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DE RUEHSG #0936/01 2951226
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O 211226Z OCT 08
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3833
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 2127
RUEHGT/AMEMBASSY GUATEMALA PRIORITY 0345
RUEHLP/AMEMBASSY LA PAZ OCT 5971
RUEHPE/AMEMBASSY LIMA PRIORITY 5736
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C O N F I D E N T I A L SANTIAGO 000936 
 
SIPDIS 
 
STATE PLEASE PASS TO USTR KDUCKWORTH 
STATE FOR WHA/BSC, EEB/TPP/BTA/EWH, AND WHA/EPSC 
TREASURY FOR SSENICH 
COMMERCE FOR KMANN 
 
E.O. 12958: DECL: 10/20/2018 
TAGS: ECON ETRD OVIP UNGA EFTA CI
SUBJECT:  A/S SULLIVAN AND PDAS KELLY MEETING WITH ECLAC ON 
NEW TRADE INITIATIVE (PATHWAYS) 
 
Classified By: Ambassador Paul E. Simons.  Reason 1.4 (b) and (d). 
 
 ¶1.  (C) Summary.  A/S Sullivan and PDAS Kelly met August 22 
with officials from the UN Economic Commission for Latin 
American and the Caribbean (ECLAC/CEPAL) to provide a brief 
on U.S. economic engagement in the Western Hemisphere and 
preview USG plans for a new initiative (now called Pathways 
to Prosperity in the Americas) designed to broaden the 
benefits of free trade among the populations of the U.S. and 
its FTA partners and increase hemispheric economic 
integration.  ECLAC Executive Secretary Barcena endorsed the 
initiative and suggested ECLAC could support it with the 
publication of a document analyzing FTA,s in the hemisphere. 
 A/S Sullivan and PDAS Kelly supported the document but 
stressed that it should be released as a follow-on to the 
launch of the U.S. initiative.  Barcena agreed to the 
approach and said she would wait for a go-ahead from the U.S. 
before proceeding with the document.  PDAS Kelly asked for 
Barcena,s ideas in promoting alternative development in 
Bolivia.  She said ECLAC was ready to help with any U.S. 
programs and suggested Bolivia might benefit from a sale to 
the World Food Program.  End Summary. 
 
U.S. Hemispheric Engagement and a New Initiative 
--------------------------------------------- --- 
 
¶2. (U) EEB A/S Sullivan, WHA PDAS Kelly, and Ambassador 
Simons met with ECLAC Executive Secretary Alicia Barcena and 
Secretary Laura Lopez on August 22 in Santiago.  Other U.S. 
participants in the meeting were:  WHA/EPSC Director Rooney, 
TPP Senior Policy Advisor Lurie, E/POL Counselor Alsace, and 
Econoff.  Other ECLAC participants were: Osvaldo Rosales, 
Director of the International Trade and Integration Division, 
and Gerardo Mendoza, Programs Director. 
 
¶3.  (C) A/S Sullivan began the meeting by underlining U.S. 
commitment to the Western Hemisphere and our strong record of 
economic engagement.  He noted assistance to the hemisphere 
had doubled under the Bush Administration and 10 new 
countries were now receiving U.S. aid.  A/S Sullivan 
explained the U.S. will continue to maintain a strong focus 
on the hemisphere, especially regarding free trade.  The USG 
was developing an initiative (Pathways to Prosperity in the 
Americas) on taking free trade to the next level, starting 
with countries with which the U.S. already had Free Trade 
Agreements (FTA).  In the future any country would be welcome 
to participate, but it was only logical to start with the 
U.S., current free trade partners.  A/S Sullivan noted he 
was due to meet with Ministers Foxley and Velasco later in 
the day to discuss the initiative, but his first meeting, by 
design, was with ECLAC. 
 
¶4. (C) A/S Sullivan explained the initiative would attempt to 
deepen links already established by FTA,s in a larger, more 
comprehensive framework in the hemisphere.  This would ensure 
that the broadest array of citizens in these countries could 
take advantage of the free trade architecture built over the 
last 25 years in a variety of areas such as English language 
training, development assistance, and small and medium 
enterprise financing.  The Bush Administration wanted to 
pursue this initiative, despite the upcoming U.S. 
presidential election, because it would continue the strong 
momentum of progress in free trade in the Americas.  A/S 
Sullivan noted constant forward progress was key in issues of 
free trade, as standing still often led to negative 
developments.  The USG initiative had already received 
enthusiastic responses from several countries.  PDAS Kelly 
added the U.S. was working very hard to emphasize the 
benefits of free trade for real people such as reductions in 
income disparity and improving health programs. 
 
