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C O N F I D E N T I A L LIMA 002853 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 07/18/2016 
TAGS: PGOV PINRPE PRELS PE
SUBJECT: AMBASSADOR MEETS PRESIDENT-ELECT GARCIA 
 
Classified By: Ambassador J. Curtis Struble, Reasons 1.4 (b,d) 
 
------------------------- 
Introduction and Summary: 
------------------------- 
 
¶1.  (C) Ambassador Struble called upon President-elect Alan 
Garcia on July 14.  The Ambassador was accompanied by DCM 
Phyllis Powers; Garcia was joined by his Foreign 
Minister-designate, Jose Antonio Garcia Belaunde.  While the 
Ambassador and Garcia had maintained contact through 
intermediaries, they had avoided meeting during the election 
campaign and Peru's TPA ratification process to frustrate 
opposition candidate Ollanta Humala's efforts to paint Garcia 
as the USG's stalking horse.  The Ambassador requested that 
the President-elect oppose Venezuela's UNSC candidacy, and 
sought clarification of Garcia's statements about 
renegotiation of the Peru TPA and whether he welcomes U.S. 
military assistance.  Garcia said he did not see how Peru 
could vote to put Venezuela on the Security Council (which is 
encouraging but will require follow-up).  He said that he 
made reference to possible future renegotiation of PTPA to 
calm fears but has no plans to request changes.  He also 
expressed appreciation for USG military and police training, 
intelligence and equipment, saying his statement that he did 
not want US military assistance answered a question as to 
whether he would permit U.S. forces to directly fight 
terrorists and narcotics traffickers within Peru.  When the 
Ambassador advised Garcia that two members of his Civil 
Aviation transition team might be tied to narcotics, the 
President-elect ordered their immediate dismissal.  Garcia 
told the Ambassador that USG expressions of confidence in his 
government's ability to manage responsibly Peru's economy 
would be very helpful.  End Summary. 
 
------------------------- 
Venezuelan UNSC Candidacy 
------------------------- 
 
¶2.  (C) The Ambassador noted that Peru would face a decision 
early in Garcia's tenure about what Latin American country to 
support for a seat on the UN Security Council;  Venezuela is 
pushing its candidacy hard.  The Ambassador pointed to UNSC 
efforts to prevent Iranian and North Korean acquisition of 
nuclear weapons.  The fact that Chavez had announced visits 
to those countries at a time when responsible members of the 
international community were trying to pressure them to give 
up destabilizing programs underlined how harmful Venezuela's 
presence would be on the Security Council.  Garcia asked his 
Foreign Minister-designate how he saw the state of play. 
Garcia Belaunde explained that Guatemala is competing with 
Venezuela.  Were there a Latin American consensus, other 
regions would fall in line, but no consensus exists.  A case 
could be made that it was Central America's turn, but it 
looked like Venezuela would be hard to beat.  Mercosur is 
pushing Venezuela's candidacy; Caricom has fallen under the 
influence of Chavez's money; and Chile is trying to find a 
consensus alternative but not having any luck.  Alan Garcia 
responded, "I don't see how we can vote for Venezuela." 
(Ambassador's Comment:  After Chavez's string of insults 
against Garcia and his financial support for Humala, it seems 
far fetched that Peru could entertain a vote for Venezuela. 
All the same, I don't dismiss that possibility.  When I 
sought a commitment last month from Garcia Belaunde that Peru 
would not support Venezuela, he became evasive.  The Foreign 
Minister-designate comes from several years of working in the 
Andean Community and gives priority to achieving South 
American consensus.  I can envision him falling into line 
with Brazil on this, or trading the UNSC vote for some 
ephemeral promise by Chavez to behave himself in Peru, which 
is why I wanted to go over his head.  The President-elect's 
comment is encouraging, but we'll have to follow up to ensure 
that it locks in.) 
 
