NSC-DIRECTED COUNTRY-BY-COUNTRY REVIEW REGARDING

C O N F I D E N T I A L SANTIAGO 000876

SIPDIS

SIPDIS

STATE FOR WHA/CCA, WHA/BSC

E.O. 12958: DECL: 04/26/2016
TAGS: ETRD ETTC PREL CU CI
SUBJECT: NSC-DIRECTED COUNTRY-BY-COUNTRY REVIEW REGARDING
SUSPENSION OF TITLE III OF THE LIBERTAD ACT: UPDATE FROM
CHILE

REF: A. STATE 57782


B. 05 SANTIAGO 2560 AND PREVIOUS

C. 04 SANTIAGO 2760

Classified By: Deputy Chief of Mission Emi L. Yamauchi. Reasons: 1.4
(b and d).


1. (C) Post provides the following information in response to
Ref. A request. Responses are keyed to the specific
questions identified in Ref. A, paragraph 5. Ref. B is
Post's response to previous requests.

Nature of Investments
--------------


2. (U) The most significant private-sector Chilean investment
in Cuba has been made by the Chilean firm INGELCO, which is
involved in the production of citrus fruit juice (primarily
grapefruit juice). According to open-source information
posted on the Chilean Foreign Ministry website
(www.minrel.cl),INGELCO has a grapefruit production facility
in Matanzas, Cuba, and a production facility for long-life
milk in Sancti Spiritus. Its long-life milk production is
primarily for the Cuban domestic market. There are other
private Chilean companies that are reportedly considering
investments in the production of footwear, seaweed
processing, and pre-fabricated home construction. A
Chile-Cuba Chamber of Commerce was established in 1999.
Total private sector Chilean investment in Cuba is estimated
at USD 50 million, almost all of that in INGELCO,s juice and
milk production.

Bilateral Trade Agreements
--------------


3. (C) Chile and Cuba signed a partial trade agreement on
August 21, 1998 that calls for the reduction of tariffs on
some 750 Chilean products and 650 Cuban products. According
to the Chilean MFA, Chilean products that would be permitted
to enter Cuba duty-free included fresh tomatoes, jams,
chewing gum, apples, wines, plastic tubing, and some
industrial machinery. Neither country has ratified the
agreement. In November 2004, an MFA official told poloff
that neither Chile nor Cuba had taken the necessary "internal
steps" for the agreement to go into effect. This official
expressed doubt that Chile would do so "any time soon." (Ref.
C)

Exchange Programs
--------------


4. (U) Post is not aware of any formal exchange programs
between Chile and Cuba. However, in a press interview before
departing Santiago, former Cuban Ambassador Fraga said that
as Health Minister under President Lagos, Michelle Bachelet
had traveled to Cuba and signed cooperative agreements in the
areas of public health and medicine, and education and
professional exchange programs.


5. (U) On April 25, a Cuban newspaper quoted Cuba's Deputy
Minister of Culture, Abel Acosta, as saying he was optimistic
about the possibilities of culture exchanges with Chilean
institutions and peoples. Acosta reportedly made the
comments after attending a cultural event ("Festival of
Political Ideas and Culture in Defense of Humanity"). The
article does not mention any existing programs between Cuba
and Chile, nor does it indicate that Acosta concluded any
agreements during his visit.

Promotion of Human Rights and Democracy
--------------


6. (C) Relations between Chile and Cuba were strained during
the Lagos Administration (March 2000-March 2006). In one of
his first major foreign policy decisions, Lagos instructed
the Chilean mission in Geneva to vote in favor of the
resolution condemning Cuba's human rights record ) a
position that Chile maintained throughout Lagos'
administration. In response, Castro withdrew the Cuban
Ambassador to Chile for nine months. In early 2005, then
Deputy Foreign Minister Barros told us that President Lagos
accepted that Chile had "a problem" with Castro stemming from
Chile's support for such resolutions, which would remain the
case for the rest of his (Lagos') administration.


