM EXPORTS BY STRENGTHENING THE AGRICULTURAL 
AND TOURISM SECTORS, AND BY DEVELOPING A PETRO-CHEMICAL INDUSTRY. 
 
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BINATIONAL PETROLEUM COMPANY WITH BRAZIL 
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7.  (U)  PRESIDENT-ELECT CHAVEZ PROPOSED TO BRAZILIAN LEADERS THE 
CREATION OF A BINATIONAL PETROLEUM COMPANY, CALLED "PETROAMERICA." 
FOREIGN MINISTER BURELLI REACTED POSITIVELY TO THE IDEA, BUT 
UNDERSCORED THAT IT WAS NOT ORIGINAL, AND HAD BEEN PROPOSED AT THE 
1994 SUMMIT OF THE AMERICAS IN MIAMI.  BURELLI EXPRESSED HIS HOPE 
THAT IDEAS INITIATED DURING HIS TERM, LIKE THE BINATIONAL PETROLEUM 
COMPANY, WOULD BECOME REALITIES DURING THE NEXT ADMINISTRATION. 
CHAVEZ FURTHER SPOKE OF VENEZUELA'S POTENTIAL IN THE AREAS OF 
AGRICULTURE, LIVESTOCK, AND TOURISM, AND THE POSSIBILITY OF 
MUTUALLY DEVELOPING THEIR SHARED BORDER AREAS. 
 
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RAPID ANDEAN INTEGRATION WITH MERCOSUR 
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8. (U)  CHAVEZ TRAVELED TO COLOMBIA ON DECEMBER 17 AND 18 WHERE HE 
CONTINUED TO PUSH THE THEME OF REGIONAL INTEGRATION, URGING THE 
ACCELERATION OF AN ANDEAN COMMUNITY AGREEMENT WITH MERCOSUR.  HE 
ADVISED A GROUP OF COLOMBIAN BUSINESSMEN THAT "WE CAN'T GET BOGGED 
DOWN IN TECHNICAL DISCUSSIONS WHILE THE WORLD ADVANCES."  COLOMBIAN 
BUSINESS AND GOVERNMENT LEADERS--CONSCIOUS OF THE VULNERABILITY OF 
ANDEAN ECONOMIES IN RELATION TO THE MORE MATURE ECONOMIES OF 
ARGENTINA AND BRAZIL--GREETED CHAVEZ' EXHORTATIONS CAUTIOUSLY.  IN 
AN EFFORT TO REASSURE COLOMBIAN INVESTORS, CHAVEZ GUARANTEED CLEAR 
RULES FOR INVESTMENT IN CONSTRUCTION, ENERGY AND TOURISM.  HE ALSO 
PROPOSED THE INCLUSION OF THE COLOMBIAN PETROLEUM COMPANY, 
ECOPETROL, INTO THE EVENTUAL ALLIANCE BETWEEN THE BRAZILIAN AND 
VENEZUELAN OIL CONCERNS. 
 
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CALLS ON COLOMBIAN GUERRILLAS TO DISARM 
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9. (U)  CHAVEZ ALSO ENGAGED THE ISSUE OF THE COLOMBIAN PEACE 
PROCESS, OFFERING HIS GOOD OFFICES TO FACILITATE THE PROCESS, BUT 
INSISTING THAT HE HAS NOT HAD DIRECT CONTACT WITH EITHER COLOMBIAN 
GUERRILLA GROUP.  COLOMBIAN INSURGENTS PUBLICLY PASSED THEIR 
RESPECTS TO CHAVEZ, EXPRESSING THEIR SATISFACTION AT HIS ELECTION, 
AND CITING HIS VICTORY AS "AN EXAMPLE FOR ALL OF LATIN AMERICA." 
CHAVEZ RESPONDED THAT HE HAD RECEIVED THEIR PUBLIC MESSAGES WITH 
"GREAT SENTIMENT, RESPONSIBILITY AND UNITY," AND THAT HE WOULD LIKE 
TO RETURN THE SENTIMENT, "BUT CARRYING THE SIGN OF PEACE."  HE 
URGED THE REBELS TO "DISARM AND HAVE THE COURAGE TO OPEN THE PATH 
OF PEACE."  FINALLY, CHAVEZ CALLED FOR A PROFOUND DIALOGUE AND 
ANALYSIS OF THE SITUATION IN COLOMBIA, VENEZUELA, AND THE ENTIRE 
CONTINENT." 
 
