Identifier
Created
Classification
Origin
07LIMA417
2007-02-12 20:57:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Lima
Cable title:  

PERU GEARING UP TO HOST APEC 2008

Tags:  ECON APECO ETRD ASEC PE 
pdf how-to read a cable
VZCZCXRO5262
PP RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHPE #0417/01 0432057
ZNR UUUUU ZZH
P 122057Z FEB 07
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC PRIORITY 3949
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION 0009
RUEHBO/AMEMBASSY BOGOTA 4361
RUEHLP/AMEMBASSY LA PAZ 4032
RUEHQT/AMEMBASSY QUITO 1009
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
UNCLAS SECTION 01 OF 04 LIMA 000417 

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON APECO ETRD ASEC PE
SUBJECT: PERU GEARING UP TO HOST APEC 2008

REF: A. LIMA 210

B. 06 LIMA 4248

SUMMARY
-------

UNCLAS SECTION 01 OF 04 LIMA 000417

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON APECO ETRD ASEC PE
SUBJECT: PERU GEARING UP TO HOST APEC 2008

REF: A. LIMA 210

B. 06 LIMA 4248

SUMMARY
--------------


1. (SBU) Organizing the 21-member APEC events presents an
enormous challenge for Peru. The GOP recognizes the benefits
APEC can bring and is engaged in preparations, but Peru will
need substantial help from other APEC members. The GOP
already has an active High-Level Organizational Committee led
by the First Vice President, as well as a draft schedule of
2008 events that culminate the weekend before Thanksgiving
(see para 14). The primary logistical challenges are quality
hotel capacity and security in the 11 host cities. The USG
andother APEC friends have already begun to pitch in, but we
expect additional requests for assistance.


2. (U) As host, the GOP's message is that development is the
shared responsibility of governments, the private sector,
international financial institutions, media, and academia.
In addition to recurring APEC priorities, Peru hopes to focus
on improving education, bridging the digital divide, bringing
more businesses into the formal economy, forging
public-private partnerships, fomenting corporate social
responsibility, and increasing transparency in government.
APEC economies are of increasing importance to Peru, with
Peru's exports to APEC growing by 23 percent in 2006 to USD
13.6 billion (58 percent of total exports). In addition to
the pending U.S.-Peru Trade Promotion Agreement (PTPA),the
GOP has or is seeking trade deals with Chile, Singapore,
Canada, Australia, Mexico, and several other Southeast Asian
nations. The GOP shares most of our priorities for APEC, and
we should help showcase Peru as a democratic, free-market
model. End Summary.

IN OVER THEIR HEADS?
--------------


3. (U) Peru has never hosted an event close to the magnitude
of the APEC activities that begin October 2007 and conclude
with the summit in November 2008. The logistical challenges
are compounded by the GOP's ambitious intention to showcase
Peru and increase Peruvians' awareness of APEC by spreading
the activities beyond Lima to 10 other provinces. The MFA
predicts 15,000 visitors for the APEC events, including 4,000
for the concluding events in Lima, bringing in $15 million to

Peru. Diplomats from other APEC countries have expressed
some concern over the likelihood that the GOP will face real
resource and logistical problems hosting these events.

ROOM AT THE POSADA?
--------------


4. (U) A primary concern is that the host cities will not
have the necessary quality hotel capacity to welcome the
thousands of government, business, academic, and media
visitors. Early reservations will be crucial for every APEC
event. The GOP has not yet decided whether it or a
contractor will control reservations, or whether it will
simply issue a list of recommended hotels and let delegations
fend for themselves. November, the month selected for the
capstone events, is the peak month in terms of hotel
occupancy rates in Lima. Not wanting to harm their
bread-and-butter regular customers, Lima's best hotels are
already developing contingency plans, including advising
customers to reschedule trips and renting Lima apartments to
accommodate overflows.