7. (C) Chile's past support for human rights resolutions
notwithstanding, the Lagos Administration consistently
opposed the U.S. embargo against Cuba, primarily on the


grounds that it hurt the well-being of the average Cuban.
Some members of Lagos' center-left governing Concertacion
coalition were sympathetic toward Castro and wished Chile had
pursued a policy of engagement with Cuba. In September 2004,
the GOC back-tracked on its commitment to invite Cuban
dissidents to Chilean national day receptions, arguing that
the GOC believed that engagement with Cuba had had a positive
effect, and that it would be difficult to maintain that
engagement if Chile invited dissidents.


8. (C) Compared to previous years, however, there were fewer
discernible counter-pressures from members within President
Lagos' governing coalition to pursue Castro-friendly policies
toward the end of the Lagos Administration. In early 2004,
four senators from the governing coalition visited Cuba and
met with dissident leaders. Upon their return to Chile, they
publicly expressed support for Cuban democracy activities,
further straining relations with Havana. The results of the
senators' meetings with activists, together with their
annoyance at how they were treated by the Cuban government,
lessened the pressure on Lagos to pursue a Castro-friendly
policy, according to then Deputy FM Barros. In April 2004,
in a 67-8 vote, Chile's Chamber of Deputies (comprised of
representatives from across the political spectrum) called on
the Chilean Government to support the UNHRC resolution on
Cuba. Chile's pique at Havana's public declarations
supporting Bolivia's sovereign maritime aspirations provided
additional reason for Chile to continue to support human
rights-related resolutions.

High-level Visits
--------------


9. (C) In late November 2005, Deputy Foreign Minister Barros
led a small Chilean delegation to Cuba for consultations.
Upon his return, Barros characterized his meetings with Cuban
Foreign Ministry officials as "light," commenting the Cubans
were more interested in "other countries in the region."
Barros lamented the across-the-board crackdown in Cuba,
commenting that the situation there appeared much worse than
in 1991-92, when he was last there.


10. (U) Former Cuban Ambassador Fraga told the Chilean press
in late December 2005 that a Chilean-Cuban "mixed commission"
met in Havana in July to discuss economic, technical and
science cooperation.

Outgoing Cuban Ambassador on State of Relations
-------------- --


11. (U) Several Chilean newspapers conducted interviews with
Fraga before he departed Santiago in late December 2005.
Fraga, who had served as ambassador to Chile for more than
five years, conveyed disappointment and frustration with
Chile-Cuban bilateral relations during the Lagos
administration. He openly acknowledged that Chile's support
for resolutions condemning Cuba's human rights record was the
primary source of the damage.


12. (U) Other noteworthy points mentioned in the press
articles:

--During his tenure in Chile, Fraga "practically never met"
with former Foreign Minister Soledad Alvear, who delegated
meetings with Fraga to Deputy FM Barros or lower-ranking MFA
officials.

--Fraga's relations with Chile's Socialist Party ended in
"failure" as a result of the Lagos Administration's support
for condemning Cuba's human rights record. In an interview
published in the June 2, 2006 edition of "Ercilla," Fraga
lamented that there were "political sectors (in Chile) that
would introduce one way or another the topic of Cuba in the
internal (Chilean) political agenda. Every time there was a
vote in Geneva, in Chile's Chamber of Deputies, sectors
within Chile's center-right opposition coalition and the
center-left governing Concertacion coalition would introduce
motions condemning Cuba's human rights practices."

--Cuba's attempt to develop ties with Chile's centrist party,
the Christian Democrats (DC),were also unsuccessful. In
2003, after accepting an invitation to travel to Cuba to meet
with Fidel Castro, Senator and DC Party President Adolfo
Zaldivar canceled the visit at the last minute after learning
that 78 Cuban dissidents had been detained.

--During his visit to Chile in 2004, Cuban FM Felipe Perez
Roque was unable to secure a meeting with Zaldivar. No


Chilean minister (including then FM Insulza) met with Perez
Roque. In the end, Perez Roque "had to" settle for a meeting
with then Under Secretary of War Gaspar, who had spent part
of his Pinochet-era exile in Cuba.
KELLY