CONGRESSMAN MEEKS DISCUSSES TRADE AND DEMOCRACY

C O N F I D E N T I A L LIMA 002366

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SENSITIVE
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USTR FOR AUSTR EEISSENSTAT AND BHARMAN,DEPT FOR WHA/AND,
EB/TPP, WHA/EPSC
COMMERCE FOR 4331/MAC/WH/MCAMERON

E.O. 12958: DECL: 06/08/2016
TAGS: ETRD ECON AA EINV PGOV PE
id: 67870
date: 6/13/2006 21:02
refid: 06LIMA2366
origin: Embassy Lima
classification: CONFIDENTIAL//NOFORN
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DE RUEHPE #2366/01 1642102
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R 132102Z JUN 06
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RUCPDOC/DEPT OF COMMERCE WASHINGTON DC


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C O N F I D E N T I A L LIMA 002366

SIPDIS

SENSITIVE
SIPDIS

USTR FOR AUSTR EEISSENSTAT AND BHARMAN,DEPT FOR WHA/AND,
EB/TPP, WHA/EPSC
COMMERCE FOR 4331/MAC/WH/MCAMERON

E.O. 12958: DECL: 06/08/2016
TAGS: ETRD ECON AA EINV PGOV PE
SUBJECT: CONGRESSMAN MEEKS DISCUSSES TRADE AND DEMOCRACY
WITH PRESIDENT TOLEDO

Classified By: Amb. Curt Struble for Reason 1.4 (b&d)


1. (U) Summary: During an official visit to Peru,
Congressman Gregory Meeks met with President Toledo to
discuss the Peruvian Trade Promotion Agreement (PTPA),
democracy and other issues. Toledo observed that the recent
shift towards populism in the region would be temporary and
the Chavez experiment would fail. He described the
Peru-U.S. relationship as deeper than just trade,
incorporating shared democratic values and a commitment to
eradicating poverty and fighting terrorism and
narco-trafficking. The trade accord would play a big role
in reducing poverty. End Summary.


2. (U) Congressman Gregory Meeks visited Peru on May 26 to 28
for meetings with some of Peru,s most important economic
sectors to discus the PTPA, democracy, poverty eradication,
the status of the Afro-Peruvian people and other issues.
President Toledo received Congressman Meeks at his home. The
Congressman's Legislative Director, Sophia King, and
Ambassador Struble accompanied him. The President was
joined by his Minister of Foreign Trade and Tourism, Alfredo
Ferrero, and by First Lady Eliane Karp. Septels will report
on the other meetings.

Shared Values
--------------


3. (U) President Toledo opened with the observation that the
U.S.-Peruvian relationship was not just about the Free Trade
Agreement; rather the two countries had shared values in
democracy, human rights, respect for freedom of the press and
separation of powers. The Free Trade Agreement is a piece of
the puzzle of poverty eradication, the President added. He
wanted history to judge him for having been on the right
side of that issue.

Poverty, Democracy and Hugo
-------------- -


4. (SBU) Toledo declared that the region was going through a
short-term swing of populism. Congressman Meeks noted that
he was one of the few members of the US Congress who had a
good relationship with Hugo Chavez, but added that Chavez,
was not offering Latin American countries a useful solution.
Toledo agreed, saying that the region was undergoing
turbulence related to the failure of political leaders,
including himself, to convert economic growth into social
development. This had created a progressive lack of faith in
democracy itself.


5. (SBU) Toledo said he had made some headway against
poverty, bringing down the number of Peruvians living on $2 a
day or less from 54 to 48 percent during his five-years in
office. In rural areas, that rate decreased from 77 to 68
percent. That was not enough, though, to arrest frustration.
The health of democratic government was tied to poverty
reduction. It was not an ideological issue, Toledo said,
nor one of capitalism versus communism; it was about jobs.


