APEC: PERU SUPPORTS CTTF EXTENSION, OPPOSES

C O N F I D E N T I A L SECTION 01 OF 02 LIMA 003489

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/31/2016
TAGS: ECON APECO ETRD PTER PE
SUBJECT: APEC: PERU SUPPORTS CTTF EXTENSION, OPPOSES
PROFESSIONAL ED

REF: A.STATE 139460 B.LIMA 3068 C.STATE 121653

Classified By: Deputy Econ Counselor Howell Howard, Reasons 1.4 (b) and
(d)


1. (C) Summary: The GOP supports an extension of APEC's
Counter-Terrorism Task Force, and suggests Thailand as a
possible new chair. The GOP generally agrees with the USG's
priorities for APEC 2006, with one notable exception: the
GOP strongly opposes the creation of a professional Executive
Director position that would "rob" Peru of its right to that
position as chair in 2008. The GOP also opposes granting
India membership in APEC without adding a Latin American
economy to maintain balance (e.g. Colombia and/or Ecuador).
The GOP may also request a bilateral meeting between
President Bush and President Garcia in Hanoi. GOP priorities
for APEC 2006 include: Doha, security, technical
cooperation, trade facilitation and liberalization,
anti-corruption, and small and medium enterprises. End
Summary.


2. (SBU) On August 28, Econoff delivered Ref A demarche
seeking support for a two-year extension of the Asia-Pacific
Economic Cooperation (APEC) Forum's Counter Terrorism Task
Force (CTTF) to the GOP's lead on APEC issues, Ambassador
Juan Capunay of the MFA's Asia/Pacific Subsecretariat.
Econoff and Amb. Capunay also discussed Ref C points on the
USG's and GOP's priorities for APEC 2006 (See Ref B for Trade
Ministry's comments on Ref C).

COUNTER-TERRORISM TASK FORCE
--------------


3. (SBU) Amb. Capunay said that "of course" Peru supports
extension of CTTF's mandate. He even said Peru would apply
for the CTTF chair position if it were not precluded from
doing so because Peru will chair Economic and Technical
Cooperation (ECOTEC) in 2007, in preparation for assuming the
APEC chair in 2008. Noting that Indonesia and the
Philippines had already served as CTTF chair, he suggested
Thailand as a possible candidate that had experience with
terrorist attacks and was not chairing any other committees.

APEC EXECUTIVE DIRECTOR
--------------


4. (C) Amb. Capunay had very strong opinions regarding the
creation of a permanent Executive Director position. He said
the President of Peru had already approved the Peruvian who
would head the Secretariat in 2008. He called plans to "rob"
Peru of its "right" to chair as host in 2008 "offensive and
unfriendly." He noted that the Peruvian chair would be the
main advisor to the Peruvian President on APEC matters
leading up to and during the ministerial and leaders' meeting
in Lima. He said that person would be a crucial link between
the GOP and APEC, and that the selection of an outsider would
complicate preparations for the 2008 meetings. He also
explained that the GOP was using APEC as an impetus for
domestic policy reform, including decentralization, at both
the national and regional level.


5. (C) Amb. Capunay mentioned that candidates for the
proposed Executive Director position included a Singaporean
and someone from the Balkan region (which, he noted, is not
even a member of APEC). He urged that if members agree a
professional Executive Director was the way to go, that it
not take effect until 2009 (when Singapore will be the host).
Amb. Capunay said he had already discussed Peru's views on
this with Amb. Michalak and the Australian Ambassador.

APEC REFORM & NEW MEMBERS
--------------


6. (SBU) Amb. Capunay said the GOP felt APEC reform must be
real political reform, and not just cosmetic. He said there
was currently a divorce between the leaders' meetings and the
Senior Officials Meetings (SOMs),where the SOMs did not
always implement the leaders' decisions. The GOP supports
strengthening the link between the leaders, the SOMs and the
committees. Amb. Capunay said that instead of the creation
of a professional Executive Director position, the GOP
supports the original USG proposal of creating a Deputy
Director position (business or management-oriented) under the
Executive Director. He maintained that the Executive
Director position should continue to be filled by a political
appointee, as only someone with political clout could
effectively communicate with member economies' governments.


7. (C) Amb. Capunay said the GOP supported lifting the
moratorium on new APEC members, and had spoken to that effect
for the past several years. He said Australia was now
supporting a lift in order to admit India, which doesn't even

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have a Pacific coast. The GOP is not opposed to adding
India, as long as the principle of regional balance is
maintained and one or two (given India's size) Latin American
economies are also admitted. Amb. Capunay said Peru would
back the entry of Colombia and Ecuador, while the Central
Americans would likely support adding Panama or Costa Rica.
He said that APEC operated by consensus, and that none of the
Latin American countries would support adding India without
also adding a Latin economy.

POSSIBLE BILAT REQUEST IN HANOI
--------------


8. (SBU) Even though President Bush will meet President
Garcia in October in Washington, the GOP may also request a
bilateral meeting on the margins of the APEC meeting in Hanoi.

TRADE AND DOHA
--------------


9. (SBU) Amb. Capunay made clear that Peru is committed to
making Doha a success, and would support any APEC initiatives
to that effect. However, he said that APEC members should
have a contingency plan in case Doha completely fizzled. He
said that the GOP was paying special attention to this in
preparation for hosting APEC in 2008. If Doha fails, the GOP
supports an Asia-Pacific Free Trade Agreement (FTA) as an
alternative. He noted such and FTA would have to be binding
(unlike most APEC decisions),unless it was based on "best
practice" norms that members would voluntarily work towards
(he cited the World Bank's Multilateral Investment Guarantee
Agency, or MIGA, as such an arrangement).

ANTI-CORRUPTION
--------------


10. (U) Amb. Capunay said that anti-corruption initiatives
were one of Peru's 2006 priorities, and would also be a key
theme when Peru hosts in 2008. He said the GOP would ask the
USG to co-sponsor a concept paper at SOM-III on
anti-corruption. The GOP also hopes anti-corruption will be
reinforced in the text of the ministers' or leaders' meeting
this year as well. In preparation for addressing
anti-corruption in 2008, Peru would like to host a meeting on
anti-corruption in November 2007. The GOP has already
exchanged letters to that effect with the American Bar
Association, Transparency International, Interpol, the United
Nations, media, and the State Department (David Luna).

OTHER GOP PRIORITIES
--------------


11. (U) Amb. Capunay listed GOP priorities for APEC 2006 as:
Doha, security, technical cooperation, trade facilitation and
liberalization, anti-corruption, and small and medium
enterprises. For APEC 2008 in Peru, the GOP plans to
prioritize: bridging the digital gap, biodiversity, small
and medium enterprises, Doha or a Doha alternative, and
anti-corruption.
STRUBLE