DEVELOPMENTS IN PERU'S RELATIONS WITH CHILE

C O N F I D E N T I A L LIMA 003807

SIPDIS

E.O. 12958: DECL: 09/01/2015
TAGS: PREL PE CI
SUBJECT: DEVELOPMENTS IN PERU'S RELATIONS WITH CHILE

REF: A. SANTIAGO 1551

B. LIMA 2226

Classified By: D/Polcouns Art Muirhead for Reason 1.4 (B, D)


1. (U) The Peruvian Ministry of Foreign Relations has posted
several items on its website documenting Foreign Minister
Oscar Maurtua's 8/23 visit to Santiago. Maurtua called on
GOC officials, including President Lagos and Senate President
Sergio Romero, as well as an extensive working meeting with
Chilean FM Ignacio Walker. The highlights of the
Maurtua-Walker meeting reportedly were the signing of an
agreement on transfer of pension funds (said to be of
potential benefit to 40,000 Peruvians residing in Chile); the
creation of a "Peru-Chile Social Integration Council"
including Peru's Ministers of Education, Health, Labor, and
Social Development, plus their Chilean counterparts; and the
signing of a 39-point Joint Declaration (also posted on the
website) documenting the issues discussed during the working
session. Contrasting the existing Foreign Affairs/Defense
consultation mechanism (Ref A) with the new Social
Integration Council, Maurtua noted that, "From the
traditional 2 2, we have evolved into a 4 4."


2. (U) At their press conference, the two Ministers
re-emphasized the themes addressed in their working session.
Both spoke out in support of energy integration and the
development of a South American gas pipeline network. Walker
referred to energy integration as one of three priorities
within the larger context of advancing toward a South
American Union, the other two being infrastructure creation
and development of a free trade zone. The Ministers were
also questioned about Peru's insistence on redefining the
maritime border, and essentially agreed to disagree, with
both affirming that the issue would not affect the overall
bilateral relationship.


3. (U) A less positive development, but one that was resolved
quickly, involved the incident that took place in the
Peruvian Congress on 8/25, following the presentation by new
Prime Minister Pedro Pablo Kuczynski (PPK) of his proposed
work plan. Ronnie Jurado, a Congressman from the southern
frontier department of Tacna, placed a Chilean flag over
PPK's desk, flamboyantly trying to make the point that he saw
Kuczynski as a lobbyist for Chile. Although PPK seemed
amused by Jurado's antics, Defense Minister Marciano Rengifo
was not, and he angrily reached over and threw the flag on
the floor, where it was retrieved by an usher and carried
out. Although Chilean officials initially expressed some
consternation about the incident, the matter was quickly put
to rest when Kuczynski, Minister Maurtua, Minister Rengifo
and President Toledo all offered apologies.


4. (C) Chilean Embassy Poloff Fernando Velasco told
D/Polcouns on 9/1 that Jurado's bizarre behavior during the
incident in the Congress had attracted only fleeting notice,
and that the GOC had considered Maurtua's visit to Santiago
to be generally positive, although not of major significance.
Velasco said that although the Chilean Embassy here was
encouraged that the GOP seemed to be looking ahead in the
relationship, rather than dwelling on past issues such as the
1995 arms sales to Ecuador (Ref B),there were still nagging
bilateral issues on which there was little progress. Besides
the maritime border matter, Velasco cited threats to LAN Peru
Airline's permit to operate here, an investment dispute over
the closing down of a Chilean-owned pasta factory on
environmental grounds, and doubts as to whether the GOP has
the political will to engage in serious free trade agreement
negotiations with Chile.


5. (SBU) COMMENT: Any positive movement in
Peruvian-Chilean bilateral relations is welcome after the
temporary freezing of ties earlier this year (Refs). New
Foreign Minister Maurtua's visit to Santiago, his first
official trip after taking office, demonstrates the priority
that the GOP is placing on improving relations with its
southern neighbor. The prompt rejection of Congressman
Jurado's inflammatory action by President Toledo, Prime
Minister Kuczynski, Foreign Minister Maurtua and Defense
Minister Rengifo is further evidence of the administration's
determination to keep bilateral links on an even keel. END
COMMENT.
STRUBLE