GOP ENGAGED AND AHEAD OF SCHEDULE
--------------


5. (U) The good news is that GOP officials seem to have
recognized that a concerted national effort is needed to pull
this off successfully, and preparatory work is already
underway in several key areas. On January 25, the Prime
Minister presented a "High-Level APEC Organizational
Committee" presided by First Vice President Luis Giampietri
(who substituted for President Garcia at the APEC summit in
Vietnam),and composed of the Foreign, Trade/ Tourism, and
Economy/ Finance Ministers. There is also an APEC Executive
Committee headed by Vice Foreign Minister Gonzalo Gutierrez,
a Business Advisory Council and a CEO Summit organizational
team. Luis Quesada (former DCM in Washington, most recently
at APEC Secretariat in Singapore) is now the GOP's Senior
Official for APEC, as Ambassador Juan Carlos Capunay is
moving to Singapore to prepare for his role as Executive
Director of APEC in 2008.

LIMA 00000417 002 OF 004




6. (U) The APEC organizers have reached out to the regional
governments in host cities and to an array of chambers of
commerce. The GOP began working on English training for key
bureaucrats as well as for tourism and transport providers a
year ago. The GOP has completed its hotel assessment, named
its senior organizational team, and set the dates for the
2008 events well ahead of many previous APEC hosts.

BRING IN THE NAVY!
--------------


7. (SBU) Simultaneously providing security for the 21
leaders, not to mention ministers and other delegates, will
also be a major challenge for the GOP. The Peruvian National
Police (PNP) has been working on plans and training for the
APEC events since November 2006. At the GOP's request, the
State Department, through DS/ATA, is providing two training
seminars for a total of 75 police in February 2007. In
addition to the police, we are told the Peruvian Navy will
likely play a key security role. Vice President Giampietri
is a retired admiral, and his key assistants include navy
personnel. The GOP is likely to request additional USG
security training for non-police event organizers, and
perhaps for the Navy.

FRIENDS LENDING A HAND
--------------


8. (U) Peru's APEC friends have already begun to offer help.
For example, New Zealand is providing English-language
training and Canada is training MFA personnel on APEC topics.
In addition to USG-provided security assistance, the State
Department is planning on providing a speaker on US-Asia
relations for the November 2007 symposium launching APEC in
Peru, and the U.S. Department of Education is considering
organizing a seminar on 21st century human resource skills,
focused on English and information technology for 2008. USDA
has offered to organize a Food Defense Workshop in Peru for
May 2007, but the MFA has not identified such an event as a
priority. Post is actively engaged with the GOP's APEC team
and with Washington offices to determine what other
assistance the USG might provide.

THEMES: DEVELOPMENT, EDUCATION
AND COMPASSIONATE COMMERCE
--------------


9. (U) Peru has already selected "A New Commitment for
Asia-Pacific Development" as the theme for APEC 2008, and the
logos are ready. As part of this theme, the GOP plans to
stress that development is not only the task of governments,
but a shared responsibility with the private sector,
international financial institutions, media, and academia.
In addition to APEC priorities of free trade (including Doha
and an eventual East Asia Pacific Trade Agreement),
counterterrorism, technical cooperation, and energy, Peru
hopes to focus on "the social dimension." These issues, high
on the Garcia Administration's domestic agenda, include:
improving education, bridging the digital divide, bringing
more businesses into the formal economy, forging
public-private partnerships, enhancing corporate social
responsibility, and increasing transparency in government.


10. (U) The Small and Medium Enterprise Ministerial promises
to be especially interesting, as the active Production
Ministry is in charge of the event and is already working
with the energetic regional president to ensure that APEC
leaves a positive mark in host city Chiclayo (in northern
Peru). The GOP hopes to enlist private sector assistance in
transforming Chiclayo into a more important commercial hub
and Peru's first "digital city," linking together the local
and regional governments, a modern university, a new
commercial zone, and the downtown area through a broadband
network. The focus of the ministerial will be on obtaining
business licenses.

APEC REFORM
--------------


11. (SBU) Regarding APEC reform, an MFA official told us
that the GOP had opposed the creation of a permanent
Secretary General post because it did not want to give up the

SIPDIS
chance to lead APEC in 2008. After striking a deal in
Australia whereby any such reforms would take place after
2008, the GOP is now neutral on the subject. On APEC
expansion, Peru feels strongly that any new Asian members
must be counterbalanced by new Latin members. Peru is very

LIMA 00000417 003 OF 004


supportive of Colombia's desire to join APEC, and may use its
hosting in 2008 to support Colombia's participation as an
associate member of the Pacific Economic Cooperation Council
(PECC) or as an observer in some APEC meetings. See Ref B
for the GOP's views on this and other APEC priorities.

