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INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION 0006

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 
 
LIMA 00003489  002 OF 002 
 
 
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