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