EXPORTS TO APEC GROW
--------------


12. (U) Improved political and economic relations with the
APEC countries are a Garcia Administration priority. Peru
exports to all of the 20 other APEC member economies, and 5
(the U.S., China, Canada, Chile, and Japan) are among Peru's
top 6 export destinations. Peru's exports of goods to APEC
members grew by 23 percent in 2006 to USD 13.6 billion (58
percent of total exports). Excluding the U.S., exports to
APEC increased by more than 42 percent to USD 8.2 billion.
Exports to China (excluding Hong Kong),Peru's number two
market after the U.S., increased from USD 1.87 billion to USD
2.27 billion. 2006 exports to Japan (USD 1.23 billion),
South Korea (USD 545 million),Thailand (USD 65 million),and
the Philippines (USD 45 million) were more than double 2005
totals. See Ref A for additional Peruvian export information.


13. (U) Peru expanded its partial trade agreement with Chile
in 2006, and a full agreement with the U.S. is pending
approval by the U.S. Congress. Free trade negotiations with
Singapore are well underway, and the GOP is seeking deals
with other Southeast Asian nations, Canada, Australia, and
Mexico.

CALENDAR OF EVENTS
--------------


14. (SBU) Following is the latest draft information we have
on upcoming APEC-related events in Peru. Some of these
dates/events have not been publicly announced.

DATE, CITY
EVENT

2007

Feb 19-24, Lima
2 DS/ATA Security Training Seminars for 75 Peruvian Police

End Oct, Lima
2nd Regional Anti-Corruption/Transparency Conference

Nov, Lima
Symposium to Launch APEC '08 (State to provide one speaker)

2008

Feb 8-10, Tacna
APEC Women Leaders (Gender Focal Point Network)

(t)Feb, Lima/Callao
(t)Customs Working Group

Feb 11-24, Lima
Senior Officials' Meeting (SOM) I

Feb 25-26, Iquitos
Security in APEC Trade (STAR)

Apr 9-11, Cusco
APEC Tourism Ministerial

May 19-28, Arequipa
SOM II

May 30-31, Arequipa
APEC Trade Ministerial (MRT)

Jun 9-11, Puno
International Assembly of Asia-Pacific Youth (APEC 2008 Youth
Camp)

(t)Jun, Ica
(t)Education Ministerial
(t)Seminar on Workplace Skills (English & IT, sponsored by US
Dept of Education)

Jun 19/20, Tumbes/Piura
APEC Academic Centers Network (Study Centers Consortium)

Aug 18-19, Piura

LIMA 00000417 004 OF 004


APEC Business Forum on Marine Resources

Aug 31-Sep 2, Chiclayo
APEC Small and Medium Enterprises (SME) Ministerial

Sep 3-14, Chiclayo
SOM III

Sep 29-30, Trujillo
APEC Finance Ministerial

(t)Oct, Lima/Ica
(t)APEC Health Ministerial

Nov 16-17, Lima
Final SOM IV

Nov 18-20, Lima
APEC Business Advisory Council (ABAC) Concluding Meeting

Nov 19-20, Lima
APEC Foreign and Trade Ministerial

Nov 21-23, Lima
APEC CEO Summit

Nov 22-23, Lima
XVI Summit of Asia-Pacific Leaders

COMMENT: U.S. ALLY PERU'S ONE CHANCE TO SHINE
--------------


15. (SBU) The GOP is eagerly anticipating that this event
will help focus the world's attention on an economically
vibrant Peru. Yet despite the country's strong macroeconomic
performance over the past five years, the GOP will need
considerable assistance for this event. Peru is one of our
closest allies in South America. Beyond our pending
U.S.-Peru Trade Promotion Agreement (PTPA),Peru sees
eye-to-eye with us on almost every APEC issue. The Garcia
Administration has made a policy commitment to combat poverty
through increased opportunity for trade. APEC 2008 will help
showcase Peru as an attractive alternative to more radical,
anti-market approaches in the region. We can use the
opportunity provided by Peru's hosting of APEC in 2008 to
advance our own APEC agenda, collaborate on opening Asian
markets, and strengthen the pro-market governments of the
Western Hemisphere's Pacific Coast.
STRUBLE