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STATEMENTS ON MERCOSUR CAUSE CONFUSION 
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10. (C)  CHAVEZ' VARIOUS STATEMENTS REGARDING MERCOSUR CONFUSED GOV 
OFFICIALS.  ECONOMIC COUNSELOR AND TRADE OFFICER MET DECEMBER 18 
WITH MINISTRY OF INDUSTRY AND COMMERCE DIRECTOR OF INTERNAL 
ECONOMIC RELATIONS JOSE ANTONIO MARTINEZ.  ECONOFFS ASKED IF 
CHAVEZ' COMMENTS IN BRAZIL INDICATED A "FOUR-PLUS-ONE" APPROACH TO 
VENEZUELA'S NEGOTIATIONS WITH MERCOSUR OR IF HIS COMMENTS IN 
COLOMBIA INDICATED A "FOUR-PLUS-FOUR" APPROACH.  MARTINEZ SAID HE 
DID NOT KNOW SINCE CHAVEZ' STATEMENTS APPEARED TO DEPEND ON "WHAT 
COUNTRY HE IS IN."  ECONOFFS THEN ASKED IF THE CHAVEZ TRADE 
TRANSITION TEAM LED BY MOVEMENT TOWARDS SOCIALISM (MAS) CONGRESSMAN 
GUSTAVO MARQUEZ INDICATED WHICH WAY CHAVEZ WAS LEANING.  MARTINEZ 
AGAIN SAID HE DID NOT KNOW.  "WE PROVIDE INFORMATION TO THEM," HE 
EXPLAINED, "BUT THEY DO NOT PROVIDE ANY INFORMATION BACK TO US." 
 
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ADVOCATES MEMBERSHIP IN MULTIPLE COMMUNITIES 
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11. (C)  CHAVEZ CLARIFIED HIS TRADE POLICY AT THE VENEZUELAN- 
AMERICAN CHAMBER OF COMMERCE (VENAMCHAM) GENERAL ASSEMBLY ON 
DECEMBER 19.  HE STRESSED THAT HE WOULD SEEK VENEZUELA'S MEMBERSHIP 
IN MERCOSUR, SIMILAR TO THE MEMBERSHIP OF CHILE AND BOLIVIA, WHILE 
MAINTAINING VENEZUELA'S ANDEAN COMMUNITY COMMITMENTS.  "IF BOLIVIA 
CAN BE A MEMBER OF MERCOSUR AND REMAIN PART OF THE ANDEAN 
COMMUNITY," HE ARGUED, "SO CAN VENEZUELA."  HE CONTINUED, "IF 
VENEZUELA CAN BE A MEMBER OF THE G-3 AND REMAIN A MEMBER OF THE 
ANDEAN COMMUNITY," HE CONTINUED, "IT CAN ALSO BE A MEMBER OF 
MERCOSUR." 
 
