VZCZCXRO8804
PP RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHSG #0506/01 0871946
ZNR UUUUU ZZH
P 281946Z MAR 07
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC PRIORITY 1231
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEHPE/AMEMBASSY LIMA 5000
RUEHBO/AMEMBASSY BOGOTA 1677

UNCLAS SECTION 01 OF 02 SANTIAGO 000506 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ECIN ETRD CI
SUBJECT: CHILE SUPPORTS U.S. GOALS FOR APEC INCLUDING LONG-TERM GOAL 
OF ASIA-PACIFIC FTA 
 
 
SANTIAGO 00000506  001.7 OF 002 
 
 
¶1. SUMMARY. The U.S. Senior Official to APEC, Ambassador Michael 
Michalak, visited Chile March 12-14.  There is general convergence 
between U.S. and Chilean goals for APEC.  Senior GOC officials 
described APEC as very important to Chile.  The GOC strongly 
supports the long-term goal of an overarching FTA for the 
Asia-Pacific region but understands the importance of a successful 
conclusion to the Doha Round first.  The GOC supports the U.S. goals 
to strengthen APEC's institutions and to maintain the membership 
moratorium for now.  Once the moratorium is lifted, Chile is 
interested in seeing Colombia join.  Chile would like to see Peru's 
APEC year in 2008 be successful and is prepared to do whatever it 
can to be helpful.  End Summary. 
 
¶2. (U) U.S. Senior Official to APEC Ambassador Michael Michalak 
visited Chile March 12-14.  He met with senior MFA trade negotiator 
Carlos Furche, Chile's Senior Official to APEC German King and 
Deputy Foreign Minister Van Klaveren, as well as academics, students 
and the press.  He was accompanied by WHA/EPSC Deputy Director 
Matthew Rooney. 
 
Chilean Support for U.S. APEC Goals 
----------------------------------- 
 
¶3. Ambassador Michalak discussed U.S. priorities for APEC with 
Ambassador Carlos Furche, the Director General of the MFA's Economic 
Directorate (DIRECON) and Chile's lead trade negotiator.  Michalak 
told Furche while the primary U.S. trade goal was a successful 
conclusion to the Doha Round negotiations, the U.S. supported a Free 
Trade Agreement for the Asia-Pacific region (FTAAP) as a long-term 
goal.  Michalak listed items on the U.S. agenda for APEC in 2007 as 
a more robust agenda on intellectual property rights, completed 
model measures which could serve as FTAAP building blocks, continued 
work on security issues, and assistance to Peru as it prepared to 
host APEC in 2008. 
 
¶4. Furche underscored Chile's strong commitment to APEC.  He said 
Chile supported the model measures initiative and the concept of an 
FTAAP, especially with Doha apparently stalled.  The GOC was 
prepared to help Peru host the APEC summit in 2008 and had offered 
its assistance.  He said Chile supported Colombia's strong interest 
in joining APEC.  At one point, Furche said Colombia was clearly 
obsessed with joining APEC.  However, he realized the moratorium on 
new members would need to stay in place until APEC institutional 
reforms were complete. 
 
¶5. Furche continued that Chile fully agrees with the U.S. effort to 
re-focus APEC on trade and investment issues.  The GOC also shares 
the U.S. interest in strengthening APEC's institutions.  Chile would 
also like to see APEC decisions be more binding.  Chile, like the 
U.S., sees the model measures as building blocks for a future FTA 
among APEC members.  Michalak responded the trend was towards APEC 
decisions being binding, which meant that it was more important than 
ever to improve the organization's institutions. 
 
Chile Ready to Help Peru's APEC Year 
------------------------------------ 
 
¶6. Ambassador Michalak met with Chile's APEC team headed by German 
King, who after years of being Chile's acting Senior Official to 
APEC, now officially holds that title.  King opened by saying Chile 
was prepared to help Peru logistically and substantively host the 
APEC summit in 2008.  King thought that President Garcia was likely 
to base the agenda on domestic issues such as anti-corruption and 
social responsibility, areas where Chile could offer real help. 
However, Peru had not yet responded to Chile's offer of assistance, 
and it was unclear in the end how Peru would frame its agenda. 
 
¶7. Michalak told King that Peru's agenda items would likely include 
small and medium enterprises, anti-corruption and public-private 
partnerships.  King said Chile had met with every APEC member in 
planning its own year (in 2004) to develop the agenda.  Michalak 
said Peru was moving ahead on some issues and had expressed interest 
in an education ministerial.  Korea had expressed a similar interest 
and so the U.S. had suggested a compromise:  a planning seminar in 
Korea followed by the education ministerial in Peru. 
 
Chile's Ultimate Focus is on APEC FTA 
------------------------------------- 
 
¶8. Michalak spoke with Deputy Foreign Minister Van Klaveren about 
Chile's interest in a FTAAP.  Michalak said the U.S. had been 
initially skeptical of an FTAAP but as a long-term goal we supported 
it.  That being said, the U.S. was aware that some in APEC remained 
unsure of the viability of the FTA concept but, in general, the idea 
enjoyed solid support.  In the near term, the U.S. wanted to see 
institutions strengthened and the APEC agenda re-focused on trade 
and investment. 
 
¶9. Van Klaveren said Chile shared the U.S support for an APEC-wide 
FTA and a renewed emphasis on trade and investment.  He said any FTA 
 
SANTIAGO 00000506  002.2 OF 002 
 
 
would take a long time to negotiate but that it was better to remain 
ambitious than complacent.  Michalak explained the U.S. had reviewed 
various frameworks for Asia and concluded APEC offered the best 
vehicle for economic integration.  To that end, the U.S. was pushing 
a reform agenda which, while off to a good start, would require 
several more years.  The U.S. envisioned a beefed up Secretariat and 
more resources.  The U.S. planned to double its contribution to APEC 
to USD 5 million annually.  The U.S. supported maintaining the 
moratorium until reforms were completed. 
 
¶10. Van Klaveren described APEC as "very important" to Chile.  Chile 
had limited relations with Asia before joining APEC.  Since joining 
the change in relations had been dramatic but more obviously 
economic than political -- Asia was now the main regional 
destination for Chilean exports.  On the political side, APEC 
membership had helped Chile deepen its bilateral ties with a number 
of countries in Asia.  Chile was interested in an FTAAP and agreed 
the model measures were good building blocks for it.  Van Klaveren 
said Chile had a great deal of FTA experience to share.  Chile had 
followed a bilateral road in its trade relationships simply because 
this was faster.  The multilateral approach offered by an FTAAP 
would be more efficient and the prime long-term goal for Chile in 
Asia. 
 
Comment 
------- 
 
¶11. There is broad consensus in Chilean society about the importance 
of Asia to Chile's future.  In the GOC, this is reflected in the 
wide spectrum of trade agreements Chile has with Asian partners - 
New Zealand, Singapore, Brunei, Korea, China and now Japan, with 
Australia and Thailand on the horizon.  The GOC's commitment to APEC 
is another sign of Chile's focus on Asia.  We can expect Chile to 
continue to take a constructive, pro-active approach to APEC that 
will largely support U.S. priorities.  And when the time comes to 
negotiate an overarching FTA for the Asia-Pacific region, Chile will 
be ready, willing and able to help the U.S. achieve this goal as 
well. 
KELLY