VZCZCXYZ0003
RR RUEHWEB

DE RUEHSG #1198/01 3441838
ZNR UUUUU ZZH
R 101838Z DEC 09
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC 0400
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHBD/AMEMBASSY BANDAR SERI BEGAWAN 0001
RUEHBO/AMEMBASSY BOGOTA
RUEHBY/AMEMBASSY CANBERRA 0001
RUEHGP/AMEMBASSY SINGAPORE 0001
RUEHHI/AMEMBASSY HANOI
RUEHKO/AMEMBASSY TOKYO 0004
RUEHME/AMEMBASSY MEXICO 0036
RUEHOT/AMEMBASSY OTTAWA
RUEHPE/AMEMBASSY LIMA
RUEHSG/AMEMBASSY SANTIAGO
RUEHWL/AMEMBASSY WELLINGTON

UNCLAS SANTIAGO 001198 
 
SENSITIVE 
SIPDIS 
STATE PLEASE PASS TO USTR DBISBEE AND KKALUTKIEWICZ 
STATE FOR WHA/EPSC, EEB/TPP/BTA, EEB/TPP/MTA 
TREASURY FOR BLINDQUIST 
COMMERCE FOR KMANN 
 
E.O. 12958: N/A 
TAGS: ETRD ECON CI
SUBJECT: CHILEAN REACTION TO PRESIDENT OBAMA'S ANNOUNCEMENT ON TPP 
 
REF: STATE 117729 
 
¶1. (SBU) SUMMARY:  Rodrigo Contreras, Director for Bilateral 
Relations at Chile's trade ministry equivalent (DIRECON) welcomed 
President Obama's announcement on joining the Trans-Pacific 
Partnership Agreement (TPP).  He though TPP could bring order to 
the mix of trade agreements in the Pacific region, and noted 
interest from Canada, Mexico, and Japan in the TPP.  Contreras 
thought that Vietnam's participation in TPP discussions might be 
complicated, citing its inexperience in trade negotiations.  END 
SUMMARY. 
 
 
 
¶2. (U) In a December 2 meeting at the Chilean Ministry of Foreign 
Affairs, General Directorate for International Economic Affairs 
(DIRECON), E/Pol Counselor, Econoff, and Econ Specialist met with 
Director Contreras, Manuel Jose Prieto, Head of the North America 
Division, Sergio Valdes Araneda, Advisor for TPP in the Asia and 
Oceania Department, and Jeff Peet, U.S. Desk Officer. 
 
 
 
Negotiations Can Return Order to "Spaghetti Bowl" 
 
 
 
¶3. (SBU) E/Pol Counselor relayed ref points to Contreras, 
underlining the importance of President Obama's announcement, and 
asking for Chile's views on TPP's future.  Contreras said Chile had 
carefully reviewed the President's speech and believes that the TPP 
announcement is especially significant for Chile and the other 
members of the P-4 (Brunei, Chile, New Zealand, and Singapore).  He 
admitted the negotiations to expand TPP to include the U.S., 
Australia, Peru, and Vietnam will be a challenge.  Contreras was 
optimistic, however, that this effort could eventually bring order 
to the "spaghetti bowl" of trade agreements in the Asia Pacific. 
 
 
 
¶4. (SBU) Contreras said that Canada and Mexico had expressed 
interest in TPP.  He noted Japan is "watching closely" as well. 
Contreras speculated that if TPP successfully expands to 11 
countries, the new agreement will consist of more than half the 
members of the Asia-Pacific Economic Cooperation (APEC).  He 
implied that this could bring the region closer to a Free Trade 
Area of the Asia-Pacific.  Contreras emphasized that TPP can become 
a profound agreement along the lines of the EU, given that all 
eight possible members share a common approach to trade, and in 
many cases share FTAs. 
 
 
 
21st Century Template 
 
 
 
¶5.  (SBU) Contreras took note of the U.S.'s intent to use the TPP 
negotiations to establish a framework for 21st Century trade 
agreements.  He said that many of the elements of interest 
identified by the U.S. are already included in existing trade 
agreements.  Chile is prepared to examine those areas, but allowed 
that the challenge will be reaching agreement on the details. 
 
 
 
Next Meeting in Melbourne 
 
 
 
¶6. (SBU) Contreras explained TPP members and aspirants will likely 
 
meet in Melbourne, Australia in March 2010.  Contreras said Chile 
hopes Melbourne will establish the modalities for future 
negotiation rounds.  He emphasized it will be critical to extract 
as many results from the March meeting as possible. 
 
 
 
No Problems with Peru, Vietnam May Be Complicated 
 
 
 
¶7. (SBU) E/Pol Counselor asked about Chile's working relations with 
Peru and if they would affect TPP negotiations, given the recent 
spat between the two countries over charges of espionage. 
Contreras said these are "completely separate issues" and both 
countries are working to put the problems behind them.  He insisted 
there is no friction on trade discussions at the working level 
between Chile and Peru.  Contreras noted that at the height of 
recent tensions, the Chilean and Peruvian delegations interacted 
amicably at the APEC Summit in Singapore. 
 
 
 
¶8. (SBU) Contreras told E/Pol Counselor that TPP negotiations with 
Vietnam might prove complicated.  He explained that Chile is 
currently negotiating a trade agreement with Vietnam.  Contreras 
opined that because Vietnam has relatively little experience with 
FTAs, the process has been long and complex, in part because of 
reluctance to commit to obligations for access for goods and 
services.  In addition, Vietnam is largely unfamiliar with the 
non-trade chapters that are usually part of an FTA (e.g., 
environment). 
 
 
 
Concerns About U.S. TPA and Colombia FTA 
 
 
 
¶9. (SBU) Contreras admitted to E/Pol Counselor that Chile is 
concerned about the difficulties that could result should the Obama 
Administration pursue TPP negotiations without first securing Trade 
Promotion Authority (TPA) from the U.S. Congress.  E/Pol Counselor 
explained the Obama Administration will consult with Congress as we 
move forward on TPP.  He noted that the Administration will also 
work with Congress to move forward at an appropriate time on the 
legacy FTAs with Colombia, Panama, and South Korea. 
 
 
 
¶10. (SBU) Contreras noted that Chile continues to support a U.S. 
FTA with Colombia.  He explained that Chile favors the entry of 
nations like Colombia and Costa Rica into APEC and TPP.  Contreras 
lamented the lack of a U.S. FTA with Colombia as a potential 
impediment to optimizing trade flows in the hemisphere. 
SIMONS