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08SANTIAGO1124 2008-12-19 18:34:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Santiago
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1. (SBU) SUMMARY: Representatives Meeks, Ryan, and Hinojosa
underlined the success of the U.S. - Chile Free Trade Agreement to
Chile's de facto trade minister. DG Furche echoed their assessment,
noting the positive impact of the FTA on Chile. He cited many signs
of the benefits of free trade to both countries, including growth of
almost 300% in exports to and imports from Chile. The Congressmen
urged Chile to spread the message about its successful economic and
democratic model throughout the region. They also encouraged Chile
to highlight support for the Colombia FTA. Furche explained Chile
had been vocal about its support for the Colombia FTA and would
continue to be so. Furche also noted Chile's top multilateral
priorities: the Pathways for Prosperity and the Trans-Pacific
Partnership. Representative Meeks said the Congress was considering
the creation of a Latin America Caucus. Furche said Chilean
officials would be delighted to work with the proposed Caucus. END

2. (U) Representative Gregory Meeks(D-NY), Representative Paul
Ryan(R-WI), Representative Ruben Hinojosa(D-TX), Ambassador, Ms.
Sophia King, CAPT Joe McClain, Econoff, and Poloff met December 16
with DIRECON Director General Carlos Furche, Head of Market Access
Division Paulina Nazal, and Head of North America Division Sandra
Ramos. Furche serves as Chile's de facto trade minister, although
he is technically under MFA purview.

U.S. - Chile FTA a Model to the Region


3. (SBU) Representative Meeks explained the U.S. and Chile shared
the view that their FTA is a success. Both countries had netted
positive results because of the agreement, including the creation of
many jobs. Meeks noted all three members of the delegation had
voted for every major FTA in the last 10 years, including with
Chile. He predicted the Obama Administration's view of the
importance of trade would continue to complement Chile's
perspective. Meeks called for better enforcement of Intellectual
Property Rights (IPR) protections. In every other area of the FTA
both countries could demonstrate impressive gains. Meeks said the
FTA could serve as a model to the region.

4. (SBU) Representative Ryan similarly cited the FTA as a model of
success that should be replicated across the continent. He also
emphasized the importance of respecting IPR. He asked about the
access of Class III dairy products to the Chilean market and noted
he had heard about the existence of non-tariff barriers. Ryan hoped
to replicate the success of resolving access for U.S. beef products
with cheese products. Paulina Nazal responded she was unaware of a
problem, as the topic had not been raised during the recent Free
Trade Commission, December 12. She promised to look into the issue.

5. (SBU) Representative Hinojosa noted Chile was an attractive
trading partner. He was impressed with Chile's investment in
education, which he predicted would yield "a 3-fold return." The
U.S. was considering a major initiative to invest in infrastructure
across the country. Hinojosa thought this might benefit Chile,
especially in terms of copper exports.

6. (SBU) DG Furche agreed the FTA had a significant positive impact
on Chile. The volume of trade in both directions had increased by
almost 300%. The U.S. was likely to enjoy a trade surplus with
Chile in 2008. In fact, all indicators pointed to a successful
agreement. The number of enterprises involved in trade, the number
of products traded, and their volume and value were all increasing.
Furche noted Chile had just hosted the Fifth Free Trade Commission
in Santiago, December 12. He said there were no major issues
concerning implementation of the FTA, although there were always
improvements that could be made. The U.S. and Chile had even begun
to accelerate tariff elimination for certain products.

Chile Can Encourage Approval of Colombia FTA


7. (SBU) Representative Meeks said he was a proponent of the U.S. -
Colombia FTA pending before Congress and was cautiously optimistic
it could be passed. However, it was critical to have the input of
other Latin American countries. He hoped members of Congress would
also visit Colombia to see for themselves how violence was down and
efforts to reduce poverty were succeeding. Although there was still
a lot to be done, such as on environment and indigenous peoples
issues, Colombia had made significant progress. Meeks had

encouraged heads of state in the hemisphere to communicate with
President-Elect Obama about the importance of the FTA to the region.
Meeks urged Furche to pass this message to President Bachelet.

8. (SBU) Furche assured Meeks the GOC (at all levels, including
President Bachelet) had and would continue to express Chile's
support for the Colombia FTA. Representative Ryan asked how Chile
and public opinion would react if the Colombia FTA did not pass.
Furche thought it would send a negative signal to the region. There
was a split in the hemisphere between countries that espoused the
democratic and open-market economy model (e.g., Brazil, Chile,
Colombia, and Peru) and those that had turned away from that model
(e.g., Argentina, Bolivia, Ecuador, and Venezuela). The position of
the latter group could only be reinforced if the U.S. Congress
failed to approve the Colombia FTA. Public perception of U.S.
interest in the region would also suffer.

9. (SBU) Representative Hinojosa called for more awareness on issues
related to indigenous peoples and poverty. It was a key issued that
could affect voting on the Colombia FTA. Furche responded by noting
poverty in Chile had been cut from 42% in 1990 to 13% in 2007, due
in no small part to the U.S.-Chile FTA. He believed this was the
most successful example of poverty reduction in Latin America.
Representative Meeks said Chile could encourage passage of the
Colombia FTA by making this kind of argument to members of the U.S.
Congress and throughout the region.

Further U.S.-Chile Links


10. (SBU) DG Furche said Chile would focus on two multilateral trade
priorities in 2009, the Pathways to Prosperity and the recently
expanded Trans-Pacific Partnership (P-4). Chile had participated in
the Pathways Ministerial in Panama December 10. The GOC had agreed
to lead one of the working groups in the Pathways initiative. Chile
is also working to expand the P-4 to include Australia, the U.S.,
and Vietnam when negotiations begin in March 2009. If the U.S. and
Chile could build on their successful FTA in the P-4, it could one
day result in an Asia-Pacific regional FTA.

11. (SBU) Representative Meeks noted the Congress was considering
the formation of a Caucus on Latin America to deepen links with and
further discussion about issues in the region. Furche welcomed the
development, explaining Chile and other countries in Latin America
had high hopes for the Obama Administration and the new Congress.
He said GOC officials would be delighted to work with the Caucus to
demonstrate the strong ties between Chile and the U.S.