Cablegate: Chavez Victory Lap Around the Region

O 231833Z DEC 98
FM AMEMBASSY CARACAS
TO SECSTATE WASHDC IMMEDIATE 2621
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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"
--------------------------------

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
-----------------------------------

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
------------------------------------------

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

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