VZCZCXRO1660
RR RUEHRN
DE RUEHFR #1732/01 3551007
ZNR UUUUU ZZH
R 211007Z DEC 09
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 7942
RUEHSS/OECD POSTS COLLECTIVE
RUEHSG/AMEMBASSY SANTIAGO 0005
RUCNDT/USMISSION USUN NEW YORK 1771
RUEHRN/USMISSION UN ROME 0018
RUEHGV/USMISSION GENEVA 3066
RUEHUNV/USMISSION UNVIE VIENNA 0727
RUEHTV/AMEMBASSY TEL AVIV 0309
RUEHMO/AMEMBASSY MOSCOW 6548
RUEHRA/AMEMBASSY RIGA 0251
RUEHLJ/AMEMBASSY LJUBLJANA 0560
RUEHTL/AMEMBASSY TALLINN 0012

UNCLAS SECTION 01 OF 02 PARIS 001732 
 
SENT FROM USOECD 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 1295: N/A 
TAGS: AORC ECON CI OECD
SUBJECT: CHILE PASSES HURDLES TO BECOME OECD MEMBER 
 
PARIS 00001732  001.2 OF 002 
 
 
¶1. (SBU) Summary: On December 15 the Organization for Economic 
Cooperation and Development (OECD) invited Chile to become the 31st 
member of the organization (and the first South American OECD 
member).  Chile completed the rigorous accession process in a record 
two and a half years, submitting to examination (and changing, as 
needed) its public policies in order to meet the standards set by 
the OECD "aquis", which includes close to 100 instruments, decisions 
and recommendations.  Speaking at the event, Chilean Minister of 
Finance Velasco stated that for Chile, the OECD was "first and 
foremost a group of democratic nations," one that provided a 
"one-stop shop" of good policies.  Speaking in Spanish to Chilean 
media, he stated that Chile would now be "sitting at the same table 
as an equal with the most significant nations of the world."  Chile 
is the first country in the latest group of OECD aspirants to reach 
the finish gate in an accession process which has become 
significantly more rigorous over the years.  The United States and 
others welcomed Chile's accession as a sign that the OECD was no 
longer "the Rich Man's club", but proof that best practices and 
sound economic policies can be shared by diverse countries with 
different income levels.  End summary. 
¶2. (U) In May 2007 the OECD Council invited Russia, Estonia, 
Slovenia and Chile to begin the accession process to become members 
of the OECD.  Between 2007 and 2009, 20 OECD committees scrutinized 
Chile's public policies to determine whether they met the standards 
set out by the close to 100 OECD Decisions and Recommendations in 
the areas of agriculture, chemicals, consumer policy, the 
environment, fiscal affairs, financial markets, fisheries, 
information computer and communications policy, insurance and 
private pensions investment and multinational enterprises, maritime 
transport, scientific and technological policy and tourism. 
¶3. (U) OECD aspirants are asked to commit to core principles such as 
full compliance with the Convention on Combating Bribery of Foreign 
Public Officials and full compliance with the principles of 
non-discrimination, transparency and "standstill" in accordance with 
the OECD Codes of Liberalization and Declaration on International 
Investment and Multinational Enterprises - to name just a few of the 
OECD instruments which constitute the OECD "aquis." 
¶4. (U) OECD candidates are also expected to share "fundamental 
values," including a commitment to pluralist democracy based on the 
rule of law and respect of human rights. (Although there is no 
formal structure for examination of either democratic institutions 
or the situation of human rights, members may raise issue of concern 
during the accession process.)  Reflecting the increase in the 
number of OECD instruments, the OECD accession process has become 
considerably more rigorous for the current group of aspirant 
countries than that which previous entrants - Korea, Mexico, Poland, 
the Czech Republic, Slovakia and Hungary - experienced in the 
nineties. 
¶5. (U) Meeting OECD standards required the Chilean government to put 
in place legislation in fiscal and tax affairs, anti-bribery, 
corporate governance and to establish environmental institutions. 
For a number of instruments, Chile requested and was given a one to 
three year time-frame for full implementation.  The OECD will 
continue peer review and encouragement for Chile to continue to 
raise its standards even after accession.  For example, the Trade 
Committee has asked Chile to provide a report after two years on 
progress it has made to improve its intellectual property rights 
protections. 
¶6. (SBU) The accession process was smooth by all accounts, with 
Chile hastening to meet a self-imposed deadline of December 2009 in 
order to have OECD membership be one of the accomplishments of the 
Bachelet administration. The only discordant note came from 
Switzerland just prior to OECD Council consideration of the final 
recommendations on December 11. Switzerland approached other country 
representatives to raise its concern that claiming "developing 
country" status at the WTO was inconsistent with OECD membership, 
and proposing that Chile make a commitment similar to the one Mexico 
made during its accession, namely that it would "participate in 
other international organizations or groupings in a manner 
consistent with the aims and undertakings of the OECD and with its 
position as a member of the organization."  Switzerland ultimately 
backed off its request for such a statement from Chile, but did 
include in its own Council statement the reminder that: "all members 
accept that OECD membership includes the readiness to strive towards 
continuous convergence and like-mindedness and, while respecting a 
country's development status, an increasing readiness to compete on 
a level playing field, and to participate in other international 
organizations or groupings in manner consistent with the aims and 
 
PARIS 00001732  002.2 OF 002 
 
 
undertakings of the OECD and with their position as a member of the 
Organisation."  Note:  OECD members Mexico and Korea are no longer 
G-77 members, but - like Chile - are members of the General System 
of Trade Preferences in the WTO.  End Note. 
¶7. (U) The OECD Council met on December 15 to formalize the 
invitation.  During a round of statements from OECD members, Chile's 
commitment to sound economic policies was hailed along with 
recognition of the many steps that it had taken to meet OECD 
standards.  Many OECD members noted that they had significant 
relations with Chile, either in free trade agreements or other 
bilateral accords.  Members also praised Chile's entry as proof that 
the OECD was about best practices, rather than GNP, and that the 
entry of Chile would enrich the debate, as well as provide a bridge 
to other countries in South America.  USOECD Ambassador Kornbluh 
praised Chile's success in reducing poverty rates, and quoted 
President Obama's remarks that Chile provided an "example for all of 
us that good fiscal policy and good economic policy ultimately 
allows for prosperity - through good times and bad times."  The U.S. 
statement also pointed out that OECD enlargement expanded the reach 
of the OECD and enhanced its future relevance. 
¶8. (U) Accepting the invitation on behalf of President Bachelet, 
Finance Minister Velasco stated that the OECD, for Chile, was first 
and foremost a group of democratic countries, noting that Chile had 
been working over the last twenty years to build and strengthen its 
own democratic governance and respect for human rights.  He said 
that Chile was committed to domestic and international cooperation 
as indispensable to achieving economic development and improving 
human well-being.  He called the OECD a "one-stop" shop for good 
public policies.  He also noted that Chile would be able to bring to 
OECD discussions its experience in fiscal policy, crisis management, 
pension reform and promoting social inclusions.  In closing, he 
expressed the hope that Chile would serve as a bridge between OECD 
and non-members, "spreading the good work, but also bringing to the 
table the concerns of the emerging economies."  Speaking to the 
Chilean media he said that Chile would now be able to sit as an 
equal at the table with the most significant countries of the world, 
but most importantly, countries committed to democracy and fiQ 
poverty and inequality.   Kornbluh