EU AMBASSADOR PROVIDES READOUT ON SOUTH AMERICAN

UNCLAS SECTION 01 OF 02 LIMA 003341

SIPDIS

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E.O. 12958: N/A
TAGS: SNAR PREL ETRD PTER EU PE
SUBJECT: EU AMBASSADOR PROVIDES READOUT ON SOUTH AMERICAN
VISIT OF EU EXTERNAL RELATIONS COMMISSIONER

REF: LIMA 3208

Sensitive But Unclassified. Please Handle Accordingly.


1. (SBU) SUMMARY: Ambassador met with EU Ambassador Mendel
Goldstein on 7/27 to convey concerns about statements
attributed to EU External Relations Commissioner Benita
Ferrero-Waldner that appeared to criticize U.S.
counternarcotics policies in the Andes. Goldstein stated
that Ferrero-Waldner's trip was designed to send a strong
political message of the EU's continued interest in the
region, with the Peru portion focusing on narcotics, trade
and development assistance. Goldstein argued that the media
improperly interpreted Ferrero-Waldner's statements on
narcotics issues as undercutting USG/GOP drug policies, but
was not convincing. He added that in Brazil, a planned
meeting with President Lula fell through, but agreement was
reached on holding Ministerial meeting in Brussels 9/2 to
re-energize EU-MERCOSUR free trade agreement talks. END
SUMMARY.


2. (SBU) According to Goldstein:

-- Ferrero-Waldner's visit was intended to send a strong
political message to Latin America as a whole of her personal
interest in the region, in response to Brussels' perception
that South America perceives the EU as refocusing its
attention on Asia to the detriment of the new world.

-- The Brazil portion was not very successful as a planned
meeting with Lula fell-through due to the latter's domestic
troubles, and the chief practical outcome was agreement to
hold a ministerial-level meeting in Brussels on 9/2 in an
attempt to re-energize the EU-MERCOSUR free trade agreement
negotiations.

-- The Lima portion was divided between the Andean Community
of Nations (CAN) and the GOP.

-- Ferrero-Waldner was not able to meet with the CAN
Presidents because Colombian President Alvaro Uribe requested
a last-minute shift in the date of the Presidents' meeting
due to his own trip to Europe, but she did meet with the CAN
Foreign Ministers.

-- The EU and CAN reached agreement last January on an "FTA
evaluation process." They had a follow up meeting in Lima in
the spring. The CAN Presidents agreed to meet before
December to discuss how they can meet the EU's minimal
conditions for FTA negotiations and to establish a program.
(COMMENT: Most daunting of the minimal conditions is that
Andeans have not been able to harmonize tariffs. END
COMMENT.) There will be a third meeting in November either
in Caracas or Lima. A mixed EU-CAN commission is to meet in
December. If its evaluation is positive, announcement of the
start of FTA negotiations would likely be made at the May
2006 EU-Latin America Summit in Vienna.

-- The Peru bilateral sessions were designed to pay tribute
to the GOP for maintaining an island of stability in the
Andean region, and the agenda focused on narcotics, trade,
and the future of development assistance.

-- Ferrero-Waldner received a warm reception, met with
President Alejandro Toledo and senior officials, and the
visit as a whole met expectations.

-- The London terrorist attack influenced the narcotics
discussions. Toledo referred to them in launching a
reflection on Peru's experience with terrorism, an experience
that left him convinced that the problems of narcotics
trafficking and terrorist violence are firmly linked.
Ferrero-Waldner agreed and suggested that these links be
analyzed with a view towards cutting them. She mentioned EU
cooperation with the U.S. in the G-8 to find a solution,
emphasizing the need for a global approach. She then
proposed that this be a priority item for the EU-Latin
America Summit.
-- On antinarcotics efforts, Ferrero-Waldner called for a
more "innovative and coherent" approach, one that goes after
money laundering and precursor chemicals, as well as other
police actions.


3. (SBU) The Ambassador noted that the local media had
quoted Ferrero-Waldner as saying that Peru and the
international community had to come up with a better response
to narcotics than "chasing peasants around," remarks that had
been interpreted widely as a criticism of eradication of coca
crops. The Ambassador told Goldstein this was unfortunate
because it appeared to drive a wedge between the U.S. and EU
positions. The Ambassador added that even more important,
USG experience is that general development programs that are
not accompanied by a credible threat that illegal coca crops
will be eradicated are ineffective in reducing leaf/narcotics
production.


4. (SBU) Goldstein claimed that Ferrero-Waldner did not say
anything against eradication, though he admitted she observed
that it is not having the results that were expected. He
said that she also expressed concern about the social aspect
of the cocalero condition, declaring that they should not
feel stigmatized. The EU, Goldstein continued, believes that
income replacement in coca regions is difficult, given the
poor agricultural conditions that are usually found.
Therefore, general development is needed to generate
alternatives.


5. (SBU) COMMENT: Despite Goldstein's effort to minimize
differences, we believe the press accurately captured what
Peruvian authorities think they heard from Ferrero-Waldner.
The EU office in Lima generally has strong donor coordination
with us and Goldstein does not/not try to play up our
disagreements in the press. However, other members of the EU
office regularly try to put light between themselves and our
more muscular policy, something that does cause difficulties
for us, particularly in the coca zones. END COMMENT.
STRUBLE