SECRETARY GUTIERREZ MEETS PERU TRADE MINISTERS

C O N F I D E N T I A L LIMA 003109

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/24/2016
TAGS: PGOV ECON EFIN EINV ETRD PINR PE
SUBJECT: SECRETARY GUTIERREZ MEETS PERU TRADE MINISTERS


Classified By: A/POL David C. Brooks, for Reasons 1.4 (c,d)

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Summary:
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1. (C) Commerce Secretary Gutierrez warned both the outgoing
and incoming Peruvian Trade Ministers that the vote on the
U.S.-Peru FTA would be close. Ambassador Struble said that
the Peruvians needed to prepare "a game plan" to obtain
support in the U.S. Congress. Trade Minister Mercedes Araoz
promised to form a working group for this purpose within two
weeks. Ambassador Struble warned that, recent campaign
rhetoric aside, President Garcia would have to show his
unequivocal interest in an FTA during his upcoming visit to
Washington in the fall. Linking the FTA to enhanced U.S.
security and possibly encouraging President Garcia to travel
to sensitive areas of the U.S. and speak out in favor of the
agreement were among suggestions offered. End Summary.


2. (C) Commerce Secretary Gutierrez, Ambassador Struble,
Commerce DAS Walter Bastian and Commercial Counselor Margaret
Hanson-Muse met with outgoing Trade Minister Alfredo Ferrero
and incoming Trade Minister Mercedes Araoz on 7/27.


3. (C) Secretary Gutierrez emphasized the closeness of a
possible vote on the U.S.-Peru FTA and how important the
timing of the vote would be to its success. He noted that
chances for passage might be better following the November
elections in the U.S., when members would feel less political
pressure. In response to a question about ATPDEA extension,
the Secretary responded that it was not likely to happen
given the current mood in Congress. Ambassador Struble
stressed the need for the incoming government to develop "a
game plan" for the U.S. Congress so that, starting in
September, the FTA could gain traction in Congress.
Ambassador added that such a game plan should include U.S.
companies with interest in the treaty as well as proposals
for trade-capacity building within Peru. In response, Trade
Minister Araoz promised to set up a working group for this
purpose "in the next two weeks."


4. (C) Ambassador Struble stressed the importance that the
GOP be unequivocal in expressing its desire for an FTA.
Minister Ferrero acknowledged that during the recent
presidential election campaign "there had been some
ambiguity" in President Garcia's approach to an FTA, but that
this constituted a response to the realities of the campaign
(during which opposition candidate Ollanta Humala roundly
criticized the FTA). In the end, Ferrero noted, APRA
Congress representatives voted unanimously in favor of the
treaty in June. Ambassador Struble warned, nonetheless, that
President Garcia must be unequivocal in favor of the treaty
when he makes a planned visit to Washington this coming fall.


5. (C) Secretary Gutierrez asked both participants about
Peru's relationship to MERCOSUR. Minister Araoz said that
Peru was not participating in MERCOSUR at the moment and that
the Peruvians found Brazil a difficult trading partner with
which to negotiate. Both Trade Ministers stated Peru's
interest in linking up with bigger economies. Minister
Ferrero said that thanks to Andean Trade Preferences and Drug
Eradiation Act (ATPDEA) and other trade agreements, the
Peruvian economy had become more open, strengthening
constituencies that favor open trade.


6. (C) DAS Walter Bastian offered suggestions as to how to
promote the U.S.-Peru FTA in the U.S. Congress. He said that
free trade could be presented as enhancing U.S. security by
stabilizing U.S. neighbors and cutting illegal immigration by
promoting economic development. He also suggested that
President Garcia might visit areas of the U.S. where the
treaty is a sensitive issue and appeal to Congressional
constituents through the U.S. media.


7. (C) Minister Ferrero noted that the new pro-Fujimori bloc
in the Peruvian Congress, led by former President Fujimori's
daughter, Keiko (the leading vote-getter in recent
congressional elections),had added a likely pro-FTA voice to
Peruvian politics. President Fujimori himself had not
focused on trade, but Ferrero expected this group to view the
FTA favorably.
STRUBLE