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 
------- 
 
¶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