PRIVATE SECTOR CALLS FOR DELAY OF FTA SIGNING

C O N F I D E N T I A L LIMA 001149

SIPDIS

SIPDIS

DEPT FOR WHA/AND, WHA/EPSC, EB/TPP/BTA
NSC FOR DAN FISK
USTR FOR AMB. PORTMAN, SUSAN SCHWAB, AND BENNETT HARMAN
COMMERCE FOR SECRETARY GUTIERREZ
STATE FOR DEPUTY SECRETARY ZOELLICK

E.O. 12958: DECL: 03/24/2016
TAGS: ETRD ECON PE
SUBJECT: PRIVATE SECTOR CALLS FOR DELAY OF FTA SIGNING

REF: LIMA 1096

Classified By: Ambassdor J. Curtis Struble for Reasons 1.4 (b) and (d)


1. (SBU) Summary. The debate on when to sign the U.S.-free
trade agreement has moved into the public forum, with
representatives from several pro-FTA business federations
publicly announcing that the signing of the agreement should
be delayed until after the first round of elections on April

9. An editorial published in "El Comercio," Peru's largest
daily, agreed with delaying the signing ceremony, but
emphasized that the current Peruvian Congress should ratify
the agreement before July 28 Presidential inauguration, as
many of the current Congressmen have first hand knowledge of
the agreement. End Summary.

Clear Message: Delay the Signing
--------------


2. (C) After several weeks of quietly pushing the GOP to
sign the free trade agreement after April 9, several pro-FTA
business organizations went on record March 20, arguing that
the GOP should wait until after the first electoral round in
order to depoliticize the agreement. The Presidents of
Confiep, Comex Peru, Lima Chamber of Commerce and the
Association of Peruvian Agroexporters commented that the U.S.
trade accord should not be a campaign issue, and an April 7
signing would effectively mobilize the anti-FTA camps. Jose
Chlimper, President of Comex Peru and former Minister of
Agriculture, highlighted that the Peruvian Government has not
yet planned what will happen after the signing ceremony. He
cautioned that the GOP should propose to Congress legislation
to compensate those in the agricultural sector who could be
injured by the FTA before the signing.


4. (SBU) The Association of Irrigation Farmers (JNURDP),
which is not a member of anti-FTA Conveagro (the largest
farmer's association in Peru),also publicly requested that
the GOP not sign the trade agreement before April 9. In a
March 23 advertisement published in several of Peru's largest
newspapers, the JNURDP stated that a signing ceremony before
April 9 would create an adverse political, social and
economic climate in Peru.


5. (SBU) Peru's largest newspaper, "El Comercio," ran an
editorial March 23 urging President Toledo to delay the
signing. The editorial explained that it would be better for
Peru if the agreement was signed after April 9, but ratified
by the current Congress before the inauguration of the next
president on July 28. Justifying its position, "El Comercio"
commented that many of the current Congressmen participated
in the FTA negotiations and have an understanding of the
issues at stake. A new Congress would have to start from
ground zero and may be more inclined to want to renegotiate
the agreement to obtain better terms for Peru.

Comment
--------------


6. (C) These public comments by our trade accord allies
reinforce what the Ambassador told President Toledo on March
16 (reftel): that the FTA adversaries are united but our
friends are divided. Instead of focusing on when the FTA is
signed, the GOP and private sector should jump start the
pro-FTA campaign, highlighting the benefits for Peruvians.
Regardless of when the agreement is signed, the Peruvians
will need to increase public understanding and support for
the agreement to ensure Congressional ratification before
July 28.

STRUBLE