6. (C) Like Congressman Meeks, Toledo said, he was a friend
of Hugo Chavez, but he would not let Chavez destabilize the
region. "We either share the values of democracy or we do
not," Toledo said. The President complained that Chavez was
interfering with electoral processes by financing candidates
in Peru, Mexico, Bolivia and Nicaragua.


7. (SBU) Toledo emphasized that both the number of poor and
the rate of inflation were up in Venezuela. The poor cannot
protect themselves from inflation, he added. He said he took
a different route, looking toward the future rather than
engaging in populism and burning Peru,s foreign reserves.
The result was a tripling of Peru,s exports and a doubling
of its reserves.

Trade, Jobs and Drugs
--------------


8. (U) Toledo said that the United States and Peru also had a
strong common interest in fighting narco-trafficking. The

drug trade was financing terrorism in the Andean region, he
stated, and Peru needs to substitute jobs for coca
plantations. He said he wants the U.S. Congress to help him
free his people. Freedom was not just having the right to
vote, rather it required the capacity to choose. It meant
having an education, because if you could not defend your
rights, you were not free.

Trade, Labor and Opportunities
-------------- -


9. (U) Congressman Meeks said that he wanted to help, but
noted that some problems might come from the U.S. side rather
than from Peru. Some people in the U.S. believed that the
FTA might take advantage of the poor. These people were
particularly concerned about the issue of labor rights and
the lack of an enforcement mechanism in our trade agreements.
The were concerned that the next administration in Peru
might undercut progress the Toledo government had made in
that area.


10. (U) President Toledo said that he had talked to President
Bush and knew that the President believed in democracy. The
FTA was a partnership. Peru, Toledo said, did not deserve
charity but rather opportunity. The country was a member of
the International Labor Organization (ILO) and was fully
complying with the ILO commitments it had signed. He
recalled that he met with the Black Caucus and was impressed
with their concern for Peru. He wanted to assure them that
he would not allow anyone to take advantage of his country.

Venezuelan Meddling
--------------


11. (C) President Toledo spoke of Venezuelan President
Chavez, intervention in Peruvian politics, claiming that he
had put $6.5 million into the Peruvian Presidential campaign,
and another $16 million into Mexico's contest. Chavez wanted
leadership and had money, but the poor would become poorer
under the policies he was promoting. Toledo pointed to
Chavez' actions in Bolivia, saying that Brazilian President
Lula was very disappointed by the results. According to
Toledo, Chavez was also putting up money to create problems
in Peru, "100 Soles per family to create trouble".

The Legacy
--------------


12. (U) Toledo said that he was proud that he had not taken
the populist course and, according to the latest poll, his
approval rating was now at 52 percent. (Note: The highest
poll we have seen puts Toledo's approval rating at 32
percent. End Note) "I'm leaving a solid economy," Toledo
said, "with average growth over five years of 5.5 percent,
inflation of 1.5 percent, a fiscal deficit of .002 percent,
and market openings in China, the European Union, Chile and
Mexico."


13. (U) Congressman Meeks said that President Toledo enjoyed
the respect of many Democratic members of Congress, but some
of his colleagues were uncertain what would happen after
Toledo, since historically Peru,s presidents left the
country when their terms finished. Toledo said that he would
not go either to an international organization nor to
academia; "I'm going to be a soldier for democracy and
against poverty," he said. Congressman Meeks recommended
that he join forces with former President Clinton.

Passing the Trade Accord
--------------


14. (U) Congressman Meeks concluded the meeting by saying he
was uncertain before his trip whether it would be better to
approve the FTA now or wait until later in the year. He was
now convinced that the U.S. Congress needed to do it while
Toledo was still in office.

Comment: Peru On The Cusp
--------------



15. (U) A proud and reflective President Toledo provided a
broad case for the trade agreement and the strength of the
U.S.-Peru relationship. He described a country in
transition, leaving behind a turbulent past and on the cusp
of big advances in democratic stability and poverty
reduction. He sees the U.S.-Peruvian trade accord as a key
element if Peru is to advance.

Congressman Meeks' office did not clear on this cable.
STRUBLE

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