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PUSHED ANDEAN COMMUNITY TOWARD INTEGRATION 
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12. (U)  SHORTLY AFTERWARDS, CHAVEZ PRACTICALLY ISSUED AN ULTIMATUM 
REGARDING NEGOTIATIONS BETWEEN THE ANDEAN PACT AND MERCOSUR.  HE 
SAID IF TALKS TO ACHIEVE AGREEMENT BETWEEN THE TWO BLOCKS WERE NOT 
ACCELERATED, VENEZUELA WOULD TAKE THE SAME COURSE AS BOLIVIA AND 
JOIN MERCOSUR WHILE REMAINING A MEMBER OF THE ANDEAN COMMUNITY. 
CHAVEZ SAID VENEZUELA HAD A VISION WITH RESPECT TO THE GEOPOLITICAL 
ENVIRONMENT AND THE AGREEMENTS SIGNED WITH THE GROUP OF THREE (G- 
3), THE CARIBBEAN COMMUNITY COMMON MARKET (CARICOM), AND ANDEAN 
COMMUNITY.  "WE WILL ACCELERATE THE INTEGRATION PROCESS, WHICH I 
HOPE WILL TAKE PLACE AS A BLOCK," CHAVEZ SAID, "BUT THERE ARE OTHER 
OPTIONS."  HE NOTED, "SHOULD THE TALKS REMAIN DEADLOCKED, VENEZUELA 
WILL JOIN MERCOSUR WITHOUT LEAVING THE ANDEAN COMMUNITY." 
 
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COMMENT 
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13. (C) THE PURPOSE OF CHAVEZ' TRIP WAS TWO-FOLD:  EXTERNALLY TO 
ENGAGE IMMEDIATELY WITH KEY SOUTH AMERICAN COUNTRIES AND ALLAY 
FEARS RAISED BY CHAVEZ' PERSONAL HISTORY AND CAMPAIGN RHETORIC. 
DOMESTICALLY, TO PORTRAY CHAVEZ AS A PRESIDENT-ELECT WELCOMED IN 
SOUTH AMERICA'S MAJOR CAPITALS AND FOCUSED ON THE MAJOR AGENDA 
ITEMS IN REGIONAL DIPLOMACY. 
 
14.  (C) WITH THE EXCEPTION OF CHAVEZ' COMMENTS ON MERCOSUR, THE 
TRIP WAS WITHOUT INCIDENT.  FOREIGN MINISTRY OFFICIALS, WHOSE ROLE 
IN THE PLANNING AND EXECUTION OF THE TRIP WAS MINIMAL, WERE HAPPY 
THAT CHAVEZ SEEMED TO AGREE AND TO RATIFY CURRENT GOV POLICY TOWARD 
THE COUNTRIES VISITED.  SOME COMPLAINED THAT HIS MERCOSUR COMMENTS 
HAD UNNECESSARILY UPSET COLOMBIA.  HOWEVER, THEY NOTED THAT HE HAD 
MADE AN EFFORT DURING HIS VISIT TO BOGOTA TO SMOOTH WHATEVER 
FEATHERS HE HAD RUFFLED BY CASTING HIS MERCOSUR REMARKS IN LIGHT OF 
ONGOING REGIONAL ECONOMIC INTEGRATION. 
 
15.  (C) FROM OUR POINT OF VIEW, TWO ASPECTS OF THE TRIP WORTH 
NOTING ARE:  FIRST, THE TRIP DEMONSTRATES THE IMPORTANCE CHAVEZ 
PLACES ON REGIONAL ISSUES, AND HIS RELATIONSHIP WITH OTHER 
COUNTRIES.  HE IS CLEARLY EAGER TO BE ACCEPTED AS A MEMBER IN GOOD 
STANDING OF THE LATIN AMERICAN AND INTERNATIONAL COMMUNITIES.  THIS 
INDICATES THAT HE WOULD THINK TWICE BEFORE ADOPTING POLICIES OR 
POLITICAL MEASURES AT HOME THAT MIGHT OFFEND HIS DEMOCRATIC 
NEIGHBORS.  SECOND, CHAVEZ MADE CLEAR THAT HE WILL NOT ALLOW 
VENEZUELA'S RELATIONS WITH MERCOSUR TO BE HELD HOSTAGE BY ANDEAN 
PACT NEGOTIATIONS WHICH HAVE DRAGGED ON FOR THREE YEARS.  HE HAS 
PUT HIS NEIGHBORS ON NOTICE THAT THE GOV WILL TAKE A MORE ASSERTIVE 
ROLE WITHIN THE ANDEAN PACT, AND IS PREPARED TO ACT UNILATERALLY TO 
MEET NATIONAL INTERESTS. 
 
 
MASON