------------------------------ 
Peru Trade Promotion Agreement 
------------------------------ 
¶3.  (C) The Ambassador said that he felt he knew Garcia's 
position on the US-Peru Trade Promotion Agreement, but wanted 
to be able authoritatively to explain Garcia's remarks about 
possible renegotiation of the agreement to Washington. 
Garcia said that PTPA divides his base.  His polls show that 
the public is split 50/50 on the issue, with higher levels of 
support in Lima and lower levels in the provinces.  In the 
coastal north, which is Garcia's core base, there is more 
fear than opposition, particularly among cotton farmers.  For 
that reason, Garcia said, he has welcomed the agreement while 
avoiding a 100 percent endorsement of the way that Toledo 
negotiated it.  In practical terms APRA has already paid the 
political cost of endorsing the FTA, he said, through its 
unanimous vote for the agreement in the Congress.  To assuage 
fears, Garcia says, he has pointed to the provision of the 
agreement that permits renegotiation, saying that if it turns 
out to Peru's disadvantage the country could seek adjustments 
down the road.  However, Garcia said,  he had no plans to 
request renegotiation.  The Ambassador noted that raising the 
prospect of renegotiation complicates approval in the United 
States Congress by giving undecided members a reason to delay 
consideration. 
 
¶4.  (C) Garcia said that he hopes to quell fears and 
demystify free trade agreements by negotiating them with a 
series of countries ) specifying the European Union, Chile 
and Canada.  Peru needs to open itself to international 
trade, he said. 
 
¶5.  (C) Garcia requested the Ambassador's appraisal of 
President Toledo's visit to Washington, asking whether the 
FTA would pass the US Congress in July.  The Ambassador said 
that prospects are uncertain; Toledo had built good relations 
with members of the US Congress during his term, but it is a 
difficult political moment in the U.S. for a trade vote. 
 
--------------------- 
Narcotics Cooperation 
--------------------- 
 
¶6.  (C) The Ambassador next asked Garcia about a statement he 
made in an interview with Colombia's "El Espectador" to the 
effect that he did not want U.S. military assistance in the 
fight against terrorism or narcotics.  Again, the Ambassador 
said, he thought he knew Garcia's position on the matter but 
wanted to have an authoritative version.  The President-elect 
said that he viewed U.S. intelligence cooperation and 
material assistance as very important and very welcome.  The 
implication of the Colombian journalist's question was 
whether Garcia would allow deployment of US troops in Peru 
for direct action in fighting terrorists or drug traffickers. 
 "If I didn't say no to that," Garcia said, "I'd be thrown 
out of office."  Garcia added that he perceived a loss of 
interest in the United States in Peru's fight against 
narcotics and an imbalance between the assistance to Colombia 
and Peru.  For that reason he had publicly called for greater 
international assistance and for a Cartegena II conference. 
The Ambassador gave the President-elect a chart showing that 
U.S. assistance both for alternative development and police 
capacity building had doubled in the past five years compared 
to the 1990s.  That said, the Ambassador acknowledged, the 
large U.S. budget deficit and our assistance responsibilities 
in Afghanistan and Iraq were putting pressure on the Andean 
programs.  The Ambassador noted that analysis of cocaine 
samples seized in the U.S. showed that around 90 percent 
comes from Colombia, 10 percent from Peru and less than 1 
percent from Bolivia.  While much of Peruvian and Bolivian 
cocaine appears to be flowing to Brazil, Argentina and 
Western Europe, the U.S. is bearing most of the financial 
burden to fight it.  He encouraged the President-elect to 
press for broader international participation in efforts to 
fight drugs. 
 
---------------------------------------- 
Possible Bad Apples in a Transition Team 
---------------------------------------- 
 
¶7.  (C) The Ambassador said that he wanted to alert the 
President-elect that, according to information available to 
the USG, two members of his Civil Aviation transition team 
had been involved in narcotics Kingpin Fernando Zevallos' 
cocaine business -* Miguel Ciriani and Hector Arce.  Garcia 
said that he had appointed transition team leaders who were 
allowed in turn to name other members.  The President-elect 
called Congressman Javier Velasquez Quesquen (the head of the 
team that covers Civil Aviation) on the spot  to direct that 
the two men the Ambassador had named be separated immediately. 
 
------------------------- 
Economic Confidence Shock 
------------------------- 
 
¶8.  (C) The Ambassador closed the meeting by asking if there 
was anything he could do to help the President-elect.  Garcia 
responded that USG statements that it expects Peru under his 
administration to enjoy macroeconomic stability and solid 
economic growth would be very useful.  (Comment:  Our 
meetings with the Economic transition team lead us to believe 
that Garcia will continue the Toledo administration's 
macroeconomic and investment-friendly policies.  Garcia 
knows, however, that his 1985-1990 record on economic 
mismanagement makes tenuous the current confidence his 
administration enjoys among the business community.) 
STRUBLE