ECLAC Document on Free Trade 
---------------------------- 
 
¶5.  (C) Executive Secretary Barcena endorsed the initiative 
and congratulated A/S Sullivan and PDAS Kelly on their good 
timing, explaining the question of free trade was more 
salient than ever.  There was a perception in the hemisphere 
that the U.S. was not focused on Latin America.  A/S Sullivan 
noted he thought the perception unfair given the numbers and 
the results, such as those of the U.S.-Chile FTA.  Barcena 
agreed and opined that the moment was ripe for the 
publication of a book of facts on FTA,s.  She recommended a 
short-and-sweet document showing the evolution of FTA,s with 
the U.S., the pros and cons of free trade, and pending issues 
(such as Brazil,s reluctance to continue the FTAA process). 
The document could be prepared by ECLAC with the 
participation of the Inter-American Development Bank and the 
Organization of American States (who all participate in the 
FTAA tripartite committee).  However, it would need to be 
produced quickly, probably within the next two months.  The 
document could then be launched at a public event in Mexico 
or Chile or even at the upcoming APEC Summit in Peru.  The 
World Bank (WB) could also be of assistance in the project 
since WB President Zoellick was a strong proponent of free 
trade.  A/S Sullivan noted the USG initiative had stemmed 
from some of Zoellick,s ideas. 
 
¶6. (C) A/S Sullivan thought the ECLAC document had a lot of 
potential and should offer an objective look at free trade, 
both benefits and costs.  However, it should concentrate on 
economic arguments and avoid political issues such as Brazil 
and free trade.  A/S Sullivan explained the USG was 
considering a high-level event to launch the new initiative 
(should it be approved), but it might be difficult to tie to 
the ECLAC document.  If ECLAC could express its support at 
the launch of the initiative, it would be extremely helpful. 
PDAS Kelly suggested the document might be helpful as a 
follow-on to the launch of the initiative. 
 
¶7. (C) Ambassador Simons suggested the need for a segment on 
institution building, noting that the U.S.-Chile FTA had 
promoted much closer institutional links on phytosanitary 
cooperation, culminating in the announcement of two-way trade 
in beef and chicken.  Ambassador Simons also suggested a 
focus on regional investment noting that Chilean investors 
valued the investment chapter of the U.S.-Colombia FTA as a 
boost to regional investment protection.  A/S Sullivan cited 
the U.S.-Chile FTA as a great example of the success of free 
trade.  He noted the staggering numbers showing U.S. exports 
had increased 200 percent and Chilean exports had increased 
170 percent since the signing of the FTA.  Unfortunately, 
there was rarely much attention paid to the collateral 
positive developments, such as the institutional cooperation 
cited by Ambassador Simons.  Stressing these lesser known 
achievements was one of the goals of the USG initiative. 
 
¶8. (C) Barcena appreciated the suggestions and admitted it 
would be best to focus the ECLAC document on facts, numbers, 
and flows.  She undertook to begin production of the 
document, but wanted to wait for the go-ahead from the U.S. 
She asked Director Rosales to follow-up with Post.  Rosales 
applauded the U.S. effort noting a hemispheric initiative was 
critical given the efforts of Europe and Asia to move beyond 
bilateral trade agreements.  It was also critical to energize 
efforts to continue the Doha negotiations. 
 
ECLAC Help in Bolivia 
--------------------- 
 
¶9.  (C) PDAS Kelly told Barcena that INL A/S Johnson and WHA 
A/S Shannon had just been in Bolivia, where the relationship 
 
was very delicate.  The GOB was attacking the Embassy and 
Ambassador frequently, and the USG was hoping to keep to the 
high-road and maintain focus on the many worthwhile USG 
programs in Bolivia such as alternative development.  He 
asked Barcena if she had any suggestions.  She replied that 
ECLAC was happy to support U.S. alternative development 
efforts in Bolivia.  She noted the World Food Program needed 
to buy $80 million of food for Haiti.  Some of this purchase 
could be made in Bolivia to demonstrate the value of 
alternative crops, which needed a captive market to maintain 
any credibility in Bolivia. 
 
¶10.  (U) This cable has been cleared by A/S Sullivan and PDAS 
Kelly. 
SIMONS