Identifier
Created
Classification
Origin
05LIMA4773
2005-11-08 16:33:00
UNCLASSIFIED
Embassy Lima
Cable title:  

A NEW ANDEAN DIALOGUE

Tags:  ECON EFIN ENRG ETRD PE PGOV 
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081633Z Nov 05
UNCLAS SECTION 01 OF 02 LIMA 004773 

SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN ENRG ETRD PE PGOV
SUBJECT: A NEW ANDEAN DIALOGUE


UNCLAS SECTION 01 OF 02 LIMA 004773

SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN ENRG ETRD PE PGOV
SUBJECT: A NEW ANDEAN DIALOGUE



1. (U) Summary: In a meeting with Ambassador Struble, Andean
Community Secretary General Allan Wagner proposed several
ideas for strengthening the relationship between the United
States, the Andes and Latin America as a whole. The Andean
Community would play a central role in the process. Wagner
envisions three major areas of dialogue, drugs, terrorism and
energy security. Wagner provided some insight into the
evolving relationship between Venezuela and its Andean
neighbors. He also made a pitch for U.S. funding of Andean
Community trade capacity building projects. End Summary


2. (U) On November 4, Ambassador Struble hosted a meeting at
the residence with Ambassador Allan Wagner, Secretary General
of the Andean Community (CAN). Ambassador Wagner had just
returned from a series of meetings in Washington, and
Ambassador Struble asked for a read out of those meetings.
Advisor to the Secretary General Saul Pineda and an Embassy
Econ Officer also participated in the meeting.

Regional Malaise
--------------


3. (U) Coming on the day of the Summit of the Americas
meeting in Mar del Plata, Ambassador Wagner started the
meeting by expressing concern that there is a distance
growing between the United States and Latin America. He
attributed part of the cause for the distancing to the
unsteady democracy building process presently underway in
much of Latin America. He also pointed to the discontent
arising from the extreme economic inequality and the lack of
resources in the region to satisfy public demands for rapid
improvements in living conditions. Wagner observed that the
democracy building process would be long, but that headway
was being made.


4. (U) To reverse the slide in the relationship between the
U.S. and Latin America, Ambassador Wagner proposed engagement
on three main topics, drugs, terrorism and energy security;
issues that are central to both the U.S. and the Andean
countries. Wagner will raise his proposal during an upcoming
Inter-American Dialogue event.

Drugs, Thugs and Oil
--------------


5. (U) Regarding narcotics, Wagner observed that Peru and
Ecuador were seeing a &balloon effect8, as pressure was
being brought on Colombian producers. Ambassador Struble

expressed his own concern about the resilience of the drug
trade in Peru and the affect it was having on Peru in
general. He cautioned, however, that the projects focused on
the cocaleros were not entirely effective. He recommended
more focus on small business projects. On the subject of
terrorism, Ambassador Wagner suggested that one of the
central issues could be money laundering, which is widespread
in the region.


6. (U) Wagner appeared to see a new energy dialogue as a key
to a revived U.S.-Andean engagement and CAN,s role in the
process. Energy security will be a major concern to the U.S.
and the world economy for decades to come, and most of the
oil resources in Latin America were located in the Andes.
Wagner suggested that a new energy dialogue between the U.S.
and countries in the region could lead to improved relations
between the U.S. and Venezuela. He recommended that the
initial discussion agenda be small, in order to encourage
Venezuelan participation.

Wither Venezuela
--------------


7. (U) Venezuela was a central theme for most of the meeting,
although Wagner frequently referred to it obliquely. He
related how the Colombia-Venezuela relationship had been
central to the creation and development of the CAN, and
Colombian-Venezuelan bilateral trade has always made up the
majority of all inter-Andean trade. But Wagner pointed to a
deterioration of the relationship between the two countries.
At the same time, he noted a growing relationship between
Colombia and Peru, which will be fortified by the eventual
free trade agreement (FTA). Wagner suggested that a healthy,
active Colombia-Peru relationship would pay dividends
throughout the region.

The FTA and TCB and CAN,s Role
-------------- -


8. (U) While Wagner expects the relationship between
Colombia, Peru and Ecuador to be enhanced by the FTA, he
warned that the Andean countries do not have much experience
competing directly with developed countries such as the U.S.
Mexico experienced a drop in employment in the first stages
of the NAFTA, he stated. Ambassador Wagner sees a role for
the CAN in promoting trade capacity building so that the
countries can take advantage of the new opportunities. To
that end, he asked whether the U.S. could provide additional
funding to support CAN,s trade capacity building efforts.
Venezuela, however, is not part of the negotiations, which
presents a problem for the CAN. Wagner asked if some of the
proposed U.S. funding could be used in Venezuela. Ambassador
Struble responded that there would be several problems with
that approach.

9. (U) Ambassador Struble noted that the trade experience of
the Andeans countries has been varied, and the Andeans should
be learning from each other. Peru, for instance, was
experiencing a boom in some of its agricultural sectors.
Ambassador Struble suggested that CAN could provide a
valuable service by establishing best practices seminars. As
an example, he pointed out that Peru was having some success
developing agriculture along the sierra. The other Andean
countries could benefit from learning how Peru is linking
businesses on the coast with the sierra.
Energy Security
--------------


10. (U) Ambassador Wagner reported on energy meetings that
took place in Caracas, Venezuela. He stated that he did not
predict that any of the countries would alter their general
approaches to coincide of reinforce Venezuela,s policies,
implying that Chavez, oil diplomacy strategy was not working.


11. (U) Comment: Ambassador Wagner appears to be looking for
a mission of the CAN. He is correct in identifying drugs,
terrorism and energy as key interests for the U.S. and in the
region, but he was short on specifics about how and why
CAN,s role was necessary and indispensable. CAN can and
should play a significant role in trade capacity building,
but the inclusion of Venezuela presents a major obstacle.
Wagner is correct in seeing major changes for the Andeans in
the near future. The FTA will have a major impact, boosting
the economies of fostering economic reforms. It will also
likely accelerate the separation between the FTA countries
and Venezuela.
STRUBLE